Wall Street Crash

Question 1

When was the Wall Street crash

Answer 1

1929

Question 2

What were the impacts of the Great Depression?

Answer 2

• start of a prolonged period of economic downturn which affected most countries
• decline in world trade
• increase in protective tariffs
• a rise in unemployment
• increased rates of poverty

Question 3

Evidence to suggest this was not as bad as originally thought

Answer 3

It did not bring down the British political system or lead to a fundamental change in policy

Question 4

Stats on unemployment

Answer 4

• unemployment never dropped below 1 million
• after the depression, this was made significantly worse
• peak reached in early 1933- in jan, there was 2,979,000 unemployed
• therefore, the depression had a significant social impact

Question 5

Name 5 varieties of unemployment

Answer 5

• personal
• frictional
• seasonal
• cyclical
• structural

Question 6

What were two areas of unemployment that suffered the worst in the 30’s

Answer 6

• cyclical
• structural

Question 7

Describe cyclical unemployment

Answer 7

• unemployment that varied with the economic cycle of boom followed by slump, normally over 8-10
• cyclical unemployment remained in the staple industries remained disproportionately high
• Britain vulnerable to this type of unemployment as a result of the Great Depression as it was dependent on imports and exports
• largest industries were the staple industries- iron, steel, coal and shipbuilding, textiles
• by 1929, British exports had only reached 80% of the 1913 amount
• the Wall Street crash prompted another cyclical depression as a result in a major collapse in British exports

Question 8

Describe structural unemployment

Answer 8

• industries facing permanent decline
• e.g. coal, cotton, shipbuilding, etc
• employed large numbers of people tied to specific areas
• decline of these industries led to acute long-term unemployment that was intensely focused in certain areas.

Question 9

Stat on levels of unemployment in areas specific to staple industries

Answer 9

60% of British unemployment was in 6 counties- Yorkshire, Lancashire, Durham, Staffordshire, Lanarkshire and Glamorgan.

Question 10

What do specific areas relating to staple industries tell us about unemployment?

Answer 10

• unemployment had regional differences
• different staple industries were varying lay hard
• areas in northern England and wales were hit disproportionately hard
• areas such as Birmingham and Coventry remained okay, due to the boom in the motor industry

Question 11

5 examples of new industries

Answer 11

• motor cars
• house building
• light electrical engineering
• leisure and communication
• chemicals

Question 12

Motor cars

Answer 12

• mass produced cars by Morrison and Austen
• in 1923, there was 120,000 employed in industry
• by 1938, there was 250,000 employed in industry
• larger firms were established, leading to greater efficiency and standardisation
• mainly in industrial areas such as Birmingham and Coventry
• by 1937, the engineering industry gad increased its output by 50% in a decade
• home market protected by very high tariff introduced in 1915, of 33%.

Question 13

House building

Answer 13

• employed around 3-4 million men
• demand was stimulated for bricks, woodwork, glass, cement so employed indirectly
• housing acts in 1933 and 1935 gave subsidies to local authorities, enabling them to concentrate on fixing overcrowding
• private house building boom- all helped by low interest rates
• e.g. builders were able to get loans to build houses and it was easier to get a mortgage so meant there was more jobs in the industry
• low cost of living, large pool of available labour, low interest rates= boom in the housing industry
• 1/3 of all houses had been built since 1939

Question 14

What did the high levels of unemployment lead to?

Answer 14

• this led to the jarrow crusade
• 1936
• in the north east of England, they had been wholly dependent on palmers shipyard
• this was closed for unemployment in 1934 and subsequently led to 70% of the men being unemployed in this area
• palmers shipyard employed 10,000 men and was making somewhat of a profit- govt only wanted to close smaller factories down to restrict output
• to raise awareness of the unemployment, the jarrow crusade was launched from jarrow to London
• 200 men
• hoped to present a petition when they arrived in London
• 11,000 signatures
• but petition was not debated and the marchers returned to jarrow.
• did not achieve its immediate goals, but the crusade gained significant media attention and its long term impact was cultural and symbolic

Question 15

Means test

Answer 15

• used to keep government costs low by paying those with additional means of support less
• what was judged to be additional support varied, including savings, pensions, the value of household items, and income of children
• the PAC would then judge how much additional support was required
• max rate was 15/3 (76p) per week

Question 16

Why was the means test disliked

Answer 16

• people thought that they were entitled to unemployment benefit as they had paid contributions to the scheme
• PAC still associated with poor law and they subjected people to humiliating, intensive scrutiny
• in Britain, overall 50% of applicants received less than the full amount
• 1931-1932, over 180,000 were removed from the receipt of any unemployment benefit
• 1932-1933, the means test saved the government £24 million in total
• in some labour controlled local authorities, the PAC’s allowed maximum payments, so local discrepancies, and were warned by ministry of labour against making illegal payments
• two authorities- Rotherham and Durham were suspended and replaced by London officials

Question 17

What was introduced in 1934

Answer 17

Unemployment act 1934

Question 18

What was the unemployment act

Answer 18

• more workers could claim- e.g. agricultural labourers were brought into the system
• unemployment assistance board was set up to take responsibility for all who had exhausted their entitlement to benefits
• provided more standardised and centrally funded benefits
• but, despite being more standardised, UAB scales of relief were often lower than PAC’s- leading to public outcry
• means test was retained, but the regulations for testing were replaced

Question 19

What were the failings of the unemployment act

Answer 19

• it did not tackle the underlying problem of poverty
• nor did it tackle unemployment
• policy of alleviation, not reconstruction
• means test continued to cause hardship and bitterness