[Austin Willard Wright]

Whether the debate over Smoot-Hawley caused the crash is a secondary issue. The primary issue is whether it turned a relatively mild recession into a full-scale depression and belong before 1980s most economists have accepted that is a truism. This is why FDR and later presidents finally junked Smoot-Hawley.

Why did trade increase after 1938? Here's a good reason. By this time, Secretary of State Cordell Hull had finally persuaded FDR to abandon Smoot-Hawley and replace it with the pro-free trade policy of making Most Favored Nation Treaties.

[rcocean]

Being curious I looked up the numbers. In 1948 GNP was $250 billion. Exports were $15 billion of which $5 billion was paid for directly or indirectly by Uncle Sam. Imports were $5 billion. Imports/Exports in 1938 were about $3 billion dollars each. Exports in 1948 only accounted for 1/15 of the US economy. By Comparison the US Federal budget for 1948 was $21 billion.

As you can see the idea that we went from depression to prosperity from 1938 to 1948 due to "Free Trade" is absurd. Exports went up by $10 billion while GNP went up from $100 billion to $250 billion. It also shows that exports were such a small percent of GNP that Smoot-Halley did not "cause" the depression or even make it worse.