Trade and Commerce 1914-1967

Question 1

What was the impact of ww1 on Britain’s economy?

Answer 1

-War was extremely expensive
-Nearly 1 million Britons died
-Britain in severe debt
-Britain’s capital investments overseas wiped out, pound sterling removed from gold standard temporarily as gold reserves low

Question 2

What was the impact of ww1 on Britain’s industry?

Answer 2

-War damaged key export industries, as Britain was focused on making war materials, so foreign competitors were able to win markets overseas (that were typically dominated by British Exports)
-Traditional industries which created income to pay for running and defending empire faced new overseas competition (for example Japanese in textile production)

Question 3

What was the impact of ww1 on Britain’s finance?

Answer 3

-Banks and financial institutions gained profits from lending money overseas, so decline in profits nad economic burden of Epire grew
-Great depression intensified this in the 1930’s with a collapse in international goods and a financial crisis in 1931 forcing country off gold standard again

Question 4

What was the impact of ww1 on the Empire?

Answer 4

-India contributed £146m, country experienced inflation and shortages as a result.
-In 1914 two-thirds of India’s imports came from Britian, but this start to fall - initally because of wartime disruption, but later because of growing foreign competition
-India’s economy benefitted as manufacturers capture more of their own market

Question 5

What happened to British placed taxes on Indian imports after ww1?

Answer 5

After ww1 British placed high taxes on Indian imports, rising from 11% in 1917 to 25% in 1931, effect was to give Indian industry protection against its competitors, and it grew as a reuslt

Question 6

What happened to canada after ww1?

Answer 6

It benefitted, emerging as an industrial power. British manufacturers lost ground here, canada looked towards its southern neighbour the USA for investment and markets as inter-war period progressed

Question 7

What did Britain do in the 1920’s?

Answer 7

Try to recreate the economic system before 1914 where the Empire had no specific preference, so Britain returned to gold standard 1925. An expection to this being the Colonial Development Act 1929, providing funds to support colonial development projects

Question 8

What happened to trade and commerce after the great depression?

Answer 8

A much greater emphasis was placed on importance of the empire for british commerce and imports from Empire increased. Britain forced to abandon gold standard in 1931, but trade with the Empire in Pound Sterling proved great asset

Question 9

What currency did the countries of the Empire use and why?

Answer 9

Most countries of the empire fixed the value of their currencies to Sterling and kept some national reserves in sterling, reflecting loyalty to Britain. Giving access to the British market for countries in the Sterling Area

Question 10

What was British policy for Imperial Trade like?

Answer 10

-The promotion of Imperial Trade, rather than its volume, marked change in British policy
-Empire remained important well into the 1930s for cotton textile imports
-World trade shrank, imperialists such as Lord Beaverbrook argued for return of idea “Imperial Preference”, ending British “free trade”

Question 11

When Lord Beaverbrook suggested the return of Imperial Preference, how did Dominions react?

Answer 11

Dominions opposed the idea and a compromise was met at the Ottawa Conference 1932, this stated:
-British introduced general 10% tax on all imports but CC were exempt
-Britain and Dominions gave each other’s exports preferential treatment

Question 12

What was the effect of the 1932 Ottawa conference?

Answer 12

-It reinforced the role of the Empire in supplying food and raw materials to Britain
-Dominions became both increasingly important market for British exports and a more significant supplier of imports

Question 13

Some Dominions like Aussy and NZ experienced serious economic problems in the inter war period, what did the cost of imports from Britain do?

Answer 13

It largely outstripped the income from their exports

Question 14

What was the importance of Imperial Preference for Aussy and NZ?

Answer 14

-Both countries ran up debts with Britain, though NZ suffered less. So Imperial Preference became very important for these countries after the great depression

Question 15

What did Asian and African countries do with Imperial Trade?

Answer 15

-Asian and African colonies suffered from Great Depression, Burma and Malaya especially
-Malaya relied on exports of tin and rubber; Burma rice
-African colonies produced food or raw materials saw tumbling prices 1930s. Incomes fell, bringing poverty and starvation and fuelling dissatisfaction with Imperial rule

Question 16

What were the effects of WW2 on the British economy?

Answer 16

-Hit Britain harder than the first, British economy faced ww2 in a weaker position than in 1914 and major defeats in West and far East proved crippling expense
-German U-boats severe impact on British trade (Brit lost about 54% of merchant fleet)
-Loss of major colonies to Japanese in South East Asia, cut of materials and trade
-Diversion of industrial production to producing weapons meant less for export
-1/3 oversea assets sold to pay for war
-USA Lend-Lease

Question 17

What was post ww2 like for Britain?

Answer 17

-Lend-lease ending after the war caused a worsened situation
-John Maynard Keynes negotiated a US loan of £900 mil but conditions tough and interest high
-Cost of colonies outstripped actual or potential value, imperial control abandoned

Question 18

What did the Colonial Development and Welfare Act of 1940 do?

Answer 18

-Wrote off Colonial debts
-Provided grants or loans to colonies of up to 5mil a year
-An addition to the act in 1945 increased aid available to colonies to 120mil over 10 years
-Required each colony to produce a ten-year development plan showing how would use money

Question 19

What was trade and commerce like in 1947-1967 in terms of the importance of the Empire and commonwealth?

Answer 19

-Between 1947 and 1967 dramatic change in importance of Empire as a supplier of British imports and as market for British produce
-Until 1960s, Empire and Commonwealth were extremely important for Britain’s international position. Provided essential imports of food and raw materials when
Britain’s reserves were low

Question 20

In 1956 approximately __% of all overseas investments in the Uk were in Empire companies and governments?

Answer 20

58%

Question 21

Why did the commonwealth and Empire lose importance to Britain in the 1960s?

Answer 21

Other parts of the world, especially Western Europe, became more important to Britain
-European economy recovered from ww2 much more quickly than expected, partly thanks to US Marshall Aid
-Technological and Scientific changes meant that by mid 1950s there was full employment throughout Europe

Question 22

What was the EEC and EFTA?

Answer 22

In 1957 the British chose not to join the EEC (European Economic Community) and set up their rival trading bloc of European Non-EEC members - the EFTA (European Free Trade Association
-EEC flourished but EFTA didn’t, Britain found itself torn between a future based on commonwealth trade or one of trade relations with Europe becoming prominent
-Exports to Europe outstripped Empires, so Britain applied for EEC 1963 + 1967, both times rejected

Question 23

When did Britain eventually join EEC and why?

Answer 23

“Sterling de-valuation of 1967” meant that the old Sterling Area was destroyed by its weakened faith, which hit Britain hard. Britain joined EEC in 1973 with acceptance of a new President in France

Question 24

What was trade and commerce like post-war reconstruction for USA and Britain?

Answer 24

-USA’s economic dominance after ww2 made it the main supplier of goods to the wilder world
-British needed to earn dollars and build up foreign exchange reserves to pay for imports, so British continued rationing at home until 1953 to cut cost of food imports and to prioritise British industrial production for export

Question 25

What was the significance of Colonial schemes in post-war reconstruction?

Answer 25

-CD&WA of 1940/45 were used to expand development and promote new technology in the colonies and in 1948, CDC (Colonial Development Corporation) set up to manage major projects, renamed Commonwealth Development Corporation in 1963
-Though not all colonial schemes successful, such as Tanganyika Groundnuts Scheme of 1948

Question 26

What was Malay’s role post-war for Britain?

Answer 26

Malay rubber proved a crucial dollar earner and as a member of the Sterling Area, Malaya became a major contributor to Hard Currency Pool (Collective pool of dollars earned by Sterling Area)