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Governments attempt to deal with 1931-39 depression
Chose to go with Snowden's proposals which he suggested to the House of
Commons 10th -11th of September. Meaning that the government's aim was to
make a balance budget by limiting government expenditure.
Range of economic policies addressing finical problems, trade and industry.
Some policies orthodox but mostly new.
Aim How? Positives Negatives
Make a -Tax rose to £51.5 million. Maintained International Lowered demand for
balanced -Cut public service wage- Confidence in Banking and goods and services.
budget Part of Teachers pay cut 15%. Armed stopped banking crises. Unemployment rose
Snowden's Plan. forces/Mp's/judges pay reduced Opportunity to get extra 1932-3.
10%. -Also cut unemployment dole because of the means
benefit by 10% introducing a testing. Bank of England
means test. gave loan of £80 million
from New York and Paris
Keep Pound -Intervene in currency markets. Value of the pound stayed Houses only targeted
stable Lower interest rates to 2% 1932 the same. Housing Boom middle class who took
making `cheap money' for with 2 million houses made advantage of cheap house
borrowers. -Loan from Bank of in 1930's providing jobs and prices and mortgages.
England of £80 million. more need for furniture. Less council houses built-
Seemed to secure the gold 700,000 built between
standard as well. 1931 and 1940.
Stimulate -Set up sterling area were pound Made more exports, Exports created by the
Trade used not gold to settle trading decreasing the amount of sterling area did not make
accounts. unemployment. up for the decline demand
-Made trade treaties with some from America and
countries (set quotas) Germany.
Help Industries - Special areas act 1934 New industrial equipment Not all Industrial areas
get back on gave £2 million to `special areas' for coal mines but meant qualified for the £2
track -Cotton Industry Act 1936 employed less people- million. Preferred to aid
shut down non-profitable mills. Jarrow unemployment 70%. new industries rather than
-British Shipping Act 1935 Created new jobs with the old industries where there
provided loans to companies to making the making of new was high unemployment.
build new ships in return to scrap ships/iron + steel factories.
- North Atlantic Shipping act
gave loans towards the building of
Transatlantic Liner Queen Mary.
-National Iron and Steel
Federation 1932 helped
demolish unprofitable places and
build new ones.
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Help Agriculture -Set marketing boards for milk, Provided some security for Less help for Arable
bacon and potatoes- set prices agriculture farmers and Farmers
for farmers of 10 shillings per protected them from
hundredweight. foreign imports.
Unemployment -Unemployment Act 1934 Unpopular with the
set up a board that unemployed.
standardised dole payments
when the 26 weeks of
The Gold Standard was scrapped in September; even though was why the government
was set up.…read more
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Rising consumer demands= expansion of home market= Government offset
cuts. For example electricity consumption doubled also demand for wireless
sets/ transport/ cinema/ dance halls
- New methods of production like assembly lines= goods made cheaper. For
example the price of motor cars fell in 30's. A small family car cost £120.
If new industries grew quicker might have compensated for the failure of staple