Trade And Commerce Inter-war Period (1914-67) Flashcards
What were the two phases that Britain went through during the inter-war period?
Phase 1: in 1920s (post WW1), Britain tried to return to free trade
Phase 2: after Great Depression (1929), importance of Empire in trade and commerce was highlighted
How did Britain try to return to free trade following WW1 and why?
Returned to gold standard in 1925, to stabilise international trade
- returning to free trade would have brought in more imports and made more from exports, allowing Britain to recover from the war
- getting back on the gold standard was a sign of supposed economic stability which would create a strong appearance for Britain coming out of WW1
What was an exception in trade in the 1920s where the colonies were considered a priority in trade?
1929 colonial development act - provided Treasury funds to support colonial development projects
Clearly, despite Britain trying to return to free trade and re-stating a position of overall economic dominance, Britain wasn’t completely turned away from the idea of imperial preference
Which event heavily impacted the Empire’s view on how British trade should be carried out?
The Great Depression
How did the Great Depression shift economic preferences for the empire?
There was an emphasis now on the importance of Britain for commerce
- imports from the empire increased
When did Britain abandon the gold standard again after the Great Depression and why?
1931 -
However, trade with the empire in Sterling was a great asset and almost stabilised what would be the economic instability that comes with abandoning the gold standard
When do Britain seem to rely on the empire for trade and commerce?
In times of economic turmoil e.g WW1 and Great Depression
How did Canada feel about returning to imperial preference?
. They were slightly concerned as they wanted more independence in industry, as they had gotten a strong trading relationship with USA due to its proximity to it.
. Imperial preference would reduce dependence on their non-empire economies and this may limit Canadian autonomy in or pursuing other trade agreements outside of the empire
When did the Dominions come together to discuss imperial preference after WW1?
1932 Ottawa Conference
How was WW1 a time of economic turmoil for Britain?
. Gold standard suspended
. Public expenditure rose
. Lost out on international markets of industrialisation
. USA economic debt
How did Britain like to go about trade pre-1914?
They saw the value of the British empire in trade but didn’t try to force trading only with the colonies, allowing a system of free trade
What is the gold standard and what are the main benefits of it in trade?
Fixing the value of your domestic currency to a fixed amount of gold
- this meant exchange rates were stable and predictable, encouraging countries to trade and invest in you as you have a stable economy
- limited ability to freely print money as you had to have the equated amount of gold in your reserve, making sure inflation didn’t occur.
Overall, the gold standard is generally a sign of a strong, stable economy
How is the gold standard political as well as economic?
. The gold standard was like the premier league of trade - sign of economic unity between great powers
. Being on the gold standard was associated with national strength and stability
. The gold standard is a sign of holding your own against other economies
Clearly the gold standard allowed Britain to maintain its place as an economic superpower for the time being
How did abandoning the gold standard in 1931 after the Great Depression help allow the British economy to recover faster than other countries staying on the gold standard?
. The pound devalued
- weaker currencies are more affordable for foreign buyers
- makes imports more expensive but exports more competitive as they are a more affordable currency now, reducing trade deficits
- devaluation can encourage domestic spending as foreign goods become more expensive, making consumers buy locally produced goods and stimulating economic growth in Britain
What agreements were made at the Ottawa conference?
. Abandon free trade
. Agreements for imperial preference set up
- Britain introduced general 10% tax on all imports but the crown colonies were exempted
. Dominions formed a self-contained trading unit where they were protected by high tariffs against foreign competition, giving each other’s exports preferential treatment in their own markets
- this meant the dominions could assist each other through the depression
What did the Ottawa conference show about the intentions of the dominions?
. The conference helped the dominions more than Britain
. Dominions were more interested in protecting themselves from the depression rather than maintaining imperial ties
. By 1938, dominions sold about 50% of their exported goods to each other
How much of Britain’s exports went to the empire from 1913-34?
1913: 37.2%
1934: 44%
Clearly Britain is increasingly preferring trade with the empire again
How was it clear that the empire became an important market for certain British exports from 1913-34?
Cotton goods: 51.7% in 1913, 53.2% in 1934
Motor vehicle exports: 67.4% in 1913, 71.7% in 1934
Why did British exports of their main commodities to the empire fall in the inter-war period?
. Tough competition emerged from Japan, USA and other emerging industrial economies
However, Britain remained relatively stable in their exports to the empire of historical commodities such as cotton, showing that even in the face of growing competition, Britain could somewhat rely on the colonies to purchase their exports
How much of Britain’s imports came from the empire from 1913-34?
1913: around 25%
1934: around 35%
Which specific British imports still came almost completely from the empire continuously between 1913-34?
Tea and jute from India
Which British imports came very much more from the empire between 1913-34?
Cocoa: 51% in 1913 to 91% in 1934
Raw cotton: 3% in 1913 to 17% in 1934
Raw rubber: 57% in 1913 to 80% in 1934
How did WW1 generally affect trade and commerce?
Difficult to generalise as different parts of the empire were affected in different ways
How important did the dominions become to the empire after WW1?
Very important due to the close ties created with the commonwealth and Ottawa conference:
. Dominions became a more important market for British exports while also becoming a more important supplier of important for Britain
A lot of trade was done with the dominions
What happened to India and Burma’s trade with Britain after WW1?
It absorbed fewer British exports as key Indian and Asian exports such as cotton were won by the Japanese, creating rival trading links that weakened Britain’s trade ties with India
