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

  • Kumiko Koyama (a1)
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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), 888. 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), 462–64. 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): 683; Eckes Alfred, “Revisiting Smoot-Hawley,” Journal of Policy History 7 (1995): 295–96.

2. In regard to raised tariffs in foreign countries after the 1930 act, see Kindleberger Charles P., Historical Economics: Art or Science? (Hertfordshire, 1990), 136; Kindleberger Charles P., The World in Depression, 1929–33 (Berkeley and Los Angeles, 1986), 123–24. As to foreign retaliation, see Jones Joseph, Tariff Retaliation (Philadelphia, 1934). 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): 802–26. 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): 748–61; Irwin Douglas, “Smoot-Hawley Tariff: A Quantitative Assessment, Review of Economics and Statistics,” Review of Economics and Statistics 80 (May 1998): 326–34.

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

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

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

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

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

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

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. 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).

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

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

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.

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.

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

15. U.S. Tariff Commission, The Tariff and Its History (Washington, D.C., 1934), 83, 103; Studenski Paul and Krooss Herman, Financial History of the United States (New York, 1963), 374; Kenkel Joseph, Progressives and Protection (Lanham, Md., 1983), 11–12; Terrill Tom E., The Tariff, Politics, and American Foreign Policy, 1874–1901 (Westport, Conn., 1973), 16–17; 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), 2; 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.

19. Wolman Paul, Most Favored Nation (Chapel Hill, 1992), 4, 15–16. 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).

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.

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, 309; Schnietz Karen, “To Delegate or Not to Delegate” (Ph.D. Diss., University of California, 1993), 199–201; Schnietz, “The 1916 Tariff Commission,” Business and Economic History 23 (1994): 176.

27. U.S. Tariff Commission, The Tariff and Its History, 83, 103; Baldwin Robert, Political Economy of U.S. Import Policy (Boston, 1985), 81. 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.

28. Several studies say that Hoover agreed with Culbertson’s views. See Kelly, “Antecedents,” 16; Lake David, Power, Protection, and Free Trade (Ithaca, 1988), 198; Goldstein Judith, Ideas, Interests, and American Trade Policy (Ithaca, 1993), 137; 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.

31. Taussig Frank, Free Trade, the Tariff, and Reciprocity (New York, 1923), 135, 181, 214, 216; Taussig Frank, “The U.S. Tariff Commission and the Tariff,” American Economic Review 16 (March 1926): 171–72; Taussig Frank and White H. B., Some Aspects of Tariff Question (Cambridge, Mass., 1931), 49; Barber William, From New Era to New Deal (New York, 1985), 63; Culbertson William, “The Making of Tariffs,” Yale Review 7 (January 1923): 255–74; Culbertson William, Commercial Policy (New York, 1919), 221, 310; 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): 39; 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): 443–44; 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), 378–80; 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), 272; Hoover Herbert, The Memoirs of Herbert Hoover (New York, 1952), 293; 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, 420; Knott Jack H. and Miller Gary J., Reforming Bureaucracy: The Politics of Institutional Choice (Englewood Cliffs, N.J., 1987), 34, 51, 56.

57. Hoover Herbert, “Industrial Waste,” Bulletin of the Taylor Society 6 (April 1921); Cooke Morris L., “The Influence of Scientific Management upon Government,” Bulletin of the Taylor Society, 9 (February 1924); Burner David, “A Technocrat’s Morality” (Reprint File, 1972, Hoover Presidential Library), 25–26; Wilson Joan, Herbert Hoover, Forgotten Progressive (New York, 1975), 127. 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), 522.

66. Berglund Abraham, “Reciprocal Trade Agreements,” American Economic Review 25 (1935): 416–17; Destler I. M., American Trade Politics: System Under Stress (New York, 1986), 10–11. 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): 418–21. 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.

I have benefited much from comments and advice by Miles W. Fletcher of the University of North Carolina at Chapel Hill, and appreciate helpful comments of three anonymous reviewers and the editor. I would also like to thank Eiich Akimoto and Yoshikatsu Hayashi. Financial support for the research in the United States came from Nagasaki University.

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