1B - Responding to Economic Challenges 1918-1945 Flashcards
Why was there economic damage after WW1?
Thought the war would have ended sooner than it did
GB had loaned money from USA
GB cut off from export markets by German U boats
GB industries had to produce for war rather than to export
¾ of men were lost
How did German U boats impact the economy after WW1?
Sank 40% of GB merchant shipping at a time where exports account for ⅓ of total wealth
Why was there a negative balance of payments after WW1?
GB had continued to import as much as in the pre war period
How much debt was GB in in 1919 in relation to economic output?
136%
How much debt was GB in by 1920?
1920 - Total debt £8 billion, budget was £800 million and £300 million was used to pay debts
By how much had the standard rate of income tax increased between 1908-1924?
20%
Why did a brief post war boom occur between 1919-1920?
Individuals had savings in cash and bonds due to rationing, they spent these in 1919 to buy luxury items that had been previously rationed
When did the recessions occur during the 1920s and 1930s?
1920-1921, 1929-1934 - hit heavy industry hard
Unemployment was high even in times of economic booms, what % was it between 1921-1938?
10%
What were the consequences of the 1920-1921 recession and the 1929-1934 recession?
Both recessions had periods of recovery after but industrial areas like Wales and Tyneside persistently struggled.
What happened in terms of light and heavy industries in the period of 1934-1939?
Rearmament and new light industries in the South East and the Midlands developed while heavy industry declined
What was the speculative boom, 1918-1920?
Businesses issued new shares for traders, investors and for other businesses to buy and more money went into the London stock market
How were shares affected by the speculative boom, 1918-1920?
The total amount of new shares increased from £65 million in 1918 to £384 million in 1920
Why did the speculative boom occur?
Due to investors being keen to buy GB shipyards, cotton mills and coal mines - but all poor investment choices.
Why were cotton mills, shipyards and coal mines poor investment choices in the speculative boom?
New competitors emerged like the USA, Japan and South America. GB had put little investment into these industries during the war making them uncompetitive.
Why did the boom come to an end, 1920?
Wartime industries hadn’t returned to civilian usage properly and couldn’t keep up with the demand. Goods in short supply became expensive, demand declined
At what rate was unemployment in the recession of 1920-1921?
12%
In what state was unemployment in 1921?
2 million were unemployed, South Wales and Tyneside were depressed as old industries like coal and ship building collapsed
What was the cost of living like in 1920 and how did this affect unions?
Increased by 25% between 1918-1920, wages stagnated meaning unions were likely to strike to secure higher living standards.