02 HISTORY CLASS NOTES British economic performance in the 1920`s and 1930`s.
After world war 1 Britain has a post-war boom. But it is very misleading becuase then we suffer the fastest economic collapse ever.
In 1919 Britains share of world trade was 25 percent , by 1929 this has fallen to 16 percent.
Lot of unused consumption during the war.Individuals don`t want to spend money, manufacturers start producing raw materials so they can produce goods for individuals.
Governments started to borrow money so that they can help this to happen.
In 1919 and 1920 we have full order books for exports. Result of which is we have full employment. Long term prospects for international trade are not good. Industrial output fell by 10 percent in one year. Main problem for Britain is that is in the staple industries. There are 5 staple industries - coal, iron, steel, mecahnical engineering, ship building and textiles.
Between 1919 and 1929 number of workers falls from 4.5 million 3.4 million ( 25 percent loss ).
The two main reasons why exports are in trouble are - .
(1) International trade is generally much weaker than before the war.
(2) Our share is smaller - exports are much less competitive than other countries, especially Germany and America.
Cotton textiles.
Lanacashire dominated world market in textiles before ww1.But then after the war we invest a lot of money into machinery in the cotton industry and therefore begin to spend a lot of inappropriate money. 2 reasons why we begin to lose are - .
(1) other countries begin to produce for themselves - often using machinery.
(2) other countries begin to protect their markets with tariffs.
possibly a third - introduction of nylon.
By 1938 the the total world trade in cotton textiles is now only two thirds of the exports alone for Lancashire in 1913. Lot less trade to go around in general. High unemployment and short time working and lower levels of wages.
Shipbuilding .
Like cotton , before the war , it has high quality goods at low prices.