The depression years in Wales and England, 1930-1939

?

Why did the Depression happen?

problems with traditional industry

  • before WW1, Britain's prosperity had depended on the sale of heavy industrial goods such as coal and steel
  • these older traditional industries entered a period of decline
  • rising costs in production
  • obsolete methods
  • a failure to invest in new technology and machinery
  • fall in demand for British goods
  • increased competition from abroad
  • more expensive British goods could not compete with cheaper imports
  • Britain's traditional pre-war export markets were no longer prepared to buy British
  • they bought US steel, German coal and Indian cotton instead
  • brought an end to the golden age of welsh and british heavy industry
  • when the worldwide economic depression arrived in the early 1930's, Britain's old industries could not cope

the wall street crash

  • the principal 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 ceased trading and many businesses were plunged into bankruptcy
  • led to rising unemployment
  • added to the economic problems
  • led to a reduction in spending
  • as unemployment rose, sales declined further
  • the way to end a depression is to get people to buy things
  • the US government did not know how to do this
  • the US president, Herbert Hoover became alarmed
  • he called in America's huge loans to other countries
  • put up customs barriers- imposed high tariffs to stop imports of foreign goods
  • Hoover's policy spread the depression across the rest of the world
  • 'when america sneezes, the rest of the world catches a cold'

impact on the British economy and employment

  • Britain, Europe and many of the world's industrial powers had come to depend on US loans and trade
  • when America's economu crashed, so did theirs
  • the world slump in production and trade lasted longer and was deeper than many governments had imagined
  • slump turned into a depression because it affected both employers and employees
  • some businesses crashed while others struggled to survive
  • production slumped because orders declined
  • led to many companies laying off workers
  • redundancies and dismissals contributed to the Depression
  • as unemployment rose, the decline in orders fell even more sharply
  • the crisis of 1929 had a significant impact on the British economy
  • the collapse of the post war economic boom in 1921
  • increased competition from abroad
  • disaster of the general strike in 1926
  • decline in the mining and steel industries
  • all these crippled the British economy
  • the crisis of 1929 made an already bad situation worse

impact on British politics

  • many politicians were convinced that the economy would right itself
  • felt that economic recovery was better left to businessmen rather than politicians
  • all would be well was their response
  • a minority of politicians did not know how best to solve the crisis
  • Sir Oswald Mosley (labour) called for massive government spending to create jobs and for high tariffs on foreign imports to protect British industry
  • economist Keynes and the leader of the opposition Liberals, David Lloyd George, tried to persuade…

Comments

No comments have yet been made