chapter 6 economic issues 1918-39

?
  • Created by: loupardoe
  • Created on: 19-05-18 17:47

how seriously did the First World War affect economic conditions after 1918?

  • WWI was a total war- required considerable economic effort
  • taxation was not excessive- 5s in the pound
  • war was financed by borrowing, increase in the amount of money put into circulation
  • raised prices
  • affected British trade- reduced the export and re-export trades
  • 1913- exports=£525 million, re-exports=£110 million
  • 1918- exports=£501 million, re-exports=£31 million
  • some markets were lost to British companies
  • Japanese and Indian manufactuers stepped in to provide cheaper and more available products- they were experiencing an industrial revolution, providing new competition for British traders
  • invisible exports- lost income from services to trade, sold off some private investments
  • very high level of financial support offered to foreign and dominion allies- £2000 million
  • financed by loans in the USA and Canada, raising shorter term loans at home via government borrowing
  • had to recruit a bigger labour force
  • 5 million served in the armed forces
  • their place in the workforce was supplied by women, younger workers and older men who delayed retirement
  • industrial workforce fell by 5%
  • skilled craftsmen were able to negotiate higher wages
  • share of wages in national income rose
  • demand for war supplies was huge
  • 1916- Battle of the Somme saw a million and a half shells fired by very large guns
  • 1914- total output of shells=half a million
  • Britain needed the products of heavy industry
  • engineering, iron, steel, chemicals, coal and agriculture faced a massive need with little foreign compeititon
  • Lever Brothers the soap, edible oil and fats company grew to be the 2nd largest manufacturing company, developing margarine as a butter substitute and exporting to the USA
  • cotton production and exports rose, shipping was available
  • rubber, medical supplies, petrol, glass and the newer electrical goods industries prospered
  • led to greater demands for coal
  • country saw full employment, diversification of labour, more production, higher wages, some improvement in working conditions, some move to rational economic controls
  • it was this growth that was to cause problems in the 1920s and beyond
  • pre war developments were reversed
  • the profits of the war moved businesses away from plans to restructure industry to meet a smaller demand or introducing new technology to improve productivity and reduce costs to ensure they were competitive
  • government provided some temporary relief- subsidies, very large amount of direct government demand, reduction of foreign competition
  • in the immediate post war period the government maintained interventions to help ease the transition to peace
  • tariff barriers to prevent foreign competition
  • suspension of the Gold Standard to allow the pound to be reduced to help exporters
  • coal mines continued to be subsidised
  • railways were kept in public ownership
  • agricultural prices were guaranteed, agricultural wages rose

post war boom

  • in the immediaete aftermath of the war there war an economic boom
  • economy as a whole flourished
  • the demobilised armed forces were reintegrated back into the economy
  • pensions and payments to ex servicemen put a lot of money into the economy
  • 17000 new agricultural smallholdings were set up
  • many new companies established…

Comments

No comments have yet been made