The various tariffs that President Trump has imposed since retaking office are based on delegated authority found in several existing statutes.[1] But a century ago, tariffs were primarily the purview of Congress. One of the most controversial manifestations of U.S. tariff legislation (and of American legislation in general) was the Smoot–Hawley Tariff Act of 1930,[2] signed into law by President Hoover shortly after the United States—and the world—fell into the black hole of the Great Depression. Just as a black hole swallows all matter, including light, the Great Depression swallowed the global economy, and didn’t allow a glimpse of any light at the end of that dark tunnel for all of the 1930s. Smoot–Hawley—named after its chief sponsors, Senator Reed Smoot of Utah, an influential Mormon who served as chairman of the Senate Finance Committee,[3] and Representative Willis Hawley of Oregon, the “big, slow-spoken, slow-witted, substantial”[4] chairman of the House Ways & Means Committee—was an ill-conceived and poorly timed response to powerful protectionist influences. During the run-up to the 1928 presidential and congressional election season, a revision of the then-current Fordney–McCumber Tariff Act of 1922[5] was thought by many to be a necessary measure for providing struggling U.S. farmers with increased protection against an onslaught of agricultural imports. But the proposed legislation’s focus on agricultural imports (a relatively unremarkable idea in the pre-crash year of 1928) led to many highly contentious debates in the House and Senate, especially after the stock market crashed in October 1929.[6] The fundamental premise of the tariff debate had changed: all industries were suffering, not just agriculture. Why should farmers be the only beneficiaries of new tariff protections when the entire economy had fallen face first into the gutter?
The debates, at times tortuous, boring and ill-tempered, seemed to go on forever. To paraphrase a famous saying, the processes of law-making and sausage-making had one thing in common: neither was a pretty sight.[7] In a 1933 Supreme Court decision, Norwegian Nitrogen Products Co. v. United States,[8] Justice Benjamin Cardozo provided insight into the tariff-making process then in place on Capitol Hill:
The process of tariff making by Congress and congressional committees is not different in essentials from that for legislation generally. If the bill has gone to a committee, the practice has been generally to give the privilege of a hearing to businessmen and others affected by its provisions. The hearing is not one that may be demanded as of right. A change of the tariff laws like a change of any other statute is not subject to impeachment on the score of invalidity, though notice to those affected has been omitted altogether. … Even so, the privilege is now so fortified by practice that it may fairly be taken for granted. But the hearing when given is not similar to a trial as conducted in a court. The proponents of a bill and the contestants make their statements for and against, bringing forward such confirmatory documents, trade journals, letters, governmental reports, and what not, as they believe to be important. The kind of information thus supplied can be gathered from the proceedings of the committees that reported the Tariff Act in question, the act of 1922, as well as from those leading up to the tariff acts of other years. In none of these congressional hearings has the practice ever prevailed of permitting the advocates of a measure to cross-examine the opponents, or the opponents the advocates, or of compelling the committee itself to submit to an inquisition as to data collected by its members through independent investigation. The committee determines for itself whether its sessions shall be public or private.
The tariff-making process, circa. 1930, was examined by political scientist Elmer Eric Schattschneider in 1935:[9]
In tariff making, perhaps more than in any other kind of legislation, Congress writes bills which no one intended. All policies are deflected and warped in being reduced to statute, but where the difficulties of the process are great, the original design may be battered beyond recognition and the policy utterly confused. This is especially true in tariff legislation because law making in this field is beset with incomparable embarrassments and perplexities, and the labor in evolving the statute is great to the point of agony. Whatever the ideal systems of protection may be or may have been, and there have been many ideals in this zone of policy, all have suffered a sea change in being made concrete in the law. The distance which separates the ideal from the real is, therefore, a rough measure of the influence of the process of law making on the policy. It follows that the legislation cannot be understood apart from the manner in which it is made. …
[T]he process of segregation and subdivision of items is capable of enormous extension, and no bill yet written, however minutely it may have been worked out, has succeeded in mentioning every item of foreign commerce, with the result that every bill is, of necessity, a difficult mixture of provisions which tax a multitude of specific commodities not specifically enumerated but covered in more general statutory language variously known as “basket clauses,” “catch-all clauses,” or “n.s.p.f. clauses.” This use of both specific and general clauses complicates the whole task of classification. The fact that many articles are composed of a variety of materials taxed at various rates in different sections of the bill and that the classifications set up are diverse, resting on bases which are not always consistent with each other, contribute to make the task of drafting the bill one of extreme difficulty and give rise to a vast amount of litigation. The legislation, moreover, is not made less litigious by the fact that, in drafting it, use must be made of trade names and terms not defined in the bill or in previous adjudications. Subsequently, industries whose protection has been taken away or reduced by judicial or administrative interpretation demand special classifications that will make their protection secure. Indeed, petitions which are substantially appeals from the decisions of the customs administration and the customs courts constitute a very large part of the total business coming before the committee during a revision. Congress has thus become a great, sluggish court of review, whose docket in the interval between revisions, accumulates huge masses of matters requiring readjustment. When the pressure of this business becomes intolerable, Congress attacks the avalanche of complaints by rewriting the legislation in even greater detail. …
One of the chief vices of tariff legislation is the tendency to disintegrate [the] general categories and thus further conceal and confuse broad questions of policy by segregating individual items, singling them out for transfer from the basket clauses to paragraphs in which they are enumerated specifically, and subdividing the items already enumerated so as to multiply the detailed provisions.
Schattschneider had a clear disdain for the tariff-making process. (And his assertion—that the process “is beset with incomparable embarrassments and perplexities, and the labor in evolving the statute is great to the point of agony”—is, one might argue, an apt description of our contemporary Congress.)
During deliberations over the scope of Smoot–Hawley many members of Congress were inundated with demands for protection from their constituent industries and from the trade associations that lobbied on behalf of many industries.[10] With their reelection battles looming, many members were fearful that any inattention to these demands would be disastrous, resulting in his state or district being deprived of its fair slice of the protectionist pie, an outcome likely to be avenged in the next election cycle.[11] Hence, after nearly eighteen months of acrimonious debate on Capitol Hill, a horde of parochial special interest groups (like the American Tariff League,[12] or the Pennsylvania Manufacturers Association, led by its powerful president, Joe Grundy,[13] who apparently held considerable influence over Senator Smoot) successfully lobbied an exasperated Congress to expand the scope of Smoot-Hawley to include further tariff increases on a broad range of agricultural and manufactured goods. In all, the Senate made 1,253 amendments to the House version of the bill.[14]
The House approved its version of the bill by a wide margin in the late spring of 1929.[15] The Senate, however, which had fewer protectionists in its ranks, continued to haggle over its version for another ten months, finally passing it in March of 1930.[16] As the final language and scope of the Smoot–Hawley legislation was being reconciled by both houses in committee, President Hoover, Senator Smoot and Representative Hawley each received during the first week of May a letter signed by 1,028 prominent American economists that urged Congress to kill the bill and urged Hoover to veto it if Congress were to approve it.[17] The letter may have had minimal (and long forgotten) impact had it been quietly delivered to Hoover, Smoot and Hawley as a private plea. But its authors delivered it very publicly when they released a copy to the press on May 3, 1930. Two days later, Pat Harrison, an influential anti-tariff senator from Mississippi who later became the chairman of the Senate Finance Committee, had the letter read into the official Senate record:[18]
The undersigned American economists and teachers of economics strongly urge that any measure which provides for a general upward revision of tariff rates be denied passage by Congress, or if passed, be vetoed by the President.
We are convinced that increased protective duties would be a mistake. They would operate, in general, to increase the prices which domestic consumers would have to pay. By raising prices they would encourage concerns with higher costs to undertake production, thus compelling the consumer to subsidize waste and inefficiency in industry. At the same time they would force him to pay higher rates of profit to established firms which enjoyed lower production costs. A higher level of protection, such as is contemplated by both the House and Senate bills, would therefore raise the cost of living and injure the great majority of our citizens.
Few people could hope to gain from such a change. Miners, construction, transportation and public utility workers, professional people and those employed in banks, hotels, newspaper offices, in the wholesale and retail trades, and scores of other occupations would clearly lose, since they produce no products which could be protected by tariff barriers.
The vast majority of farmers, also, would lose. Their cotton, corn, lard, and wheat are export crops and are sold in the world market. They have no important competition in the home market. They cannot benefit, therefore, from any tariff which is imposed upon the basic commodities which they produce. They would lose through the increased duties on manufactured goods, however, and in a double fashion. First, as consumers they would have to pay still higher prices for the products, made of textiles, chemicals, iron, and steel, which they buy. Second, as producers, their ability to sell their products would be further restricted by the barriers placed in the way of foreigners who wished to sell manufactured goods to us.
Our export trade, in general, would suffer. Countries cannot permanently buy from us unless they are permitted to sell to us, and the more we restrict the importation of goods from them by means of ever higher tariffs the more we reduce the possibility of our exporting to them. This applies to such exporting industries as copper, automobiles, agricultural machinery, typewriters, and the like fully as much as it does to farming. The difficulties of these industries are likely to be increased still further if we pass a higher tariff. There are already many evidences that such action would inevitably provoke other countries to pay us back in kind by levying retaliatory duties against our goods. There are few more ironical spectacles than that of the American Government as it seeks, on the one hand, to promote exports through the activity of the Bureau of Foreign and Domestic Commerce, while, on the other hand, by increasing tariffs it makes exportation ever more difficult. President Hoover has well said, in his message to Congress on April 16, 1929, “It is obviously unwise protection which sacrifices a greater amount of employment in exports to gain a less amount of employment from imports.”
We do not believe that American manufacturers, in general, need higher tariffs. The report of the President’s committee on recent economics changes has shown that industrial efficiency has increased, that costs have fallen, that profits have grown with amazing rapidity since the end of the war. Already our factories supply our people with over 96 percent of the manufactured goods which they consume, and our producers look to foreign markets to absorb the increasing output of their machines. Further barriers to trade will serve them not well, but ill.
Many of our citizens have invested their money in foreign enterprises. The Department of Commerce has estimated that such investments, entirely aside from the war debts, amounted to between $12,000,000,000 and $14,000,000,000 on January 1, 1929. These investors, too, would suffer if protective duties were to be increased, since such action would make it still more difficult for their foreign creditors to pay them the interest due them.
America is now facing the problem of unemployment. Her labor can find work only if her factories can sell their products. Higher tariffs would not promote such sales. We can not increase employment by restricting trade. American industry, in the present crisis, might well be spared the burden of adjusting itself to new schedules of protective duties.
Finally, we would urge our Government to consider the bitterness which a policy of higher tariffs would inevitably inject into our international relations. The United States was ably represented at the World Economic Conference which was held under the auspices of the League of Nations in 1927. This conference adopted a resolution announcing that “the time has come to put an end to the increase in tariffs and move in the opposite direction.” The higher duties proposed in our pending legislation violate the spirit of this agreement and plainly invite other nations to compete with us in raising further barriers to trade. A tariff war does not furnish good soil for the growth of world peace.
Despite the letter’s notoriety and the unanimity of more than a thousand economic experts on the recklessness of Smoot–Hawley, it wasn’t enough to convince Hoover or the economic charlatans in Congress to abandon the bill. Nor were the scores of formal complaints—and preemptive retaliatory actions—from governments and non-governmental entities around the world.[19] Nor was an increasing intensity of objections at home. Henry Ford, one of the more pragmatic and bluntly persuasive businessmen in America, visited the White House to pointedly tell the President that the bill was “an economic stupidity.”[20] The heads of the other American automobile makers expressed similar disdain. The president of General Motors, Alfred Pritchard Sloan, Jr., said that “[a]dditional restrictions in the way of raising the height of the tariff wall are bound to have an adverse influence on our domestic prosperity through reducing our ability to produce.”[21] And the heads of Packard, Studebaker, and Nash were more blunt, jointly calling Smoot–Hawley “a great menace to our foreign trade.”[22] Notable, too, was the fact that not all trade and industry associations were monolithically in favor of a higher tariff wall: the Textile Converters Association, the National Cigar Leaf Tobacco Association, and the well-regarded American Importers & Exporters Association all denounced Smoot–Hawley as counterproductive to U.S. interests. Even some labor unions, usually the most vociferous proponents of steep tariffs, began to see the danger in higher tariffs during a time of severe economic distress. In one example, the leader of the International Printing Pressmen’s Union of North America described the bill as “the most atrocious and indefensible tariff revision ever considered by Congress.”[23]
Hoover, Smoot, and Hawley stubbornly continued to support the bill despite the growing list of credible opponents. Right or wrong, each man had invested too much political capital in the bill to reverse course. Hoover found himself in a political and ethical quandary, having won the presidency in 1928 largely on the campaign promise of tariff increases (in the GOP tradition of the day), primarily to aid struggling farmers.[24] He rejected foreign complaints because he believed that tariffs were an internal domestic concern not to be influenced by external opinion. Rep. Hawley drew a terse line-in-the-sand on the threat of retaliatory measures by other countries if the bill bearing his name were to become law, saying that “in the long run they will find tariff reprisals an unprofitable venture.”[25] Senator Smoot maintained a more statesman-like resolve, and continued to speak about the need to protect American business and labor.[26] But in the end there was still enough bipartisan support in Congress to pass the bill,[27] and so, on June 14, H.R. 2667 was placed upon the President’s desk for signature or veto. Choosing not to veto a bill that had become unrecognizable and bloated beyond its original farm aid intent, he signed it into law on June 17, 1930.[28]
Although it was a decision that effectively ruined his chances for reelection in 1932, Hoover was steadfast on protectionism, as was the Republican National Committee. An RNC pamphlet on the tariff issue reprinted comments made by Hoover on May of 1932, only six months before the election:[29]
There never has been a time in the history of the United States when tariff protection was more essential to the welfare of the American people than at present. Prices have declined throughout the world but to a far greater extent in other countries than the United States. Manufacturers in foreign countries which have abandoned the gold standard are producing goods and paying for raw materials in depreciated currency. They may ship their goods into the United States with great detriment to the American producer and laborer because of the difference in the value of the money they pay for their raw materials and the money they receive for their finished products. Under such conditions it is imperative that the American protective policy be maintained.
As Frank Taussig noted in a Foreign Affairs essay during the debate over Smoot–Hawley, “tariff legislation is a perennial source of international distrust and irritation.”[30] Protectionist policies, by their very nature, tend to encourage (perhaps incite is a more apt verb) retaliation. By double-dog-daring our trading partners around the globe into taking retaliatory action against the U.S.—actions that would only further shrink an already skeletal global economy—Smoot–Hawley’s excessive protectionism brought swift retaliation from many of our major trading partners, most notably Canada,[31] France, the UK, Italy, Spain, and Switzerland. Canadian Prime Minister William Lyon Mackenzie King stood firm on the countervailing duties his country imposed on various U.S. exports, but made clear his willingness “in the future to consider trade on a reciprocal basis.”[32] Many of the European countries were in considerable debt to the U.S. because of America’s role as the principal financier of the post-WWI rebuilding efforts, and had been using trade with the U.S. as a way to facilitate debt repayment—until the new tariff barriers erected by Smoot–Hawley effectively brought trade to a halt.[33]
Also in Foreign Affairs, the economist Percy Bidwell documented the reaction of the European press as “disapproval—immediate, undisguised and unanimous.” The Spaniards warned that America “was trampling on fair competition”. In Belgium Smoot–Hawley was blasted as “malevolent, reckless [and] puerile”, while in Germany it was denounced as “a monster of economic folly.”[34]
So devastating were the results of Smoot–Hawley that Senator Harrison remarked in 1931 that the law “amounts practically to an embargo” and was “one of the truly fundamental causes for the prolongation of the present economic crisis.”[35] Many American industries were decimated by the effects, both direct and indirect, of higher tariffs and the retaliation of our trading partners. The automobile and steel industries suffered enormous losses, triggering bank closures in Detroit and Pittsburgh. All told, more than ten thousand U.S. banks closed their doors—and it was no coincidence that a great percentage of closures occurred in the midwestern agricultural states after the foreign retaliation of Smoot–Hawley’s massive tariff increases on agricultural imports.
Hoover’s 1930 State of the Union Address acknowledged that the world was engulfed in a depression, but he didn’t mention tariffs except for a single passing reference: “The price levels of our major agricultural commodities are, in fact, higher than those in other principal producing countries, due to the combined result of the tariff and the operations of the Farm Board.” In his 1931 State of the Union Address, Hoover devoted a single paragraph to the issue of tariffs. Amazingly, not only was he apparently disinclined to renounce Smoot–Hawley, but he actually doubled-down and warned of possible further tariff increases: [36]
Wages and standards of living abroad have been materially lowered during the past year. The temporary abandonment of the gold standard by certain countries has also reduced their production costs compared to ours. Fortunately any increases in the tariff which may be necessary to protect agriculture and industry from these lowered foreign costs, or decreases in items which may prove to be excessive, may be undertaken at any time by the Tariff Commission under authority which it possesses by virtue of the tariff act of 1930. The commission during the past year has reviewed the rates upon over 254 items subject to tariff. As a result of vigorous and industrious action, it is up to date in the consideration of pending references and is prepared to give prompt attention to any further applications. This procedure presents an orderly method for correcting inequalities. I am opposed to any general congressional revision of the tariff. Such action would disturb industry, business, and agriculture. It would prolong the depression.
Like Hoover, Senator Smoot felt no buyer’s remorse over the steep tariff increases. Some sixteen months after the law was enacted, Smoot wrote that “abnormal conditions throughout the world have made protective duties the key to industrial stability” and that these “tariff barricades … are a [necessary] result and not the cause” of these conditions.[37]
Between 1929 and 1931, the average U.S. tariff rate grew from 40.1% to 53.2%, with perhaps the greatest segment increase occurring in agricultural products, which increased from 57.8% to an astounding 91.8%.[38] In 1932, the ratio of duties collected to the value of dutiable imports reached 60%.[39] The tariff-fueled decline in international trade was unprecedented, like a runaway train hurtling down a foggy mountainside toward a calamitous end. As reported by the U.S. State Department, imports from Europe plummeted from a peak of $1.3 billion in 1929 to just under $400 million in 1932, while the volume of American exports to Europe fell from $2.3 billion to $784 million during the same period.[40] Around the globe, world trade declined by about two-thirds between 1929 and 1934.[41] Leo Pasvolsky, a high-level bureaucrat in the Roosevelt administration who was a principal author of the United Nations Charter, wrote in 1934 that “we [the United States] have lost more markets for our exports than any other commercially important nation; hence we have a greater stake than any other nation in the restoration of trade.”[42] But five years into the economic nightmare, little optimism remained that recovery was imminent.
Speaking of nightmares, a new Hollywood movie, Frankenstein, starring Boris Karloff as the Monster, was released by Universal Pictures in November of 1931. At one point in the film a pack of frenzied villagers hunt down the Monster to avenge the drowning of a little girl, a reaction similar to the degeneration of American industry, special interest groups, and Congress into an unruly mob terrified by its own monster: foreign imports. Had Frankenstein been released several months earlier—before Smoot–Hawley became law—maybe many in Congress (and many lobbyists, farmers, and manufacturers) would have recognized the danger of mob mentality, and maybe would have listened to the warnings of economists and of savvy industrialists like Henry Ford, and therefore maybe would have been more measured with the scope and severity of the legislation. Maybe. But then again, Smoot–Hawley was the child of unimaginative politicians with limited worldviews and even more limited knowledge of economics, and who likely wouldn’t see the allegorical lesson in Frankenstein, and for whom only one thing mattered: surviving from one election cycle to the next.
Smoot–Hawley didn’t cause the Great Depression.[43] But in hindsight it’s reasonable to presume that the law’s severe protectionism, coming on the heels of tariffs under Fordney–McCumber that were already at historic highs, provided much of the muscle that pushed the U.S. and global economies over the cliff and into the Depression. It would be unwise to presume that the same fate awaits us today in the wake of President Trump’s tariff gambit, as it is difficult to compare the dynamics of the global economy in 1930 with our current economy. But it would be equally unwise to be blindly optimistic. Reasonable Americans can agree that our continued economic success is our common goal, regardless of our political leanings.
[1] For example: Trade Expansion Act of 1962, Trade Act of 1974, and International Emergency Economic Powers Act (IEEPA, 1977).
[2] Although controversial, the Smoot–Hawley Tariff Act of 1930 (or simply the Tariff Act of 1930, when it was published on June 16 in The United States Daily (Vol. V., No. 89, Section II), which was the forerunner of the Federal Register), Pub. L. 71–361, 46 Stat. 590, as amended many times over the years, is, ironically, the legislative bedrock of the current CBP regulations and tariff rates. Because of the Reciprocal Trade Agreements Act of 1934, Smoot–Hawley bears the distinction of being the last major legislated influence on tariff policy. Referring to the law as Smoot–Hawley is technically incorrect; because revenue-related legislation must originate in the House rather than the Senate, Hawley–Smoot is the more appropriate name. But Smoot–Hawley is the more common designation.
[3] Upon his death, Sen. Smoot was described by the Washington Post as “the high priest of the protective tariff.” Washington Post (February 10, 1941). After becoming Utah’s junior senator in 1903, his eligibility to retain his seat was questioned because of his standing in the Mormon Church, which culminated in 1907 in a vote to expel him from the Senate. He survived the vote and ultimately served for thirty years.
[4] From an article entitled Winnings & Losings, Time (May 12, 1930), 17–18. The article described Hawley as “a high protectionist to the bone.” He served in the House for thirteen terms, from 1907 until 1933.
[5] Fordney–McCumber Tariff Act of 1922, Pub. L. 67–318, 42 Stat. 858 (September 21, 1922).
[6] In The History of American Customs Jurisprudence (privately published, 1941), William H. Futrell, who had served as a Justice Department attorney, observed that “had it not been for persistent demands that our agricultural economic situation must be improved and protected, we probably should have had no tariff legislation in 1930.”, 64.
[7] From the University of Michigan’s school newspaper, The Chronicle, of March 27, 1869: “‘Laws,’ says that illustrious rhymer, [American poet] Mr. John Godfrey Saxe, ‘like sausages, cease to inspire respect in proportion as we know how they are made.’”
[8] Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294 (1933).
[9] E.E. Schattschneider, Politics, Pressures and the Tariff: A Study of Free Private Enterprise in Pressure Politics (New York: Prentice-Hall, Inc., 1935), 13, 15, 18.
[10] There were some 1,500 registered trade associations in 1925, nearly twice as many as existed in 1914. Barry Eichegreen, The Political Economy of the Smoot–Hawley Tariff, NBER Working Paper No. 2001 (Cambridge, MA: Nat’l Bureau of Economic Research, August 1986), 6.
[11] 1928 was a presidential election year; and, as in every even-numbered year, all House seats, along with one-third of the Senate, were up for grabs in both 1928 and 1930.
[12] Supra note 9. Schattschneider called the American Tariff League “the greatest repository of skill and experience in the pressure politics of the tariff”.
[13] Grundy briefly served in the Senate—just as the debate about the new tariff bill was reaching its crescendo—when he was appointed to an open seat by Pennsylvania’s governor (albeit after Gov. Fisher’s first choice, William Vare, failed by a 58–22 margin to gain Senate approval). Time had this to say in National Affairs: A Strange Garret (December 23, 1929), 8: “The transformation of Mr. Grundy—’Old Joe’ as he likes his friends to call him—from a tariff archlobbyist to a full-fledged Senator caused some of his more volatile colleagues to gag and splutter furiously.” His confirmation hearing, according to Time, was contentious: “With hands folded in his lap and a bland smile on his round face, he listened placidly to a torrential flow of senatorial invective. He heard himself called a ‘corrupt lobbyist,’ his appointment an ‘insult to decency,’ his Governor an ‘ass.’” Sen. Grundy’s career as a lawmaker was brief; he served for only 355 days, from December 11, 1929, until December 1, 1930, failing to win election on his own merits. His short tenure coincided with the Senate’s passage, with his help, of Smoot–Hawley. Though brief, his Senate career was not the shortest; Rebecca Latimer Felton, the first female senator, represented Georgia for only one day in 1922, at the age of 87. Grundy was 98 when he died in 1961.
[14] Senate Amended Tariff 1,252 Times, The New York Times (March 25, 1930), 2.
[15] The House passed it by a margin of 264–147 on May 28, 1929.
[16] The Senate version was approved on March 24, 1930, by a 53–31 margin.
[17] Hoover was well aware that a president had never vetoed a tariff bill.
[18] See Congressional Record (Senate), May 5, 1930. Although the letter was sent on behalf of 1,028 prominent economists, the following seven shared primary responsibility for drafting the letter: Paul H. Douglas (Chicago), Irving Fisher (Yale), Frank D. Graham (Princeton), Ernest M. Patterson (Pennsylvania), Henry R. Seager (Columbia), Clair Wilcox (Swarthmore), and Frank W. Taussig (Harvard).
[19] The U.S. State Department received three dozen formal complaints from other countries.
[20] Voices for Veto, Time (June 16, 1930), 18.
[21] Id.
[22] Id.
[23] Id.
[24] The Eighteenth Amendment—a.k.a. Prohibition—also was a major issue in the 1928 election between Hoover and New York Governor Al Smith. The Wall Street Journal (November, 1, 1928) endorsed Hoover, claiming that a vote for Hoover was “the soundest business proposition” for the country.
[25] Supra note 20 at 19.
[26] Five years earlier Senator Smoot had noted, when questioned about growing anti-tariff sentiments, that “many of our people [U.S. citizens] feel that certain rates should be made higher rather than reduced.” New Tariff Alignment Cuts Across Parties, The New York Times (Sept. 13, 1925), 9.
[27] The reconciled version of Smoot–Hawley had considerably less support than the original versions. Nevertheless, H.R. 2667 was passed by the Senate by a thin 44–42 margin on June 13, and then was approved the following day by a still-comfortable 222–153 margin in the House. Neither Senator Smoot nor Representative Hawley was reelected in 1932.
[28] The bill was not veto-proof given its one-vote margin of victory in the Senate. We will never know, but it was highly unlikely that Congress would have mustered a two-thirds majority in each house to override a presidential veto.
[29] Republican National Committee, The Tariff Protects America From Inundation During Economic Storm, (1932).
[30] F.W. Taussig, The Tariff Bill and Our Friends Abroad, Foreign Affairs (Vol. 8, No. 1, October 1929), 1.
[31] Canada, perennially the United States’ largest trading partner during the twentieth century, decided in May of 1930 to assess countervailing duties on more than two dozen American products, including steel. F.W. Taussig commented in Necessary Changes in Our Commercial Policy, Foreign Affairs (Vol. 11, No. 3, April 1933), 401, on the “… harsh and even boorish manner in which we have so long dealt with … our nearest neighbor [and] our best customer.”
[32] Selwyn Parker, The Great Crash (London: Little, Brown Group, 2008), 69.
[33] Smoot–Hawley was a perfect example of the adage “cut off your nose to spite your face.” Time, in Great Britain: Empire Runcimanned in its November 30, 1931, issue, reported the frustrations of foreign leaders who blamed America’s exorbitant tariff increases for “mak[ing] it difficult for Germany and Europe to export enough to pay Reparations and War Debts from their profits.” Even though the war had ended a dozen years before Smoot–Hawley, the onerous terms of the Treaty of Versailles forced, for years to come, an unnecessary strain upon the recovery of the world economy.
[34] Percy Wells Bidwell, The New American Tariff: Europe’s Answer, Foreign Affairs (Vol. 9, No. 1, October 1930), 13. An American economist, Prof. Bidwell was on the faculty of Yale University and the University of Buffalo, and he served as a commissioner on the U.S. Tariff Commission.
[35] Harrison Denounces Smoot Tariff Law, The New York Times (March 13, 1931), 5.
[36] William Starr Myers, The State Papers and Other Public Writings of Herbert Hoover, (New York: Doubleday, Doran & Company, Inc., 1934), 55. Hoover’s address is available from multiple sources.
[37] Reed Smoot, Our Tariff and the Depression, Current History (Vol. 35, No. 2, November 1, 1931), 173.
[38] James Gerald Smith, Economic Planning and the Tariff (Princeton, NJ: Princeton University Press, 1934), 208.
[39] John M. Dobson, Two Centuries of Tariffs, (Washington DC: United States Government Printing Office, 1976), 34.
[40] U.S. State Department, Office of the Historian: http://history.state.gov/milestones/1921-1936/protectionism.
[41] Id.
[42] Leo Pasvolsky, United States Attacks the World Trade Deadlock, The New York Times (July 15, 1934), Sec. 9, 1.
[43] Much research has identified the many factors (beyond the scope of this review) that in the aggregate contributed to the Great Depression, with poor monetary policies sharing much of the blame. Douglas Irwin of Dartmouth suggested that France’s hoarding of gold in the late 1920s, at a time when many national monetary systems were on the gold standard, was a primary cause of the Great Depression. See Douglas A. Irwin, Did France Cause the Great Depression?, NBER Working Paper No. w16350 (September 2010).
