. Economic policy of the inter-war years (IWYs) 1918-1939;

Question 1

the defence of the realm act 1914

Answer 1

• august 1914
• gave legality to the unprecedented powers for the government to introduce restrictions on the population at the time Britain was at war
  -state control over industry
• control of railway and dockyards given to the board of trade
• income tax doubled in the budget of November 1914
• press censorship

Question 2

trade union cooperation

Answer 2

as minister of munitions from may 1915 DLG made dilution agreements with the trade unions

Question 3

what are dilution agreements

Answer 3

• agreements between government and trade unions to allow semi skilled, unskilled workers and women to be trained to carry out jobs previously reserved for skilled workers

Question 4

cost of WW1

Answer 4

• government spending increased from £200 million in 1913 to £2.6 billion in 1918
• government raised loans
• increased income tax to help pay for the war

Question 5

wartime control of food

Answer 5

• department of food production set up to maintain a steady supply of home grown food and ensure troops were fed
• women employed on land to replace male farmers
• food rationing introduced

Question 6

minister of munitions

Answer 6

• established a central purchasing system for buying essential war materials
• engaged scientist to develop new weapons
• controlled wages prices and profits
• purchased 90% of imports

Question 7

public wartime control

Answer 7

• British summertime introduced
• strength of alcohol reduced
• opening hours for public houses were limited

Question 8

foreign competition

Answer 8

by 1914 staple industries threatened by foreign competition form Germany and USA

Question 9

lack of investments

Answer 9

• resulted in low productivity
• problem masked by extra demands during the war
• but in 1919 government contracts for war material came to a sudden end
• lead to over production, stagnation and the loss of jobs

Question 10

outdated technology

Answer 10

• pushed up production cost
• less than 1/5 of coal produced was cut by machines
• machinery in the textile industry was 2nd rate
• shipbuilding held back by restrictive practices

Question 11

poor industrial relations

Answer 11

general strike led to loss of output and market
- decline of staples produced structural unemployment on top of cyclical unemployment

Question 12

the general strike

Answer 12

• May 1926
• lasted 9 days
• due to structural problems in the coal industry
• coal mines handed back to owners in April 1921 after being under gov control for the duration of the war
• to combat falling prices the owner cut wages
• return to the gold standard made exports more expensive
• Samuel commission by the Baldwin gov did not help

Question 13

effects of the general strike

Answer 13

• disaster for the miners
• Baldwin set up volunteers to assist the army in keeping the country moving
• miner leaders refused to compromise turning public opinion against them
• TUC suddenly called off the general strike so the miners had to give in and accept the pay cuts and longer hours
• weakness on TUC leadership exposed
• government passed the trade dispute act 1927

Question 14

trade dispute act

Answer 14

• 1927
• placed limitations on unions
  outlawed sympathy strikes

Question 15

Government finance

Answer 15

• due the Geddes report (1922) government cut spending
• safeguarding of industries act 1921 was a move towards protectionism
• slump led to a contracting economy

Question 16

Gold standard

Answer 16

• 1925 by Winston Churchill chancellor of exchequer
• economy had stabilised wages were steady and would stimulate competition
• Keynes argues it would be deflationary and increase unemployment
• overvalued the pound (£4.86 to $1) making British goods expensive to buy and crippled the export market
• wall street crash in 1929 led to Britain withdrawing from the gold standard

Question 17

when was the wall street crash

Answer 17

October 1929

Question 18

effects of the wall street crash on British economy

Answer 18

• British exports fell by half between 1929 and 1931
• unemployment reached 2.5 million by then end of 1931 and 3 million in 1932

Question 19

effects of the depression on the staple industries

Answer 19

• cotton exports in 1932 was less than half its 1913 figure
• coal output fell by 40 million tons
• new ships launched fell from 1 million to 133,000 in 1933

Question 20

unemployment in the staple industries

Answer 20

• by summer 1932 40% of coal miners were out of work
• 47% of steel workers
• 63% in ship building

Question 21

depressed areas

Answer 21

• old staple industries which had grown up mainly around the coal fields were situated in north England, south wales central Scotland and Belfast
• suffered from large scale and long term unemployment
• 62% of male population in tydfil unemployed
• 72% of Jarrow population were unemployed

Question 22

financial policies to tackle depression

Answer 22

• aimed to balance the budget and limit government spending to match income
• 10% cut in unemployment benefits
• introduced a means test
• cut in wages
• came off gold standard

Question 23

trade polices to tackle the depression

Answer 23

• sterling area set yup to trade in the pound
• import duties act 1932 ending free trade and imposing tariffs

Question 24

industrial polices to tackle the depression

Answer 24

• special areas act 1934 granted aid to special areas
• marketing board for milk bacon and potatoes so guaranteed prices for farmers
• British shipping assistance act 1935 provided government loans to build new ships

Question 25

evaluation of polices to tackle the depression

Answer 25

- special areas act only provided aid to the most depressed areas and many old industrial towns did not qualify - cutting government spending helped to maintain international confidence and averted the banking crisis, but also reduced demand for goods and service - leaving the gold standard September 1931 allowed the pound to fall in value and made British exports cheaper - exports to empire increased but did not make up shortfall

Question 26

economic realignment

Answer 26

- recovery limited to midlands and south east - unemployment fell by half between 1933 and 1939 - new industries such as aircraft and chemical enjoyed growth - 2nd largest car manufacturer in the world - increase in consumption due to full employment - spending on rearmament assisted economic recovery

Question 27

what are the 4 topic for the economic policy of the IWY

Answer 27

1. The impact of the 1WW on the economy of the 1920s 2. Problems with the world economy: the decline in British industrial exports 3. Problems of the British economy 4. Government policies.

Question 28

evidence for GB being the world leading trading and lending nation in 1914

Answer 28

- trade larger than Germany and USA - city of London was the worlds leading financial centre where international trade was conducted - overseas investment stood at £4bn

Question 29

what is the beachhead effect (loss of market)

Answer 29

- war forced GB to withdraw form international markets - countries not involved in war (Latin america, japan) filled the market - after war foreign competitors had established a strong position in markets British firms had previous dominated

Question 30

the war office

Answer 30

- controlled 90% of British imports - marketed 80% of the food consumed - both returned to private control by 1922

Question 31

protectionism after the war

Answer 31

- introduced by the McKenna duties of 1915 - continued in the key industries duties act 1921 - protectionism for food imports was discontinued ending the pause on the decline in farming created by the war