2.1 The Coming of Depression

Question 1

When did the Wall Street Crash occur?

Answer 1

October 1929

Question 2

Why did traditional British Industry decline?

Answer 2

1. Competition from abroad
   In the 1920s, Britain’s economic rivals were the USA, Japan and Germany. Britain’s traditional textiles (cotton and wool), coal, iron and steel made products on a small scale so they were more expensive than the larger scale foreign counterparts.
2. Finding New Markets
   Britain’s policy of free trade allowed foreign goods to come into Britain for free but the British companies still had to pay import duties to foreign governments.
3. Obsolete Methods
   Mass production methods were not widely used. Britain’s industries were slower to move to new quicker and more efficient methods of production. It also didn’t switch to more profitable new light industries like chemicals, rayon and automobiles.

Question 3

What was the Wall Street Crash?

Answer 3

The Wall Street Crash was the collapse of the American stock market due to the panic selling of shares. This caused banks to collapse as loans were not repaid and businesses went bust due to high unemployment. The UK had lots of loans from the USA and they were asked to pay them back. American banks also stopped lending UK businesses money. This caused an economic depression

Question 4

What were the impacts of the Wall Street Crash on Britain?

Answer 4

• International trade declined
• exports from Britain fell by half between 1929 and 1931
• Britain now imported more than they exported
• Unemployment reached 2 million by 1930 and rose to over 3 million by 1932

Question 5

What was the unemployment figure in 1930 and what did it it rise to by 1932?

Answer 5

Unemployment:
1930 - 2 million
1932 - over 3 million

Question 6

How did the Depression affect the coal industry in Britain?

Answer 6

• Coal was cheaper abroad
• Mining coal was harder
• Mines hadn’t invested in up-to-date machinery like other countries
• Britain lost European Markets as Germany paid some of its reparation payments in coal and the French
  preferred American coal.

Question 7

How did the Depression affect the iron and steel industries in Britain?

Question 8

How did the Depression affect the shipbuilding industry in Britain?

Question 9

How did the Depression affect the textile industry in Britain?

Question 10

What is Free Trade?

Question 11

What was the Great Depression?

Question 12

What are Import Duties?

Question 13

What is Mass Production?

Question 14

What does exports mean?

Question 15

What does imports mean?

Question 16

What does Reparations mean?