Economy 1930's Flashcards
Outline the Import Duties Act of 1932
Free trade was abandoned in 1932. The Act placed a 10% tariff on most imports except those from the empire. It increased sales of British goods at home and brought in extra revenue so Chamberlain was able to avoid raising income tax.
What further measures did the government take to help the economy?
- Defence expenditure and interest on war loans were reduced.
- Some attempt was made to reorganise iron and steel, shipbuilding, textiles and coal, and to persuade new industry to move into areas of high unemployment
- The bank rate was reduced from 6% to 2% to reduce debt charges but many local authorities took advantage of low interest rates to borrow money for house-building This provided extra jobs for builders and all the allied trades (inc. gas and electricity)
How did remaining of the gold standard benefit the economy?
Made British goods cheaper abroad and led to an increase in exports.
What benefits did the depression have on the working class?
- Prices of all products (GB + imported) fell during the depression including the prices of raw material, reduced prod. costs for GB ind. and brought down the cost of house-building
- The cost of living also came down, even with rage reductions, there was an increase in real wages
- Enabled people in jobs to spend their extra cash on GB consumer goods and even on luxuries such as radios and holidays, stimulating creation of jobs
How did rates of unemployment change in the 1930’s?
Unemployment gradually fell from a peak of over 3 million in late 1932 to around 2 million in 1935.
What were the results of the general election 1935?
National Gov = 432 seats
Labour = 154 seats
Independent Liberals =21 seats
Which regions thrived during the 1930’s?
The economy in the Midlands and the South was booming, success of the expansion of new industries such as motor car manufacturing, with factories in Coventry and Oxford.
Why was the 1930’s referred to as a decade of prosperity?
- The majority of the population began to enjoy a higher standard of living than ever before
- New council houses were available
- Sale of consumer goods increased rapidly eg. radios, electric cookers, refrigerators
- Some workers able to afford an Austin or Morris car
- Cinemas and dance halls were packed
- Annual holiday at the seaside became a national institution
- Higher real wages meant an improvement in diet - more fresh fruit, veg. and dairy produce were eaten
What were some of the individual figures from depressed areas?
Jarrow 68% total workforce unemployed 1934, Merthyr Tydfil 62% and St. Albans 3.9%
What was the percentage unemployed in Shipbuilding compared to the average for all industries?
59.2% compared to 22.9%
Why was unemployment so persistent in depressed areas?
The depressed areas had concentrated exclusively in the old order, export-based staple industries of coal, textiles, ship-building, and iron and steel where export trade had declined.
What was wrong with the staple industries?
Little was done to modernise these declining industries; machinery and techniques were out-dated. They were inefficient and over-staffed compared to their main foreign competitors. As profit fell, there was less chance of re-investment to make them more competitive.
What kind of unemployment was seen in the North of the country?
Structural employment, caused by faults in the structure of the economy. Unemployment was high even before the world economic crisis.
How did the National Government respond to the regional depression?
- The unemployment act 1934 which was based on the highly unpopular means test introduced in 1931
- The special areas act 1934, appointed 2 unpaid commissioners and provided them with 2 mill to try to revive Scotland, Cumberland, Tyneside and South Wales -> not a great deal of success
- Attempt was made to revitalise the steel ind. by imposing a tariff on foreign steel and setting up the British Iron and steel Federation -> 1937 showing signs of revival
How did the National Government respond badly to the depression?
Nat. Gov. ignored most of the advice offered by economists such as Keynes b/c it shrank from spending any large amounts of cash, and refused to accept that the problem could be solved. Saw it as natural in the cyclic fluctuations of the economy. Response was unimaginative and measures failed to solve the root of structural unemployment.
