How Did The Great Depression Affect The Economy In The 1930s

President Herbert Hoover, like the majority of the elected Senate in 1928, was a Republican and believed a protective tariff was a “fundamental and essential principle of the economic life of [the] nation.” The 1920’s was characterized by economic prosperity and a boom in capitalism, but on October 24, 1929,seven months into Hoover’s four year term, protectionism would be tested by the stock market crash.
Prior to the crash, the US economy was considered to be in recession;“ a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” A depression is more severe than a recession and lasts through multiple business cycles. The Great Depression in the 1930s is synonymous with high unemployment, massive bank failures and a continuing nosedive in GDP. In response to the recession, Protectionism, a policy in which the competition from foreign trade is

Hoover himself said, “If we were not prosperous and able to buy, the rest of the world also would suffer.”Furthermore, the US ignored the advice of the League of Nations, which proposed a “tariff Truce,” In September 1929, the high tariffs of the Smoot-Hawley were protested by 23 trading partners of the United States, all of whom were members of the league. Canada, a historic trading partner of the United States who had recently reduced tariffs on imports, was infuriated by the US’s Tariffs. In response, Canada more than tripled their taxes on eggs imported from the US This resulted in the US’s exports of eggs dropping by Other countries followed suit, raising their own tariffs so that their goods could compete. Not only did this hurt American exports short term, it contributed to the collapse of world