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HERBERT HOOVER

FRANKLIN D. ROOSEVELT

Smoot-Hawley Tariff

Nature:

The Smoot-Hawley Tariff was meant to create incentive for Americans to purchase American products rather than imports.

Once Europe (excluding Germany) had somewhat recovered from their pause in trade and internal production, American companies were watching their prices drop to what it was before. To help companies keep competitive prices, Hoover passed the tariff to raise the price on imports so as to have Americans turn to American goods.

Efficacy:

While its effects were felt almost immediately, it in actuality hurt America much more than help. In fact, while it is still in debate amongst some economists, the tariff is said to contribute to the severity and duration of the depression.

Emergency Banking Relief Act

Nature:

A reconstruction act meant to stabilize and rebuild confidence in the banking system. It was meant to allow for quick federal action in the event of a banking/economic crisis.

Efficacy:

Overall, it was a success. Before March 8, currency held privately had increased by $1.78 billion. By the end of March, however, after the banks reopened on March 13, two-thirds of this cash had been redeposited. Wall Street also benefitted from this act. On March 15, only 2 days after the banks were restored, the New York Stock Exchange recorded an increase of 15.34% in the stock- the largest one-day price increase in the last decade.

Agricultural Adjustment Administration (AAA)

Reconstruction Finance Corporation

Nature:

The program was meant to be a relief program that provided finance loans to large companies to help continue production, and slow unemployment and bankruptcies.

Efficacy:

Despite its initial success, the corporation by its very nature was self-destructive. It was meant to be transparent, and whenever money was borrowed, the amount and the name of the company was required to be published. This became a major problem, as it actually hindered trust in companies and therefore hurt the stock market. Also, if non-Federal Reserve banks borrowed, many of their customers would rush to withdrawals.

Nature:

An act meant to influence crop prices by paying farmers to create artificial scarcity of crop and food in order to drive up food prices.

Efficacy:

The Supreme Court determined that the AAA was unconstitutional, but even critics had to agree that it provided hope for farm communities. While it was in itself unsuccessful, doing little to end the Depression or the drought, the AAA provided a basis for several farm programs thereafter.