The Depression

  • Created by: elina.d_
  • Created on: 26-10-17 15:15

Main Causes Of The Depression

  • After the First World War, Britain had depended on the sale of staple industries such as coal and steel. However, at the end of the war, these older traditional industries entered a period of decline.
  • Rising costs in production, obsolete methods and a failure to invest in new technology and machinery contributed to the decline in these traditional industries.
  • There was a fall in demand for British goods and increased competition from abroad particularly from the USA and Germany
  • After World War One, Germany had to pay reparations which they paid in the form of coal, steel and iron.
  • The more expensive British goods could not compete with cheaper imports. To make matters worse, Britain’s traditional export markets (such as Australia, Canada and New Zealand) were no longer prepared to buy British. They bought US steel, German coal and Indian cotton instead.
  • This brought to an end the so-called ‘golden age’ of Welsh and British heavy industry. When the worldwide economic Depression arrived in the early 1930s, Britain’s old industries could not cope

The Wallstreet Crash

  • The main cause of the Depression was the Wall Street Crash of 1929.
  • The collapse of the US stock market caused a financial crisis in which some major banks in the USA stopped trading and many businesses were forced into bankruptcy.
  • This led to rising unemployment which added to the economic problems as it led to a reduction in spending. As unemployment rose, sales declined further.
  • The US president, Herbert Hoover, became alarmed. Unsure of what to do, he called in America’s huge loans to other countries. He also put up customs barriers by imposing high tariffs to stop imports of foreign goods.
  • However, instead of protecting America, Hoover’s policy simply spread the Depression across the rest of the world which also fell into an economic slump.

The Decline Of Traditional Industries

  • Countries which had bought coal from Wales were now able to buy it at a cheaper price from countries…


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