The International Financial Crisis in 1929 Essay

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The International Financial Crisis in 1929 Throughout the 1920's in Britain there were economic problems. Unemployment was increasing; therefore there was low domestic demand and large amounts of poverty. Markets were also being lost abroad, leading to a decrease in trade. However in 1929-31 these problems reached crisis point, when in 1929 The Wall Street Crash called for an end of American Loans to Britain, and the re-call of all Britain's debt. This had impact worldwide, as prices for goods slumped due to lack of demand and business confidence disappeared. In Britain it became clear that the 'Laissez-faire' policy was not going to work, but there was a divide in thoughts over which policy to adopt…show more content…
He was, however convinced by King George V to remain as Prime Minister but as leader of a national coalition government. In order to prove that Labour was a national, responsible party, Macdonald was prepared to do this, as was Philip Snowden, Chancellor of the Exchequor. Snowden believed that the budget should remain balanced and Britain should remain on the gold standard. He therefore supported the May Committee's proposal despite Labour's working class stance. However Arthur Henderson the foreign secretary did not agree. Henderson was heavily influenced by the Trade Unions, and felt strongly that Labour should represent the working class, therefore he felt that if the budget had to be balanced by cutting unemployment pay and raising taxes it was better for Labour to leave office and leave such policies to the Conservatives or Liberals. This difference in opinion within the party led to its break up and the formation of a national government due largely to the proposals if the May Committee. (c) 'Ramsey MacDonald had no alternative but to form a National Government in 1931.' Do you agree or disagree with this statement? Explain your answer. (15) After the First World War, Britain was thrust into a depression. Unemployment rocketed and wages fell dramatically. The most
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