In 1929 a significant event occurred in America, which was to affect almost the whole world. The ‘Wall Street Crash’ plunged America and many other countries into a state of depression that would last the best part of 10 years. This all came about because people began to take their shares from the stock market, which was because they had lost faith in it. A huge misdistribution of wealth and money also played a key role in the Depression. The unequal distribution of money was between the rich and the middle class, between the industry and agriculture within the United States, and between the United States and Europe.
It slowly increased throughout the 1920’s. The increased manufacturing output added to the gap between the rich and working class people. The output (of production) increased a lot while the worker’s wages only increased a small amount. Because of the unequal distribution of money, the economy became unstable. The large amount rumours about the stock market kept it artificially high, and it eventually led to huge market crashes in the future. As a result, the American economy was left in ruins. Due to this America called in all of its loans to other countries in order to recover, but this also left these countries in a state of Depression.
What made it worse was Britain could only pay back its some of its loans whilst receiving reparations from Germany, who were borrowing money from the U. S. A in the Dawes/Young plans. This resulted in America stopping loaning money to Germany, who slowed reparations to Britain and France, which meant they couldn’t pay back their loans to the U. S. A straight away. In this essay I aim to find out if all consequences of the Depression were bad, if the impact was regional, as well as answering the main question. I hope to use historian’s views in my essay. Perhaps the biggest most disruptive consequence of the Depression was Unemployment.
After World War One, industries such as coalmining, textiles, iron and steel, and shipbuilding (which had provided almost three quarters of the country’s exports) suffered hugely. This along with the Depression brought around with it the terrors of mass unemployment. The War had resulted in losing markets to industrial rivals such as America and Japan, which reduced demand for British goods. Due to this as well as an over-valued currency, weakness in finance, and manager-worker relations, there was a depression in these industries, which had once made Britain a dominating power.
This resulted in many workers being unemployed. Large areas were affected by unemployment because the workers didn’t have any money to spend (either they were unemployed or their wages had been lowered), which meant that shops had to close down – this had a bad effect on the economy and society in general because there was less money going through the system. The coal industry that had been so profitable was almost ruined, and many workers were left unemployed and in poverty because their employers could not afford to pay their wages and had to make them redundant.
People who were on the Dole were basically being paid to be unemployed, and they also didn’t have to pay taxes. The only reason that there was not poverty in Britain as bad as there was in Germany, for example, is because this country had a much more generous system for the unemployed (even more than the U. S. A) in the 1930’s. Another bad thing about the Unemployment is that the National Insurance schemes didn’t pay out everyone. This meant that money that was desperately needed by some people, which they were entitled to, wasn’t being sent to them.
J. Stevenson and C. Cook’s views of unemployment at the time point out (in ‘Britain in the Depression’), that the dole allowed the unemployed to afford the necessities of life and therefore helped to ‘defuse popular discontent’. The people that were affected by the depression the worse had a terrible lifestyle, and could not even afford good food. The majority of people who were living in poverty bought Spam, which wasn’t the best of foods, but could be used for many different types of meals. Another terrible fact was that when Seebohm Rowntree did a survey in York in 1934 and discovered that over 30% of families were living in serious poverty.
Their health suffered and the infant death rate rose rapidly. In Jarrow it reached a peak of 114 deaths in 1000 live births. There was also an increase in diseases caused by poor diet, such as rickets. Even those who were lucky enough to get work or still have their old jobs were being affected by the depression, as their working hours were being reduced which meant that their wages were as well. Even though there were new industrial area in Britain that were set up around big cities like Birmingham and London, people living there were still not immune to unemployment.
There were so many people trying to get jobs at these new places of work, and yet those who already had jobs there could not be guaranteed they would still have them by the next week. There were some good things that came out of the Great Depression of the 1930’s, even after all of the problems for nearly ten years. British society had changed during this time and depending in what area of the nation you lived in, it either was a change for the better, or a change for the worse (even though everything did eventually recover).
The cost of living in Britain fell by more than a third between 1920 and 1938. This is a huge change in what it would cost for the average person to maintain a satisfactory standard of living. This benefited all social classes, but the one most affected was the working class. By being able to afford to live a suitable life for a third cheaper than it used to be, meant that the Working class were able to live more comfortably with large sections of them gaining a general rise in living standards, and were able to spend more of their earnings (if they had a job).
Because of the overall effect of the Depression on the British economy prices went down, which meant that people could afford to by much more. This was especially relevant to those living and working in the South and in the Midlands as they had better paid jobs, which meant they had more spending power. Between the years of 1930 and 1937, the number of Britons owning private cars rose from 1,056,000 up to 1,798,000. This for one thing shows the huge advancement that Britain made economically during the Depression years, albeit with the problems that came with it.
The Middle Class of Britain were used to a healthy standard of living, and new that they would always be able to cope and have a satisfactory standard of living if things got bad. But what happened due to the Depression they were almost certainly not expecting. After this event that brought so much suffering and trouble to the United Kingdom, living standards of the Middle Class actually rose a great deal. If anything, we would have expected the standard of living to go down for the Middle Class or at least stay the same, but not for it to get better.
For those living in the areas of Britain that experienced good changes, seeing as they were wealthier they could afford better food that gave them a better balanced diet and improved their health by quite a lot. This is significant because there were still people becoming ill and dying of disease due to not having a healthy, balanced diet. Healthier people (in particular workers) meant that they were happier; this resulted in more production on the work front, which helped the economy to recover. Perhaps also relevant to this is that the average family size (of children) decreased from 4. 6 down to 2. 19.
This was probably because people were richer they didn’t need to have more children to send out to work. If you lived in the Midlands or especially the south of the country, you might not have even known that there was a depression in the country. Prices fell and so the cost of living fell. If you had a job and a steady wage you had more money to spend than ever before. In the south the boom was particularly strong in the new light electrical industries springing up around London. New consumer goods were available and some workers could afford to buy cars (see previous text).
The unemployment rate in St Albans in Hertfordshire in 1934 was 3. % and the infant mortality rate in the south was 42 per 1000. Diet was good and people’s health was steadily improving. Many accounts from the time describe Britain as seeming like two separate countries. Cinemas were often full and families began to go away on holiday. A Butlin’s Holiday Camp was built at Skegness in 1936, which proved to be quite popular with British holidaymakers. This shows that leisure activities increased for people in these areas of Britain, because they could afford it and the prices were lower. Also more people were buying TV’s, so subsequently 36,000 people were granted TV licences.
All in all, I feel that the time of the Depression (known as ‘the hungry thirties’) was obviously a terrible time for many people, but it overshadows the advances that the country made during that time. Yes there were a lot of people who were unemployed, who lacked money and who personally suffered, but as J. Stevenson and C. Cook write, ‘for three quarters of the population (and, for most of the decade, more) who stayed in work, these were years of rising living standards in prosperous new suburbs, and of new levels of consumption upon which a considerable degree of industrial growth was based.
Personally I feel A. J. P Taylor puts it better when he wrote, ‘which was more significant for the future – over a million unemployed or over a million private cars? ‘ The Depression of the 1930’s, in my view, had a very big impact on society in Britain. It had both its good and bad points, but that all really depended on which area of the country that you lived in. The people living in the Midlands or especially the south of the country were hardly affected at all, and if anything their living standards went up. But for people living in the North, in Scotland or South Wales, life couldn’t have been worse for them.
It seems that whatever social class you were at the time, if you were in an area that was badly affected you would probably suffer. But it is true that in the worse-off areas, the different social classes didn’t really suffer as equally as they perhaps should have. This is because they had savings and could use these to support themselves comfortably. The business owners were probably the worse hit in industry, because so many businesses went bankrupt during the depression. There was nothing that they could really do about it because whatever they did it was always going to happen.