Decline of Industry after WWI

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  • Created by: Pip Dan
  • Created on: 20-09-17 15:09

The state of the staple industries that had accounted for almost half of Britain's total output, a quarter of employment and three-quarters of exports before 1914 was to be a key problem for most of the inter-war period. As a result, throughout the 1920s unemployment remained at about 10-15% of the insured workforce, although there were considerable regional variations. Britain's share of the world export trade fell, from 18% to 11% and there were also a drop in the value of overseas investments, which left Britain struggling to pay for imports. The city of London was no longer the undisputed financial capital as the world money-lender, the US dollar displaced the pound as the world's major currency.  Although there was economic growth in this period due to new emerging industries there was industrial decline, as the staple industries declined.

Examples of decline

Year

Coal (millions of tonnes dug out)

Iron (millions of tonnes of pig iron output )

Cotton (millions of metres of cloth export)

1913

292

10

6,469

1929

261

8

3,443

1938

231

7

1,324

Cause of the economic problems in the 1920s

  • World War I led to lost export markets, and to over-protection in industries like steel and shipbuilding. It also disrupted international trade. World trade took in till 1925 to return to 1913 levels. The war forced Britain to sell off many overseas investments. Returns from these 'invisibles' was now reduced. The war also forced Britain off the Gold Standard weakening the pound as a trading currency.
  • Foreign competition intensified in the 1920s. British coal faced competition from Poland and Germany; cotton faced competition from India, the USA and Japan. Oil increasingly replaced coal as fuel in ships and some countries began to develop  hydro-electricity. There was an excess of coal

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