This article examines the reasons for the passage of the “Smoot-Hawley” Tariff Act in 1930 by focusing on President Herbert Hoover’s support for the bill. It is well known for imposing high tariff rates on many items in the midst of the Great Depression. The 1930 act represented, as most scholars conclude, the peak of protectionism in U.S. trade history. By causing other nations to enact retaliatory tariffs, it furthered the division of the world into economic blocks.Footnote ¹ Even today, the act is referred to as a notorious measure that should not be repeated again.Footnote ² Several studies of the passage of the act have shed light on the legislative process. Moreover, previous studies have centered on analyzing the impact of either interest groups or party politics. Those studies, however, neglect the role of the executive branch, even though President Hoover had to sign the law in order for it to take effect. He supported the bill because it finally included a provision called Flexible Tariff Provision (FTP), which he had strongly advocated.

The FTP, which the Fordney-McCumber Tariff Act of 1922 first introduced, enabled the president and the Tariff Commission, an agency independent from Congress, to change tariff rates without congressional debate and approval. Through the FTP, the federal government could change tariff rates for single items at any time, in addition to the congressional general tariff revisions that occurred about every six years. The U.S. Constitution prescribes that only Congress should have power to set tariff rates. In this sense, the legalization of the FTP represented a revolutionary change in the history of American foreign trade. However, during the congressional debate of the 1930 act, a good deal of opposition arose to granting the president authority to change tariff rates. Analyzing the creation of the FTP can provide a different image of Hoover from the general impression that he was a staunch protectionist and that he played only a minor part in the passage of the act.

This study is not the first to note Hoover’s important role. Alfred Ecke’s 1995 overview of American trade policy briefly mentions Hoover’s interest in the FTP.Footnote ³ Among the few studies of the FTP, Richard Snyder (1973) argued that Hoover fought hard with the Senate to gain control of the FTP. Snyder, though, views Hoover as an adamant protectionist.Footnote ⁴ This article, while also emphasizing the president’s leadership, will demonstrate that through the FTP he wanted to create an objective and businesslike process for determining tariffs that would lead to moderate rates under presidential discretionary power.

PREVIOUS STUDIES

Early studies of the passage of the Smoot-Hawley Tariff Act have examined influences on Congress. Although not all of these deal thoroughly with the act, they do offer controversial explanations for its passage. Franklin Taussig (1931) argued that the passage and the form of high tariffs imposed on many items of the act resulted from traditional logrolling in both the House Committee on Ways and Means and the Senate Committee on Finance.Footnote ⁵ E. E. Schattschneider (1935), who studied the act thoroughly and carefully, contends that the actions of lobbyists and special interests that requested tariff protection were responsible for major provisions of the law. He argued that domestic producers who requested to raise tariffs controlled the passage of the act.Footnote ⁶ Joan Wilson (1971), influenced by Schattschneider’s model, points out that big business, exporters and importers had complaints about the government’s traditional high tariff policy, but their influence on Congress was comparatively small.Footnote ⁷ Robert Pastor (1980) insists that the 1930 Act was simply a consequence of party politics, because the Republican Party, which then dominated Congress, had long advocated a high-tariff policy, while the Democrats favored a low-tariff policy.Footnote ⁸

Since then, a controversial debate emphasizing either interest groups or party politics has continued. Barry Eichengreen (1989) concludes that an economic coalition of industrial and agricultural protectionists determined the passage of the 1930 Act.Footnote ⁹ To the contrary, Colleen Callahan, Judith McDonald and Anthony O’Brien (1994) insist that economic interests made little difference.Footnote ¹⁰ Richard Cupitt and Ecuel Elliot (1994) emphasize party politics as an explanatory variable, especially in the Senate.Footnote ¹¹ Douglas Irwin and Randall Kroszner (1996) conclude that special interests were significant by suggesting that a coalition can be identified among some industries.Footnote ¹² This article presents a new interpretation of the reasons for the passage of the 1930 Act.

DEVELOPMENT OF THE TARIFF COMMISSION: PROMOTED BY BUSINESS

When Herbert Hoover approved the Smoot-Hawley bill on June 15, 1930, he stated that he viewed his advocacy of the FTP as fitting with calls for reforming tariff policy during the past several decades. Supporters had included President Theodore Roosevelt and many leaders of industry.Footnote ¹³ Therefore, explaining the history of that reform movement in reference to the FTP is important to understanding the depth of its appeal to Hoover.

The FTP was based on three basic concepts. (1) An investigatory agency, independent of Congress and staffed by specialists with economic expertise, should be created. (2) The agency should conduct an objective and comparative investigation of the production costs of goods to adjust tariff rates. (3) Final authority over tariff rates should be vested in the president. Generally, business had promoted and led campaigns for such a tariff-related agency. While the third concept sparked much controversy in 1929–30, these concepts had gradually proved attractive to many as measures to eliminate time-consuming and irrational partisan politics from the process of setting tariffs.

Proposals for an investigatory agency first arose in the latter half of the nineteenth century. After the Civil War, a conviction that scientific investigation held the key to progress in solving America’s social, political, and economic problems took hold in academic circles. Since the end of the nineteenth century, progressives increasingly believed that an independent investigatory agency could reduce partisan politics in making economic policies. In politics this progressive movement, spreading from the local to the state and federal level, took the form of advocating appointed committees or commissions to study specific issues. Progressives insisted that recognized experts should deal with various matters, including protective tariffs, in an apolitical manner, based on a principle of efficiency and justice.Footnote ¹⁴

The Congress allowed the establishment of short-lived temporary investigatory agencies of tariff-related matters in 1865, 1882, 1888, and 1909. The first temporary Commission in 1865 focused on the issue of increasing tariff revenue in order to aid the federal government in meeting the expenses incurred during the Civil War. However, the chairman, David Wells, an economic journalist, began to argue that experts and not politicians should set tariff rates. He believed that the United States should decrease tariffs in order to encourage reciprocity abroad and widen its foreign markets. These suggestions faced hostility in Congress, which had not yet considered the development of foreign markets an urgent matter.Footnote ¹⁵

In the wake of the depression of the 1870s, businessmen wanted more influence over U.S. tariff policy and started a campaign to establish a tariff commission to reflect their views on tariffs. In 1877, Joseph Wharton, chairman of the Industrial League, which promoted tariff protection, suggested that Congress should consult with businessmen before revising tariff rates. Other business groups such as the American Iron & Steel Association supported his view. Leaders of various economic sectors, including manufacturing, commerce, and agriculture, insisted that tariffs should respond to the industrial needs of the United States and that the commission should accept businessmen as members. As a result, Congress established another temporary tariff commission in 1882 dominated by protectionist manufacturers.Footnote ¹⁶

In 1888, Congress created another temporary commission to investigate tariff-related matters in response both to public criticism of budgetary surpluses and to protectionists’ complaints that American production costs were higher than those in other countries. Carroll D. Wright, a statistician and the first commissioner of the U.S. Bureau of Labor Statistics from 1885 to 1905, advocated the principle of equalizing the costs of production through tariffs. Wright believed that obtaining facts through objective investigation would enable policymakers to decide just tariffs precisely calculated to compensate for the differences of production costs between the United States and foreign countries.Footnote ¹⁷

The campaign for a permanent tariff commission received a boost from new reciprocity provisions introduced in tariff acts during the 1890s. The reciprocity provisions aimed to expand foreign markets. The first reciprocity provision of the 1890 Tariff Act empowered the president to place penalty tariffs on certain duty-free tropical goods without debate and the approval of Congress when countries exporting these goods did not reciprocally decrease tariff rates on American products. The executive branch, especially Secretary of State James Blaine, pushed for this provision with the backing of business groups such as trade associations and local chambers of commerce.Footnote ¹⁸ Since the mid-1890s, the idea of reciprocity had been supported by national business organizations such as the National Association of Manufactures (NAM).Footnote ¹⁹

Business leaders soon realized the need for a permanent agency to implement reciprocal tariffs. Founded in 1895 by small manufacturers in the Midwest to promote exports, the NAM quickly became one of the largest nationwide business groups. After the 1894 Tariff Act repealed the provision for reciprocal tariffs, the NAM insisted on their restoration. The 1897 Tariff Act not only restored the reciprocity provision but also added other types of reciprocity provisions. One of them authorized the president to conclude treaties with other countries for more extended reciprocal relations by decreasing tariff rates within 20 percent on any articles imposed to the United States. Because these concessions had an impact on competing industries in the United States, the NAM began to receive complaints from members who would be adversely affected. The NAM responded by endorsing reciprocity treaties that would not injure any home industry.Footnote ²⁰

The NAM adopted resolutions in 1901, 1902, and 1904 to request the establishment of a reciprocity commission as a bureau of the proposed Department of Commerce and Industries to give information to Congress and the president for guidance in negotiating reciprocal trade agreements. In 1907, the NAM officially adopted a resolution favoring the creation of a permanent tariff commission, like the Interstate Commerce Commission (ICC), with semijudicial powers to summon witnesses. The NAM wanted the commission to promote foreign trade by enacting punitive or concessionary tariffs through reciprocal trade agreements and at the same time to protect home industries. In regard to the protective levels, the NAM explained in its resolution of 1901 that tariffs should only compensate firms for a higher cost of production and not permit excess profits.Footnote ²¹

The campaign by business groups for a tariff commission gathered steam in 1909, when Congress again considered tariff revision. In February, about 2,500 leaders representing 223 industrial, commercial, agricultural, and civic bodies gathered at Indianapolis, Indiana, for a National Tariff Commission Convention to confirm the necessity of creating a tariff commission to promote a statistical and scientific basis for tariff revision. The convention concluded that the government needed a permanent tariff commission to gather information to calculate appropriate tariff rates, but it should not have the power to fix them. Former President Theodore Roosevelt and President William Taft agreed with this stand.Footnote ²²

Supporters soon created the National Tariff Commission Association (NTCA) to campaign for the creation of a nonpartisan tariff commission. The association represented trade and commercial organizations with a membership of 85,000 scattered throughout the United States. Such demands from the business community for a permanent tariff commission bore fruit as a provision of the Payne-Aldrich Tariff Act enacted in 1909, although it did not include a permanent commission. The provision gave the president power to set maximum and minimum rates as a retaliatory feature and to employ such persons as may be required to secure information to assist him. The provision stated vaguely that a tariff board should assist the president in deciding maximum and minimum rates. Congress made an appropriation for the board in June 1910 as a result of the strenuous efforts of the NTCA.Footnote ²³

The business campaign for a permanent tariff commission continued. Maintaining a commitment to tariff protection for American capital and labor, the NAM reaffirmed its advocacy of a permanent tariff commission in 1909, 1912, 1913, and 1916.Footnote ²⁴ In the second decade of the twentieth century, the U.S. Chamber of Commerce (USCC) joined the campaign for a permanent tariff commission. The USCC, which was established in 1912 for the exchange of information about foreign markets between the executive branch and small and medium-sized companies, declared in its first conference of 1913 the need for a permanent investigatory agency to collect information on tariff-related matters. A vote conducted by members of the USCC in 1913 decided that a tariff commission should not set tariffs but serve as a fact-finding body to assist Congress and the president. The USCC argued in 1915 that an independent tariff commission would enhance the prosperity of the American economy because such a commission would help the economy respond to an unstable situation after the current Great War in Europe ended. The USCC also created a Tariff Commission League to strengthen its campaign for a commission. In 1916, the USCC, in cooperation with the NAM, urged Congress to create a tariff commission particularly in the view of trade adjustments that would necessarily follow the termination of the current European war.Footnote ²⁵

President Woodrow Wilson, a Democrat elected in 1912, at first opposed the creation of a tariff commission. He changed his mind, however, after he recognized the necessity of enlisting business in support of him after the losses of the Democratic Party in the mid-term election of 1914. Thus, a permanent tariff commission was first legalized under the Revenue Act of 1916 as a fact-finding agency to collect and give information on tariff matters to Congress and the president. The Tariff Commission continues its work today as the International Trade Commission (ITC), which was renamed in 1974. The president appoints the six members, but no more than three can come from the same political party.Footnote ²⁶

THE 1922 FTP

After the establishment of the Tariff Commission, business groups pushed for further reform through devising a policy of flexible tariff rates that the president could implement quickly. The Fordney-McCumber Tariff Act of 1922 first introduced a Flexible Tariff Provision. The role of the commission now extended to assist the president in deciding tariff rates. This change marked a crucial development because it allowed the president to set some tariffs, based on information provided by the Tariff Commission, without the approval of Congress. The commission could start an investigation of tariffs if requested to do so by the president and suggest appropriate rates. The president could then decide which rates to use.Footnote ²⁷ The 1922 FTP and the 1930 FTP were similar in introducing a new method of setting tariffs that would be controlled by the Tariff Commission and the president, who would have final authority. This new presidential power was a key point, on which President Hoover put his highest priority in the passage of the 1930 act.

The FTP largely originated from the ideas of Tariff Commissioner William Culbertson and the support of Secretary of Commerce Herbert Hoover.Footnote ²⁸ The original House bill of the 1922 act did not include the FTP. The Senate, however, revised the legislation on the advice of Culbertson.Footnote ²⁹ A progressive Republican, he had served on the Tariff Board during the presidency of William Taft and on the Tariff Commission under President Woodrow Wilson. Observing that tariff rates in congressional bills were higher than necessary, he came to doubt the effectiveness of the traditional tariff-making method in Congress. He believed that tariff rates should be readjusted just enough to protect American industry only if the production costs of American firms were higher than those of foreign countries.Footnote ³⁰ During Wilson’s presidency, Culbertson opposed the views of Franklin Taussig, chairman of the Tariff Commission, who favored retaining the power of Congress to raise or lower tariff rates. Culbertson believed that Congress should delegate its authority to the executive branch in order to make the setting of rates fairer, efficient, and responsive to economic conditions. After Taussig resigned from the commission in 1919, Culbertson worked hard to cooperate with the executive branch to accomplish reform in the procedure for setting tariffs.Footnote ³¹

In March 1921, as the newly elected president, Warren Harding, was about to appoint Culbertson again to the commission, Culbertson contacted Secretary Hoover in order to get support for his reforms, and Hoover responded favorably. On October 28, 1921, Culbertson sent Harding a memorandum outlining his proposal for a flexible tariff system. He urged passage of a new law with flexible and elastic tariffs so that rates could be adjusted to meet unusual and changing conditions that could not be accurately anticipated. He proposed, as well, expanding the powers of the Tariff Commission so that it could administer flexible provisions of the new tariff law. Impressed, Harding convened a conference at the White House on November 28, which was intended to discuss Culbertson’s proposals by Hoover, Senator Reed Smoot, Culbertson, and other five commissioners. Evidently enough of a consensus emerged to prompt Harding to issue a public statement on December 6 urging Congress to incorporate Culbertson’s ideas into a pending tariff bill. Hoover then actively committed himself to the project, as he suggested to Thomas Page, chairman of the commission, that tariff rates should account for changes in competitiveness between industries in the United States and competing countries.Footnote ³²

New strong supporters of Culbertson’s ideas joined in. One of them was Senator Irvine Lenroot, a Republican from Wisconsin, who consulted closely with Hoover on this issue. They both believed that appropriate tariff rates could be determined scientifically by a formula that would take into account changing world trade conditions. Hoover and Lenroot supported the use of a production-cost formula because they believed it would eventually lower tariffs. To protect the setting of tariff rates from political pressures, the Tariff Commission would have to assume more authority.Footnote ³³ The final bill, the Fordney-McCumber Act of 1922, reflected the ideas of Culbertson, Hoover, and Lenroot.Footnote ³⁴

The main flaw of the Fordney-McCumber Act lay in its failure to give the Tariff Commission the explicit power independent of the president to initiate investigations and recommendations regarding tariffs. Because President Harding held more sympathy for requests to raise tariffs than to lower them, he proved reluctant to grant the commission more leeway to act. While Culbertson argued that the commission was capable of pursuing investigations without executive guidance, Harding countered that the commission as a presidential agency should simply reflect the president’s policies.Footnote ³⁵ Lenroot and Hoover urged Harding to use the FTP more actively. Still, Harding’s policy did not change.Footnote ³⁶

After Harding’s death in August 1923, Culbertson hoped for a new attitude from the new president, Calvin Coolidge. However, Coolidge also did not want the commission to act independently. The White House soon eased Culbertson out of his post. After he managed to initiate an investigation into tariffs on sugar in 1924, the White House offered him a different position. Hoover advised Culbertson to leave the commission because Coolidge was even less interested in using the FTP than Harding was. Culbertson later accepted a diplomatic post.Footnote ³⁷ Hoover, though, would seek to implement Culbertson’s vision for tariff policy in the next overhaul of tariffs in 1930.

Meanwhile, business groups lobbied hard for the FTP. The National Foreign Trade Council (NFTC) ,whose members were drawn from the largest corporations and banks interested in foreign business, worked most actively for the passage of the 1922 FTP.Footnote ³⁸ The council believed that sustained prosperity in the United States depended on foreign trade, because domestic productive capacity substantially exceeded the requirements of the domestic market. The NFTC thought that the system for setting tariffs should be more flexible to maintain access to foreign markets by having the ability to threaten to raise tariffs quickly against any country discriminating against American products. The ability to lower tariffs rapidly could reward nations that did not impose barriers to American imports. The NFTC feared that as the American economy grew, more countries would begin to discriminate against American products.Footnote ³⁹

The NFTC supported the Tariff Commission as an investigatory agency to decide on an objective basis whether actions by foreign nations merited retaliation through higher tariffs. In 1918, the council proposed that Congress adopt the principle of flexible tariffs to assure the continuance of the favorable treatment that American exports had enjoyed before World War I. In 1919, the council backed the Tariff Commission’s recommendation for a flexible tariff as useful in trade negotiations with other nations. In 1920, the council declared that the American government should impose additional tariffs on imports from nations discriminating against U.S. trade in order to ensure equality of treatment from other countries. The NFTC, though, insisted that the FTP would in most circumstances help to lower tariffs by correcting excessive rates. The NFTC thought that moderate tariffs would help the United States ensure equal treatment from abroad.Footnote ⁴⁰

THE PASSAGE OF THE 1930 FTP

As mentioned previously, this article emphasizes the crucial role of President Herbert Hoover in bringing about and signing the Smoot-Hawley Tariff Act of 1930. While many historians and commentators have reviled this legislation as a notorious case of protectionism, Hoover’s interest in the bill sprang from different concerns. These centered on the empowerment of the Tariff Commission and the president to set tariffs independently of Congress and the use of the Flexible Tariff Provision to work toward lower tariff rates with trading partners, concerns of Hoover since the early 1920s. He abhorred the high tariffs mandated by the act. Indeed, in that respect it embodied the baleful effects of partisan politics that he wanted to eliminate from the process of setting tariff rates. Yet, he signed the act because it achieved his goal of creating a new process for determining tariff rates on a rational basis.

Soon after Hoover’s inauguration in January 1929, he called for a new tariff bill that would include a strengthening of the powers of the Tariff commission and the FTP. Delivering on his campaign promise to protect agriculture, on April 16 he urged Congress to consider tariff revisions limited to agriculture and other industries suffering from foreign competition as the result of changed economic conditions. He also suggested changes in a new tariff law that would enable the commission to conduct investigations more quickly. In other words, he emphasized that the 1922 FTP must be maintained and broadened.Footnote ⁴¹ While debates over tariff rates dominated much of the discussion, significant resistance to retaining the 1922 FTP emerged during the congressional debate. The opposition focused on one part of the 1922 FTP that gave the president final authority to decide tariff rates based on investigations by the Tariff Commission. Most Democrats criticized the 1922 FTP as an unconstitutional measure because it deprived Congress of its power to set all tariffs. Even though the platform of the Democratic Party in 1928 had abandoned its traditional stance and accepted the standard Republican emphasis on using tariffs to equalize foreign and domestic production costs, the platform asserted that the Tariff Commission should report to Congress and not the president. Republicans generally supported the expanded power of the executive branch, although some joined in the attack on the 1922 FTP. For example, Senator William Borah of Idaho joined Democrats in arguing that the FTP deprived Congress of its constitutional authority.Footnote ⁴²

Hoover responded by insisting that the FTP should be included. He was convinced that the FTP was absolutely essential to correct later unjust tariff rates set by Congress. The House presented relatively few problems. Dominated by an overwhelming majority of Republicans, the House voted for the continuance of the FTP in May 1929. The Senate, however, not only joined the House in seeking higher tariffs on a wide range of goods but also sought to severely weaken or even eliminate the FTP. When the Committee of the Senate reported the House bill with amendments of tariff rates on August 29, Hoover criticized some rates as being too high and insisted that his proposal for strengthening the Tariff Commission and the FTP should be included.Footnote ⁴³

The struggle between Hoover and the Senate persisted. Hoover warned that he would veto a new tariff bill unless it included provisions to strengthen the FTP and make it more effective. He repeatedly made this threat to legislators publicly and privately throughout the congressional debate. As criticism there of the FTP mounted, Hoover emphasized on September 24 that the Supreme Court had ruled that the FTP was constitutional when Democrats and Republican insurgents assailed the FTP. Hoover sent the following word, “No provision for the FTP, then no tariff bill.” He became increasingly convinced that there was little hope of securing a bill with fair tariff rates because of the sectional and group conflicts in Congress and the rates would have to be corrected later by the Tariff Commission. A coalition of Democrats and Republican insurgents attempted to fatally weaken the FTP in the Senate on October 2 by passing the “Simmons-Norris” amendment bill by 47 to 42. This amendment obliged the Tariff Commission to report results of an investigation to Congress, not to the president. The amendment, in substance, would deprive the president of power to make the ultimate decision about tariff rates. The amendment of course was far short of Hoover’s requirements. On October 5, he advised Republican leaders that when the bill was in conference they should add an adequate and reasonable FTP such as Hoover had proposed or he would veto the bill.Footnote ⁴⁴

Hoover continued to hold the line of the FTP despite growing pressure to abandon it. On October 30, he told a delegation from the Senate that his campaign promises should be carried out by giving adequate protection to agriculture and to the industries where economic changes demanded tariff assistance. At the same time, he emphasized that the delays in the Senate demonstrated the desirability of a real FTP in order that unjust rates could be promptly corrected by scientific investigation. On December 3, Hoover insisted again that the 1922 FTP should be preserved with the executive authority. His official statements stressed that the Tariff Commission’s recommendations should go to the president, not to the Congress, because Congress could not deal quickly and efficiently with changing specific tariffs. In the past, debate over revising the tariffs for just a single item had too frequently led to a long reexamination of all tariffs. In contrast, the commission and the president could promptly adjust tariff rates. Hoover warned Congress once more that he would reject a bill containing the Simmons-Norris amendment.

The debate continued into the spring. In late February 1930, Senator Joseph Grundy (R-Pa.) assailed Hoover’s views. He appealed to his colleagues to fight the president because Hoover supported more moderate protection, only limited tariff revisions, and the FTP. Grundy allied for the time being with a coalition of Democrats and Republican insurgents in his fight against a Tariff Commission armed with adequate flexible revision powers. Hoover then talked with Senate and House leaders in an effort to bring about a conclusion to the lengthy debate because of uncertainties it was creating in a business world already shocked by the stock market crash in late 1929. The Senate finally passed a tariff act by 53 to 31 on March 24 with greatly increased rates and the Simmons-Norris amendment.Footnote ⁴⁵

The House and Senate bills now went to conference. When the House and Senate began talks to reconcile their views on the FTP, Hoover argued firmly for the FTP and resumed his threats. During the debate in the House-Senate conference, the House voted against the Simmons-Norris amendment by a vote of 236 to 154 on May 3, and the Senate failed to adopt it with a tie vote of 42 to 42 on May 19. Then the conferees worked to find compromises that both the House and the Senate would accept. Hoover told Republican leaders to write an adequate FTP such as he had proposed earlier.

A congressional conference soon reached an agreement. The conferees suggested that the 1922 FTP should be retained, with the following restrictions on the power of the president: (1) The Commission could recommend raising or lowering tariff rates by 50 percent, but the president would have to approve or reject the recommendation. He would not have the leeway to modify the recommendation. (2) If the president did not act within sixty days, the commission could promulgate new tariff rates. Those regulations struck a balance between proponents and opponents of presidential power in setting tariffs and reflected great confidence in the Tariff Commission. Later, even the second provision was removed from the final legislation. The compromise in the conference represented a victory for Hoover by retaining the FTP and the authority of the president to set tariffs based on recommendations of the Tariff Commission. Hoover obtained nearly every point he had sought in the FTP.Footnote ⁴⁶

However, opposition remained strong. A Democratic-Republican coalition still fought against the conference measure in hopes of reviving the Simmons-Norris amendment. The passage of the bill, including the conference measure, depended on the wavering attitudes of two legislators, Grundy and David Reed, both fervent protectionists from Pennsylvania. These two senators withheld their support because they wanted higher tariffs on manufactured items. Hoover wanted a bill containing a strong FTP. Therefore, after the conference bill satisfied Hoover, he, together with Secretary of Treasury Andrew Mellon, approached Reed. Hoover and Mellon had agreed that tariff uncertainty during the extended debate had helped dampen business activity. After Hoover discussed the matter with Reed several times, he and Grundy decided to vote for the new tariff law. In explaining their decision, the two senators said that they wanted to reduce the uncertainty for businesses in making their plans. The tariff bill squeaked in the Senate by only two votes, 44 to 42, while it sailed through the House, 222 to 153.Footnote ⁴⁷

On June 15, 1930, when Hoover approved the bill, he insisted that an “outstanding step” of the 1930 act had been the reorganization of the largely inoperative FTP of 1922 into a form that should make it possible to secure prompt and scientific adjustment of serious inequities and inequalities that might prove to have been incorporated in the bill. This stance indicated that Hoover considered the 1930 FTP more important than whatever rates happened to be set by the 1930 act. Significantly, two years later Hoover cited the omission of the FTP as a major reason for vetoing the “Collier” tariff bill of May 1932 because the bill deprived the president of the ultimate discretionary power to change tariff rates—in substance, nullifying the FTP.Footnote ⁴⁸

Strong support within the business community for the FTP bolstered President Hoover’s belief in the FTP. Among business groups, the NAM worked most actively for the passage of the FTP during the congressional debate over the 1930 act. Since 1927, the NAM had declared that the Tariff Commission presented the only practical alternative to sporadic and unpredictable congressional revisions that created uncertainty for business enterprises. The NAM had then begun to urge the retention of the Tariff Commission, improvement of the quality of its personnel, and its closer cooperation with other branches of the government. James Emery, general counsel for the NAM, enumerated in 1929 the reasons for keeping the FTP under the control of the executive branch. First, general tariff revisions by Congress, which occurred about every six years in the last fifty years, were time-consuming. Second, tariffs needed to be adjusted more frequently. He suggested that the pace of changing tariffs every six years did not fit an increasingly competitive industrial economy. In its 1929 resolution, the NAM insisted on the validity of the executive’s adjustment of tariff rates with the aid of a qualified Tariff Commission, which would recommend tariffs based on comparative economic data rather than as a result of political deals, as so often happened in Congress.Footnote ⁴⁹

Testifying at Senate hearings, Emery further explained that the NAM was interested only in the administrative feature of the bill, such as the FTP, because the NAM represented a broad range of trades, sections, and manufacturers. There were seventy-four other associations of manufacturers and trades at both the state and local levels that authorized the NAM to represent them in support of retaining the FTP. The groups, he admitted, had different views about specific tariff rates according to their particular economic interests, but they all agreed that America had to have an effective system to protect the domestic market. The NAM thus accepted the authority of the executive to set tariffs.Footnote ⁵⁰ This support from the business community proved crucial in the final vote.

Two other major business groups opposed the FTP. The USCC believed that the Tariff Commission should only be an investigatory agency to report results of its studies to Congress and the president. Therefore, the USCC had not committed itself during the debate of the 1922 FTP because the role of the Tariff Commission was expanded to assist the president in deciding tariffs. In 1930, the USCC opposed the maintenance of the FTP.Footnote ⁵¹

The NFTC switched its stance by withholding support for the FTP in 1930 because members were disappointed that so few tariff rates fell. Under the presidencies of Harding and Coolidge, the Tariff Commission conducted forty-seven investigations for fifty-five articles. Although it recommended changes in the rates for thirty-eight articles, tariffs were lowered in just five cases.Footnote ⁵² As one representative from the National Council of American Importers and Traders (NCAIT) explained during the 1928 NFTC Convention: “I think it is generally admitted that this Section 315 [the 1922 FTP] has not worked well. . . . So far the action of the Commission has resulted almost invariably to the collection of higher duties. It has not functioned in the manner intended and expected by the advocates of the Flexible Section. Section 315 should be repealed and the making of rates of duty left with Congress.”Footnote ⁵³

HERBERT HOOVER’S ROLE

In brief, President Hoover played the most crucial role in the Smoot-Hawley Tariff Act by initiating deliberations on it, insisting on the FTP under presidential authority, and signing the final legislation. The parts that he cared about most—the Tariff Commission, the FTP, and the use of presidential authority to set tariffs—derived from his long-standing interest in the reform of the executive branch ever since he entered the cabinet as Secretary of Commerce in 1921. He wanted to foster a cooperative relationship between government and business that would lead to a more active and effective government that would preserve private initiative and individualism. For establishing such a private-led government, he stressed the participation in policymaking of specialists in the private sector and of national trade associations that had developed over the past thirty years.Footnote ⁵⁴

Hoover regarded commissions, committees, and conferences under the auspices of the executive branch as important fact-finding instruments and tried to make use of them as much as possible. When Hoover encountered a new problem, he always consulted with experts. During his seven and a half years as Secretary of Commerce, the Department of Commerce sponsored 343 study committees and 1,250 conferences, all of which published substantial reports based on statistical data. After becoming president, he continued this approach.Footnote ⁵⁵

However, Hoover did not invent the idea of a commission independent of Congress. Responding to Populists’ pressure, Congress first created an independent commission in 1887, the Interstate Commerce Commission (ICC), to regulate the nation’s railroads. Progressives supported the existence of an administrative agency outside the executive departments and Congress in the hope that it would remain independent of partisan political control. Progressives agreed that the operation of the federal government would improve if it could administer its affairs with businesslike efficiency. Meanwhile, in the private sector, the scientific management movement of Frederick W. Taylor also held up efficiency as an ideal.Footnote ⁵⁶

Trained as an engineer, Hoover believed in the goal of achieving efficiency and insisted on the elimination of wasteful practices in reforming the executive branch. As for tariff matters, he emphasized the FTP, which created a procedure to adjust tariff rates to efficient levels, high enough to protect domestic industries from unjust competition but low enough to avoid retaliatory tariffs abroad. Hoover thought that the emphasis of engineering on efficiency, which had helped make the United States an industrial power in the past few decades, could help solve social and political problems as well.Footnote ⁵⁷ Observing the new political influence of national trade associations that arose after World War I and lobbied successfully for higher tariffs, he sought to change their role. Through the FTP, business would provide data that the Tariff Commission could assess objectively. In 1927, the Department of Commerce under his leadership issued a report urging trade associations to cooperate with the Tariff Commission.Footnote ⁵⁸

Hoover wanted to strengthen direct contact between interested parties such as trade associations and the Tariff Commission under the ultimate tariff-setting authority of the president, in order to allow swift, efficient, and scientific adjustment of tariffs in accordance with rapidly changing economic conditions. In the passage of the 1930 act, he placed the most emphasis on the authority of the president to make the final decision on tariffs. According to Hoover’s view, if Congress had the final authority to set tariffs, past experience showed that they would be set too high. While supporting more private involvement in policymaking, he wanted expanded power for the executive branch in foreign trade policy to counterbalance that involvement.

The passage of the 1930 act of high tariff rates on many items seemed to reflect really a victory of not Hoover but Congress, because the majority Republican Party had committed itself to the principle of tariff protection. However, President Hoover managed to achieve a major success because of the inclusion of the FTP in the context of his leading the Republican Party, whose platform had adopted the principle of tariff protection. A veto would mean the refusal of his party to enact the legislation that he declared the country needed.Footnote ⁵⁹ Hoover felt compelled to reiterate his support for tariff protection as he strived to rally votes for the bill in the face of determined resistance from congressional Democrats. He was able to persuade some Republicans that the FTP under presidential authority would provide sufficient protection, and he received support from those who sincerely wanted a mechanism to determine fair tariff rates.

Although Hoover came under severe pressure to veto the bill because of the high tariffs it imposed on many items, he did sign it into law on June 17, 1930. By May, more than one thousand American economists, including professors and advisers to bankers, urged Hoover to veto the bill. Big business increasingly expressed opposition.Footnote ⁶⁰ Still, he signed the bill because he obtained nearly every point he had sought in the FTP, particularly presidential control of discretionary tariff revisions. He was not indifferent to the large rate increase. The high tariffs mandated by the bill dismayed him, but he judged that he had to concede that point. He sensed that, in the wake of the stock market crash that began in late 1929 and the subsequent economic troubles, pushing for lower tariffs would be difficult. He only had to concede to Congress the point of high tariffs, which he hoped would be temporary, in exchange for the inclusion of the FTP. He feared that if the bill failed after eighteen months of often acrimonious debate, he would lose his influence over tariff policy, and subsequent legislation might abandon entirely the FTP and the granting of authority to set tariffs to the president, goals for which he had fought over the past decade. If the tariff debate had continued into the next long session, it was expected that the opposition to the FTP might gain even greater power in the Senate and possibly in the House. Then Congress might well pass a tariff law even less to Hoover’s liking than the Smoot-Hawley bill.Footnote ⁶¹ Furthermore, as he stated when he signed the act, he believed that through the FTP he could gradually lower tariffs.Footnote ⁶²

Hoover’s decision to approve the Smoot-Hawley Tariff Act has received much criticism. Some scholars charge that he caved in to political pressure from his party and offered the FTP as an alibi for signing the act of new high tariffs to cover his lack of political courage. The FTP, though, was hardly an alibi. As the preceding analysis has made clear, he had long advocated proper use of the FTP since the early 1920s. Similarly, Hoover and those who voted for the 1930 act did not, as some observers argue, regard the FTP as a new solution to the Great Depression. Hoover called for a new tariff law, which would include the FTP, six months before the stock market crash of October 1929, and, as noted above, he had long backed the FTP. He believed that only the passage of the FTP would solve tariff matters by making it possible for the Tariff Commission and the president to correct tariff rates later.

In addition to the inclusion of the FTP, the 1930 act contained a provision with a new definition of production costs. The provision eased the Tariff Commission’s work because it allowed the substitution of custom invoice values when foreign costs were not readily ascertainable. Moreover, to assist the new commissioners, Congress appropriated funds for increases in the size of the staff, which numbered more than three hundred in 1931 compared with about two hundred throughout the previous decade. In practice, more investigations took place. The Tariff Commission’s record of accomplishment during the first few years after the passage of the 1930 act was substantially better than in the 1920s. Until November 30, 1932, the commission, under the 1930 FTP, implemented and made recommendations to the president on forty-five investigations covering eighty-four commodities. Tariff rates rose on fourteen commodities and fell on twenty; no changes occurred on fifty items. In only two years, Hoover had adjusted tariff rates on twice as many items as his predecessor, Calvin Coolidge, during his entire term.Footnote ⁶³

Overall, however, the results of the Tariff Commission and the FTP were disappointing. At a practical level, the difficulty that the commission encountered in gathering records of production costs of foreign goods induced doubts about its ability to determine tariff rates in an apolitical, scientific, and expeditious manner.Footnote ⁶⁴ The high tariffs on many items in the 1930 act might have caused tariff retaliation against the United States in many foreign countries.Footnote ⁶⁵ Moreover, the impact of the 1930 FTP was soon overshadowed by subsequent developments. As the Great Depression deepened and a new Democratic administration took control, Congress in 1934 passed a Reciprocal Trade Agreements Act (RTAA) to revive foreign trade. Aiming to expand U.S. exports, the RTAA authorized the president to change tariff rates (up to a limit of 50 percent of the existing rates) by concluding bilateral agreements with foreign countries, without having to obtain the ratification of Congress. By triggering a trend of decreasing U.S. tariff rates, the RTAA eclipsed the role of the FTP.Footnote ⁶⁶