June 17, 1930
The Senate Passes the Smoot-Hawley Tariff
A memorable scene from the movie Ferris Bueller’s Day Off has a high school teacher vainly struggling to get some response from his dazed students. He says: “In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act. Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone?... Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression.” This amusing scene managed to omit the U.S. Senate, but it was on June 17, 1930, that the Senate passed the Smoot-Hawley Tariff, among the most catastrophic acts in congressional history.
How did this happen? After Herbert Hoover became president in 1929, he called Congress into special session to deal with a troubled farm economy that had fallen into depression during the otherwise prosperous 1920s. President Hoover proposed a “limited revision” of the tariff on agricultural imports to raise rates and boost sagging farm prices. He then made the tactical error of trying to distance himself from the tariff debates. Republican protectionists, who controlled the House Ways and Means Committee chaired by Representative Willis Hawley, put the farm issue aside and took the opportunity to raise industrial tariffs to new highs. Hoover’s failure to object encouraged other economic interests to lobby the Senate Finance Committee, chaired by Utah senator Reed Smoot, for further tariff hikes. In protest, low-tariff Democrats and progressive Republicans slowed the tariff debate over a tedious 15-month process of congressional bargaining.
A thousand economists signed a petition, drafted by a Chicago economist, and future U.S. senator, Paul Douglas, that implored the president to veto the tariff. “Poor Hoover wanted to take our advice,” Paul Douglas mused, but he could not bring himself to break with his own party’s congressional leadership. Ignoring the experts, Hoover signed the tariff.
As the economists predicted, the high tariff proved to be a disaster. Even before its enactment, U.S. trading partners began retaliating by raising their tariff rates, which froze international trade. The tariff fight solidified Hoover’s ties with Republican regulars, but it shredded his standing among his party’s progressives. Most of the progressive Republican senators who had campaigned for Hoover in 1928 wound up endorsing Franklin D. Roosevelt for president in the next election. Nor did the tariff sit well with the voters. In 1932 they turned the majority in both houses over to the Democrats, by large margins. The voters also made clear their disdain for the Smoot-Hawley tariff by booting both Reed Smoot and Willis Hawley out of office that year.