Causes of the Economic Depression in the 1920s & Inner and Outer Britain (Leaving Cert History): Revision Notes

Causes of the Economic Depression in the 1920s & Inner and Outer Britain

Before we jump right into the Jarrow March case study, it is imperative that we look at the years preceding it, as that will provide some valuable context for your answer. Below are some key causes of the depression in Britain in the early 1920s, as well as some of the economic and social hardships that the British had to face prior to the March in the 1930s.

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Causes of the British Economic Depression in the 1920s

• Several interrelated factors precipitated the British Economic Depression in the 1920s. One of the primary causes was the aftermath of World War I, which left Britain with substantial debt and a weakened economy.

  • The war disrupted trade and destroyed much of Europe's economic infrastructure, reducing demand for British exports.
  • Another significant factor was the overvaluation of the British pound following Britain's return to the Gold Standard in 1925.
  • The high value of the pound made British goods more expensive on the international market, leading to a decline in exports and an increase in unemployment.

• Additionally, global economic conditions were unfavourable, with many countries facing their own economic difficulties, reducing overall demand for British products.

Inner and Outer Britain

• Inner Britain and Outer Britain refer to the economic and social divisions within the country during the 1920s. Inner Britain consisted of industrial regions such as the Midlands, Northern England, and parts of Scotland and Wales. These areas were heavily reliant on industries like coal mining, steel production, and shipbuilding, which were particularly hard-hit by the economic downturn.
• In contrast, Outer Britain included the South of England and London, which were less dependent on heavy industry and experienced a relatively milder economic impact. Outer Britain benefited from the growth of new industries, such as automobiles and consumer goods, and financial services centred in London.

Government Policy & The Dole

• In response to the economic depression, the British government implemented various policies to mitigate its effects.
• One key measure was the introduction of unemployment benefits, commonly known as "the dole." The dole provided financial assistance to the unemployed, helping to alleviate some of the economic hardships faced by working-class families.
• However, the government's fiscal policies were often criticised for being overly conservative. The government imposed wage cuts and pursued austerity measures to balance the budget and maintain the Gold Standard.
• These policies included reducing public spending and keeping interest rates high, which many argue exacerbated the economic depression by reducing consumer spending and investment.

Wage Cuts

• Wage cuts were a significant issue during the early 1920s, particularly in the industrial sectors. Employers, facing declining profits and increased competition, sought to reduce labour costs by cutting wages.
• This led to widespread discontent among workers and contributed to labour unrest and strikes. The reduction in wages also decreased the purchasing power of the working class, further depressing demand for goods and prolonging the economic downturn.
• Overall, the combination of post-war economic challenges, the return to the Gold Standard, and conservative government policies contributed to a prolonged economic difficulty for Britain in the 1920s.

Social Issues

The 1920s in Britain were marked by significant social issues that exacerbated the hardships caused by the economic depression. Among the most pressing concerns were means testing and hunger marches, which highlighted the widespread poverty and discontent among the working class.

Means Testing

• Means testing was introduced as a way to determine eligibility for unemployment benefits and other forms of public assistance. This policy required individuals to undergo a thorough examination of their financial situation, including savings, income, and household assets, to qualify for relief. The process was often humiliating and invasive, leading to widespread resentment.
• Means testing aimed to ensure that only the most destitute received aid, but it often excluded many who were genuinely in need. Families had to exhaust nearly all their resources before qualifying for assistance, leaving them vulnerable and without a safety net. This policy disproportionately affected the working class, who could not receive adequate support despite facing significant economic hardships.

Hunger Marches

• Hunger marches became a prominent form of protest in response to the dire economic conditions and the inadequacies of means testing. These marches were organised by groups such as the National Unemployed Workers' Movement (NUWM), which sought to draw attention to the plight of the unemployed and demand government action.
• The most notable hunger march was the Jarrow March in 1936, where 200 men marched from Jarrow in the North East of England to London, covering a distance of nearly 300 miles. The marchers aimed to highlight the severe unemployment and poverty in their town, which had been devastated by the closure of its shipyard.
  • Hunger marches were characterised by their peaceful yet determined nature. Participants often faced harsh weather, limited resources, and police harassment, but they remained steadfast in their mission to bring their grievances to the attention of the government and the public.
  • These marches garnered significant media attention and public sympathy, highlighting the desperate conditions faced by many working-class families.

Additional Social Issues

Housing Conditions

• Overcrowding and poor housing conditions were rampant, especially in industrial areas. Many families lived in substandard accommodations with inadequate sanitation, contributing to health problems and social unrest.

Health and Nutrition

• Malnutrition and poor health were common among the unemployed and low-income families. Limited access to adequate medical care and nutritious food exacerbated these issues, leading to high rates of illness and mortality.

Education

• The economic depression also impacted education, as many children from impoverished families were forced to leave school early to work and support their households. This lack of educational opportunities perpetuated the cycle of poverty.

Labour Strife

• The widespread wage cuts and deteriorating working conditions increased labour strikes and unrest. Workers demanded better pay, job security, and improved working conditions, but their efforts were often resisted by employers and the government.