Cumann nGaedheal Economic Policies 1923-1932 Flashcards
Background
Inherited a backwards economy burdened by civil war debts and an overwhelming depression in agriculture
Realised the Irish economy was enmeshed with the British economy
Cabinet members had little economic experience
World economy was in recession
Ireland was a predominantly rural economy and the main industrial area had been partitioned off
Political considerations
Generate support for the new state and confidence among crucial classes- the bankers, the large farmers and Anglo-Irish community
Government adopted conservative policy
Concentrated on agriculture(2/3 people lived in rural areas and 1/2 employed in agriculture)
Belief that industrialization could not be engineered
Maintained the link with sterling which left the Irish pound over valued - which avoided problems with inflation
The government needed to avoid bankruptcy by a policy of low taxation, avoidance of borrowing and balancing the budget
Agriculture the problems?
Small farms who has no money for new technology
Conservative old farmers would not give their farms to their heirs until they were relatively old
Ireland had supplied poor quality produce to England during the war so reputation for quality was poor
Britain adopted a cheap food policy in post war period- traditionally the chief one- had to be competed for and this mentioned prices obtained for irish produce declined
Agriculture- The Policies
Minister for Agriculture, Patrick Hogan
Set standards for production of butter, meat and eggs
Advisory service to improve breeding stocks and crops
Interventionist policy to improve standards in marketing
Established the Agricultural Credit Corporation to make loans- few took advantage of it
The land act 1923 completed compulsory purchase of all land still held by land Lords- but many farms were too small to be viable
Income tax was kept low, cut from 25% to15% between 1924-26
Agriculture- the outcomes
Limited success in early years
Little change in volume of output or structure of exports
Value of butter exports rose very slowly
The number of cows fell a little
The total value of exports reached a peak in 1924 at 51.6 million, fell to 42 million in 1926, recovered to 4i million in 1929 and did not reach that figure again until 1948
Loss of tillage and a new dependence on imported foodstuffs. Development of sugar beet as a new cash crop
Policies benefited the strong farmers, rather than smaller ones
What were the problems with industry?🏗🏭
It was not a priority for government
The home market was too small to cope with imports
There was no source of power
The government was convinced that industry could not be forced but it was unlikely that industry would emerge without the help of protectionism, bounties or special financial provision
Larger industries opposed protectionism
The outstanding exception was the Shannon scheme at ardnachrusha and the establishment of the semi state body the ESB
What were the specific economic measures?
Cut wages of teachers,gardai and civil servants by 10% in 1923
Cut old age pension by 10% in 1924
Government used the building of the ardnachrusha Shannon scheme to drive down wages by up to 30%, provoking 9 months long strike in Limerick involving hundreds of Workers
What was were was the impact of these economic policies?
Economic growth was slow
Unemployment never fell below 6% and could have been much higher than this official figure and was deemed to be due to laziness of Workers or restrictive trade union practices
Emigration averaged 33,000 per year
Income tax remained low, which ment that it was difficult to tackle poverty and social problems
