Unemployment and Government Response Flashcards
What key event happened in 1929 that triggered the Great Depression?
The Wall Street Crash in October 1929
What did American banks do?
They recalled some of their loans
Why did American banks recalling their loans hurt Britain?
Many British companies were over-dependent on American loans
How many people were unemployed by 1933?
3 million
Which industry was worst hit by the Depression and why?
Shipbuilding - as countries stopped trading with each other, there was little need for ships to be built.
How many tonnes of shipping did British shipbuilders produce in 1930 and 1933?
1930 - 1.4 million tonnes
1933 - 133,000 tonnes
Why did the coal industry suffer badly?
- 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)
Why did Britain’s iron and steel industry suffer?
- 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
How much did the British textile industry shrink by between 1929 and 1939?
40 per cent
In 1932, what percentage of people nationally were unemployed?
23%
Which parties made up the 1931 National Government?
Conservative, Labour and Liberal parties
Who was the Prime Minister of the National Government from 1931-1935?
Ramsey MacDonald
Who was the Prime Minister from 1935-1937?
Stanley Baldwin
What did the government do to government workers’ pay?
- They cut it by 10% (teachers, civil servants, police etc.)
Why did the government come off the Gold Standard?
The govt. came off the Gold Standard which made imports more expensive - encouraging people to buy British
What did the government do to income tax?
Raised it to try and pay for the increased unemployment benefit
What was the Import Duties Act and when was it signed?
It was signed in 1932 and it put a 10-20% tax on all imports - again, to encourage people to buy British goods
What were the Ottawa Agreements and when were they signed?
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
What was the Special Areas Act?
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).
Name a success of the Special Areas Act
The Team Valley Trading Estate in Gateshead in 1938
By 1938, how many new firms and jobs had been created by the Special Areas Act?
121 firms - and only 14,900 jobs (for £8,400,000 spent)
What were the main reasons for the fall in unemployment?
- A revival in world trade, which led to a greater demand for British exports
- rearmament (building of military equipment/vehicles) in preparation for war
How many people were unemployed by the end of the 1930s?
1 million
Was unemployment evenly spread?
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.
