KQ1 - The Coming Of The Depression Flashcards
What were the 4 main British industries?
Coal, Iron and Steel, Textiles and Shipbuilding
- produced raw materials or heavy goods
What were the 3 main reasons for the decline of British industry?
Competition from Abroad
New Markets
Obsolete Methods
Describe the competition from abroad
The industries depended on the EXPORTS as they were only profitable if sold to worldwide markets.
From the early 1920s,
Foreign companies MUCH BIGGER than their British counterparts
Produced goods CHEAPER than small British companies.
E.g Palmers Shipyard in Jarrow
USA, Japan + Germany had modernised, efficient plants. Germany gave coal as reparation payments.
Britain’s major economic rivals
USA, Japan and Germany (despite WW1)
Describe why Britain struggled to enter New Markets
Finding new markets to buy British goods was proving difficult and was made worse by the policies of successive British governments.
They followed a policy of free trade in the 1920s which allowed foreign goods to come into Britain freely. Conversely, British companies that exported goods often had to pay import duties to foreign governments.
What is the industry that is considered to have been worst hit at start of depression? Why?
Shipbuilding
As no one was buying or selling, then no new ships were needed to transport goods around the world
Stats to show decline of shipbuilding
In 1930, British shipbuilders built 1 400 000 tonnes of shipping
In 1933, the figure had fallen to 133,000 tonnes
Describe obsolete methods
During the 1920s in the USA, new methods of production was seen.
Mass-production was pioneered in the production of the motor-car which was copied in many other consumer type industries.
Major british industries were slow to move to new, quiver and more efficient methods of production. Also, national resources were not switched quickly enough to new emergences such as chemicals, rayon and automobiles
What were the new emerging industries?
Chemicals, rayon and automobiles
Describe the decline of the coal industry in terms of competition abroad
Competition from abroad - in the mid-1920s, coal was produced in USA for 65p a tonne, whilst £1.56 in Britain.
By the 1920s and early 1930s, the industry has lost its European markets because of German reparations (paid in coal).
The French preferred American coal meaning demand from the welsh coalfields dropped significantly
Describe the decline of the coal industry in terms of obsolete methods
Mines had not invested in latest machinery = more expensive
Coal mine owners did not want to invest in modernisation
Investment in the coal industry was stagnant which meant modern mining methods could not be introduced like in competitor countries
What was the effect on people from the decline of the coal industry?
Unemployment in Swansea and Merthyr Tydfil reaches 25%
As high as 80% in Dowlais
Describe the decline of the Iron and Steel industry
There was far less demand for ships and armaments in the years after WW1. Competitors such as USA and Japan regularly undercut British prices + their steel-making plants were generally larger, more efficient and modernised than those in UK.
Steel industry in South Wales particularly ill-equipped to cope with the pressures of changing markets & new competitors.
Faced competition with America + Germany -> plants more technologically advanced and more efficient.
1929, steel making ceased completely in Ebbw Vale
1930, major part of steel works closed in Dowlais -> 3000 workers unemployed
Stats for the decline of the Iron and Steel industry
In 1929, steel making ceased completely at Eve Vale.
In 1930 a major part of the steel works at Dowlais closed leaving 3000 steel workers unemployed.
Describe the decline of the Shipbuilding industry
Shipbuilding declined more rapidly than other industries.
Post-WW1, fall in world trade = less need for ships.
International disarmament = fall in demand for warships
Foreign countries such as the USA could produce ships much BIGGER + CHEAPER than Britain’s small companies (e.g Palmer’s Shipyard in Jarrow)
1930, British Shipbuilders built 1 400 000 tonnes of shipping.
1933, fell to 133 000 tonnes -> unemployment
Describe the decline of textiles in terms of obsolete methods
Obsolete methods - man-made fibres, invented in the 1920s, soon became popular. When man-made fibres were mixed with cotton and wool, they produced clothes more hardwearing and easier to wash.
Describe the decline of textiles in terms of competition abroad
Competition abroad - increasing competition from USA and Japan during the 1920s who had developed their own industries during WW1. ‘Safe home markets’ became vulnerable to foreign competition, particularly Lancashire a high could not compete with cotton produced in Indus
When was the Wall Street Crash?
29 October 1929
Describe the Wall Street Crash
On 29 Oct 1929, the US Stock Exchange collapses. Thousands of people lost their life savings. Banks collapsed -loans not repaid
Businesses went bankrupt - fall in demand for goods
High unemployment.
USA recalls some of its earlier loans. So, the economic depression hit UK and other European countries due to over-dependence on USA.
How was Britain ‘full of contrasts’ in the 1920s?
Southern England and the Midlands saw growing prosperity whilst many areas experienced despair and disillusionment. The population the in the countryside declined as farming became mechanised, as prices for farm goods fell so did rural incomes.
In parts of Britain that had older industrial communities (North, North-east England and South Wales) had poor living conditions, illness, disease and a lower life expectancy.
What were the economic effects of the Wall Street Crash?
Business confidence fell dramatically and international trade declined.
Between 1929 and 1931 exports from Britain fell by half.
Britain’s balance of trade was badly affected and by 1931, the trade deficit was at £114 million compared to trade surplus of £104 million in 1928.
The slump in exports also affected industries supplying the the home domestic market.
Rapid growth in Unemployment (+Stats).
Stats on unemployment during Depression
By middle of 1930,
unemployment reached 2 million and peaked at 3 million by 1932.
What were the effects of the depression on the people?
- Unemployment (peaks at 3 mil in 1932)
- Poverty and poor diet (York 1936, 73% workers lived below poverty line)
- Health + housing (Poor = 10x more likely for Bronchitis and 8x more for Pneumonia)
- Mental health (hopelessness + lost dignity)
How bad was unemployment during the depression in Britain? (6 points)
1932: 3 million
70% in areas of the old industries
South Wales declared ‘depressed area’
Rhondda Valley = ‘black spot’ of employment (over 40% unemployed)
Merthyr = ‘black spot’ due to closure of iron + steel works
Dowlais area = 73% unemployment
What happened to the Government in after the Wall Street Crash?
National Government set up in 1931
Conservatives, Liberals and Labour
Led by Ramsay MacDonald (Labour)
1935 -Stanley Baldwin is PM (Conservative)
1937 - Neville Chamberlain (Conservative)
Describe the decline of the coal industry
Competition from abroad -
Mid-1920s, coal produced in USA was 65p a tonne, whilst £1.56 in Britain.
By the 1920s + 1930s, the industry lost European markets because of German REPARATIONS (paid in coal).
The French preferred American coal meaning Welsh coalfield demand dropped
Obsolete Methods -
Mine owners DIDN’T INVEST in latest machinery = more expensive (particularly SW)
Investment in the coal was stagnant -> NO MODERN METHODS introduced that were in competition countries.
Effect - Swansea & Merthyr Tydfil reach 25% unemployment, up to 80% in Dowlais
