Section Three-The Economic Impact of WW2

Question 1

How did WW2 have a severe and drastic impact on British trade?

Answer 1

• German U boat attacks on British sea traffic were devastating as Britain lost 11.7 million tons of shipping in the war (54% of country’s merchant fleet strength)
• Loss of major colonies in SEA to Japanese from 1942 disrupted trade and cut off supplies of vital raw material e.g. rubber from Malaya
• Diversion of industrial production to producing weapons of war meant that less was produced for export; British tried to reduces imports by food rationing etc. but balance of trade heavily deficit in war
• Third of Britain’s overseas assets were sold to pay for war; Britain borrowed from USA from 1941 in form of Lend-Lease and emerged from war with massive debts

Question 2

When did USA end Lend-Lease and what occurred as a result?

Answer 2

In late August 1945 in which John Maynard Keynes negotiated massive US loan (approx. £900 million) however pound sterling had to be made freely convertible to dollars by spring of 1947

Question 3

What was the new approach after this turn of events?

Answer 3

-Where costs of controlling a colony massively outstripped actual or potential value imperial control was abandoned; however where colonies were regarded as economic benefit to Britain, new emphasis was placed on economic development e.g. rubber and tin industry of Malaya received heavy investment

Question 4

What was the Colonial Development and Welfare Act of 1940?

Answer 4

• Wrote off some colonial debts

- Provided colonial grants or loans of up to £5million per year

Question 5

What was the further Colonial Development and Welfare Act of 1945?`

Answer 5

• Increased aid available to colonies to £120 million over ten years
• Required each colony to produce ten-year development plan showing how it would use such funds