britain 14 Flashcards
(10 cards)
Why was Britain one of the first countries hit by the 1929 Wall Street Crash?
Britain’s 1925 return to the gold standard made exports expensive.
USA raised tariffs, cutting British trade.
USA called in war loans; other countries (e.g., Italy) couldn’t repay Britain.
Result: exports and loan repayments collapsed.
What happened in July 1931 and how did it lead to the National Government?
May Report triggered crisis of confidence in the pound.
Investors withdrew £2.5 million/day in gold.
Crisis overwhelmed Labour — failure to respond led to the formation of the National Government.
What were the main views on how to deal with the economic crisis in 1931?
Orthodox (banks/businesses): Stick to gold standard, free trade, cut spending.
Mosley’s plan: Borrow and spend on roads, schools, hospitals; introduce tariffs; increase pensions to boost demand.
Far Left: Capitalism was collapsing — wanted state control and full socialism.
: What happened in September 1931 and what were the effects on the pound?
Another run on the pound
Naval protests triggered a new panic.
Bank of England suspended the gold standard.
Pound dropped from $4.86 to $3.40 — a 30% devaluation.
Exports became cheaper, boosting trade, though other countries also devalued.
What was ‘cheap money’ and how did it help recovery?
After dropping gold standard, interest rates cut from 6% to 2% (1932).
‘Cheap money’ made borrowing easier for businesses and homebuyers.
Result: 2 million homes built in 1930s, jobs created (though mostly for middle class).
Only 700,000 council houses built.
What was the 1932 Import Duties Bill and how did the Ottawa Conference impact it?
Bill: 10% tariff on imports (except Empire goods).
Ottawa Conference (1932): Canada/Australia feared British competition.
Solution: Empire preference trade deals (lower tariffs within Empire).
Liberal free traders angry, but policy had limited effect on recovery.
What were the effects of government cuts and industry schemes in 1931?
Maintained global financial confidence, avoiding banking collapse.
But: Unemployment soared (esp. 1932–33).
Closed old industries (mills, mines, shipyards); fewer jobs in modernised firms.
Towns like Jarrow saw 70%+ unemployment.
How did different industries respond to the Depression?
New industries (cars, chemicals, aircraft) grew.
Car output doubled 1929–1939, 400,000 employed.
UK became 2nd largest car maker globally.
Staple industries (coal, steel) slowly recovered — coal output back to 227 million tonnes (1938).
What drove Britain’s economic recovery in the 1930s?
Less about government policy, more about rising consumer demand.
Reasons:
Falling prices.
Smaller family sizes.
Despite high unemployment, more employed than unemployed.
Housing boom offset public spending cuts and loss of foreign trade.
: How did the Great Depression affect trade and agriculture?
Trade: By 1932, global trade was just 1/3 of 1929 levels; Britain hardest hit.
After 1933, slow global improvement.
Agriculture: Wheat prices fell 50%, cereal farmers worst hit.
Many quit or switched crops — UK relied more on imports.
Govt used quotas, tariffs, and marketing boards to help, but wages still low — rural wages = 1/3 urban wages.
