History Spotlight, 2/9

right: Senator Reed Smoot (R-UT)
left: Congressman Willis C. Hawley (R-OR)

Senator Reed Smoot, Republican from Utah and co-sponsor of the infamous Smoot-Hawley Tarrif Act, died today in 1941. During the economic expansion after the Industrial Revolution, a trend began to be noticed in industrialized nations: there seemed to be an upper limit to what was needed from industry. For example, the car industry can churn out many more cars than anyone actually needs. At some point, there's going to be a glut of cars on the market and the car market will crash. This lays off lots of auto workers and they no longer can buy the things that they want and that causes other manufacturing markets to crash or at least have difficulty. Throw enough of these mini-crashes into the mix at the same time and you've got yourself a maxi-crash. This is why you see, in histories of the various 19th Century empires, that they're always looking for "new markets" for their manufactured goods. Heck, half of the Great Game between Britain and Russia was about selling tin pots to the Afghanis.
Mostly, nobody knew what to do about this, but they did have plenty of ideas. Senator Smoot embraced the notion of raising tariffs on imported goods. The idea was to make cheap foreign goods less attractive to the consumer. The consumer would then buy domestically produced goods which would keep more factories running and more people employed and they could keep buying stuff. As a bonus, you get a more money into the federal government from tariffs. It seems pretty simple and the Smoot-Hawley Tariff Ace became law on June 17, 1930. In the end, it raised tariffs on over 20,000 different imported goods, some as high as 60%. But that law of unintended consequences is a bitch and she showed herself before the ink was dry on Hoover's signature.
First, Canada raised tariffs on US goods and lowered tariffs on goods from the British Commonwealth. France and Britain followed suit soon after and then several other nations joined in. From 1929 to 1933, imports in the US dropped 66% and exports dropped 61%. This in turn caused the already trouble manufacturing industry to completely auger into the dirt and the Depression got that much worse.