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The Passage of the Smoot-Hawley Tariff Act: Why Did the President Sign the Bill?

Published online by Cambridge University Press:  01 April 2009

Kumiko Koyama*
Affiliation:
Nagasaki University

Abstract

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Articles
Copyright
Copyright © Donald Critchlow and Cambridge University Press 2009

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References

NOTES

1. The rate of tariffs for dutiable goods calculated to total imports in 1931 was 53.2 percent. U.S. Department of Commerce, Historical Statistics of the U.S., Part 2 (Washington, D.C., 1975), 888Google Scholar. The rates of tariffs for specific goods were as follows: chemical products/paint 38.4 percent, pottery/glassware 52.3 percent, cotton products 47.5 percent, wool/wool products 75.5 percent, silk/ silk products 59.3 percent. U.S. Department of Commerce, Statistical Abstract of the U.S. (Washington, D.C., 1932), 462–64Google Scholar. As for the notoriety of the 1930 act, see Callahan, Colleen, McDonald, Judith, and Patrick O’Brien, Anthony, “Who Voted for Smoot-Hawley?Journal of Economic History 54 (September 1994): 683Google Scholar; Eckes, Alfred, “Revisiting Smoot-Hawley,” Journal of Policy History 7 (1995): 295–96.Google Scholar

2. In regard to raised tariffs in foreign countries after the 1930 act, see Kindleberger, Charles P., Historical Economics: Art or Science? (Hertfordshire, 1990), 136Google Scholar; Kindleberger, Charles P., The World in Depression, 1929–33 (Berkeley and Los Angeles, 1986), 123–24Google Scholar. As to foreign retaliation, see Jones, Joseph, Tariff Retaliation (Philadelphia, 1934).Google Scholar As to the relation between the 1930 act and retaliatory tariffs, see McDonald, Judith, O’Brien, Anthony, and Callahan, Colleen, “Trade Wars: Canada’s Reaction to the Smoot-Hawley Tariff,” Journal of Economic History 57, no. 4 (December 1997): 802–26Google Scholar. The relation between the 1930 act and the Great Depression is still controversial. See Carey, Kevin, “Investigating a Debt Channel for the Smoot-Hawley Tariffs,” Journal of Economic History 59 (September 1999): 748–61Google Scholar; Irwin, Douglas, “Smoot-Hawley Tariff: A Quantitative Assessment, Review of Economics and Statistics,” Review of Economics and Statistics 80 (May 1998): 326–34.Google Scholar

3. Eckes, Alfred, Opening America’s Market: U.S. Foreign Trade Policy Since 1776 (Chapel Hill, 1995), 134.Google Scholar

4. Snyder, Richard, “Hoover and the Hawley-Smoot Tariff: A View of Executive Leadership,” Annals of Iowa 14 (1973): 1173–89.Google Scholar

5. Taussig, Frank, The Tariff History of the United States, 8th ed. (New York, 1967), 491–99.Google Scholar

6. Schattschneider, E. E., Politics, Pressure, and the Tariff (New York, 1935), 285–93.Google Scholar

7. Wilson, Joan, American Business and Foreign Policy, 1920–1933 (Lexington, Ky., 1971), 75.Google Scholar

8. Pastor, Robert, Congress and the Politics of U.S. Foreign Economic Policy, 1929–1976 (Berkeley, 1980), 81.Google Scholar

9. Eichengreen, Barry, “The Political Economy of the Smoot-Hawley Tariff,” in Research in Economic History, vol. 12, ed. Ransom, R. L. et al. (Hartford, Conn., 1989), 11–12.Google Scholar As for some depressed industries in the 1920s, see Bernstein, Michael, The Great Depression: Delayed Recovery and Economic Change in America, 1929–1939 (New York, 1987).Google Scholar

10. Callahan et al., “Who Voted,” 683–90.

11. Cupitt, Richard and Elliot, Ecuel, “Schattschneider Revisited,” Economics and Politics 6 (1994): 187–99.CrossRefGoogle Scholar

12. Irwin, Douglas A. and Kroszner, Randall S., “Log-rolling and Economic Interests in the Passage of the Smoot-Hawley Tariff,” Carnegie-Rochester Conference Series on Public Policy 45 (1996): 173–200.CrossRefGoogle Scholar

13. Public Papers of the Presidents of the United States, Herbert Hoover Containing the Public Messages, Speeches, and Statements of the President, 1930 (Washington, D.C., 1976), 234.Google Scholar

14. Crick, Bernard, The American Science of Politics (Westport, Conn., 1959), 38Google Scholar; Nelson, William, The Roots of American Bureaucracy, 1830–1900 (Cambridge, Mass., 1982), 84, 93, 109Google Scholar; Hody, Cynthia, The Politics of Trade (Hanover, N.H., 1996), 32.Google Scholar

15. U.S. Tariff Commission, The Tariff and Its History (Washington, D.C., 1934), 83, 103Google Scholar; Studenski, Paul and Krooss, Herman, Financial History of the United States (New York, 1963), 374Google Scholar; Kenkel, Joseph, Progressives and Protection (Lanham, Md., 1983), 11–12Google Scholar; Terrill, Tom E., The Tariff, Politics, and American Foreign Policy, 1874–1901 (Westport, Conn., 1973), 16–17Google Scholar; Hody, The Politics of Trade, 44; Encyclopedia of Tariffs and Trade in U.S. History, vol. I, ed. Cynthia Northrup and Elaine Plange (Westport, Conn., 2003), 380, 426.

16. Kenkel, Progressives, 22–23; Northrup and Plange, Encyclopedia of Tariffs, 428–29; New York Times, 11 June 1881, 12; 30 September 1881, 3.

17. Reitano, Joanne, The Tariff Question in the Gilded Age (University Park, Pa., 1994), 2Google Scholar; Kenkel, Progressives, 3, 28.

18. Terrill, The Tariff, 49, 163–67; Kaplan, Edward and Ryley, Thomas, Prelude to Trade Wars (Westport, Conn., 1994), 2–4.Google Scholar

19. Wolman, Paul, Most Favored Nation (Chapel Hill, 1992), 4, 15–16.Google Scholar The idea of reciprocity had also been supported by the National Association of Agricultural Implement and Vehicle Manufacturers (NAAIVM) and the Merchants Association of New York (MANY).

20. NAM, Proceedings of National Association of Manufacturers, 1900, 18; Hody, The Politics of Trade, 176. As to the NAM, see Steigerwalt, Albert, The National Association of Manufacturers, 1895–1914 (Ann Arbor, Mich., 1964).Google Scholar

21. NAM, Proceedings, 1907, 172–73; 1901, 121.

22. Wolman, Most Favored Nation, 95–96; New York Times, 16 February 1909, 2; 17 February 1909, 2; 18 February 1909, 2. The participants in the National Tariff Commission Convention included J. W. Van Clave of St. Louis, president of the NAM; Henry Towne, president of the MANY; Daniel Tompkins, an entrepreneur of Textile Co. in North Carolina; and Herbert Miles, chairman of the Tariff Committee of the NAM and an entrepreneur in Wisconsin. As to Herbert Miles, see Northrup and Planger, Encyclopedia of Tariffs, 257–58.

23. New York Times, 24 January 1909, 4; 13 June 1910, 11; 31 March 1911, 10.

24. NAM, Proceedings, 1909, 176–77; 1910, 83; 1912, 119; 1913, 199; 1916, 100, 214. The NAM supported a weak Tariff Commission and objected to giving the government power to look into business records. As for the NTCA, it disappeared in 1914, due to a dispute between the NTCA and the NAM over the authority of the federal government to audit account books of companies. Becker, William, The Dynamics of Business-Government Relations (Chicago, 1982), 81–82.Google Scholar

25. Kenkel, Progressives, 95; USCC, Nation’s Business, 15 April 1913, 3, 9; February 1916, 3; NAM, Proceedings, 1916, 100, 214.

26. Becker, The Dynamics of Business-Government Relations, 87; Kenkel, Progressives, 102; USCC, Nation’s Business, February1916, 55. As for the 1916 Tariff Commission, see Goldstein, Judith and Lenway, Stefanie, “Interests or Institutions: An Inquiry into Congressional–ITC Relations,” International Studies Quarterly 33 (1989): 303, 309Google Scholar; Schnietz, Karen, “To Delegate or Not to Delegate” (Ph.D. Diss., University of California, 1993), 199–201Google Scholar; Schnietz, , “The 1916 Tariff Commission,” Business and Economic History 23 (1994): 176.Google Scholar

27. U.S. Tariff Commission, The Tariff and Its History, 83, 103; Baldwin, Robert, Political Economy of U.S. Import Policy (Boston, 1985), 81.Google Scholar When the term “FTP” was used, it sometimes included Section 316 of the 1922 Tariff Act (Section 337 of the 1930 Tariff Act), which was intended to protect the United States against unfair methods of competing foreign countries, and Section 317 of the 1922 act (Section 338 of the 1930 act), which was intended to protect U.S. industries against discrimination of foreign countries. The clause that Hoover strongly advocated was Section 315 of the 1922 act (Section 336 of the 1930 act) in passing the Smoot-Hawley bill. Thus, this article uses only Section 315 (Section 336) as the FTP, distinguished from the broadly defined FTP. As to the “FTP,” see Kelly, William, “Antecedents of Present Commercial Policy, 1922–1934,” in Studies in United States Commercial Policy, ed. Kelly, William (Chapel Hill, 1963), 15, 22, 27.Google Scholar

28. Several studies say that Hoover agreed with Culbertson’s views. See Kelly, “Antecedents,” 16; Lake, David, Power, Protection, and Free Trade (Ithaca, 1988), 198Google Scholar; Goldstein, Judith, Ideas, Interests, and American Trade Policy (Ithaca, 1993), 137Google Scholar; Eckes, Opening America’s Markets, 101; Kenkel, Progressives, 155. However, these studies do not focus on the connection between Culbertson and Hoover in the context of the FTP, as this article does.

29. Kaplan and Ryley, Prelude to Trade Wars, 112; Kelly, “Antecedents,”116; Abraham Berglund, “The Tariff Act of 1922,” American Economic Review 13 (March 1923): 30.

30. Snyder, Richard, “William S. Culbertson and the Formation of Modern American Commercial Policy, 1917–1925,” Kansas Historical Quarterly 35 (Winter 1969): 396, 398–99.Google Scholar

31. Taussig, Frank, Free Trade, the Tariff, and Reciprocity (New York, 1923), 135, 181, 214, 216Google Scholar; Taussig, Frank, “The U.S. Tariff Commission and the Tariff,” American Economic Review 16 (March 1926): 171–72Google Scholar; Taussig, Frank and White, H. B., Some Aspects of Tariff Question (Cambridge, Mass., 1931), 49Google Scholar; Barber, William, From New Era to New Deal (New York, 1985), 63Google Scholar; Culbertson, William, “The Making of Tariffs,” Yale Review 7 (January 1923): 255–74Google Scholar; Culbertson, William, Commercial Policy (New York, 1919), 221, 310Google Scholar; Snyder, “William S. Culbertson,” 402.

32. Culbertson contacted Hoover through an introduction from W. A. White. Letter from W. A. White to Hoover, 10 March 1921, CP (Commerce Papers), HPL (Hoover Presidential Library, West Branch, Iowa); Letter from Culbertson to Hoover, 15 March 1921, WCP (William Culbertson Papers), Container 4, LC (Library of Congress, Washington, D.C.); Letter from Christian A. Herter (Secretary to Hoover) to Culbertson, 15 March 1921, WCP, LC; Letter from Culbertson to Harding, 25 March 1921, WCP, LC; Letter from George B. Christian (Secretary to Harding) to Culbertson, 28 March 1921, WCP, LC; Memorandum for the President, 28 October 1921, WCP, Container 46, bound correspondence, LC; Letter from Hoover to Page, 21 November 1921, CP, HPL; Culbertson Diary, 7 December 1921, WCP, LC.

33. Margulies, Herbert F., “The Collaboration of Irvine Lenroot, 1921–1928,” North Dakota Quarterly 47 (Summer 1979): 39Google Scholar; Letter from Hoover to Lenroot, 10 June 1922, CP, HPL; Culbertson Diary, 19, 20 July; 5 September 1922, WCP, LC; Schnietz, “To Delegate,” 99–100.

34. Although the draft produced by the House of Representatives did not include a FTP, the Senate included it. Moreover, Culbertson succeeded in defending the FTP against a two-year time limit placed on it. Culbertson Diary, 6, 7, 9, 10, 20, 21 September 1922, WCP, LC.

35. Glassie, Henry, “Some Legal Aspects of the Flexible Tariff, Part II,” Virginia Law Review 6 (April 1925): 443–44Google Scholar; Snyder, “William S. Culbertson,” 407–8; Kenkel, Progressives, 163; Colin Goodykonntz, “Edward P. Costigan and the Tariff Commission, 1917–1928,” Pacific Historical Law 16, no. 14 (Reprint File, n.d., HPL): 419.

36. Culbertson Diary, 20, 24 March; 16, 21 April 1923, WCP, LC.

37. Goodykonntz, “Edward P. Costigan,” 416; Kenkel, Progressives, 163, 189. As to the investigation on sugar by the Tariff Commission, see Joshua Bernhardt, “The Flexible Tariff and the Sugar Industry,” American Economic Review 16 (March 1926): 182, 190.

38. William Redfield, Secretary of Commerce, created the NFTC in 1914. Becker, Dynamics, xii; NFTC, Official Report, 1915, vii. The aim of the NFTC is still to promote foreign trade and investment. As to the present role of the NFTC, see Encyclopedia of Associations, 28th ed., ed. Peggy Daniels and Carol Schwarts (Detroit, 1994), 238.

39. NFTC, Official Report, 1922, v, vii, xxx; 1919, 71.

40. U.S. Congress, House, Committee on Ways and Means, Hearing on General Tariff Revision, 67th Cong., 2nd sess., vol. 283, pt. 6, 4333–34 (Statement of O. K. Davis, Secretary Official of NFTC); NFTC, Official Report, 1918, ix; 1919, x; 1920, ix–x. One prominent member of the NFTC, J. C. Ainsworth of the National Bank, proclaimed that tariff revision should have the closest scrutiny so that it would protect and not stifle American industry and, at the same time, not throttle our foreign trade. NFTC, Official Report, 1922, 67.

41. Star Myers, William and Newton, Walter H., The Hoover Administration: A Documented Narrative (New York, 1936), 378–80Google Scholar; Public Papers of the Presidents of the United States, Herbert Hoover, Containing the Public Messages, Speeches, and Statements of the President, 1929 (Washington, D.C., 1974), 233–35; Wall Street Journal, 24 October 1929, 6. Hoover also referred to the FTP in Boston, on 15 October 1928. He said that the Tariff Commission was the only commission that could be held responsible to the electorate, and the tariff could be changed whenever the executive saw fit under the FTP. House, Committee on Ways and Means, Hearings on H.R.2667, vol. 283, pt. 6, 70th Cong., 2nd sess., 1929, 10189.

42. Porter, Kirk and Johnson, Donald, National Party Platforms (Urbana, Ill., 1966), 272Google Scholar; Hoover, Herbert, The Memoirs of Herbert Hoover (New York, 1952), 293Google Scholar; Kenkel, Progressives, 154, 213; Goldstein, Ideas, Interest, 145.

43. Myers, The Hoover Administration, A Documented Narrative, 388, 390, 391; Wall Street Journal, 24 October 1929, 6.

44. Myers, The Hoover Administration, A Documented Narrative, 401, 404, 406–7; New York Times, 3 October 1929, 1; New York Times, 19 May 1930, 4; Wall Street Journal, 5 October 1929, 1; Wall Street Journal, 8 October 1929, 7; Hoover, The Memoirs, 294; Public Papers of the Presidents of the United States, Herbert Hoover, 1929, 300–302, 362–63. Hoover emphasized the constitutionality of the FTP. The constitutionality of Section 315 was challenged, however, by Hampton Co., an importer of barium dioxide, which argued that Section 315 was a delegation to the president of tariff-setting power vested in the Congress. The Supreme Court overruled the objection in 1928, saying that under Section 315 the president was simply carrying out the will of Congress on the basis of the principle of the equalization of cost, and it was clear that Congress attempted to encourage American industries to compete on equal footing with other countries. Senate, Committee on Finance, Hearings on H.R.2667, 71st Cong., 1st sess., vol. 327, no. 2, 414–15; U.S. Tariff Commission, Twelfth Annual Report, 1928 (Washington, D.C., 1929), 13–14.

45. Myers, The Hoover Administration, 411–12, 424, 426; Public Papers of the Presidents of the United States, Herbert Hoover, 1929, 415–16; Hoover, The Memoirs, 295.

46. New York Times, 4 May 1930, 1; 5 May 1930, 3; 20 May 1930, 1; 24 May 1930, 1; 25 May 1930, 1; Wall Street Journal, 23 May 1930, 1; 27 May 1930, 1; 29 May 1930, 16; 30 May 1930, 13; 17 June 1930, 1; Myers, The Hoover Administration, 407, 432–34.

47. New York Times, 6 June 1930, 1; 10 June 1930, 12; 13 June 1930, 1; 14 June; 15 June; Wall Street Journal, 23 May 1930, 15; 27 May 1930, 1; 13 June 1930, 16; 14 June 1930, 10; 16 June 1930, 5; Myers, The Hoover Administration, 425, 436–37.

48. Public Papers of the Presidents of the United States, Herbert Hoover, 1930, 233–35; Myers, The Hoover Administration, 439–40; Public Papers of the Presidents of the United States, Herbert Hoover, Containing the Public Messages, Speeches, and Statements of the President, 1932–33 (Washington, D.C., 1977), 205–6.

49. NAM, Proceedings, 1927, 36, 124; 1929, 42–45, 75–76. As to heated discussions, see NAM, Proceedings, 1928, 174–210; 1929, 86–94.

50. Those seventy-four organizations included manufacturers of jewelry, pulp, coal, wood, chemicals, and metal products, in addition to state and local associations of manufacturers. Senate, Hearings on H.R.2667, 408–9, 462–64; House Hearings on H.R. 2667, 70th Cong., 2nd sess., vol. 283, pt. 6, 10104–5. According to Edgerton, president of the NAM, who also testified for the FTP in the Senate, NAM’s views were broadly supported by the overwhelming majority of 80,000 manufacturers of 300 affiliated organizations. House, Hearings on H.R. 2667, 10104.

51. USCC, Referendum No. 37, Tariff Principles, 7 December 1921.

52. U.S. Tariff Commission, Thirteenth Annual Report, 1929 (Washington, D.C., 1930), 10.

53. NFTC, Official Report, 1928, 199–200 (Statement of George Davis, Counsel of NCAIT).

54. Letter from Hoover to Warren Harding, 8 September 1920, Pre-Commerce Papers (Hoover Presidential Library); Herbert Hoover, American Individualism (West Branch, Iowa, 1997, original ed., 1922), 19. For example, Ellis Hawley contends that Hoover hoped to build a superior socioeconomic order through grafting corporatist and technocratic visions onto a base of nineteenth-century individualism. See “Herbert Hoover, the Commerce Secretariat, and the Vision of an ‘Associative State,’ 1921–1928,” Journal of American History 61 (June 1974): 116–40; “The Discovery and Study of a ‘Corporate Liberalism,’” Business History Review 52 (Autumn 1978): 309–20; The Great War and the Search for a Modern Order (New York, 1979).

55. Carolyn Grin, “Herbert Hoover and Social Responsibilities of the Expert” (Reprint File, Seminar, 28 May 1971, HPL), 2, 4, 7; New Republic, 23 July 1930.

56. Johnson, Arthur M., Government-Business Relations (Columbus, Ohio, 1965), 53, 420Google Scholar; Knott, Jack H. and Miller, Gary J., Reforming Bureaucracy: The Politics of Institutional Choice (Englewood Cliffs, N.J., 1987), 34, 51, 56.Google Scholar

57. Hoover, Herbert, “Industrial Waste,” Bulletin of the Taylor Society 6 (April 1921)Google Scholar; Cooke, Morris L., “The Influence of Scientific Management upon Government,” Bulletin of the Taylor Society, 9 (February 1924)Google Scholar; Burner David, “A Technocrat’s Morality” (Reprint File, 1972, Hoover Presidential Library), 25–26; Wilson, Joan, Herbert Hoover, Forgotten Progressive (New York, 1975), 127Google Scholar. Melvyn Leffler points out Hoover’s apolitical side, but concludes that his approach to tariffs endangered his reputation as an apolitical manager. See “Herbert Hoover, the ‘New Era,’ and American Foreign Policy,” in Herbert Hoover as Secretary of Commerce, ed. Ellis Hawley (Iowa, 1974), 148, 149, 164, 166. As to Hoover’s thought on efficiency, see Samuel Habeler, Efficiency and Uplift (Chicago, 1964), 157–58.

58. U.S. Department of Commerce, Trade Association Activities (Washington, D.C., 1927), 268–69.

59. Herbert Hoover, Speech at Republican Meeting in Tulsa, Oklahoma, 25 October 1926, CP, HPL; Wall Street Journal, 22 May 1930, 1.

60. Wall Street Journal, 6 May 1930, 1; 14 May 1930, 19; 21 May 1930, 11.

61. Wall Street Journal, 16 June 1930, 5.

62. Public Papers of the Presidents of the United States, Herbert Hoover, 1930, 232–35.

63. U.S. Tariff Commission, Sixteenth Annual Report (Washington, D.C., 1933), 1; Fourteenth Annual Report (Washington, D.C., 1930), 1, 3.

64. U.S. Tariff Commission, Thirteenth Annual Report (Washington, D.C., 1929), 17; Percy Bidwell, What the Tariff Means to American Industries (New York, 1956), 55.

65. Kindleberger, Historical Economics, 136; Kindleberger, The World in Depression, 123–24. Some scholars objected to the conventional explanation that the 1930 act triggered retaliation. Many countries raised tariffs or boycotted U.S. products following the 1930 act, but it is uncertain as to whether these actions were in retaliation against the Smoot-Hawley Act. Eckes, Opening America’s Markets, 124–32; Walton, Gary and Rockoff, Hugh, History of the American Economy, 8th ed. (New York, 1998), 522Google Scholar.

66. Berglund, Abraham, “Reciprocal Trade Agreements,” American Economic Review 25 (1935): 416–17Google Scholar; Destler, I. M., American Trade Politics: System Under Stress (New York, 1986), 10–11Google Scholar. As to the rationale for the delegation of authority in the RTAA of 1934, see Schnietz, Karen, “The Institutional Foundation of U.S. Trade Policy,” Journal of Policy History 12 (Winter 2000): 418–21Google Scholar. While the average rate of dutiable imports was 59.1 percent in 1932, it was 19.3 percent in 1947. U.S. Department of Commerce, Historical Statistics, 888.