3.3.2

Inter-War Trade & Commerce

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Inter-War Trade and Commerce

The 1920s were spent reconstructing the economic system which had existed before 1914. The 1930s were spent recovering from the Great Depression.

Trade in the 1920s

Trade in the 1920s

  • In the 1920s, Britain sought to recreate the economic system which had existed before 1914. This involved fixed exchange rates between countries.
  • Britain got back onto the Gold Standard in 1925.
Trade in the 1930s

Trade in the 1930s

  • Amid the Great Depression at home, Britain tried to increase its exports to the Empire to make up for lower sales in Britain. Britain also began to import more from the Empire.
  • Harley (2004) states that imports from the British Empire were treated 'preferentially' by Britain.
    • Britain was forced to abandon the gold standard again in 1931. This increased exchange rate volatility and made trade between nations more difficult and more uncertain.
British protectionism during the 1930s

British protectionism during the 1930s

  • Britain's ability to trade with the Empire in using the British Pound (sterling) was helpful for trade. Prices could be quoted in pounds and paid in pounds, which lowered the friction to trade.
  • The British Empire pursued a policy of imperial preference (a protectionist economic policy).
  • This imperial preference was reflected at the Ottawa Conference of 1932. Here, Britain imposed a 10% tariff (tax) on imports, except imports coming from Crown Colonies.

British Rule in India During the Great Depression

Historian Shashi Tharoor has prompted a re-write of British rule in India, advancing the argument that British rule was intensely damaging, destroying pre-existing industry and prestige.

Shashi Tharoor, An Era of Darkness (2016)

Shashi Tharoor, An Era of Darkness (2016)

  • 'The manipulation of currency, throughout a feature of the colonial enterprise, reached its worst during the Great Depression of 1929–30, when Indian farmers (like those in the North American prairies) grew their grain but discovered no one could afford to buy it.'
  • 'Agricultural prices collapsed, but British tax demands did not; and cruelly, the British decided to restrict India’s money supply, fearing that the devaluation of Indian currency would cause losses to the British from a corresponding decline in the sterling value of their assets in India.'
Shashi Tharoor, An Era of Darkness (2016) cont.

Shashi Tharoor, An Era of Darkness (2016) cont.

  • 'Britain insisted that the Indian rupee stay fixed at 1 shilling sixpence, and obliged the Indian government to take notes and coins out of circulation to keep the exchange rate high.'
  • 'The total amount of cash in circulation in the Indian economy fell from some 5 billion rupees in 1929 to 4 billion in 1930 and as low as 3 billion in 1938. Indians starved but their currency stayed high, and the value of British assets in India was protected.'
Jump to other topics
1

High Water Mark of the British Empire, 1857-1914

1.1

Development of Imperialism, 1857-1890

1.1.1Empires over Time1.1.2Key Questions About Empires1.1.3Expansion into Africa1.1.4History of Egypt1.1.5Control of Egypt1.1.6Control of Sudan
1.2

Imperial & Colonial Policy, 1857-1890

1.2.1The British Empire & India1.2.2The British Raj1.2.3International Relations with other Powers1.2.4Scramble for Africa1.2.5The Informal Empire
1.3

Trade & Commerce, 1857-1890

1.3.1Trade & Commerce in the Empire1.3.2Infrastructure of Trade & Commerce1.3.3Products of Trade & Commerce
1.4

Attitudes Towards the Empire, 1857-1890

1.4.1Explorers1.4.2Missionaries1.4.3Traders & Colonial Administrators1.4.4Government Attitudes Towards Imperialism
1.5

Relations with Indigenous Peoples, 1857-1890

1.5.1Relations with India1.5.2Relations with South Africa1.5.3British-Boer Relations
2

Imperial Consolidation & Liberal Rule, 1890-1914

2.1

Consolidation & Expansion in Africa, 1890-1914

2.1.1Consolidation & Expansion into Africa2.1.2Consolidation & Expansion in South Africa2.1.3Historical Interpretations: Expansion into Africa
2.2

Imperial & Colonial Policy, 1890-1914

2.2.1Policy in India2.2.2Policy in Egypt2.2.3Native Policy in Colonies2.2.4International Relations with Other Powers
2.3

Trade & Commerce, 1890-1914

2.3.1The Benefits of Trade2.3.2Costs of the Empire2.3.3Debates Over Trade
2.4

Attitudes Towards the Empire, 1890-1914

2.4.1Key Administrators - Chamberlain & Rhodes2.4.2Key Administrators - Baring & Milner2.4.3Key Administrators - Curzon2.4.4Government Attitudes to the Empire2.4.5National Efficiency & the Boer War2.4.6Popular Attitudes Towards Imperialism
2.5

Relations with Indigenous Peoples, 1890-1914

2.5.1Challenges in India2.5.2Challenges in Africa2.5.3Challenges in South Africa2.5.4Historical Interpretations of the Boer War2.5.5Relations & Business with Iran
3

Imperialism Challenged, 1914-1967

3.1

Expansion & Contraction of Empire, 1914-1947

3.1.1Impact of WW13.1.2Palestine3.1.3Ireland & WW13.1.4Impact of WW2 on the British Empire
3.2

Colonial Policy & Administration, 1914-1947

3.2.1Administration in India & Palestine3.2.2Administration in Iraq & the Dominions3.2.3Imperial Defence
3.3

Trade, Commerce & Economic Impact of War

3.3.1Economic Impact of WW13.3.2Inter-War Trade & Commerce3.3.3Economic Impact of WW2
3.4

Attitudes Towards the Empire, 1890-1914

3.4.1Colonial Administrators3.4.2Trusteeship3.4.3Gandhi3.4.4Montagu, Haig & Linlithgow3.4.5Cameron, Mitchell, Cohen & Furse - African Admins3.4.6Imperialist Ideals
3.5

Relations with Indigenous Peoples, 1914-1947

3.5.1Ireland & India 1914-19473.5.2The Middle East and Africa
4

The Wind of Change, 1947-1967

4.1

Decolonisation in Africa & Asia, 1947-1967

4.1.1Reasons for Decolonisation4.1.2Decolonisation in East & West Africa4.1.3Decolonisation in Central & South Africa4.1.4Decolonisation in Asia
4.2

Colonial Policy & Administration, 1947-1967

4.2.1Relations & Business with Iran after WW24.2.2The 'Winds of Change'4.2.3The Suez Canal Crisis - 19564.2.4International Relations 1947-1967
4.3

Trade & Commerce, 1947-1967

4.3.1The Economic Impact of WW2
4.4

Attitudes Towards the Empire, 1947-1967

4.4.1Colonial Administrators: Cohen & Arden-Clarke4.4.2Local Leaders in the Independence Movement4.4.3Pan-Africanism in Nationalism
4.5

Post-Colonial Ties, 1947-1967

4.5.1Windrush & Immigration4.5.2Commonwealth Immigrants Act4.5.3Residual Impact of the Empire
4.6

Relations with Indigenous Peoples, 1947-1967

4.6.1Challenges to Colonial Rule Post 19474.6.2Kenya & the Mau Mau Uprising4.6.3Nigeria & Rhodesia

Practice questions on Inter-War Trade & Commerce

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  1. 1
    What were the impacts of Britain abandoning the gold standard in 1931?Fill in the list
  2. 2
    What word does Harley (2004) use to show how Britain treated imports from the Empire?Multiple choice
  3. 3
    According to Tharoor, how did the British respond to agricultural prices collapsing in India during the Great Depression?Fill in the list
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