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Based on your original post, you believe restricting trade caused the decline in the market...IE imposition of tariffs. This is not true. President Hoover wanted a rather flexible tariff-one that could react to market conditions. He was opposed in the Senate, by a bi-partisan group who supported agriculture. However, both believed in restricting trade. The market rose when it looked like Hoover would prevail and declined when it looked like he would fail.

You could say, in truth,on June 9th and 10th the market declined upon the expectation of President Hoover signing Smoot-Hawley. This would be true and is backed up by data. What you can not conclude however, is that it was the trade restriction aspects of the bill that caused the decline because the street favored President Hoover’s bill which restricted trade also. the market had actually been up when it looked like President Hoover’s trade bill would be implemented. Thus those who claim the DOW declined because the notion of tariffs was somehow repugnant to the market of the 1930’s are incorrect. They didn’t like this particular version of the legislation (both restricted trade), and one can reasonably conclude that had President Hoover’s version been adopted the Dow would not have declined even though it did impose tariffs.

The free traders who use the graph you provided to ‘prove’ that restricting trade caused the DOW to decline in June 1930 are wrong. If one of my students had studied this issue and proclaimed that the implementation of tariffs caused the June decline in stocks and failed to notice the Smoot-Hawley battle in the senate-not to mention the market reaction-up and down beginning in January 1929 ...I would think they had not been thorough in their research and had reached unwarranted (by the data available)conclusions.

Trade was 6% of GNP in 1930-very limited. Those who argue that trade restrictions caused or prolonged the depression refuse to consider this...one of those pesky variables overlooked by the free trade crowd. I have looked at all sorts of charts, graphs and data about this...I see no reason to believe trade issues had anything to do with the cause or length of the depression.I view it as one giant excuse from the financial community. Wall Street reckless trading and the Fed’s monetary policy damaged the economy of the 1930’s and caused the depression. I will look up some of the links I used in this research and send them to you when I have time since you are interested.

What you can not conclude however, is that it was the trade restriction aspects of the bill that caused the decline because the street favored President Hoover’s bill which restricted trade also. the market had actually been up when it looked like President Hoover’s trade bill would be implemented. Thus those who claim the DOW declined because the notion of tariffs was somehow repugnant to the market of the 1930’s are incorrect. They didn’t like this particular version of the legislation (both restricted trade), and one can reasonably conclude that had President Hoover’s version been adopted the Dow would not have declined even though it did impose tariffs.

I am seeing just the opposite here. The Dow reached a high for the year of 294.07 on April 17. Thereafter, the French increased their tariff on automobiles to a by wieght system. Toward the end of the month, the Tariff bill seemed to be stalling. As a result, "President Hoover last week took a hand to speed the Tariff Bill to final enactment" by inviting conferees to a White House breakfast.

http://timeinc8-sd11.websys.aol.com/time/magazine/article/0,9171,739145,00.html

The Dow sells off to 259.68 by May 5.