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The Great Depression

1929 - 1932

The Great Depression

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  • Intro

    Through the 1920s, Britain's economy was already struggling to pay for the effects of World War I. Then, in 1929, the US stock market crashed. World trade slumped, prices fell, credit dried up, and many countries protected their domestic market by taxing foreign imports. The value of British exports halved, plunging its industrial areas into poverty: by the end of 1930, unemployment more than doubled to 20 per cent.

     

    Public spending was cut and taxes raised, but this depressed the economy and cost even more jobs. Finally in 1931 the pound was devalued by 25 per cent, helping exporters by making their goods cheaper abroad, and helping to start the recovery.

     

    Through the 1930s, poverty and unemployment blighted large areas of Wales and northern England. Around London, however, some parts of the economy thrived: the suburbs enjoyed a building boom, helped by cheap interest rates.

     

    In this recording, the equivalent of a party political broadcast in the days before television, Labour party leader Ramsay Macdonald (1866-1937) spoke about the two outstanding issues that were to dominate the next decade: world peace and unemployment.

     

    This photograph shows the poor in Covent Garden, London in April 1929, a few months before the Wall Street crash. Copyright Getty Images.

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