Unemployment and Government Response

Question 1

What key event happened in 1929 that triggered the Great Depression?

Answer 1

The Wall Street Crash in October 1929

Question 2

What did American banks do?

Answer 2

They recalled some of their loans

Question 3

Why did American banks recalling their loans hurt Britain?

Answer 3

Many British companies were over-dependent on American loans

Question 4

How many people were unemployed by 1933?

Answer 4

3 million

Question 5

Which industry was worst hit by the Depression and why?

Answer 5

Shipbuilding - as countries stopped trading with each other, there was little need for ships to be built.

Question 6

How many tonnes of shipping did British shipbuilders produce in 1930 and 1933?

Answer 6

1930 - 1.4 million tonnes

1933 - 133,000 tonnes

Question 7

Why did the coal industry suffer badly?

Answer 7

• British coal mines had not invested in modern machinery making mining coal expensive
• Coal could be produced more cheaply abroad (65p in USA vs. £1.56 in Britain)

Question 8

Why did Britain’s iron and steel industry suffer?

Answer 8

• Less demand for ships/weapons after end of WWI
• Companies in USA/Japan undercut British companies because they could produce iron and steel more cheaply in their modern plants

Question 9

How much did the British textile industry shrink by between 1929 and 1939?

Answer 9

40 per cent

Question 10

In 1932, what percentage of people nationally were unemployed?

Answer 10

23%

Question 11

Which parties made up the 1931 National Government?

Answer 11

Conservative, Labour and Liberal parties

Question 12

Who was the Prime Minister of the National Government from 1931-1935?

Answer 12

Ramsey MacDonald

Question 13

Who was the Prime Minister from 1935-1937?

Answer 13

Stanley Baldwin

Question 14

What did the government do to government workers’ pay?

Answer 14

• They cut it by 10% (teachers, civil servants, police etc.)

Question 15

Why did the government come off the Gold Standard?

Answer 15

The govt. came off the Gold Standard which made imports more expensive - encouraging people to buy British

Question 16

What did the government do to income tax?

Answer 16

Raised it to try and pay for the increased unemployment benefit

Question 17

What was the Import Duties Act and when was it signed?

Answer 17

It was signed in 1932 and it put a 10-20% tax on all imports - again, to encourage people to buy British goods

Question 18

What were the Ottawa Agreements and when were they signed?

Answer 18

Signed in 1932, these allowed Commonwealth countries to trade on preferential terms, providing a market for British exports and allowed British consumers to buy food cheaply from abroad

Question 19

What was the Special Areas Act?

Answer 19

Passed in 1934, the govt. offered grants of £2 million to companies who would relocate to areas badly affected by the Depression (e.g. north-east and north-west England, South Wales, Northern Ireland).

Question 20

Name a success of the Special Areas Act

Answer 20

The Team Valley Trading Estate in Gateshead in 1938

Question 21

By 1938, how many new firms and jobs had been created by the Special Areas Act?

Answer 21

121 firms - and only 14,900 jobs (for £8,400,000 spent)

Question 22

What were the main reasons for the fall in unemployment?

Answer 22

• A revival in world trade, which led to a greater demand for British exports
• rearmament (building of military equipment/vehicles) in preparation for war

Question 23

How many people were unemployed by the end of the 1930s?

Answer 23

1 million

Question 24

Was unemployment evenly spread?

Answer 24

No, the north-east, north-west, Clydeside (Glasgow), South Wales and Northern Ireland were hit hardest. This is where old industries (shipbuilding, coal mining, iron and steel) were located.

• Things were not as bad in the south of England: newer, more modern industries (cars, electrical goods) were not nearly as badly affected.