Chapter 15 - Trade, Commerce And The Economic Impact Of War

Question 1

Did B win ww1 + ww2?

Answer 1

Yes

Question 2

What did the wars do?

Answer 2

Weakened B economy
Reduced ability to pay for the empire

Question 3

How much did the war cost?

Answer 3

35 billion

Question 4

How much had to be borrowed from the USA?

Answer 4

4 billion

Question 5

What were the effects of the war on the economy?

Answer 5

Britain was in debt
Much of capital overseas investment wiped out
Pound sterling removed from gold standard as gold reserves ran low

Question 6

What was the gold standard?

Answer 6

Where notes of money were backed up by reserves of gold
The notes could be exchanged back with gold

Question 7

What effect did the war have on export industries?

Answer 7

Production for war was prioritised
Meant B competitors won markets usually dominated by B exports

Question 8

What markets were difficult to win back?

Answer 8

Textiles
Shipbuilding
Coal
Iron
Steel

Question 9

What was an example of this competition?

Answer 9

The Japanese textile production

Question 10

What was the effect on the financial sector?

Answer 10

Less ability to borrow from banks
Economic burden of Empire grew

Question 11

What was the problem intensified by?

Answer 11

Great Depression - collapse of international trade + markets

Question 12

When was the Great Depression?

Answer 12

1930’s

Question 13

What happened in 1931?

Answer 13

A financial crisis forced the country off the gold standard
This reduced earnings from oversea investment

Question 14

How did the war effect India?

Answer 14

They contributed £146 million
Had inflation + shortages
Imports from B fell
Indian manufacturers had more of the domestic market

Question 15

What did B impose on India for higher revenue?

Answer 15

Increased taxes
1917 - 11%
1931 - 25%

Question 16

What was the effect of war in Canada?

Answer 16

They benefitted
Became industrial power
Looked more to USA for investment + markets

Question 17

What was the effect of war in Australia + New Zealand?

Answer 17

Relied on B market as exporters of food
Hit hard by disruption of trade

Question 18

What was B policy towards imperial trade in 1920s?

Answer 18

Wanted to recreate system before 1914
Returned to gold standard 1925 to stabilise international trade
Colonial Development Act of 1929 - gave treasury funds to support colonial development projects

Question 19

What was the policy after the Great Depression?

Answer 19

More importance on Empire for commerce
Imports from Empire increased
Abandoned gold standard 1931

Question 20

What did most countries in the empire fix the value of their currencies to?

Answer 20

Sterling

Question 21

What did this create and give B access to?

Answer 21

The Sterling Area

Question 22

What was the empire used for?

Answer 22

To soften the impact of the international economy + great depression

Question 23

What was the total value of exports to the empire?

Answer 23

1913 - £195 million
1934 - £166 million

Question 24

What was the biggest export going to the empire?

Answer 24

Motor vehicle exports
1913 - 67.4%
1934 - 71.7%

Question 25

What were other big exports to the empire?

Answer 25

Cotton Locomotive Railway carriage Motor vehicles Electrical engineering

Question 26

Why was exports of the prominent textiles industry decreasing?

Answer 26

Competition from Japan

Question 27

What was suggested for a return of by imperialists like Lord Beaverbrook?

Answer 27

Return of ‘imperial preference’

Question 28

What did this end?

Answer 28

Free trade

Question 29

Who opposed this?

Answer 29

Dominions They wanted to protect their own growing industries

Question 30

Where was a compromise reached?

Answer 30

Ottawa Conference 1932

Question 31

What was said in the Ottawa Conference 1932?

Answer 31

B introduced 10% tax on all imports but Crown Colonies exempt B + Dominions gave each others exports preferential treatment

Question 32

What did this reinforce?

Answer 32

Importance of empire supplying foodstuffs + raw materials

Question 33

What was the total value of B imports from the empire?

Answer 33

1913 - £191 million 1934 - £257 million

Question 34

What was the biggest percentage Britain had of imports coming from the empire?

Answer 34

Jute imports 1913 - 99.4% 1934 - 98.8%

Question 35

Who became more important for B exports + supplier of imports?

Answer 35

Dominions

Question 36

Who reduced the amount of B exports they sent?

Answer 36

India Still exported tea + jute

Question 37

What were the total imports and exports from and to the British?

Answer 37

Exports: 1909 - 35% 1938 - 41.3% Imports: 1909 - 26.9% 1938 - 41.2%

Question 38

Who experienced serious economic problems in the inter-war period?

Answer 38

Australia New Zealand

Question 39

Why were they struggling?

Answer 39

Cost of imports outstripped income from exports They ran up debts with B Meant imperial preference was more important

Question 40

What did the debt to B increase in Australia?

Answer 40

Support for independence in the Australian Labour Party

Question 41

How did Burma suffer in the collapse of the world trade in 1930s?

Answer 41

Relied on exports of rice

Question 42

How did Malaya suffer in the collapse of the world trade in 1930s?

Answer 42

Relied on exports of tin and rubber

Question 43

How did other African colonies also suffer?

Answer 43

Prices reduced for the food + raw materials they were producing Incomes fell = poverty + starvation Fuelled dissatisfaction with colonial rule

Question 44

Which war impacted B more?

Answer 44

WW2

Question 45

Why was B economy weaker for WW2?

Answer 45

Entered war in a far weaker condition Defeats in West + Far East were expensive

Question 46

What impact did attacks with German U-boats have?

Answer 46

Lost 11.7 million tons of shipping 54% of merchant fleet strength lost in beginning of the war

Question 47

What event cut off supplies of vital raw materials?

Answer 47

Loss of major colonies in South East Asia to the Japanese Cut off supply of rubber from Malaya

Question 48

Why was B balance of trade in heavy deficit?

Answer 48

Diversion to producing weapons Less produced for export B tried to reduce imports - campaigns to support home production + rationing

Question 49

How many of B oversea businesses were sold to pay for the war?

Answer 49

1/3 Borrowed from USA 1941 in for of Lend-Lease Came out with massive debt

Question 50

What is a Lend-Lease?

Answer 50

Arrangement in WW2 where USA supplied B with weapons, food + other necessities

Question 51

Who did B depend on more for imports?

Answer 51

The Empire There was big investment from colonial govts to help food + raw materials

Question 52

What helped B pay for the war effort?

Answer 52

Colonial reserves ('sterling balances')

Question 53

When did the USA end the Lend-Lease?

Answer 53

Aug 1945 They didn't want to support a revived BE

Question 54

Who negotiated a new deal for a US loan?

Answer 54

John Maynard Keynes Got £900 million

Question 55

What were the conditions for the loan?

Answer 55

The pound sterling had to be made freely accessible to dollars by Spring 1947

Question 56

Who was John Maynard Keynes?

Answer 56

Economist Argued govt should play active role in managing economy Major advisor to the wartime coalition + post war Labour govts

Question 57

What was the Sterling Crisis of spring 1947?

Answer 57

US loan was meant to help free convertibility from £ to $ at a fixed rate B nearly ran out of $ reserves within 6 weeks - had to suspend convertibility

Question 58

What approach did B take to re-establishing it's world power?

Answer 58

Dual approach If the cost of controlling a colony outweighed its value - control abandoned If colonies had economic benefit - more colonial economic development

Question 59

Where did they want to develop economically?

Answer 59

Malaya For tin + rubber industry

Question 60

What Act formed the foundation for this approach?

Answer 60

The Colonial Development and Welfare Act 1940

Question 61

What did this Act do?

Answer 61

Wrote off some colonial debts Provided grants up to £5 million/year

Question 62

What did the further CDWA 1945 do?

Answer 62

Increase aid to colonies to £120 million over 10 years Each colony had to product 10 year plan on how it would use the funds