Democrats, who had generally tended to support free trade ever since the days of Thomas Jefferson, were quick to criticize the Smoot-Hawley Tariff, and Hoover in particular for signing it. Critics such as Rep. Jacob Milligan (D-MO) predicted that it would undermine the country’s export trade. While that certainly did happen – by the end of the year the value of goods traded internationally had plummeted by $1.5 billion – economists to this day disagree on the extent to which Smoot-Hawley was responsible.
. . . [I]t is my opinion that it is most inopportune that the tariff bill should have become a law. We have not only a surplus of farm commodities but also a surplus in all industrial lines, hence must have foreign markets. We can not afford to destroy our foreign trade in order to allow the American manufacturer to plunder the pockets of the consumer. . . .
The tariff bill was under consideration for 17 months. During these 17 months the President had opportunity to inform Congress as to what he meant by “limited tariff revision for the benefit of agriculture.” During these 17 months the President remained mute. . . . So the only logical conclusion that can be reached is that the bill was entirely indorsed by the President during its making. So I would not take credit from the President and the “Chief Manipulator” of this legislation in the Senate. I think the bill should be known as the Hoover-Grundy tariff bill.[1] The President assumed full responsibility when he signed the bill, as it could not have become law without his signature.
On the day the tariff bill became a law all grain prices fell to a new low level for the season. Wheat fell to the lowest price in a year, oats to the lowest price in 8 years, rye to the lowest price reached in 30 years. Cotton fell to the lowest price in more than three years.
The steel industry reported a further decline in operations to 69 per cent of capacity.
On the day the bill passed, the Department of Commerce announced that American exports dropped in May to the lowest point in the last six years.
Stocks dropped in value $2,000,000,000 the day the President announced that he would sign the bill.
This tariff law carries a general average increase of 20.4 per cent over the Fordney-McCumber law of 1922,[2] which means an additional burden each year to the consumers of this country. The farmers are told they will benefit by this law. The facts are that every dollar of benefit given the farmer will cost him $10 because of the increase in the rate on the other than the agricultural rates.
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There is an increase carried in this law upon practically every thing a person uses in everyday life from the swaddling cloth of the newborn babe to the tombstone he erects above his dead. This tariff law means an average increased cost of from fifty to one hundred dollars to every average householder in the United States each year. How the now overburdened masses can carry this additional burden I do not know.
We hear from certain quarters that prosperity is raging rampant in every corner of the land; that we are enjoying this unprecedented prosperity because Mr. Hoover is President. I am willing to give President Hoover full credit for the so-called Hoover prosperity we are not enjoying.
I understand that two new planets have been discovered and that someone suggested one be named “Hoover Prosperity” because it is invisible; the other “Farm Relief” because it is so far away.
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