<Li> Countries that abandoned the gold standard, allowed their currencies to depreciate which caused their balance of payments to strengthen . It also freed up monetary policy so that central banks could lower interest rates and act as lenders of last resort . They possessed the best policy instruments to fight the Depression and did not need protectionism . </Li> <Li> "The length and depth of a country's economic downturn and the timing and vigor of its recovery is related to how long it remained on the gold standard . Countries abandoning the gold standard relatively early experienced relatively mild recessions and early recoveries . In contrast, countries remaining on the gold standard experienced prolonged slumps ." </Li> <P> The consensus view among economists and economic historians is that the passage of the Smoot - Hawley Tariff exacerbated the Great Depression, although there is disagreement as to how much . In the popular view, the Smoot - Hawley Tariff was a leading cause of the depression . However, many economists hold the opinion that the tariff act did not greatly worsen the depression . </P> <Table> <Tr> <Td> </Td> <Td> It has been suggested that this section be split out into another article titled European banking crisis of 1931 . (Discuss) (September 2017) </Td> </Tr> </Table>

Why did prices drop during the great depression