in order to protectAmerican business. However these tariffs reached an all-time high in the 1920's and early 1930's. Starting with the Fordney-McCumber Act of 1922 and ending with the Hawley-Smoot Tariff of 1930, the United States increased many tariffs by 100% or more34. The effect of these tariffs was that Europeans were unable to sell their own goods in the United States in reasonable quantities. In the 1920's the United States was trying "to be the world's banker, food producer, and manufacturer, but to buy as little as possible from the world in return."35 This attempt to have a constantly favorable trade balance could not succeed for long. The United States maintained high trade barriers so as to protect American business, but if the United States would not buy from our European counterparts, then there was no way for them to buy from the Americans, or even to pay interest on U.S. loans. The weakness of the international economy certainly contributed to the Great Depression. Europe was reliant upon U.S. loans to buy U.S. goods, and the U.S. needed Europe to buy these goods to prosper. By 1929 10% of American gross national product went into exports36. When the foreign countries became no longer able to buy U.S. goods, U.S. exports fell 30% immediately. That $1.5 billion of foreign sales lost between 1929 to 1933 was fully one eighth of all lost American sales in the early years of the depression37.Mass speculation went on throughout the late 1920's. In 1929 alone, record volumes of 1,124,800,410 shares were traded on the New York Stock Exchange38. From early 1928 to September 1929 the Dow Jones Industrial Average rose from 191 to 38139. This sort of profit was irresistible to investors. Company earnings became of little interest; as long as stock prices continued to rise huge profits could be made. One such example is RCA Corporation, whose stock price leapt from 85 to 420 during 1928,even though it had not yet paid a single divid...
