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Because so many business leaders perceived the Depression as part of a natural business cycle, they offered traditional solutions to the problem — solutions that only made the Depression worse. Particularly disastrous was the passage in 1930 of the Smoot-Hawley Tariff, the highest levy in American history. An attempt to shore up the failing agricultural sector, the tariff led to retaliation from Europe and Latin America, further clogging world trade and destabilizing balance of payments. Business leaders, including Bernard Baruch, recommended balancing budgets and belt-tightening, which only furthered the deflationary spiral. A 1930 tax cut failed to stimulate the private sector, while it undermined federal revenues. A 1931 tax increase to balance the federal budget hit the private sector hard. Voluntary business associations continued to be threatened by antitrust laws and were, in any event, insufficient to stem the corrosion of an increasingly brutal market: competitive pressures in...
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This section contains 388 words (approx. 2 pages at 300 words per page) |
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