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During the interwar period, Britain underwent an economic transformation. The established industries such as those that produced staple goods, were experiencing stronger competition from overseas, Britain at the time was being accused of not adapting its production of its staple industries to new technological advances that were being implemented and taken advantage of in other parts of the world. As cited by Derek Aldcroft(1983), the impact of the war on the British economy showed in the rates of 1913-29, they were abnormally low, this combined with the reduction in exports led to the collapse of the export market of the staple industries.
By 1913 Britain lost its dominant position in manufacturing production to the USA and Germany, however at the time remained the world's largest exporter (Aldcroft, 1983, pg 9).
In 1913 Britain's share of world manufacturing production 14. 0%, 36% for the USA and 15. 7% for Germany, by the end of the 1930's Britain held a mere 9%, with the USA, Russia and Germany as the three largest producers (Aldcroft, 1983 pg10).
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After the war Britain experienced a boom, due to the pent up need for basic necessities, although there was an immediate downturn in the economy, by the summer of 1919 the boom was in full bloom.
However it did not last long and by late 1920 the collapse was even more dramatic than the unexpected boom of 1919, (Aldcroft, 1983 pg. 13). The 1920's also were a time of mass unemployment, it was associated regionally, and the Northern regions being affected the worst. The differences were reflected in the structural transformation of Britain's ever changing economy as it shifted away from its prior dependence on 19th Century staple industries.
The new industries brought with them a totally different organisational structure; they were not tied to any particular area by bulky fuel or raw material needs (S.
Pollard, pg 49, 1993). For the first time they also did not relay on male labour, women unskilled but adaptable were able to enter the work arena. New industries such as electrical engineering, motor industry, paper and printing were developing. Substitute materials such as Rayon and Nylon were cheaper to mass produce, oil was beginning to replace coal and steam engines were taken over by diesel engines (B. Alford). Electricity aided the development of the new industries, however throughout the 1920's Britain fell behind other countries regarding consumption of electricity.
Once the Central Electricity Board (CEB) was established and the National Grid was formed, consumption increased; between 1929 and 1935 it expanded to 70%. Early developments in mass consumerism were beginning to emerge, due to the mass producing of consumer goods such as white goods for the home market. London held the largest number of home consumers, the new industries from 1932-7 accounted for five sixths of he net increase in the number of factories and two fifths of employment in these new industry factories, (Pollard, 1993).
Demographically Britain also suffered along side many other European countries after the war. Wartime casualties along with shifts in fertility and mortality rates resulted in a smaller population, this coupled with the reduction in fertility and the mass loss of life of those in their prime due to military deaths, resulted in Britain losing part of its most productive labour force. During the interwar period the birth rate grew but was significantly lower then it had been in the 19th century (Aldcroft, 1983).
There was also an increase of suburban migration mainly due to increasing congestion, rising incomes and improved transport facilities, over 4 million new houses were built during this time (Aldcroft, 1983, pg 21). Before 1914 Britain depended on foreign supplies to feed itself, after the U-boat attacks on British mercantile ships, Britain had to look to its own home market production. Agriculture experienced favourable conditions just after the war prices and wages had a minimum guarantee. Agriculture prices began to slump after 1920 worldwide, the price of wheat fell more than one half between 1920 and 1922.
The government who had previously guaranteed farmers high minimum cereal prices could no longer sustain this guarantee and the Corn Production Acts of 1917 and 1920 were revoked (Aldcroft, 1983, pg 38). Fruit, dairy produce and meat produce were in great demand, with falling prices from abroad and more efficient means of packing and preservation of meat produce, Britain were being left behind in agriculture production. In 1925 Winston Churchill announced that he would 'make Britain great again', and return Britain to its former glory of being the worlds financial capital.
He believed this would be done by returning to the gold standard. It would have a fixed exchange rate of the pre 1914 level $4. 86 to the i??1, this was noted by John Maynard Keynes recognised at the time this would be a 10% over-valuation, his insight was correct and Britain experienced high interest rates and the burden of 10% lower import prices, this hindered the home market further (R. Pope, 1998). Transportation was another area which had an economic boom especially in the area of motor vehicles and aviation.
Unfortunately the older and more established forms of transport such as railways underwent a period of retardation. Private expenditure on passenger transport rose from 3. 8% before the war to 6. 5% in 1925-29 and to 7. 5% from 1935-38 (Aldcroft, 1983). Freight railway was not so severely hit as public; it managed to maintain control in the carriage of heavy goods. However it tended to transport goods that were part of the ever declining staple industries i. e. coal, iron and steel. Coal traffic declined from 225. 5 million tons in 1913 to 188. million tons in 1937 (Aldcroft, 1983), this had a negative multiplier effect on the freight railways. The growth of motor transport was accelerated by the distribution of many ex-army vehicles on to the market, the advancement of vehicles continued and the invention of the pneumatic tyre made the production of motor vehicles even more economically viable (Alcroft, 1983) Aviation before the war was at its most primary stage, once war broke out and the advantages of aviation became apparent the technical advancement was rapid.
In 1924 the government took control of the existing four private companies and established 'Imperial Airways' from 1924-34 Imperial airways extended its mileage from 1,520 to 15,529, passenger transportation increased from 10,321 to 66,324 (Aldcroft, 1983). Britain also experienced rate and profits declining in overseas shipping, although the worst period for this was during the early 1930's, Britain's fleet experienced a decline during a period (1913-38) when world tonnage rose by 46%.
Britain's own share of the tonnage declined from 42. 8% to 26. 0%. This was a result of a sharp fall in exports from Britain, partly a consequence of Britain's delay in adapting to new changes within the industry such as the 'diesel propulsion' (Aldcroft, 1983). Unemployment as mentioned earlier was rife during the 1920s and 1930's, there was a clear North and South divide, the South was hit less due to the new prosperous industries that were being established.
There was also variations between regions some counties within the North and the South experienced different levels of unemployment. In the South counties such as Norfolk, Suffolk and Cornwall were hit just as badly as some North counties. One of the main reasons for the unemployment was these areas supported the old 19th century staple industries, such as mining, textiles, shipbuilding, as demand decreased home and overseas, the inefficient overmanned industries suffered stagnation and even permanent contraction.
During the 1920's employment in mining, mechanical engineering, ship building, iron, steel and textiles fell by more than 1 million, (Aldcroft, 1983) this figure could be higher depending on whether this figure includes both skilled and unskilled workers. Overall the South escaped the high levels of unemployment that the North experienced due to its advantageous locations for the new industries. Buildings of new properties were unimportant during the war; but throughout the interwar period a series of public programmes were introduced.
New house were being built to replace the ones that had been damaged or destroyed during the war, this was encouraged by the 1919 Housing and Town Planning Act, and this made the building of houses obligatory to the local councils, (Pollard, 1992). As cited by Pollard (1992), favourable conditions for private building, led to a boom in the building industry, this boom of the early 1930's was noted as being partly responsible for pulling the country out of depreciation.
0s: A Watershed for Industrial Regimes. (2020, Jun 02). Retrieved from https://studymoose.com/many-respects-1920s-formed-watershed-old-industrial-regime-pre-1914-area-new-essay
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