Posted: November 28th, 2013
The Great Depression in England
The Great Depression is seen as one of the greatest economic slumps in the twentieth century. This period can be substantially remembered by the crash of the stock markets in the United States of America (Paton, Jenkins, and Scott 424). In England, this period begun at around 1930. At this time, the world was globally experiencing the economic depression. Many of the European had not yet recovered from the First World War. These countries were trying to repay the debts that they had accumulated, at the end of the World War One, to recover from the damages and debts caused by the war. This proved to be a struggle of the European nations. England was hit by the depression at around 1930, and there many factors that led them to be affected. However, they were able to pull through and survive.
In order to clear the problems that culminated from the First World War, England decided to sell their foreign investments instead of borrowing. This led them to survive on the exports they were making. Secondly, there were industries that were emerging during this period. The motor vehicle industries in England were among the first industries to evolve. However, it had started becoming impossible for England because it could not compete with the foreigners like Japan whom were attracting customers all over the world (Potts 26). For these facts, it became difficult for England’s exports to support the economy. This led to the great depression or the great economic slump in 1930.
The great depression in England was characterized by several activities. The first activity involved the industrial exports in England. The exports products the companies producing in England collapsed (Potts 26). Many industries had to be closed down because they were incurring losses. The prices of the commodities they were selling had gone down. This meant that the companies were working at a loss. This led to the closure of many companies that existed at that time. In this situation, it proved that England was experiencing the great depression.
Secondly, there were high rates of unemployment at this time. Many people depended on working at these companies. Therefore, when the companies were performing well it meant that they were working, and their jobs were safe. However, during the great depression, many companies in England closed resulting to increased rates of unemployment (Potts 26). In addition, the living standards of the people decreased. The people were struggling to have the basic needs. Eventually, due to survival tactics, lot social crimes were taking place. Prostitution rates short together with the levels of crime in England.
There were increased rates of labor strikes. The new companies and the existing companies were striving hard to increase their profitability levels, therefore, had to cut costs. One of the ways of doing this was reducing the salaries, as they were laying off other employees. This provoked the labor unions to gather the employees and go to the streets of England. However, the problem at this time was that the government could not do anything to help the citizens. This is because the pound had already collapsed living the companies to help themselves.
For this reason, the government had to do something quickly so that they could save the nation. The gold standard was the first to be introduced so that they can increase the amount of money in circulation. At first, when the golden standard was introduced, the economic recovery halts. This is because England’s exports became extremely expensive. The companies were unable to make profits. However, after some time, the golden standards picked up and England was back in its feet to recovery.
The government reduced the interest rates. This meant the people had to pay their debts at a lower price as compared to before. Additionally, it led the increase of the pound in circulation. This made sure that the people had money to transact (Schultz, 23). Hence, it encouraged people to take loans for invest while spending. This increased the living standards of the people, and at the same time, it increased the domestic gross product for the nation. This started to characterize the beginning of the recovery in England.
Finally, the government started to encourage created an act known as the special areas act (Schultz, 24). This act encouraged light industries like the chemical industries to move their operations in the poor performing areas. In additional, the government made sure that the light industries were paying their employees extremely well. This increased the rate of employment. On the other hand, it increased the living standards of the people as it reduced the social crimes level rates. Lastly, this act ensured that there was equal distribution of resources to areas that were performing poorly.
The great depression was one of the biggest slumps in the economy to have ever occurred in the world. It was characterized by the collapse of the United States of American capital markets. Additionally, the First World War played a great role because many countries were struggling to pay their debts accrued at the time of the war. This led to the increased rate of companies closing down, unemployment, strikes and social evils in the society. In the effort to avert the situation, the England government at that time introduced the golden standard, reduced interest rate and the special areas act. The economy started to recover once again in the government.
Paton, J, R Jenkins, and J Scott. “Collective Approaches for the Control of Depression in England.” Social Psychiatry and Psychiatric Epidemiology. 36.9 (2001): 423-8. Print.
Potts, David. “In Brief – the Myth of the Great Depression.” Tls, the Times Literary Supplement. (2006): 26. Print.
Schultz, Stanley. The Great Depression: A Primary Source History. Milwaukee: Gareth Stevens, 2006. Print.
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