Trade and Commerce 1947-67 (SECTION 4) Flashcards
Compare the % of British imports coming from the Commonwealth and from Western Europe from 1948-1965
1) 1948: 44.9% of imports came from the Commonwealth. 20.5% came from Western Europe.
2) 1965: 29.8% of imports came from the Commonwealth. 30.6% came from Western Europe.
What % of British exports came from the
Commonwealth and Western Europe in the years:
1948, 1954, 1960 and 1965
1) 1948: 46.1% of exports came from the Commonwealth. 24.8% came from Western Europe.
2) 1954: 48% of exports came from the Commonwealth. 28% came from Western Europe.
3) 1960: 35.7% of exports came from the Commonwealth. 26.6% came from Western Europe.
4) 1965: 27.9% of exports came from the Commonwealth. 32.5% came from Western Europe.
What happened in 1947 regarding the pound?
1) Devaluation of the pound, making exports cheaper, but reduced investment.
In what ways did the USA rise to global economic predominance after WW2?
1) Lots of nations had borrowed money from the US.
2) Dollars became the main currency.
3) Marshall Plan 1948-52 provided Britain with $3.3bn.
How did Britain attempt to meet the challenge to pay for vital imports in the post-war period?
1) Britain needed to earn dollars and build up foreign exchange reserves with which to pay for imports.
2) Continued to ration at home to reduce food imports, and prioritised industrial production for the export rather than the domestic market.
3) They tried to develop the productive and export capacities of the colonies, particularly in Africa, where the relative under-development of local resources offered huge opportunities for growth.
Why was trade with the empire and commonwealth important up to the 1960s?
1) Areas like Malaya were a major contributor to the Hard Currency Pool (having to keep some reserves in another country so you trade with other nations..
2) Until the 1960s, it provided essential imports of food and raw materials when Britain’s reserves of foreign exchange were too limited to source imports from many other parts of the world.
Why had Europe emerged as a favourable trading partner by the 1960’s?
1) European economy had recovered much more quickly and impressively than might have been expected, partially because of the support from the US and the climate of liberal democracy which favoured private enterprise.
2) Advances in science and technology.
3) By the mid 50s there was employment throughout Europe, growth rates were high and living standards were rising rapidly.
What was the Colonial Development Corporation? How successful was it?
1) Built on the Colonial Development and Welfare Acts of 1940 and 1945 which were used to expand agricultural production and promote new technology in the colonies.
2) Set up in 1948 to co-ordinate major projects and develop self-sustaining agriculture, industry and trade.
3) Renamed the Commonwealth Development Corporation in 1963.
4) Not all schemes successful such as the Tanganyika Groundnut Scheme of 1948.
5) However, Malay rubber proved a crucial dollar earner.
What was Britain’s initial reaction to the formation of the European Economic Community?
1) Chose not to join the EEC in 1957 when it was set up.
2) Instead they set up their own rival trading block, the European Free Trade Association.
Why was Britain rejected in its EEC applications in both 1963 and 1967?
1) Exports to Europe outstripped those to the Empire in the early 1960s.
2) France rejected Britain’s application to the EEC because if Britain joined it would bring the Commonwealth with it meaning that countries outside of Europe would also join.
What was the Sterling Devaluation? Why did it hit Britain’s imperial pretensions?
1) In 1967, Harold Wilson announced that the government as lowering the exchange rate so the pound became worth $2.40, down from $2.80.
2) Decision taken reluctantly in the face of a balance of payment crisis. It was designed to cut Britain’s deficit by making exports cheaper.
3) Destroyed the old ‘Sterling Area’ by weakening international faith in the value of sterling at hit at Britain’s global imperial pretensions.
In what ways were the Empire/Commonwealth important to the Post-War Reconstruction of Britain?
1) Helped pay for crucial imports.
2) Britain was dependent on the colonies in some key raw materials and foodstuff eg: meat from New Zealand.
3) Colonial Development was a key policy & Empire an area for significant British investment.
4) Initially Britain refused to join the EEC & was rejected due to its commitment to the Commonwealth.
5) Britain remained committed to its colonies despite the loss of India 1947.
6) Britain still able to benefit from trade with former colonies within the Commonwealth.
In what ways were the Empire/Commonwealth not so important to the Post-War Reconstruction of Britain?
1) Devaluation of the £ destroyed the Sterling Area.
2) Failure of trade with Commonwealth to prop up the £.
3) Trade with Empire and Commonwealth decreased.
4) Colonial Development projects such as the Tanganyika Groundnut Scheme failed in 1948.
5) Britain relied on the USA for financial backing. Heavily reliant on the Marshall Aid (1948-52) in total $3.3 bn. Britain also had to back down in the Suez Crisis in 1956 since it wasn’t economically strong enough to oppose the USA.
6) Cost of administrating colonies outstripped their value to Britain.
