trade and commerce Flashcards
economic impact of ww1 on britain
much of britain’s capital investment had been wiped out
£35,000 million debt
the pound sterling had to be removed from the gold standard for the duration, because gold reserves ran so low
production for the war was prioritised over making goods for export to traditional overseas markets, and this meant that britain’s competitors were able to win markets previously dominated by british exports
britain’s textile, shipbuilding, coal, iron and steel industries experienced difficulties - competition from japanese textile industry
problems intensified by the great depression in the 1930s, which saw a collapse of international trade and markets for british industrial exports
forced off the gold standard again in 1931 - reduced earnings from overseas investments
economic impact of war on india
contributed £146 million to the war effort and experienced inflation and shortages as a result
1914 - 2/3 of india’s imports came from britian but this started to fall because of growing strength of foreign competition
indian manufacturers began to capture more of the domestic market
after the war britain placed high taxes on indian imports, rising from 11% in 1917, to 25% in 1931 - give india protection against its competitors
interwar period
in the 1920s, britain tried to recreate the economic system which had existed before 1914 - returned to the gold standard in 1925 in order to stabilise its international trade
greater emphasis was placed on the importance of empire for british commerce and imports from empire increased
most of the countries of the empire fixed the value of their currencies to sterling and some kept their national reserves in sterling. created sterling area - trade in pound sterling
statistics
imperial exports as a percent of total british exports:
- 1913 - 37%
- 1934 - 44%
motor vehicle exports:
- 1913 - 67%
- 1934 - 71%
imperial imports as a percent of total british imports:
- 1913 - 24%
- 1914 - 35%
cocoa imports:
- 1913 - 50%
- 1934 - 90%
ottawa conference 1932
the british introduced a 10% tax on all imports apart from the dominions
britain and the dominions gave each other’s exports preferential treatment
canada didn’t like this - wanted to trade with usa
economic impact of ww2
german u boat attacks on british sea traffic were devastating - britain lost 11.7 million tons of shipping or about 54% of the country’s merchant fleet strength
the loss of major colonies in south east asia to the japanese from 1942 disrupted trade and cut off supplies of vital raw materials from malaya such as rubber
balance of trade in deficit
1/3 of britain’s overseas assets were sold to pay for the war - britian borrowed $900 million from the usa in the form of lend lease in 1941, and led to massive debts
dependence on empire increased
sterling balances used to help britain pay for the war effort
colonial development and welfare acts
1940:
- wrote off some colonial debts
- provided colonial grants or loans of up to £5 million per year
1945:
- increased the aid available to the colonies to £120 million over 10 years
- required each colony to produce a 10 year development plan, showing how it would use such funds
tanganyika ground nut scheme
1948
britain experienced a severe shortage of cooking fats and from this emerged the idea of growing ground nuts in tanganyika which could be processed and turned into cooking oil and sold to the world economy
the project involved massive investment in tractors, equipment and the construction of a railway to transport the crop
cost £49 million
abandoned in 1951 since the terrain proved too difficult to cultivate
1950s
until the 1960s, empire and the commonwealth were extremely important for britain’s international trading position - provided essential imports of food and raw materials at a time when britain’s reserves of foreign exchange were too limited
1956 - 58% of all overseas investments in the uk went to wmpire
imports from western europe:
- 1948 - £427 million
- 1965 - £1762 million
economy recovered due to marshall aid
chose not to join the eec in 1957 and instead set up their own rival trading bloc, the efta. however, the eec flourished and britain was increasingly torn between a future based on a commonwealth of global trade links, and one in which economic relations with europe would become the basis of future policy
post war reconstruction
continued rationing to cut the costs of food imports and prioritising british industrial production for the export rather than the domestic market
developed productive and export capacities of the colonies particularly in africa to increase dollar reserves and to ensure a steady supply of goods to britain from within the sterling area
the sterling devaluation 1967
labour government announced it was lowering the exchange rate so the pound became worth $2.40 down from $2.80
cut of 14%
decision was taken reluctantly, in the face of a balance of payment crisis and was designed to cut britain’s deficit by making british exports cheaper
