Back then, president herbert hoover signed the tariff act of 1930, commonly known as the smoothawley law, which raised alreadyhigh tariffs. Conceived and passed by the house of representatives in 1929 as a protective measure for domestic industries, including socalled aged industries, the act contributed to the early loss of confidence on wall street and signaled. The great depression lesson about trade wars history. Since exporting firms are more productive than the nonexporting firms, a decrease in trade.
It imposed huge tariff increases in over 900 cases, leading to a decline in world trade at the worst possible time. When the federal government began to collect income taxes in 19, tariffs began to lose their importance as a source of government revenue and the last great tariff law was the smoothawley act of 1930. The smoothawley act is a cautionary tale during the 2016 election. Back then, president herbert hoover signed the tariff act of 1. The smoothawley tariff passes the house on may 28, 1929. Clearly, not all of the blame for the higher tariff in the early 1930s can be blamed on senator smoot and congressman hawley. Trumps 2019 protection could push china back to smoothawley.
Hawley, it was signed by president herbert hoover on june 17, 1930. When congress reconvened in april 1930 a compromise was worked out in. In retaliation, european countries set even higher tariffs to protect their markets. Reed smoot was active and prominent in the national republican party. Hawley smoot or smoot hawley a note on usage congressional. History books, newspapers, and other sources use the popular name to refer to these laws. Back then, president herbert hoover signed the tariff act of 1930, commonly known as the smoothawley law, which raised alreadyhigh tariffs on hundreds of imports. The act imposed tariff on over 20,000 imported products. The hawley smoot tariff act, sponsored by wills c hawley and senator reed smoot led to a raise in the us tariff.
Americas last major trade war worsened the great depression. Willis hawley, sponsors of the tariff bill that touched off. The smoothawley tariff act, known formally as the united states tariff act of 1930, was a piece of u. In this comprehensive history, irwin examines the political wrangling that caused the yearlong delay in its passage. In his book on american history, the humorist dave barry went a step further, with. On the other hand, 17 editorial cartoons throughout the book educate and entertain. Smoothawley tariff act legal definition merriamwebster. In early 1929 he was contemplating pushing for further tariff reductions, but this. Byrd teaches about how the hawleysmoot tariff worsened the great depression. Stock prices in new york 1926100 drop from 196 in march to 191 in june. Calls for increased protection flooded in from industrial. With this intention the act increased the import rate by 50% there by creating a world wide pressure during the time of great depression. Hawley and signed into law on june 17, 1930, that raised u. He is perhaps best known as the joint author of the famous if often criticized smoothawley tariff act.
The us congress passed the united states tariff act of 1930, also called the smoothawley tariff act, in june 1930 in an effort to help protect domestic farmers and other us businesses against steppedup imports after world war i. In 1922 congress had enacted the fordneymccumber act, which was among the most punitive protectionist tariffs passed in the countrys history, raising the average import tax to some 40 percent. The smoothawley tariff was simply too small a policy change to have so large an effect as triggering a depression. It increased 900 import tariffs by an average of 40% to 48%. For a start, it applied to only about onethird of americas trade. After world war ii, that understanding supported a push towards multilateral trading agreements that would prevent. Taken together, such steps would also raise us tariffs on china to levels similar to those resulting from the infamous smoothawley tariff act of. The tariff act of 1930 aka the smoothawley tariff act, started out as a bill that would only raise tariffs on some agricultural products, but a host of other special interests piled on and before the legislation finally reached president hoovers desk it represented one of the largest tariff increases in u. Pushed through by republicans, it was an effort to aid steel. An extreme example of trade protectionism admittedly, but the 1930 smoothawley tariff act that increased us import duties by as much as. Most economists blame it for worsening the great depression. In 1922 congress had enacted the fordneymccumber act, which was among the most punitive protectionist tariffs passed in the countrys history, raising the average. Use features like bookmarks, note taking and highlighting while reading peddling protectionism. The object of the act is to protect the american business and farmers.
This book chronicles the passage and consequences of the smoothawley tariffs. On this day in 1930, president herbert hoover signed into law the smoothawley tariff act, spurning a petition to the white house from more than 1,000 economists urging him to veto the legislation. Willis hawley left and reed smoot, cosponsors of the smoothawley tariff act of 1930. Smoothawley tariff was an act implementing protectionist trade policies sponsored by senator reed smoot and representative willis c. The smoothawley act was probably one of the worst pieces of legislation in the 20th century. In 1934 the reciprocal trade act gave the president independent authority to negotiate tariff reductions with foreign countries.
Lessons learned from smoothawley tariffs bloomberg. By taxing imported goods, congress hoped to stimulate american manufacturing, but the tariff triggered retaliatory tariffs in other countries, which further hindered global trade and led to greater economic contraction. Smoothawley and the great depression kindle edition by irwin, douglas a. Heavily featured in the book dave barry slept here.
However, from 1932 to approximately 1985, due to the smoot hawley tariff act, watches were cased in locally produced cases in north america and sold under the name lecoultre by the company vacheronlecoultre, a subsidiary of longines. As the united states slid into depression, the act represented a desperation move by con. World trade 192933 the outcome of the smoothawley act. The smoothawley tariff act was a grave error for u. The primary purpose of the hawley smoot tariff of 1930 was to heavily restrict imports to the united states, making it easier for people to find jobs domestically. The smoothawley tariff act of 1930, named after two congressmen who. On a wall of economist pat choates office on capitol hill is a photograph of two dapper gentlemen, circa 1930. Youd have to go back more than 200 years to see congress passing a worse law than the smoothawley tariff act of 1930. It is often associated withand sometimes blamed forthe onset of the great depression, the collapse of world trade, and the global spread of protectionism in the 1930s. Sponsored by senator reed smoot and representative willis c. The results massive expansion in the agricultural production sector outside of europe during world war i led, with the postwar recovery of european producers, to massive agricultural overproduction during the 1920s. Smoothawley and the great depression isbn 978691150321 princeton university press, 2011 p. Hawley left and reed smoot meeting shortly after the signing of the smoothawley tariff act. Depressing 1930s chart shows what happened the last time.
And sometimes they are meant to garner political support for a law by giving it a catchy name as with the usa patriot act or the take pride in america act or by invoking public outrage or sympathy as with any number of laws named for victims of crimes. The tariff act of 1930, which increased nearly 900 american import duties, was. The smoothawley tariff and the great depression cato. The hawleysmoot act of 1930 imposed an average tariff rate of 53 percent and thereby hiked up consumer prices, ignited a retaliatory trade war, and intensified the great depression, making this protectionist legislation among the costliest economic blunders in u. In fact, few economists think the smoothawley tariff as it is most often. The smoothawley tariff act of 1930, named after two congressmen who sponsored it, raised u. Dominion bureau of statistics, canada year book, 1932, table 7, pp. It is often associated with and sometimes blamed for the onset of the great depression, the collapse of world trade, and the global spread of protectionism in the 1930s. More than 1,000 economists made the risks of the bill clear to president herbert hoover but he ignored them and signed the act into law. Legislation passed in 1930 which included drastic tariff increases for goods entering the united states. In may 1930, us raised the tariff with the smoot hawley tariff act. Hoover signs smoothawley act, june 17, 1930 politico.
Amongst the umpteen number of tariff acts passed by the congress of the usa, there were some which created a flurry of events and some pathbreaking consequences. The smoothawley tariff act raised the united statess already high tariff rates. The enactment of these tariffs resulted in retaliatory tariffs from international trading partners and the us experienced significant decreases in both imports and exports. In effect, the smoothawley tariff act prolonged the depression and possibly deepened it around the world, not just in the united states but for other countries, he says. The tariff act of 1930 commonly known as the smoothawley tariff or hawleysmoot tariff. Protectionism the battle of smoothawley christmas specials. Hawley smoot or smoot hawley a note on usage congressional legislation is often from econ 340 at michigan state university. Smoothawley tariff act law and legal definition uslegal.
The smoot hawley tariff act of 1930, named after two congressmen who sponsored it, raised u. He served as a delegate to the republican national conventions in 1908, 1912, 1916, 1920, and 1924, and was chairman of the resolutions committee at the 1928 republican. The hawley smoot tariff was the last legislation under which the u. The tariff act of 1930 commonly known as the smoothawley tariff or hawley smoot tariff. Historians say its excessively protectionist measures were responsible for raising us tariffs to historically high levels, adding considerable strain to the.
Due partly to the trade war sparked by hawleysmoot, by 1933 world. Wilson pushed for a slashing of rates as his first act in office in 19. The act raised us tariffs on over 20,000 imported goods. The fordneymccumber tariff prompted retaliation from european governments but did little to dampen u. Alamy stock photo successful presidents including barack. The socalled hawleysmoot tariff called for a significant rise in tariff rates on farm products imported into the country.