Coal

War and depression (part 2)

The rise of unemployment

Danger signals became apparent in the mid 1920s when unemployment among coalminers rose from 2% in April 1924 to 12.5% in January 1925 and to 28.5% in August. The south Wales coalfield, more dependent upon exports than the other British coalfields, was the worst hit.

The decline in the foreign demand for coal was caused by increased coal production elsewhere, the change to oil, the high exchange rate of sterling, the capture of South American markets by the United States, the unmodernised character of British production methods and the loss of European markets because Germany was paying reparations in coal.

The depression halted and reversed the industrial growth which had been in full flow for 150 years. It caused massive emigration: Wales lost 390,000 people between 1925 and 1939, and its population did not regain its 1925 level until 1973.

The structural unemployment which struck the coalfield in the mid 1920s was exacerbated by the cyclical unemployment caused by the Wall Street crash of 1929. By 1932, when unemployment among Welsh insured males reached 42.8%, Wales was among the world's most depressed countries.

While unemployment was at its most extreme in coal mining, the depression also hit steel, tinplate, slate and transport workers. Agriculture experienced great hardship, with many fully employed smallholders and farm labourers earning less than those on unemployment benefit.

The impact of depression

The depression halted and reversed the industrial growth which had been in full flow for 150 years. It caused massive emigration: Wales lost 390,000 people between 1925 and 1939, and its population did not regain its 1925 level until 1973.

Enforced idleness created fatalism and despondency. Low incomes resulted in poor health and substandard housing. The Means Test - the reduction in unemployment benefit received by families who had any other source of income - led to massive protests, including the demonstrations of 3 February 1935 when 300,000 people took to the streets in Wales.

The apparent collapse of capitalism increased support for the socialists and also the communists, who were at the forefront of all protests. The impoverishment of industrial Wales dealt a devastating blow to chapel culture and to the Welsh language.

Disagreement over support for the unemployed led to the collapse of the Labour government of 1929-31, and the subsequent National Government believed that little could be done apart from waiting for circumstances to improve.

In 1937, however, it began to provide assistance for companies creating jobs in areas of high unemployment - the foundation of the regional economic policies to which Wales was to become much indebted.

Yet despite new sources of employment - in particular the steelworks at Ebbw Vale and the trading estate at Treforest - coupled with outward movement of thousands of the unemployed, there was little real improvement in the Welsh economy. In the last month of peacetime - August 1939 - unemployment among Welsh insured males was 15.2%.


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