The Harding Years

Intro | United States Tariff History | Setting the Stage | The Harding Years | Election of 1928 | Hearings & Proceedings | Aftermath | Lessons | References | Bibliography

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With the election of a Republican President, coupled with the subsequent Republican control of Congress and public outcry for Protectionism and self-sufficiency, a return to high tariffs was inevitable.

In 1921, hoping to provide temporary relief to farmers and the agricultural sector, the Emergency Tariff Act of 1921 was created. This tariff raised the tariffs on wheat, sugar, meat, wool and other agricultural products imported into the United States (9).

This Act was revised in 1922, with the creation of the Fordney-McCumber Tariff Act. This act did the following:

• Raised tariff rates to historical highs

• Granted the President the ability to raise or lower tariff rates by up to 50 percent on certain items

• Introduced the concept of the American Selling Price, which allowed the President to calculate the tariff based on the price of the American-made good, not that of the imported good. (10)

The Fordney-McCumber Act had a profound effect on the economy, leading to a period of steady growth between 1922 and 1928. By 1928, real GDP in the United States was 1.4 times larger than it was in 1913. Nevertheless, the agricultural sector of the United States was still struggling, experiencing stagnation, negative trade palances, and plunging profit margins (11).

Description

Source: Fratantuono, Michael. 'The Hawley Smoot Tariff Act of 1930' Exhibit 8

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Intro | United States Tariff History | Setting the Stage | The Harding Years | Election of 1928 | Hearings & Proceedings | Aftermath | Lessons | References | Bibliography