Unit 1: Topic 1 - The Impact of Depression 1920s -1939

Question 1

How did the depression start?

Answer 1

• USA had been supporting European economy. Britain was one of those countries.
• Stock market collapses in 1929 and loan is needed to be repaid.
• This lowered the wages of jobs significantly and unemployment rapidly increased.

1929- 1.5 millions unemployed
1930- 2.4 million unemployed
1932- 3 million unemployed
1936- 2.3 million unemployed

Question 2

How did people protest?

Answer 2

• Petitions were collected
• Individuals wrote letterto the newspapers
• Regular marches on streets of London (e.g. Jarrow March)

Question 3

What support was there before the Depression?

What was the immediate support given when The Depression struck?

Answer 3

1911- National Insurance Benefit
- It used to cover workers in struggling industries such as:

• Ship building
• Steel
• Textiles
• Coal

These areas include:

• Clydeside
• South Wales
• Northern Ireland
• NW + NE of England

NOTE: 80% of all new factories built from 1932 to 1937 were in London or near by.
E.g. Chemical industry had 17.6% unemployed.
Mining had 34% unemployed
Ship-building had 62% unemployed in 1932.

Nov 1918 - Out of work donation or “Dole”
- Paid a small amount for soldiers and war workers after 6 months of unemployment.

1930 - Unemployment Insurance act

• Gives more people benefits
• No longer had to prove if seeking work

Question 4

What was coalition government called?

Who was the leader?

What were the general views on this issue?

Answer 4

1931- The National Government formed

Consisted of Labour, Liberal, Conservative MPs.

Leader: Ramsey Macdonald

On one hand there was a traditional view which was more stable and their agenda was primarily balancing the budget. One example of an MP who supported this is Neville Chamberlain.

On the other hand, John Keynes wanted to spend on public works to build profit by investing in businesses.

Question 5

What measures did the government attempt to secure the economy?

Answer 5

SHORT TERM MEASURES

• Spending cuts of benefits by 10% in Oct 1931.
• Coming of the “Gold Standard” because the sterling pound was overvalued and interest rates were at 8%. They were reluctant to further increase rates. The rates then dropped to 0.6% in 1933.
• Means Test checking
• Raised income tax

LONG TERM MEASURES

• 1932 - Import Duties Act - 10-28% on all imports, benefiting motor vehicles and electronics.
• Ottawa agreements to maintain imperial preference which was a free trade between commonwealth nations.
• Exchange Equalisation Accounts (1931-80s). Essentially a way to manage value of pound sterling on international markets.

Facts may suggest the government was opting in on the traditional view.

Question 6

The Means Test

The benefits and disadvantages?

Answer 6

PACs (Public Assistant Comittees) would conduct these mean tests. This would be check if the individual would need the benefits or not.

DISADVANTAGES

• It was intrusive and so people did not like it
• Humiliating
• Forced elders to be moved out so more benefit could be produced. Pensioners money can reduce benefit amount.

Average maximum = £1.46
Average wage = £3

ADVANTAGES

• It cut costs for the people and the government

Question 7

What acts were placed in 1934 to support the unemployed?

What was the Jarrow March?
When?
Why?
Opposition?
Support?

Answer 7

Unemployment Act

• National Insurance payments were a right
• Dole could be refused

Special Areas Act

• £2 million aid to struggling industrial areas (Southern Wales + Northern England)
• 15,000 jobs created (insignifcant)

JARROW MARCH CASE STUDY

Due to their only industry closing down (Palmer’s Shipyard) in 1934, they are not applicable for the Special Areas Act.

• 80% of Jarrow unemployed
• 450KM March in 1936

OPPOSITION

Prime Minister - Stanley Baldwin

There was opposition as it was non - political as the NUWM would argue and Stanley Baldwin ignored the 12,000 petiton.
There was also opposition from NUWM (National Unemployed Worker Movement). They wanted unemployment workers to march together.

FOR (MARCHING TO LONDON)

On the other hand, the marchers received support from many towns along the way. This included accomodation and food.

• Public meetings took place to explain what had happen in Jarrow
• Public baths were used for free in some towns.
• But they sometimes had to sleep in the workhouse - the last resort

CONCLUSION

The government did not act at once. Due to WWII, work was eventually found. However the march became a legend and inspired many modern marches.

There was some small gains. Marchers were offered work but meant leaving Jarrow. One marcher whose sister lived in London was offered work as a baker and reluctantly refused.
Sir John Marvis, an MP said he would set up steel works in Jarrow. It only employed 200 men in Dec 1937 and gave the governmeny to ignore Jarrow.

Question 8

What Act was placed in 1937?

What were the changes?

Answer 8

1937 - Special Areas Amendment Act

• Tax cuts
• Low rent
• Low rates for businesses moving to these areas