Key Question 1- causes of depression

• Competition from Abroad 


  heavy goods- ships, textiles, coal and steel
• Competition from Abroad 


  only profitable if they could sell to markets all across the world
• Competition from Abroad 


  Britain suffered economically from WW1
• Competition from Abroad 


  Early 1920’s- faced competition from countries
• Competition from Abroad 


  foreign competitors produced goods better and cheaper
• Competition from Abroad 


  Coal- USA produced coal at a cost of 65p per tonne compared to £1.56 in Britain
• Competition from Abroad 


  Iron & Steel- US and Germany steel making plants more advanced than Britain counterparts
• Competition from Abroad 


  Textiles- increased competiton in USA and Japan
• Competition from Abroad 


  Ship Building- Japan and USA could produce more ships cheaply than Britain
• New Markets 


  Difficult to find new markets for British goods as products were more expensive
• New Markets 


  Free trade policy allowed goods from foreign markets to come into Britain freely
• New Markets 


  consumers had access to cheaper goods
• New Markets 


  British companies that exported goods often had to pay import duties
• New Markets


  Made products expensive
• Wall Street Crash 


  October 29th 1929- financial crash in the most powerful economy took place
• Wall Street Crash

  Effect of the Great Depression felt across Europe- “when America sneezes, Europe catches the cold”
• Wall Street Crash

  In Britain businesses confidence fell dramatically and trade declined
• Wall Street Crash

  1929-1931- exports from Britain fell by half
• Wall Street Crash

  Balance of trade was badly affected
• Wall Street Crash

  By 1931- trade deficit of £14 million
• Wall Street Crash

  unemployment numbers increase rapidly
• Wall Street Crash


  1930- 2 million unemployed. 1932- 3 million unemployed
• Obsolete methods


  USA produced mass production method to produce goods such as cars
• Obsolete methods


  Britain was slow to move to new quicker and efficient methods of production
• Obsolete methods


  British mines had not invested in up to date machinery so it was difficult to mine
• Obsolete methods


  British coal was expensive
• Obsolete methods


  steel making plants abroad were larger and more modern
• Obsolete methods


  1929- steel making ceased completely in Ebbw vale
• Obsolete methods


  1930- 3,000 steel workers were unemployed at merthyr
• Obsolete methods


  End of WW1 there was less demand for warships