The impact of war, 1914-1922, Economic issues Flashcards
List what was included with the huge demand brought on by war.
- massive increase in the production of weapons of war
- Supply vast quantities of war materials to its allies
- Huge demands to provide transport
- Increase and protect the provision of food
- ensure adequate supplies of fuel and coal
What impact did this huge demand have?
- pushed up prices and created shortages of both materials and workers in 1914
What happened to private industry
It could not cope on its own
The state began commandeering stocks of total war materials and fixing prices
Which offensive failed in 1915
Neuve Chapelle offensive in 1915.
- first major assault on British forces.
The loss to Germany was blamed on the shell shortage
What did the Ministry of Munitions oversee?
- purchase
-production
-and supply
of war materials which was headed bay David Lloyd George
What did the Ministry of Munitions do?
Set up central purchasing system for buying essential war materials .
Organised British science to help the war effort
Encouraged the development and production of new weapons such as mortars and the tank.
Encouraged factoriels to switch from peace to wartime production and slo built its own factories, some of which became huge enterprises. One in Leeds employed 16,000 workers producing 25 million shells a year by the end of the war.
Which key industries came under state control?
- railways
- docks
- coalmines
By 1918 the Ministry of Munitions directly managed 250 State factories, supervised another 20,000 factories and controlled almost 4 million workers.
What did the Ministry of Munitions control
- prices
- wages
- profits
- rationed essential foods
- bought 90% of all imports
- had charge over transport and fuel
What was done about food?
Had huge armies to feed. But this was difficult with a shortage of labour on land and German U-Boats sinking merchant ships bringing food from overseas.
A Department Of Food Production was set up to increase the amount of home grown foodstuffs.
The government subsidised farmers to plough up wasteland, allocated scarce fertilisers, supplied prisoners of war to work on the land and encouraged women to volunteer for farm work.
How much did the war cost?
The cost of war was staggering.
Government spending went up from £200million in 1913 to £2600 million in 1918.
The traditional ‘balancing of budgets’ had to be abadoned.
Instead, the government had to borrow money from its people and from neutral countries such as the USA.
Government also increased taxation, both on the affluent middle class ad on manual workers. Income tax was greatly extended in 1915
Economic impact of war on workers, negative
- Increase in taxation
- Rise in cost of living
- Food prices rose y 10% in the first month of war and continued to rise. BY 1918 they had doubled.
Economic impact of war on workers, positive
- More work
- Before war there had been many unemployed or with only part-time work. Now they could work full time.
- Many unskilled workers at last had real bargaining power because of labour shortages and consequently earned more
- fall in poor relief applications and fall in the lower class mortality suggested that the standards of living had increased
Economic impact of war on middle and upper classes
More disadvantaged by war than workers.
- higher income tax rates and tax on land
- Many landed estates had to be sold off
25% of land holdings were sold between 1917 and 1921
Housing after war
Government promised ‘homes fit for heroes’
Minister for health, Addison, introduced the Housing and Town Planning Act, 1919, which encouraged local government to clear slums and construct low-rent homes for the working class.
200,000 houses were built by 1922. However, the cost was excessive.
Addison was paying £910 a unit for each house when the true value was only £385 per unit.
Addison was sacked due to this.
By 1922 housing grants had been withdrawn, leaving a shortage of over 800,000 houses for the lower class.
Economic recession
Occurred after 1921.
This meant that rather than spending money on expanding social provision, the government had to consider a policy of retrenchment.
The government who was struggling with debt interest and falling tax revenues had to appoint a committee under Sir Eric Geddes to examine government spending.
The Geddes Axe
The committee initially recommended cuts of £86 million, reduced to £64 million.
Austerity cuts meant that not only were the housing subsidies withdrawn but that £46.5 million was cut from the armed series and £18.2 million from education.
In addition, the 1920 Agriculture Act which gave price guarantees for farmers and maintained minimum wages for farm labourers was repealed and the Unemployment Act altered to make it more difficult for the unemployed to claim benefits.
Treasury Agreement 1914
specified that unions involved in vital war work would not strike
Munitions of War Act 1915
banned strikes for munitions workers.
It also became illegal for workers in key production posts to switch jobs without permission.
Dilution agreements
Between government and trade unions.
Allowed semi-skilled, unskilled and women workers to be trained to of jobs or parts of jobs previously reserved for skilled craftsmen.
Many workers objected to this
Strike activity
Despite ban on strikes, strike activity continued throughout war.
1917= 48 strikes
By 1918 the trade union movement was stronger doubling its membership to 8 million by 1921.
Good relationship between government and unions was coming to an end.
A mood of militancy as the early 1920s saw the creation of vary large unions such as the Transport and General Workers union led by Ernest Bevin.
In 1919, there was a police strike in Liverpool and serious riots in Glasgow
In May 1920, dockers refused to load a ship with weapons to be used against the Bolsheviks in the Russian Civil war and a ‘Hands off Russia’ campaign got support from the unions.
Lloyd George’s actions towards industrial relations from 1919.
1919= brought the rail strike to an end and also averted the threat of a coal strike in February 1919 by appointing the Sankey Committee to investigate pay and conditions in the coal industry.
He also set up industrial councils to negotiate wage rates and look at production methods.
What was the impact of the industrial recession of 1921
- wages slumped
- strikes increased
1921= almost 86 million days were lost in strike activity.
Staple industries
- Steel
- Shipping
- coal
- textiles
Urgent need for products of Britain’s staple industries during the war had led to massive investment. However, the demand for these goods declined dramatically at the end of the war and the long-term decline evident before the war now became more apparent.
Position of Steel
Britain’s capacity to produce steel expanded by 50% during the war. However, by 1921 it was clear that there had been substantial over-investment and that neither the domestic nor the foreign markets could absorb this quantity of steel.
Position of Shipping
Britain had built 2 million tons of shipping during the war to cope with the demands of continual losses to the German U-Boats; however after 1918, it only needed to produce 0.5 million tons a year.
Position of coal
By 1918 other countries such as Poland and Germany were now producing more and were supplying the world markets. In addition, gad, electricity and oil were rival energy sources. Cars and ships used petrol and oil. Some countries began to develop Hyde-electiricity.
Position of textiles
Overseas markets had been lost during the war to the Japanese, India and the USA.
How did restrictions on trade lower demand
America imposed tariffs on certain imports
Italy tried to move towards self-sufficiency
Soviet Russia tried to avoid reliance on capitalist countries.
Restrictions on trade and tougher foreign competition hit the staples hard because they were great exporting industries.
The result was that they had to drastically scale back their production meaning laying off many workers.
This led to structural unemployment.
Position of Britain’s trade by the end of the war.
Before the war=
Braitn already imported a greater value of goods than it exported. It could more than make up for this by selling services and by income it received from overseas investments (invisible trades).
Therefore, Britain had a favourable trade balance.
During the war=
British government and other investors sold off many overseas investments. The government borrowed vast sums to fight the war, particularly from the USA and there was interest to pay back on this.
After the war=
1919-20 short-term increase in exports to countries that could not get British goods while the war was fought, but this did not last. By 1921-22 Britain had an unfavourable;e trade balance.
