Editing Smoot–Hawley Tariff Act (section)

== After enactment ==
The tariffs initially appeared to be a success; according to historian [[Robert Sobel]], "Factory payrolls, construction contracts, and industrial production all increased sharply." However, larger economic problems loomed in the guise of weak banks. When the [[Creditanstalt]] of [[Austria]] failed in 1931, the global deficiencies of the Smoot–Hawley Tariff became apparent.<ref name="Sobel 1972" /> 

U.S. imports decreased 66% from $4.4 billion (1929) to $1.5 billion (1933), and exports decreased 61% from $5.4 billion to $2.1 billion. US gross national product fell from $103.1 billion in 1929 to $75.8 billion in 1931 and bottomed out at $55.6 billion in 1933.<ref>Bureau of the Census, ''Historical Statistics'' series F-1</ref> Imports from Europe decreased from a 1929 high of $1.3 billion, to $390 million in 1932. U.S. exports to Europe decreased from $2.3 billion in 1929 to $784 million in 1932. Overall, world trade decreased by some 66% between 1929 and 1934.<ref>{{cite book|url=http://future.state.gov/when/timeline/1921_timeline/smoot_tariff.html|title=Smoot–Hawley Tariff|series=U.S. Department of State|date=2003|isbn=0-8240-5367-2|archive-url=https://web.archive.org/web/20090312055958/http://future.state.gov/when/timeline/1921_timeline/smoot_tariff.html|archive-date=March 12, 2009|last1=Jones|first1=Joseph Marion|publisher=Garland Pub. }}</ref>

Unemployment was 8% in 1930 when the Smoot–Hawley Act was passed but the new law failed to lower it. The rate jumped to 16% in 1931 and to 25% in 1932–1933.<ref>{{Citation|author= U.S. Bureau of the Census|author2=Social Science Research Council|title=Historical Statistics of the United States, Colonial Times to 1957|location=Washington, DC|publisher=Govt. Print. Office| year=1960|page=70}}.</ref> There is some contention about whether this can necessarily be attributed to the tariff.{{sfn|Eckes|1995|p=113}}{{sfn|Irwin|1998|pp=332–333}} The [[Great Depression]] was already in motion before Smoot-Hawley, mainly due to financial instability, falling demand, and poor banking practices. However, the tariff worsened the crisis by shrinking global trade, hurting farmers, and reducing employment in export-dependent industries. Had it not passed, the Depression still would have occurred, but perhaps with less severity.

It was only during [[World War II]], when "the American economy expanded at an unprecedented rate",<ref>{{cite encyclopedia |last=Tassava |first=Christopher |chapter-url=http://eh.net/encyclopedia/the-american-economy-during-world-war-ii/ |article=The American Economy during World War II |encyclopedia=EH.Net Encyclopedia |editor-first=Robert |editor-last=Whaples |date=February 10, 2008}}</ref> that unemployment fell below 1930s levels.<ref>[[Bureau of Labor Statistics]], [http://herb.ashp.cuny.edu/items/show/1510 "Graph of U.S. Unemployment Rate, 1930–1945"], ''HERB: Resources for Teachers'', retrieved April 24, 2015.</ref> Imports in 1929 were only 4.2% of the U.S. GNP, and exports were only 5.0%. [[Monetarists]], such as [[Milton Friedman]], who emphasized the central role of the money supply in causing the depression, considered the Smoot–Hawley Act to be only a minor cause of the [[Great Depression in the United States]].<ref>{{cite book |first1=Milton |last1=Friedman |first2=Anna Jacobson |last2=Schwartz |title=A monetary history of the United States, 1867–1960 |date=1963 |page=342}}</ref>