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Topic 1 The Impact of the Depression - Answers
1. 29th October 1929 Wall Street collapsed and the Great Depression began. USA couldn't lend money to European
countries and recalled some loans. Depression soon hit Britain and the rest of Europe because of their
over-dependence on the USA. The depression had a major impact on Britain:
Dramatic increase in unemployment in 1929 there were 1.5 million unemployed, but by 1930 it had risen to 2.4
Demand for British escorts declined because people wanted to buy cheaper goods.
Britain's major, older industries such coal, textiles, iron and steel and shipbuilding were badly affected and it
was these areas that had the largest influence on the unemployment figures.
Keys areas of British industry that suffered were Coal, Textiles, Iron and steel and Shipbuilding.
2. South Wales, North-West and North-East England, and Northern Ireland were the worst affected by unemployment.
These areas were badly affected because of long-term problems in older industries: coal, textiles, iron and steel
and shipbuilding. The main problem of the old industries was that they depended on exports.
3. In the south-east of England where new light industries such as chemicals, electrical goods and automobiles had
been developed, families were affluent. 80% of all new factories built from 1932 to 1937 were in London or nearby.
These factories ran mostly on electricity, not coal, and so did not help the coal industry by increasing demand for fuel.
In fact, people with jobs benefited from the Depression because prices fell and they could buy more.
4. Workers in badly affected industries and the unemployed protested in various ways:
They collected petitions and wrote individually to the government asking for work
They wrote to the newspapers, highlighting the problems
They regularly marched to London to protest to the Government about conditions
They took these actions to make the point that the unemployed were not lazy, but wanted more than benefits.
5. Before the Wall Street Crash, Britain was still trying to recover from difficult conditions left after WWI. The Gold
Standard made British Exports more expensive. The UK's industries did not get investment or diversification in the
1920s. Wage cuts hit some industrial workers, especially miners. When the depression hit, it made a bad situation
much worse and the Labour politicians responded with orthodox economic policies which did not alleviate the
6. Government Measures to Alleviate Depression
1930 Unemployment Insurance Act allowed additional numbers of workers entitled to benefits
Allowing more benefits helped to alleviate short term hardship however; it led to an increase in Government
spending and did not tackle unemployment
1931 Means Test was an assessment of belongings and worth in order to allow them to receive the 'dole'.
Many people were no longer able to receive benefits, resulting in an increase in hardship, however it
reduced Government spending.
1931 The Government came off the Gold Standard which reduced the exchange rate
The Removal of the gold Standard allowed people to import British goods for less money, encouraging
trade. This helped to create jobs.
1931 The Government introduced 10% tariffs on imported goods
British consumers were more likely to buy British goods rather than foreign ones, which were more
1934 Unemployment Act made clear the division between National Insurance payments (a right) and the dole.
1934 Special areas act gave government aid to depressed areas and low taxes and rent and rates
Encouraged companies to relocate to depressed areas, thereby creating more jobs
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The Means Test was unpopular because:
"This is more about the government than helping the unemployed!"
People hated having an inspector go through their belongings.
Relatives sometimes had to move out so family could get the full amount.
Humiliated families had to reveal their savings and earnings.
Some authorities applied the means test harshly, others refused to do it.
Families may be forced to sell their possessions if they wanted to receive the dole
Means test put a great strain on family life.…read more