History Timeline 1930's

Photo above: A workman on the construction crew of the Empire State Building. Courtesy Federal Works Agency, WPA/National Archives. Right: Unemployed workers in Chicago in line at food kitchen run by Al Capone. Courtesy Wikipedia Commons via National Archives, U.S. Information Agency.

Great Depression

U.S. Timeline - The 1930s

The Great Depression

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  • Timeline

  • 1930 - Detail

    June 17, 1930 - The Smoot-Hawley Tariff Act is signed by President Herbert Hoover. Its effective rate hikes would slash world trade.

    Tax Petitions Smoot Hawley

    It's often brought up today, when discussions of international trade, fair trade, and tariffs ensue, trying to protect american interests, that anything that would prohibit free trade, would result in disastrous consequence to the economy. Well, and that's fair. The Smoot-Hawley Tariff Act is often described as the main reason for the lengthening of the Great Depression. While it attempted to protect American trade and level the field of the economy after industrialization, the placement of its tariffs and other measures actually did the opposite, grinding world trade to a halt.

    Although the League of Nations, of which the United States was not a member, had been lobbying for the world to reduce its tariffs and move toward free trade starting in 1927, world powers started to move in the opposite direction. France raised tariffs in 1928. William C. Hawley, a Republican Congressman from Oregon, and Senator Reed Smoot, a Republican from Utah, responded to the French move with the start of legislation to increase United States tariffs in the spring of 1929, passing the House in May. Politicians thought that the overcapacity in food production brought forward by gains in productivity due to mass production and electricity would be offset and alleviated by raising tariffs. It would limit supply caused by the industrial revolution.

    During the summer and fall of 1929, debates continued in the Senate. After the stock market crashed on October 29, the Senate continued to debate its merits and horse trade tariffs based on state industries. By June, it had passed both houses of Congress after conference. There had been dissension among economists, however, on whether the legislation would be a boon or a bust. Over one thousand of the nation's best economic minds sent a petition to the White House, urging President Hoover to veto. J.P. Morgan head Thomas W. LaMont begged the President not to sign it. Henry Ford went to the White House, urging the same, calling the tariff act "an economic stupidity." And even though Hoover disliked the bill on its merits and because it went against his like for international cooperation, he capitulated to the leaders of his party, signed it, and the bill became law. It raised tariffs on eight hundred and ninety products, making them the highest in one hundred years, only surpassed by the Tariff Act of 1828.

    Outcomes of the Smoot-Hawley Act

    Reaction among world leaders and nations was almost immediate. Twenty-three nations had stated their intent prior to the bill to retaliate, but those warnings had been ignored. Canada raised its tariffs with alacrity. They turned to Great Britain for increased trade. Others followed by raising their tariffs.

    It was estimated that imports dropped on dutiable goods by 17-20%, on overall goods by 4-6%. This was on top of the 15% drop of the year before. Within two years, imports had dropped a total of 40%. In 1929, U.S. imports were $4.4 billion; in 1933, they were $1.5 billon. U.S. exports went from $5.4 billion to $2.1 billion. American GNP dropped from $103.1 billion in 1929 to $55.6 billion in 1933. Deflation occurred. Within five years, world trade had decreased 66%.

    So what happened to Smoot and Hawley. They both lost their reelection bids in 1932. Smoot returned to Utah and became a leader in the LDS Church. Hawley returned to his law practice in Salem, Oregon.

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    Timeline of Smoot-Hawley Tariff Act

    April/May 1929 - Introduced into the House of Representatives by Willis C. Hawley.

    May 28, 1929 - Passed House of Representatives 264-147.

    March 24, 1930 - Passed Senate 53-31.

    June 13, 1930 - Passed Senate after Joint Committee changes, 44 to 42.

    June 14, 1930 - Passed House of Representatives in final form 222-153.

    June 17, 1930 - Signed into law by President Herbert Hoover.

    Photo above: Smoot and Hawley Tax Petitions in Washington, D.C., December 7, 1929, from Herbert A. French. Courtesy Library of Congress. Photo Below: Willis C. Hawley on left, with Reed Smoot on right, April 11, 1929, from Herbert A. French. Courtesy Library of Congress and Wikipedia Commons. Info Source: Wikipedia Commons; "The Battle of Smoot-Hawley," the Economist, December 8, 2008.

    Smoot Hawley

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