Economics Flashcards
Why was economic weakness so significant to GB?
=struggle to afford Empire
What was the total cost of WW1?
£35 billion
(£4 billion borrowed from USA)
What was the result of the “total war” economy under Lloyd George after 1916?
re-directing public finances to war effort
=national debt rising from £650 million in 1914 to £7.4 billion in 1919
How much of the national expenditure was spent on paying back the national debt?
44% in the 1920s
Why was removing the £ from the gold standard significant?
Gold Standard had been around since the mid 19th century and helped international trade to have fixed values of each currency to the other
1914- the £ removed from gold standard
125- return
1931- Great Depression meant £ removed from the gold standard
=All significant indicators that Britain now debtor country and no longer a global superpower
What were the impacts of WW1 on Global trade and commerce?
Britain prioritising of war production severely cut its export trade, benefitting competitors
e.g Pre WW1 Britain dominated many Asian markets in textiles, however Japan took over and remained dominant
e.g Before 1914 Britan’s finance sector had been highly profitable in lending capital overseas however struggled post war to weakened sterling area which worsened when great depression hit
How much did India contribute to WW1 in total?
£146 million
Before 1914 how many of India’s imports can came from GB?
2/3 rds
After WW1 GB increased Indian import tariffs in 1917 and 1931 by how much?
1917= 11%
1931=25%
After WW1 growth of Indian industry led to what?
=reduced reliance on Britain
During the 1930’s how did imperial policy shift?
policy shifted to emphasis of empire for Gb trade, mainly driven by promoting imperial products to domestic consumers e.g Empire Marketing Board
When was the Ottawa conference?
1932
What was the Ottawa Conference?
-imperial economic conference in Canada reached a compromise on trade policy
-GB would apply a 10% tariff on all imports except from crown colonies
-GB and dominions would give preferential treatment to each other’s exports
What happened to Australia and New Zealand?
Cost of buying GB manufactured goods was far greater than income from exporting raw materials to GB
However both ran up major debts with GB which GB called an “economic mismangement” with many Australians saw it as colonial exploitation
To what extent was trade and commerce between Britain and the Empire in the years 1919 to 1939 affected by the legacy of the first world war?
How much did WW11 cost GB?
£120 billion
state the impact of WW11 on British trading
British industrial production fully focused on war 1939-45 = less for export = short term drop in income, long term further loss off global markets
=Trade deficit
State some examples of the changing role of the USA?
Lend-Lease Program
Brainchild of president Roosevelt, allowed USA to support allied war effort whilst remaining “neutral”
March 1941-Sep 1945 $50 plus billion of supplies given
President Truman took over in 1945 = less friendly relationship with GB, determined to resist communism and imperialism, unwilling to “prop up” British Empire
What loan did John Maynard Keynes successfully get from America in July 1946?
£900 million
What did GB do in response to the August 1947 “Sterling crisis”?
-fixed the pound and dollar exchange rate back to just over $4
with hope that reduced imperial costs and increased trade recovery would strengthen the £ again
HOWEVER………….
Did not work
By sep 1949 the gov had to devalue the £ by over 30% against the $
What were the shifting domestic economic priorities?
Lab gov determined to build a welfare state and national welfare state
=major imperial costs were unlikely to be tolerated
HAD to now be in british interest and self-sufficient to stay
What was the Colonial Development and Welfare Act 1940
= provided grants/ loans up to £5 million
What was the Colonial Development and welfare Act 1945?
Increased available aid to colonies to £120 million over ten years
BUT requried the colonies to produce a 10 year development plan showing how it would use such funds
