economy 1914-1939 Flashcards
when was the wall street crash?
1929
what were the regional variations of unemployment like in Britain?
North of England, South Wales and parts of Scotland were worst hit. Eg Jarrow in county Durham, were 72% were unemployed
when did Britain return to the gold standard and whose idea was it?
1925
Churchill
why did Churchill want to return to the Gold Standard?
because the last time Britain was on it, they were doing well economically.
Churchill through it would restore the economy to pre-war strength
thought it would control inflation and create stability in British export industries.
what was the problem with returning to the gold standard?
Churchill valued money to gold 10% too high, meaning that British exports became more expensive and uncompetitive
unemployment grew and wages fell in the staple industries
ww1 economy
DORA
Defence of the Realm Act
formed basis of government intervention
allowed government to intervene and direct labour, conscription…
illiberal
done to improve economy
ww1 economy
rationing
introduced due to dependence on imported food and shortages by 1916
The Ministry of Food was set up in 1916 to give subsidies to reduce bread prices and introduced voluntary rationing
full rationing was introduced in 1918 including sugar, meat and butter
ww1 economy
mining
brought under government control after 1915 strike threatened production
price controls introduced and limited export licenses
a coal controller was introduced in 1917 to ensure supply
but coal mies remained in private hands
industrial relations remained poor
no real modernisation or innovation
ww1 economy
shipping
Britain was the world leader
No immediate need for government intervention
1916, Ministry of Shipping set up
1917, 4 million tonnes of food was sunk by German U boats, overcome by convoy system
War loses caused construction boom
Britain would never recover to pre-war strength and dominance
ww1 economy
railways
Quickly brought under state control
Highlighted inefficiencies
not nationalised after war, but did lead to structural changes
1921, there were 4 railway companies compared to 130 at the start of the war
ww1 economy
munitions
1915 Shell Scandal revealed problems such as the War office using over 250 companies
250 new shell factories were built by the state
Profits were limited and prices were kept down
new technology
better standards of health and safety
nationalisation in areas such as pubs in munition producing areas.
more unskilled workers took jobs previously taken by skilled workers as engineers etc had been lost to the war effort
munitions factory profits were limited to prewar levels by 1/5
new Ministry of Munitions controlled buying and supplying of goods to munitions factories and its new shell factories
Ministry had £2 billion to fund its expansion of production
ww1 economy
agriculture
Gov knew production increased due to high reliance on imports
Cultivation Production Act 1917, farmers could be forced to change land use
Corn Production Act guaranteed minimum price for grain and wage for labourers
Womens Land Army provided extra labour
daylight savings introduced
Gov aimed to persuade not force change
was the Ministry of Munitions a success?
Yes
increased control kept prices down
Ministry controlled 20,000 munitions factories and the supply chain so the system was highly centralised and efficient
created new standards: health and safety, new technology, research into more advanced weapons
pubs nationalised in munition areas so gov can control opening times and strength of drinks
how was world trade between 1929-1933?
It fell by 35%
which industries were hit worst by the international downturn and why?
staple industries
had not modernised, techniques and machinery required a lot of manpower eg, a great deal of British coal continued to be cut by hand
when did Britain return to the Gold Standard?
1925
why did Britain return to the Gold Standard?
the economy was doing well last time Britain was on the Gold Standard, so Churchill, Chancellor of Exchequer thought that it would restore the economy to pre-war strength, control inflation and create stability for British export industries
what was the problem with the Gold Standard?
Churchill valued pound against gold 10% too high
what was the impact of the Gold Standard?
British exports became too expensive and uncompetitive.
Unemployment grew and wages fell in the staple industries
caused general strike
interest rates had to be kept high to encourage foreign investment in British banks, otherwise gold reserves would have been depleted but this discourages borrowing and prevented innovation
government had to limit spending so they did not go into defecit as it would destroy the confidence of foreign investors
when was Britain taken off the Gold Standard?
1931 under the national government led by Ramsey-MacDonald
how was the 1930s described?
decade of the devil
how many people were unemployed in the early 1930s?
2.5 million