Tag Archives: Trade

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“And the Echo Answers: Where!”

The Agricultural Marketing Act of 1929 proved to be detrimental to the American agricultural industry. While the bill began with good intentions to help farmers, abuse soon became rampant and the U.S. Federal Government, specifically the Federal Farm Board, couldn’t keep up with increasing crop production. The 1929 law soon proved to be too much for the Government to handle when it came to subsidizing farmers across the United States.

This cartoon, titled “And Echo Answers: ‘Where!’”, by cartoonist John Knott, first appeared in the Dallas Morning Newson June 26, 1930. The cartoon, which was published during the early months of the infamous Great Depression, was in response to the Federal Farm Board. The Board, which was within the Herbert Hoover administration, was unable to rectify the declining markets for cotton and wheat. The two crops had fallen to a 7-year low just one year after enacting the Farm Bill. When Black Tuesday hit in 1929, the falling stock in cotton and wheat excelled at a rapid pace.

In the cartoon, we see a drowning farmer with “wheat” and “cotton” being “flooded” by low prices. It is raining heavily, signaling that the prices will seemingly decrease and the product demand will suffer even more. The farmer is asking where the relief for farms is because President Hoover, Congress and the Farm Board were largely unable to help them.

That is not to say, however, that President Hoover and Washington DC didn’t try. Several months before the market crashed, Hoover signed the “Agricultural Marketing Act of 1929.” The law was meant to address falling prices by allowing the Federal Government to purchase, sell and store excess crops from farmers and lend money to farmers in need. The revolving money allocated, approximately $150,000,000 , was intended to be loaned to farmers for buying seed, food and livestock to help maintain their livelihood should they fall on hard times (Joy).

Hoover didn’t necessarily intend to lend the money to farmers directly as he feared this would create dependence on the government. Instead, the Federal Farm Board lent money to co-operatives. Co-Operatives were established to be groups of farmers who pooled their resources together (Sibley 453).

The law, however, had a large loophole. When stocks were being dumped at alarming rates at the end of 1929 and beginning of 1930, the Federal Farm Board was unable to keep up with production (Sibley 454). Farmers were aware that the law never put in place a stipulation on how much the government would be forced to buy from them. Therefore, with no production limit, farmers overproduced to ensure that they would be paid. Farmers across the country, who still needed to provide for themselves, knew if they couldn’t see their crops privately, the government would still cut them a check. The law was designed specifically for a prosperous economy, not a failing one (Sibley 456).

Foreign trade was also declining across the globe due to the effects of the 1929 Stock Market crash. The government had to deal with the excess production issue domestically. While the government did have the right to sell the crops that they had bought, consumer spending in the United States was also in a steep decline. As well, wheat likely suffered due to Prohibition, the ban on manufacturing and sale of recreational alcohol. Eventually, the Farm Board ran out of money and the program had to be abolished.

One of the other contributing factors to economic decline was the Smoot-Hawley Tariff Act, enacted in 1930. The legislation put forward was an attempt to keep American farmers afloat and decrease foreign trade competitors during the agricultural issues during the end of the 1920’s (Riggs 1219). This tariff raised import taxes by approximately 20 percent and spiraled into an international trade war. This trade war was considered to be one of the leading factors that spiraled America into the Great Depression, all while decreasing trade by 66 percent within a five year period of its enactment (Riggs 1219).

Along with a declining import market, this also lead to declining export from the US agricultural industry. When Smoot-Hawley was actually signed into law, Great Britain, Canada and France – among others – immediately reduced exports. This subsequently negated anticipated gains, sales, revenues and in the end, profits (Beaudreau 300).

The Dust Bowl, which occurred during the mid-late 1930s, was also a problem that came later. It is believed to have been caused by years of low rainfall and unusually high temperatures (Schubert 1856). The combination of the poor farm conditions prior to the Agricultural Marketing Act, the onset of the great depression and the lack of trade caused by the Smoot-Hawley Tariff Act led to an unimaginable crisis. Farmers likely didn’t expect agricultural economy to get worse than it was in 1929, but it did within less than a decade (Schubert 1856).

The humor element in Knott’s cartoon is evoked using “Where’s farm relief?” which is asked by the farmer who is drowning. As well, the title draws attention for its use of an “echo answer.” An echo answer is when the verb in a question is restated, or echoed, in the response. The Depression era farmers were consistently asking “Where is farm relief?”. For most, there were no answer and the farmers echoed their anger as if to say “Yeah! WHERE is farm relief?”

While farmers were aware of the passage of the Agricultural Marketing Act of 1929, they were seemingly unaware at the massive failure occurring. As recently as 2008, agriculture continues to be a flaw in Government regulation due to overproduction and falling trade. The 16 farm bills that have been passed between 1929 and 2008 are a continued cyclical of an ongoing agricultural problem.

By: David Rubin

Works Cited

Beaudreau, B.C. Int Adv Econ Res (2017) 23: 295. https://doi.org/10.1007/s11294-017-9642-z

Joy, Mark S. “Agricultural Marketing Act of 1929.” The 1920s in America, edited by Carl Rollyson, Salem, 2012. Salem Online.

Knott, John. “And Echo Answers: ‘Where!”.” Dallas Morning News, 29 June 1930.

McElvaine, Robert S. Encyclopedia of the Great Depression. Gale, Cengage Learning, 2004. Gale Virtual Reference Library. EBSCOhost, ezproxy.lib.utexas.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=100381&site=ehost-live.

Schubert, Siegfried D., et al. “On the Cause of the 1930s Dust Bowl.” Science, vol. 303, no. 5665, 2004, pp. 1855–1859. JSTOR, JSTOR, www.jstor.org/stable/3836515.

Sibley, Katherine A. S. “The Worsening of the Great Depression.” John Wiley & Sons, Inc, Hoboken, NJ, 2014.

“Smoot-Hawley Tariff Act (1930).” Gale Encyclopedia of U.S. Economic History, edited by Thomas Riggs, 2nd ed., vol. 3, Gale, 2015, p. 1219. Gale Virtual Reference Library, http://link.galegroup.com/apps/doc/CX3611000828/GVRL?u=txshracd2598&sid=GVRL&xid=117ab699. Accessed 16 Apr. 2018.

Blind Politics

politicalcartoon2-lively

Trump’s “Foreign” Policy is a cartoon that seeks to map out some of the ideas that Donald Trump has had about other nations. In the cartoon, Trump is explaining his foreign policy, which includes labels like “RAPISTS” on Mexico, “OUR PAL PUTIN” on Russia, and “DROP BOMB HERE?” in the middle east. All of these labels are references to things that Trump has said about these countries before, and all of them point toward the fact that Trump thinks about the rest of the world in an ethnocentric way, influencing all of his decisions on policy. One policy in particular that Trump is especially vocal about is his policy to keep low-skill manufacturing jobs in the U.S. by putting tariffs on imported goods (Rich). Although Donald Trump seeks to boost the success of American companies by cutting America off from the rest of the world, his policies may only harm American industries like what happened during the Great Depression.

Donald Trump’s motives in his economic policies are benign on a surface level. According to him, one of the biggest problems with our country is that industries are moving production plants out of America since labor is cheaper in other countries, and then these companies are distributing their goods in the U.S. without having to pay taxes for imports. In this way America is losing both low-skill manufacturing jobs and tax revenue from tariffs on foreign-made goods. His policy is to prevent or discourage companies from doing this by putting taxes on their imports into the U.S.

Trump has repeatedly vowed to impose high tariffs – or the threat of high tariffs – to bully American companies into keeping jobs in the United States. His favorite example is Ford Motor Co., which plans to build a massive plant in Mexico. Trump has said that before he takes office he will persuade Ford to change course by threatening to charge the company a 35 percent tax on cars imported back into the United States (Robert).

This policy is a bit more feasible than many of his other policies, but his no-compromise attitude and business background may cause him to force companies to decide between selling to America or to the rest of the world.

So what’s been interesting about Trump is he has really appealed to this older sense of nationalism as opposed to modern American conservatism. He criticizes outsourcing of jobs to other countries, things like that. So that’s his economic point of view. Then you throw in things on immigration – the Buckleyan conservatives are open to skills-based immigration. Let’s bring the best and brightest from around the world to America. The  view is that those individuals are a threat to the people who live here now, and we should only bring them in very, very limited numbers. (Robert)

The kind of America that Trump believes in is a kind of America that is self-sustaining, isolated, and free of foreign influence without benefit. Putting massive tariffs on imported goods discourages trade and encourages consumers to buy domestic goods, but trying to force this has never worked.

Trump is interested in running the country like a business. He seeks to be the CEO instead of the diplomatic leader. This comes into play when he talks about NATO and relations with Japan. “If we’re attacked, Japan doesn’t have to do anything. They can sit home and watch Sony television… They have to pay… It’s got to be a two-way street” (Henderson). Trump is talking about the Treaty of Mutual Cooperation and Security signed in 1960. This treaty requires both nations to defend each other in case of an attack, but article 9 of the treaty stops Japan from coming to the aid of the U.S. in the event of an attack. This treaty was made since “alliance with Japan is crucial for America’s Asia-Pacific strategy and security,” (Henderson) but Trump is instead looking at this alliance as a business opportunity. This goes back to the ethnocentric ideas that Trump has. It is a privilege to use the best military in the world, so other people have to pay for it, simple as that. The only problem is; it is not as simple as that. “Mr. Trump regards treaties with other countries as contracts that needed to be reviewed to see whether they benefited Americans” (Rich). Concerns that are rising about Trump’s relations with other countries are very similar to the concerns brought about by the Smoot-Hawley Tariff. This tariff, passed by Herbert Hoover during the Great Depression, started global trade wars that became detrimental to both American and world economies. If Trump seriously gives up an alliance with the Japanese for lack of profit, he will inevitably set off a chain reaction of instability in Asia, that could spread even further. An alliance with Japan is necessary not only for peace between nations, but also for trade. Donald Trump is trying to look out for his own country, but he is doing it through an ethnocentric lens. Doing this has led to mistakes before, such as when Franklin Delano Roosevelt passed a 42 percent tariff on Japanese cotton in 1936 in hopes of stimulating the American textile economy. This action was later referred to as the “cotton blunder” because of the backfire it caused; Japan responded to this tariff with a counter-tariff and a threat to trade with other nations instead of the U.S.

There are times when being a businessman is useful, but being able to balance this skill with good diplomacy is more important for the President of the United States. Because Donald Trump sees things through an ethnocentric viewpoint, he fails to recognize that benefitting other nations through alliances and trade agreements can be good.

Bibliography

Henderson, Barney. “Donald Trump Savages Japan, Saying All They Will Do Is ‘watch Sony TVs’ If US Is Attacked and Threatening to ‘walk’ Away from Treaty.” The Telegraph [UK] 5 Aug. 2016: 1+. Print.

Johnson, Sean Sullivan;Jenna. “Trump ramps up rhetoric on trade.” The Washington Post. (July 1, 2016 Friday ): 1348 words. LexisNexis Academic. Web. Date Accessed: 2016/11/15.

Rich, Motoko. “Abe to Meet Trump to Press Japan’s Case on Security and Trade.” The New York Times 11 Nov. 2016: 1+. Print.

Robert, Siegel. “Nationalism V. Conservatism: What Trump’s Rise Means For The GOP.” All Things Considered (NPR) (2016): Newspaper Source. Web. 24 Oct. 2016.

“Trump’s protectionist rhetoric worries Chinese.” Global Times (China). (March 17, 2016 Thursday): 817 words. LexisNexis Academic. Web. Date Accessed: 2016/10/24.

Roosevelt’s Cotton Tariff

A good customer threatens to walk out

A Good Customer Threatens to Walk Out is a political cartoon by John Knott seeking to give immediacy and perspective to the problem of Franklin Delano Roosevelt’s new tariff on cotton goods during a fragile time in the history of the United States of America: The Great Depression. The cartoon depicts the two parties affected by the tariff – The Japanese and American textile departments. Although the “Raw Cotton for Export” is plentiful, and “Japan’s Textile Industry” is readily available, trade cannot occur because of the piece of paper that is sitting between the Japanese and American characters – the tariff on Japan’s cotton goods. The editorial accompanying this cartoon, “Cotton Blunder,” tells the story that explains the visible tension in the scene. Effective June 20th, 1936, President Roosevelt decided to raise taxes on Japanese cotton by 42 per cent. “The new tariff action will give [Japan] an excuse to retaliate by buying less raw cotton from America and more from other countries” (“Cotton Blunder” 9). Although Roosevelt was trying to help American textile companies by placing a tariff on Japanese imported textiles, it only angered Japan and threatened to perpetuate the Great Depression even further due to its implications.

After the devastating stock market crash of 1929, America’s economy had started a seemingly unstoppable downward spiral. Herbert Hoover was the standing president at the time, and although it was not his fault the American economy had crashed, it was his fault it had gotten worse. One of the worst decisions he made as president was passing the notorious “Smoot-Hawley” Tariff Act which imposed 20,000 record-high taxes on imported goods. As if facing increased inflation and skyrocketing prices for common goods was not bad enough, now people were expected to pay extra money for foreign goods (Henderson). Though it was supposed to stimulate domestic economy, it only closed the metaphorical Pandora’s box of American economics before hope could escape. This tariff hurt other nations’ economies as well, since the U.S. was previously a prominent trade partner for many countries. Now, however, their goods were not selling in the U.S. so the immediate reaction from affected countries was to enact tariffs of their own in response. Consequentially, the “Smoot-Hawley” Tariff Act set off a chain of trade blockades in the global marketplace until the world had become divided into economic blocks; effectively making the Great Depression a worldwide event.

The “Smoot-Hawley” Tariff Act was not only the downfall of the Herbert Hoover administration; it was also a catalyst for the rise of the Franklin Delano Roosevelt administration. In his campaign for president, FDR told the American people that he would lower tariffs during his presidency. True to his word, after he was elected, FDR passed the Reciprocal Trade Agreements Act in 1934. (Koyama) This act allowed Roosevelt to negotiate reciprocal trade agreements with other nations. However, in 1936, Roosevelt was faced with a dilemma: Northern American textile companies were pushing for government intervention in their competition with the increasingly successful Japanese textile market. “The immediate effects of this tremendous increase in imports from Japan, irrespective of the relation of their total volume to the total American production and consumption, were the ever-present threat to the American price structure and the resultant uncertainty and instability which had marked the American market since the influx began” (Murchison 273). But as wary as Roosevelt was about this problem of a weakened domestic industry, he was also reserved about implementing tariffs. He sought a gentleman’s agreement with Japan to set a quota that would limit shipments to about 45,000,000 square yards of cotton annually in order to regulate the influx of foreign goods. Unfortunately, talks for this agreement suddenly collapsed in May, and as a result, Roosevelt passed a 42% tariff on Japanese cotton goods.

Textile interests expressed satisfaction today over the president’s proclamation raising tariff walls in an effort to halt a sharp increase in shipments of cotton cloth from Japan to this country. President Roosevelt acted after the tariff commission reported importations of Japanese cotton goods rose rapidly during the first quarter of this year following failure to effect a “gentlemen’s agreement” with the island empire to restrict cotton textile exports to the United States. By proclamation issued yesterday under the 1930 flexible tariff act, the president increased tariffs approximately 42%, effective June 20. The higher rates will apply to the types of cotton cloth of which Japan supplies about 90% of this country’s imports, the remainder coming from Great Britain and Switzerland. The proclamation followed recommendations of the tariff commission, which investigated costs of domestic and foreign cotton cloths last year. (Tariff Hiked on Japanese Cotton Goods)

This article came out about the same time that the Dallas Morning News editorial came out. As Knott’s cartoon points out, southern cotton producers and middle men had benefitted from Japan’s increasing presence in the marketplace since Japan bought raw cotton from American manufacturers; a fact overlooked by the Roosevelt administration when making the decision to implant the tariff. In trying to stimulate the northern cotton textile companies, he effectively killed southern ones. This wasn’t the only problem Roosevelt now faced; he had also started a trade war with the Japanese. There are two ways they could retaliate now; either by implementing a counter-tariff on American goods in Japan, or by simply halting trade with the U.S. therefore Japan appears to be an unhappy customer in the cartoon, verbally threatening to take his trading business elsewhere. A frightened Uncle Sam is seen to the right, frantically asking for someone to call for Mr. Hull, the current secretary of state. After this cartoon was published, it was Mr. Hull that, with cooperation from the Japanese Embassy at Washington, could peacefully end this potentially disastrous tariff (Woolner).

This cartoon is comedic due to its use of visual humor. The Japanese man appears angry, slamming his fist on the counter, anyone’s natural response upon learning that they have been betrayed. The way the man is drawn is also a source of humor, since features like big teeth and large, circular glasses give a stereotypical American view of the Japanese at that time.

Franklin Delano Roosevelt made a big mistake by raising tariffs; a mistake that he should have avoided after seeing the negative effects raising tariffs had on the country under Herbert Hoover’s administration. He would have started a trade war with Japan and worsened the Great Depression if not for the efforts of the secretary of state at that time, Cordell Hull. In the end, Japan and America made a compromise in trade and America survived this “cotton blunder.” The lesson learned was that what may be a good idea in theory can backfire when a president’s vision fails to reach further than his own borders.

Bibliography

Balio, Tino. “Surviving the Great Depression.” Grand Design: Hollywood as a Modern Business Enterprise, 1930-1939. Ed. Charles Harpole. Vol. 5. New York: Charles Scribner’s Sons, 1993. 13-36. History of the American Cinema 5. Gale Virtual Reference Library. Web. 24 Oct. 2016.

Berglund, Abraham. “The Tariff Act of 1930.” The American Economic Review, vol. 20, no. 3, 1930, pp. 467–479.

“Cotton Blunder.” The Dallas Morning News 26 May 1936: 2. Print.

Henderson, David R. “Hoover’s Economic Policies.” The Concise Encyclopedia of Economics. Indianapolis, IN: Liberty Fund, 2008. Print.

Koyama, Kumiko. “The Passage of the Smoot-Hawley Tariff Act: Why Did the President Sign the Bill?” Journal of Policy History 21.2 (2009): 163–186. Web.

Murchison, Claudius T. “American-Japanese Cotton Goods Agreement.” Journal of Marketing, vol. 2, no. 4, 1938, pp. 272–277.

“Tariff Hiked On Japanese Goods.” Newspapers.com. The Lincoln Star, n.d. Web. 24 Oct. 2016.

Woolner, David B. “Hull, Cordell.” Encyclopedia of the Great Depression. Ed. Robert S. McElvaine. Vol. 1. New York: Macmillan Reference USA, 2004. 485-486. Gale Virtual Reference Library. Web. 24 Oct. 2016.

Zeiler, Thomas W. “Tariff Policy.” Encyclopedia of American Foreign Policy. Ed. Richard Dean Burns, Alexander DeConde, and Fredrik Logevall. 2nd ed. Vol. 3. New York: Charles Scribner’s Sons, 2002. 531-546. Gale Virtual Reference Library. Web. 24 Oct. 2016.

Tea for Two

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John Francis Knott – November 20, 1933

The political cartoon as viewed above is a direct reference to the sudden change in decision by Russia to eagerly collaborate in diplomatic relations with America. In order to understand the humor within the image, one must be aware of the historical evidence of the October Revolution (also commonly known as Red October) of 1917.

Vladimir Lennon, Leon Trotsky, and other Bolshevik Party members let the October Revolution in hopes of creating what is now known as the basis of Soviet Russia (Trotsky).  Soon after the removal of Russia’s government and installation of the new, they refused to honor their debts to the United States as well as seize American property located in Russia (US Department of State).  For the subsequent 17 years, America, as well as other foreign countries refused to interact with or recognize Russia as a country until years later. America also became the last Western country to identify Russia as a country. Meanwhile, Russia continued what it had been doing before the new Soviet government took over which was continue trade relations and act as if nothing ever happened, after all, what happened in Russia was not a problem the United States had to handle.  In the early-mid 20th century, the United States was well-known to steer clear of intervening in the issues of other countries unless provoked by attack. Otherwise, The U.S. only focused on its own internal problems.

The political cartoon is accompanied with the article titled, “Normal Relations Resumed” which gives a semi-bias opinion of the situation.  While the information is presented in a factual and objective manner, the author uses some words that indicate favoritism in one direction. For example, Knott adds in a few adjectives such as “great” before “Nation” when describing the importance of Russia being on friendly terms with America.  Also, at points, the author bears his excitement through his choice of words: “renewed once again the friendly relations that had existed for so long between the United States and Russia” (Knott).

Throughout the article, there is an indication of opinion on how the author praises Roosevelt’s action for “recognizing Russia” (Knott). One can easily acknowledge the author’s support for Roosevelt who lists all the pros of becoming in good terms with Russia, but the risks are not mentioned.  The picture mirrors this idea through Uncle Sam and Joseph Stalin.

The humor found in the cartoon itself is a satirical reference to the situation on how both countries see each other once they decided to have diplomatic relations.  The two drinking tea is a symbolism for friendship as its common to invite someone over for a drink, lunch, dinner, etc., when the two are old friends or wanting to get to know one another.  The people displayed on the picture are not so much a reference to the historical figures, but how the people of both countries reacted in such a friendly way towards each other in the aftermath.

It is important to note their physical appearances and gestures such as the certainty in their direct eye contact with one another.  Uncle Sam is leaning forward smiling with his tea cup raised almost as if he is about to give a toast.  Stalin, however, is much more stiff and it is uncertain whether he is smiling. This reflects the author’s perspective where he places much emphasis on how Americans see the new relationship (optimistic), but he fails to mention how Russia feels about America. Thus in the art he is uncertain how to portray Stalin (again, representation of Russia) and thus gives him a stiff pose that can be perceived in different ways.

Overall the scene depicts the two countries in the form of men who are drawn as carefree characters considerate and compassionate to one another. It makes fun of the fact that the countries can seem to be oblivious of the past and willing to let bygones be bygones.

Works Cited:

BUDNITSKII, OLEG. “October Manifesto.” Encyclopedia of Russian History. Ed. James R. Millar. Vol. 3. New York: Macmillan Reference USA, 2004. 1087-1088. Gale Virtual Reference Library. Web. 30 Nov. 2014.

Knott, John Francis. “Normal Relations Resumed.” Dallas Morning News[Dallas] 20 Nov. 1933: 2. Infoweb.newsbank. Web. 21 Oct. 2014.

RABINOWITCH, ALEXANDER. “October Revolution.” Encyclopedia of Russian History. Ed. James R. Millar. Vol. 3. New York: Macmillan Reference USA, 2004. 1088-1096. Gale Virtual Reference Library. Web. 30 Nov. 2014.

RABINOWITCH, ALEXANDER. “October Revolution.” Encyclopedia of Russian History. Ed. James R. Millar. Vol. 3. New York: Macmillan Reference USA, 2004. 1088-1096. Gale Virtual Reference Library. Web. 30 Nov. 2014.

“Trotsky, Leon.” International Encyclopedia of the Social Sciences. Ed. David L. Sills. Vol. 16. New York: Macmillan, 1968. 155-158. Gale Virtual Reference Library. Web. 30 Nov. 2014.

United States. Government. Historian. Recognition of the Soviet Union, 1933 – 1921–1936 – Milestones – Office of the Historian. N.p., n.d. Web. 20 Nov. 2014.