Financing the Wars - First World War Flashcards
How and why did the National debt increase so much during the First World War?
The National debt rose substantially as the war dragged on as the emergence of total war meant that all industry had to be focused towards the war effort. In 1914 the National debt was at £625 million and by 1918 it was £7’800 million.
How did the Government borrow the funds required for the conflict?
They had to borrow from various British and other financial institutions most of which were in the USA through a system of bonds which offered good returns on said investments after the war.
How were ordinary people involved in the process of war bonds?
Small bonds were made available to British investors seeking money after the war, this was the first time in British history that people were asked personally to fund the war effort.
Who were the three chancellors during the war and what did they all do?
They all raised taxes and the three chancellors were Lloyd George, McKenna and Bonar Law.
How much did the rate of income tax change?
Income tax increased from 3.75% in 1914 to 30% in 1918. In 1914 the number of taxpayers was at 1.5 million. This increased 7.7 million in 1918.
What role did tanks play in raising finances?
Tanks became a focal point for funding as they were seen to be new and exciting. Towns and cities competed with each other in order to raise money for tank banks. Glasgow raised the most at £14.5 million.
Why did the Government begin to intervene more extensively into the economy?
In 1915 there was the shells scandal in which the army were facing a shortage of shells many of which were poor quality. The Government created the Ministry of Munitions and in turn nationalised the industry.
What impact did the war have on trade unions?
Many trade unions accepted the war time restrictions and workers could not strike, skilled jobs could be diluted, workers could not refuse overtime or change jobs. However, wages were protected and pay rises could be offered. Profits were also fixed for the duration of war.
