protectionism
DESCRIPTION
Protectionism. Presented by Representatives of Duzowia. World Economic Conference. Held in Geneva in 1927 Determined that all nations would have to decrease tariffs on products in order for fair economic competition in the world market. Smooth- Hawley Tariff. 1930 - PowerPoint PPT PresentationTRANSCRIPT
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Protectionism
Presented byRepresentatives of
Duzowia
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World Economic Conference
• Held in Geneva in 1927• Determined that all nations would have to decrease tariffs
on products in order for fair economic competition in the world market
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Smooth- Hawley Tariff
• 1930• First introduced in the Spring • Took a year and a half to be passed• Countries protest against it• Foreigners slowly stop buying US products• Unemployment goes up (b/c jobs lost)• Stores, banks, factories close• Agricultural industries were handicapped by the foreign
trade barriers impose b/c of tariff
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Smooth- Hawley Tariff (cont.)
• Unemployment goes up (b/c jobs lost)• Stores, banks, factories close• Agricultural industries were handicapped by the foreign
trade bariers impose b/c of tariff• Increase in prices → Avg. American became poorer.• Turned a bad reccesion into The Great Depression
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Underwood- Simmons Tariff
• Named after Oscar W. Underwoodo He was a U.S. congress man from 1895-1927
• Underwood Tariff Act signed in 1913o The tariff sought to promote international trade, but also
to make up for the loss of revenue, it also enforced the first (small) federal income tax.
o The tariff created a reduction in tariff (taxes), and allowed manufacturers to create more products allowing for more international competition.
o The loss of revenue created because of al the extremly low tariffs placed on items during the 1913's was a general cause to great depression.
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Fordney McCumber Tariff
• Opposed by numerous democratso Claimed it would raise revenue- but republicans were
no concerned• Creator of the tariff blamed the recession irrelevant duty
rates fom the Underwood- Simons Tariff• Imposed a 50 cent tax on wheat• Average duty on all imports was 14 percent Average on
dutiable imports was 38.5 percent • Agricultural prices dropped in the U.S.• Added to the decline of international trade
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The Gold Standard
• Def = monetary standard under which the basic unit of currency is defined by stated queantity of gold.
• It was suspending gold convertibility (or devaluing the currency in gold terms)
• Great Britain depleting gold reserves• In September 1931, the Bank of England stopped
exchanging pound notes for gold & the pound was floated on foreign exchange markets.
• This partly explains why the experience and length of the depression differed between national economies.
• Like inflation
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Causes of Inflation?
1. The supply of money goes up. 2. The supply of goods goes down. 3. Demand for money goes down. 4. Demand for goods goes up.
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The Beggar-thy-Neighbor policy
This was a protectionist policy with a goal to increase demand for a country's exports (by devaluing the currency and making a country's goods less expensive in other countries) while also reducing demand for the countries imports (by making them more expensive through the tariff barriers).
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Protectionism: A cause of war
• Tariff acts imposed by other nations as well• Improving own country at the expense of others
• Imports and exports decline• 1929-1934: World trade declined by 66% overall
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Sources
• http://www.voxeu.org/index.php?q=node/3280
• http://www.gusmorino.com/pag3/greatdepression/
• http://eh.net/encyclopedia/article/kaplan.fordney
• Investopedia.com
• http://uspolitics.about.com/od/economy/tp/what_caused_great_depression.htm
• http://www.economicthought.net/wp-content/uploads/2009/12/smoot-hawley-veto.jpg
• http://www.economicthought.net/2009/12/did-protectionism-cause-the-great-depression/