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A-Level History Britain > 1b: Post war boom, crisis and recovery - 1918-1939 > Flashcards

1b: Post war boom, crisis and recovery - 1918-1939 Flashcards

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1
Q

How much had the war cost Britain and what did this mean?

A

£3.25 billion.
The war had lasted longer and used up more resources than was expected.
Debt was = to 136% of 1919 economic output.

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2
Q

How many men had died and how did this affect the economy?

A

750,000

This massively depleted the workforce.

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3
Q

Why did exports fall and by how much did they?

A

Exports fell from 1/3 of total wealth to 1/5.

This was because 40% of merchant ships had been sunk and because industries moved to war production.

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4
Q

What did Wall Street loans mean for the UK?

A

It meant debt would only increase.

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5
Q

What was the issue with imports after WW1?

A

We imported the same amount as the pre-war years but were not exporting the same amount.
This led to balance of payments problems.

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6
Q

What was debt looking like in 1920?

A

£8 billion - 3/8 of the budget went to debt repayment.

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7
Q

How much did income tax rise by and why?

A

1908 = 5%
1924 = 25%
Necessary to repay debts.

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8
Q

What followed the brief 1919/20 boom?

A

Two recessions: 1920/21 + 1929/30

These hit areas of heavy industry the hardest.

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9
Q

What did unemployment average from 1921-1938?

A

Persistently high at 10% - this was double pre-war years.
It did decline in times of recovery but remained high in declining industrial areas.
Unemployment in coal-mining areas in Wales = 80%.

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10
Q

What type of industries grew and where?

A

1934-1939: Rise of light industries in the south-east and the midlands.

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11
Q

Boom:

Why was there a boom?

A

People had saved money during the war - result of rations and restrictions.
1919: Consumers and businesses spent savings.

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12
Q

Boom:

What type of boom occurred?

A

A speculative boom:
New shares increased - 1918 = £65 mn
1920 = £384 mn.
This meant money poured into London.

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13
Q

Boom:

What did share owners buy into?

A

Old industries under the assumption shipping would return to pre-war levels.
The industries were outdated and uncompetitive.

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14
Q

Boom:

Why did the boom lead to recession?

A

Industries couldn’t keep up with demand so prices rose.

As prices rose, demand fell.

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15
Q

Recession:

What did unemployment rise to?

A

12%

2 million unemployed in 1921.

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16
Q

Recession:

What happened to old industries and what did this lead to?

A

Old industries collapsed.

Areas (Wales and Tyneside) became depressed and it led to strike action.

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17
Q

Recession:

How much did the cost of living increase between 1918 and 1920?

A

25% - wages stagnated, fuelling industrial unrest.

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18
Q

Recession:

How many days were lost to strike action in 1921?

A

84 million.

Result of high prices and low wages, NOT REVOLUTION.

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19
Q

Why was there a Miners’ Strike in 1921?

A

Wages had been cut and hours lengthened due to return to private hands - impossible to find another job.

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20
Q

What was Black Friday?

A

Railwaymen and dockers abandon the triple alliance - the strike collapses.

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21
Q

What was the result of the Miners’ Strike?

A

They suffered a pay cut.

Wages were 20% lower than 1914.

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22
Q

Recession:

What was deflation?

A

Govt cut spending by 75% (1918-1920)
and
Interest rates rose to 7% - this made borrowing expensive.

23
Q

Recession:

What was the result of deflation?

A

The measures did not work and debt increased.

120% —-> 160% of GDP.

24
Q

Recession:

Did Britain dominate the global economy?

A

Not anymore.
Foreign companies dismantled, resulting in a loss of British export trade.
Japan supplied textiles to South Asia meaning a decline in the NW textile industry - loss of jobs.

25
Q

Recession:

How did pre-war underinvestment cause problems?

A

UK steel produced significantly less than rivals.

1920: UK manufacturers were importing American steel as it was cheaper and better quality.

26
Q

Recession:

In 1937, how much steel did Britain produce compared to its rivals?

A 
Britain = 83k tonnes per year.
USA = 210k
Germany = 125k
27
Q

Solving issues, 1921-1924:

What did DLG implement to appease the middle classes?

A

Retrenchment:
The Geddes Axe cut £87 million in 1922/23 in order to cut tax.
This mainly came from the military but key welfare was cut from £205 mn to £182 mn.

28
Q

Solving issues, 1921-1924:

What divided the Tories, leading to their downfall in the 1923 election?

A

Protectionism vs Free Trade.

Baldwin wanted protectionism and called an election to get a mandate from the public.

29
Q

Solving issues, 1921-1924:

Did MacDonald manage to improve unemployment as he promised?

A

No.
A lack of a majority meant he couldn’t spend money to create jobs.
Further, he wanted to show the labour party as being moderate and fit-to-rule.

30
Q

Solving issues, 1921-1924:

What happened to unemployment in this period?

A

It went down from 12% to 6.5% but began to rise under MacDonald, hitting 8% in 1925.

31
Q

Solving issues, 1921-1924:

What happened to inflation?

A

It fell from 15% in 1920 to <1% in 1924.

DUE TO SPENDING FALL AS A RESULT OF UNEMPLOYMENT, NOT THE GOVT.

32
Q

Baldwin, 1924-1929:

What was the Gold Standard blunder?

A

Export prices were kept high, making them uncompetitive. This led to wage and hour cuts - employment almost as bad as unemployment.

33
Q

Baldwin, 1924-1929:

Was the pound devalued by the Gold Standard?

A

NO.
Keynes: It was 10% too high.
As this and interest rates were too high, businesses could not borrow and expand, thus not creating jobs.

34
Q

Baldwin, 1924-1929:

What was Churchill’s reasoning for keeping the pound high?

A

1) Prestige.

2) The economy couldn’t be competitive if things were made easy for manufacturers.

35
Q

Depression, 1929-1934:

The USA was the largest importer so how did the Crash affect Britain?

A 
Global trade shrunk by 60% over next 5 years.
UK exports (which were worth 1/3 of GDP) fell by 50%.
36
Q

Depression, 1929-1934:

What was the result of the collapse in global trade?

A

Heavy industries further declined.
Unemployment rose from 1 mn in 1929 to 2.5 mn in 1930.
The rise in unemployment meant tax revenue went down but govt financial assistance would need to go up.

37
Q

Depression, 1929-1934:

What happened to the UK economy and why?

A

1931: Economy shrank by 5%.

This was due to the commitment to the Gold Standard - low spending, high interest rates.

38
Q

Depression, 1929-1934:

What did Snowden want to do to improve things?

A

Tax the rich but was unable to.

39
Q

Depression, 1929-1934:

What was Keynes’ suggestion?

A

Spend money on PWS to create jobs.

Snowden refused as the pound would drop and upset bankers w/ bonds.

40
Q

Depression, 1929-1934:

What brought the Labour govt down?

A

Rumours that the 1931 budget would be unbalanced led to pound panic selling.
Labour proposed spending cuts to reassure financiers and help value - 10% cut in unemployment assistance.

41
Q

Depression, 1929-1934:

What did the National Govt do in September 1931?

A

Abandoned the Gold Standard.

42
Q

Depression, 1929-1934:

Did the National Govt implement Labour’s cuts?

A

Yes.
Public sector workers’ wage cut 10%.
National Economy Act, 1931 included means testing for unemployment assistance.

43
Q

Depression, 1929-1934:

What was the National Economy Act, 1931?

A

1 - Disqualified short term workers creating a poverty trap and hurting those in depressed areas.
2 - Benefits could only be claimed for 6 months before reapplying.
3 - Means testing for help after 6 months - had to sell everything as all income taken into account.

44
Q

Depression, 1929-1934:

What did the National Economy Act lead to?

A

Families needed to break up.

Unemployed parents didn’t get benefits in employed children lived with them.

45
Q

Depression, 1929-1934:

What was the Special Areas Act (1934)?

A

It gave direct assistance but was too little too late.

Slight investment - Steel Works in Ebbw Vale.

46
Q

Depression, 1929-1934:

What was the result of govt action?

A

Hunger marches - National Unemployed Workers’ Movement with the CPGB.
1936 Jarrow Crusade.

47
Q

Recovery, 1934-1939:

What did coming off the Gold Standard enable?

A

Economic growth - could recover quicker than others.

48
Q

Recovery, 1934-1939:

What examples demonstrate growth (1932-1937)?

A

Real incomes rose 19%.
Industrial Production up to 46%.
Unemployment down from 18% to 7.5%.

49
Q

Recovery, 1934-1939:

What was economic growth between 1934 and 1937?

A

4% a year.

50
Q

Recovery, 1934-1939:

What was the impact of inflation?

A

It stimulated the economy.

Money on road building boosted car industry.

51
Q

Recovery, 1934-1939:

What did devaluation mean?

A

Exports became cheaper and more competitive.

52
Q

Recovery, 1934-1939:

What did a cut in interest rates mean?

A

A housing boom - invest instead of save.
Mainly in the south.
1931/32 - 133,000 houses built.
1934/35 - 293,000 houses built.

53
Q

Recovery, 1934-1939:

What did a restructuring of war debts mean?

A

Money could be invested elsewhere.

25% of tax, not 40%.

A-Level History Britain (14 decks)

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