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'In many respects the 1920's formed a watershed between the old industrial regime of the pre 1914 area and the new industrial economy of the post 1945 period' - Derek Aldcroft….Explain background to this assertion.

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Introduction

'In many respects the 1920's formed a watershed between the old industrial regime of the pre 1914 area and the new industrial economy of the post 1945 period' Derek Aldcroft....Explain background to this assertion. 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). 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. ...read more.

Middle

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 �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. ...read more.

Conclusion

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. ...read more.

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