Economic Developments 1886-1914; (complete) Flashcards
(36 cards)
What was the contemporary view of the changes occurring in the economy in the late nineteenth century?
Britain was suffering from a long-term depression, from 1873-96; The Great Depression
In what years did Britain go through marked cyclical downturns in the economy?
1873-79, 1882-86, 1890-96
Not a single downturn lasting 20 years
What events decreased Britain’s economic supremacy, despite its previous domination of export markets?
-Began to face competition from foreign markets
-Fall in demand for British goods in traditional European & American markets
-Prices & profits tumbled in industry + agriculture, continued for 20 years
Why was a Royal Commission set up in 1886 and what did this conclude?
-Salisbury’s gov was anxious about the economy
-Intention was to report on “the extent, nature and probable cause of the depression prevailing in various branches of trade and industry.”
-Concluded agricultural prices had been falling since 1873, downward trend was continuing
-Noted increase in production of most other commodities & supply outstripping demand in many instances—> reduction in profits, fall in prices, lower rates of interest on invested capitals
-Issues related to foreign competition
-Commented that there was encouraging signs for the future
When did unemployment reach a peak and why?
-Businessmen were in the business to make money
-When profit levels were ↓, there was less money available for capital investment
-To offset profit loss, employers had little alternative but to pay off their workforce
-1886; unemployment reach peak of 10%; creates much hardship & sense of depression
What was the % drop in price levels of most commodities between 1873-1896?
30-40%
What caused a beneficial shift in terms of trade for Britain?
Price of imports ↓ more than price of exports
By 1900, what percentage of foodstuffs and raw material in industry did Britain import and what did this result in?
-50%
-Benefitted from import prices
Why did the late 1890s see a return to economic prosperity/period of affluence that held until 1914?
-Wages didn’t fall → as long as a man could stay in a job, he benefitted from lower-priced goods & foods
-Resulted in significant ↑ in standard of living in Britain
-Prices picked up in 1890s, as gold-mining boom in S Africa gave boost to economy
What interrupted the 1890s period of affluence?
The Boer War (1899-1902)
What development caused future industry problems for Britain?
-Between 1886-1914, Britain’s traditional industries were expanding
-Technical innovation opened new areas of industry
-There had been a change in emphasis in demand for type of goods Britain exported; w/ coal, shipping & machinery becoming predominant
-This development cause future issues for Britain as these exports comprised basic ‘tools’ for process of industrialisation in other countries that would soon use them to successfully outcompete Britain
Why has Britain’s response to the changes in the economy been criticised for being too complacent?
-British industrialists were perhaps too slow to respond to forge in competition & too set in ways to make necessary changes needed to be more competitive
-As the first industrial nation, Britain’s machinery & production methods were out of date & was reluctance to invest capital in new modern machinery; by then both manufactured & used in USA + Germany
Why was Britain falling behind in steel output and why was this significant?
-Steel became as much a key to industrial progress as coal
-In spite of successful innovations in steel production being British (Bassemer process, Siemens open hearth process, etc), it was Germany & USA who exploited the new techniques & forged ahead in steel output
-Demand for steel at home fell off as railway boom of mid 19th cent slowed & there were little new track built as most key areas had good rail links
-Most manufacturing companies family-owned & handed down to next gen; who may not be as passionate as founding father
Why was Britain being overtaken in industrial production once realising + what specific industries?
-USA & Germany had greater natural resources, had begun to overtake GB in industrial production once realising own industrial potential
-Competition keenly felt in coal, iron, steel industries
-Instead of using capital to develop new machinery & speed up production, GB companies invested money abroad; where profits were quick & easy
-Little input of new ideas/reorganisation of old practices
Why was the cotton export of 1896-1914 significant?
-New factories built in Lancashire
-However, few owners had foresight to invest in automated power looms & instead relied on old technology
What have economic historians suggested about the engagement with the development of new industries + what contrary example exists?
-That there was a lack of engagement w/ future development of new industries like chemicals & electrical engineering
-Contrary eg; the Lever brothers, soap-manufacturing company that sold 40,000 tons/yr & started expanding to Europe + America
What increased Britain’s agricultural problems apart from competition in the 1880s?
-The development of the canning process
-Meant that beef from large cattle ranches in Argentina & Uruguay could be put into tins, preserved and exported to GB
-Methods of refrigeration developed at this time meant previously perishable goods (mainly lamb) could be transported from as far afield as Australia & New Zealand, could compete w/ GB goods in terms of price, if not quality
By 1899, what % of meat consumed in Britain came from abroad?
40%
What were the results of the innovations and advances from foreign competitors on British farmers?
-Fierce competition for the GB farmer
-Prices fell heavily
-Wheat & cereal counties of S & E were hardest hit areas
-Farmers went bankrupt; many out of work agricultural labourers deserted countryside, settled in towns, where life wasn’t much easier as depression in industry made finding regular work difficult
-Thus, they sought a better life by emigrating to the USA/Canada
How did the numbers of agricultural workers fall from 1871 to 1901?
1871 - 1 million
1901 - 600,000
Why and how did British farmers have to adapt as a result of the depression?
-Pattern of GB agriculture changed; no part of country was unaffected
-To survive, farmers had to diversify
-Farmers in S of Scotland, Warwickshire, Lancashire= less badly affected as areas were already conc on mixed farming
-Many farmers moved into dairy farming as milk couldn’t be easily imported, yet could be quickly transported some distance across GB by rail
-Poultry farming became popular
-Development of market gardening as alt to farming met w/ great success, esp in area like Vale of Evesham where fruit, flowers, veggies grew well
-GB as whole; area under cultivation ↓, area turned over to pasture ↑
How were the staple industries of Britain doing at the time?
-GB still relied heavily on staple industries, had developed in earlier industrial revolution; coal, iron, steel textiles, shipbuilding
-Industrial output continued to ↑ but rate of growth ↓
-Export figures in all these industries continued to show good returns & brought prosperity to districts like Lancashire (centre of textile industry)
-Trade & transportation brought wealth to shipbuilding areas of Tyneside, Clydeside, Belfast
What new industries emerged and what idea did these oppose?
-Tech innovation opened new industry like electrical engineering, motor industry, bicycles, aluminium, rubber, artificial tile
-Electricity, a new source of power, was being harnessed to industry
-↑ manufacturing output shown by appearance of smaller industries like boot/shoe manufacture, chocolate, soap, tobacco, beer; all successful
-William Lever started up a soap-manufacturing business, 1886 LPool, one of first to manufacture soap from vegetable oil. Had innovative approach & marketing practices
-These opposed idea of depression through late 1880/90s
What was needed for these new businesses to grow, how was this done + the impact?
-Capital needed for new businesses to grow
-Men like Lever ↑ capital by offering limited liability (share restricting liability of shareholder to amount they originally subscribed) shares in their companies
-Led to ↑ in # of large joint-stock companies (commercial enterprise w/varying # of stock supplied by shareholders), whose main loyalty was to their shareholders not workers
-Companies operating in same line of business amalgamated to form giant corporations like Imperial Tobacco Armstrong & Vickers-Armstrong; biggest producers of armaments in GB
-Developments led to change in market for consumer goods. ↑ pop, urbanisation, ↑value of real wages gave ↑ to mass-market in consumer goods
