British Empire: Cycle Industry in the Colonies

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Empire folding bike

Probably the biggest contrast between Great Britain now and Great Britain at the turn of the twentieth century is in our attitude. Our country then was  the dominant world superpower with an empire spanning the globe. In 1914, fighting for King and Country was considered an honour. But these days we’ve become apologists for our previous empirical ways.

My grandad fought in WW1, signing up at fourteen years of age by pretending he was older. My dad fought in WW2 and regaled us with stories of it in my formative years. As a teenager in the sixties I rebelled and became a hippy. The Empire stood for everything I hated about British society. But now my old friends make fun of me because after years of religiously wearing jeans I wear the type of clothes my dad wore when I go on vintage cycle runs. And I’ve developed an interest in the Victorian and Edwardian era. So has it changed my attitude toward the Empire?

Because we’re now a more multi-cultural and inclusive society, maybe I no longer need to rebel against the old order? And it’s hard, as a vintage cycle enthusiast, not to to feel affectionate for the era when Great Britain made the best bicycles in the world.

Some retribution for Empire may indeed be due, but every culture throughout history depended for its survival on trade with neighbours. Empires were created for commercial purposes, and conquering and trading went hand in hand. For example, the British East India Company was established by industrialists and financiers in London to exploit resources in Asia. They were provided with a mandate to govern the territories they established, with British military support. This practice followed a pattern established by other European powers such as Spain …though Spanish imperialism was carried out officially in the name of the church. The plundering of assets of older civilisations was at the heart of most exploration: it was an expensive venture and without taking treasures home it would be hard to fund subsequent voyages.

Dominance in world trade always breeds resentment. Corporate companies have little incentive to help customers, only to create monopolies and make more money. The GM food corporations are a classic example in our current age, creating crops which are initially resistant to pests, which on the face of it seems advantageous. However, the GM seeds may only ever be purchased from those same companies, to create a dependency which in the long term can only be beneficial to the company not the farmer.

Historically, it was governments themselves that adopted the role of the corporation. The immense wealth of European countries came from the sugar trade, for example. When sugar was first imported into Britain, there was great resistance from the population. Beer was a staple food at the time, providing nutrition for the masses. But unethical publicans would use sugar to speed up the brewing process. So when a chap ordered a pint at his local pub he would pour a sample of it onto the wooden bench and sit on it. If it stuck to his leather breeches, he knew it was made using sugar – and the publican would grabbed from behind the bar and placed in the stocks as a warning to other unscrupulous publicans. With the government getting rich by selling addictive sugar, it’s no wonder Britons have always been distrustful of their government and politicians …as well as the food industry.

The corporate monopolies now have no borders; they buy up companies in every country to become multi-nationals. They are the new ’empires.’ So is it now time to forgive Great Britain for its empire days, and instead celebrate how our country at that time led the world in invention, innovation and engineering?

The years between WW1 and WW2 were dominated by political disputes and inflations in the 1920s resulting in what became known as the Great Depression in America and the Slump in Great Britain. Market economies worldwide were affected. These two decades were also a transition from Great Britain’s position as  the world’s leading creditor nation, its leading trading nation, and the producer of a third of the world’s manufactured exports, and the years after 1945, when the country was overtaken in terms of per capita incomes, productivity, and growth rates by many of its European competitors.

Britain did not experience the boom that had characterized the America, Germany, Canada and Australia in the 1920s, so its bust appeared less severe. Great Britain’s world trade fell by half  during 1929–1933, the output of heavy industry fell by a third, and employment profits plunged in nearly all sectors. At the depth in summer 1932, there were 3.5 million registered unemployed, and many more had only part-time employment. Particularly hardest hit by economic problems were the industrial and mining areas in the north of England, Scotland, Northern Ireland and Wales. Unemployment reached 70% in some areas at the start of the 1930s (with more than 3 million out of work nationally) and many families depended entirely on payments from local government known as the dole.

A major cause of financial instability, which preceded and accompanied the Great Depression, was the debt that many European countries had accumulated to pay for their involvement in the First World War. This debt destabilised many European economies as they tried to rebuild during the 1920s. Britain had largely avoided this trap by financing their war effort largely through sales of foreign assets. Following Britain’s withdrawal from the gold standard and the devaluation of the pound, interest rates were reduced from 6% to 2%. As a result, British exports became more competitive on world markets than those of countries that remained on the gold standard. This led to a modest economic recovery, and a fall in unemployment from 1933 onwards. Although exports were still a fraction of their pre-depression levels, they recovered slightly.

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THE POST-WAR BRITISH EMPIRE

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At the start of the war, Britain had spent the money that they did have in normal payments for material under the ‘US Cash-and-Carry’ scheme. Basing rights were also traded for equipment e.g. the ‘Destroyers for Bases Agreement.’ But, by 1941, Britain was in a terrible financial state and ‘Lend-Lease’ was introduced.

Large quantities of goods were in Britain or in transit when Washington suddenly and unexpectedly terminated Lend-Lease on 29 August 1945. The British economy had been heavily geared towards war production (around 55% GDP) and had drastically reduced its exports. The UK therefore relied on Lend-Lease imports to obtain essential consumer commodities such as food while it could no longer afford to pay for these items using export profits.

The end of lend-lease thus came as a great economic shock. Britain needed to retain some of this equipment in the immediate post war period. As a result the Anglo-American Loan came about. Lend-lease items retained were sold to Britain at the knockdown price of about 10 cents on the dollar giving an initial value of £1,075 million.

John Maynard Keynes was sent by the United Kingdom to the United States and Canada to obtain more funds. British politicians expected that in view of the United Kingdom’s contribution to the war effort, especially for the lives lost before the United States entered the fight in 1941, America would offer favorable terms. Instead of a grant or a gift, however, Keynes was offered a loan on favourable terms.

Historian Alan Sked has commented that: ‘The U.S. didn’t seem to realize that Britain was bankrupt’ and that the loan was denounced in the House of Lords, but in the end the country had no choice. America offered $US 3.75bn (US$55 billion in 2013) and Canada contributed another US$1.19 bn (US$15 billion in 2013), both at the rate of 2% annual interest. With the interest instead of paying the original loan amount the United Kingdom ended up paying a total of $7.5bn (£3.8bn) to the US and US$2 bn (£1bn) to Canada.

The loan was made subject to conditions, the most damaging of which was the convertibility of sterling. Though not the intention, the effect of convertibility was to worsen British post-war economic problems. International sterling balances became convertible one year after the loan was ratified, on 15 July 1947. Within a month, nations with sterling balances had drawn almost a billion dollars from British dollar reserves, forcing the British government to suspend convertibility and to begin immediate drastic cuts in domestic and overseas expenditure. The rapid loss of dollar reserves also highlighted the weakness of sterling, which was duly devalued in 1949 from $4.02 to $2.80.

World War II changed British society in many ways. First, Great Britain was bankrupted by the war. The Anglo-American Loan Agreement was negotiated by John Maynard Keynes from the United States and Canada on behalf of the United Kingdom, on 15th July 1946. (It was eventually settled on 29th December 2006).

However, despite the Anglo-American Loan and receipt of a third more Marshall Aid than West Germany after WW2 ($2.7 billion v $1.7 billion), postwar British governments chose not to make industrial modernisation its central theme. Instead, it was decided by both Labour and Conservative politicians to use the money to maintain Great Britain’s role as a world power and banker. But it was impossible for the country to return to its pre-war Empire days. India’s independence was followed, in due course, by other colonies, which duly led to the formal creation of the Commonwealth in 1949.

British leaders had also promised its working population more equal treatment as a reward for fighting the Nazis. The creation of the Welfare State was kick-started by the 1942 Beveridge Report. Liberal economist William Beveridge recommended to the government that they should find ways of tackling the five giants, being Want, Disease, Ignorance, Squalor and Idleness. He argued to cure these problems, the government should provide adequate income to people, adequate health care, adequate education, adequate housing and adequate employment. It proposed that ‘All people of working age should pay a weekly National Insurance contribution. In return, benefits would be paid to people who were sick, unemployed, retired or widowed.’

Before 1939, most health care had to be paid for through non government organisations – through a vast network of friendly societies, trade unions and other insurance companies which counted the vast majority of the UK working population as members. These friendly societies provided insurance for sickness, unemployment and invalidity, therefore providing people with an income when they were unable to work. Following the implementation of Beveridge’s recommendations, institutions run by local councils to provide health services for the uninsured poor, part of the poor law tradition of workhouses, were merged into the new national system. As part of the reforms, the Church of England also closed down its voluntary relief networks and passed the ownership of thousands of church schools, hospitals and other bodies to the state.

ration-book-car-1950

The postwar years for ordinary British citizens were not easy. Rationing had been introduced in 1939 at outbreak of war, and continued into the mid-fifties, although as much rationing as possible was ended by Queen Elizabeth’s coronation in 1953. But, despite rationing, there was great optimism, and everyone mucked in. The things that affected ordinary people were social. My mother described the importance of fashion to young women after WW2, particularly the ‘New Look’ which was the first collection of the House of Dior, launched on 12th February, 1947.

Popular music was also important to ordinary folks. Before the war, BBC Radio had had an elitist approach to popular music. Jazz, swing or big band music for dancing was relegated to a few late night spots. During the war, the BBC was obliged to adapt, if only because British soldiers were listening to German radio stations to hear their favourite dance bands. American G.I’s had helped popularise Boogie Woogie and the Jitterbug during the War, with dances held in church halls, village halls, clubs, and Air Force bases all over Britain. However, after the war, the big band sound started to decline, and crooners became popular. In 1950s Great Britain, Skiffle – using home-made instruments such as washboards and tea-chests – laid the foundation for Britain’s rock n rollers.

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The key to Great Britain’s postwar balance of payments was its Export Drive. Harold Wilson was president of the Board of Trade between 1947 and 1951. He explained in his 1957 book Post-War Economic Policies in Britain:

‘Increased exports enabled us to pay for more food and raw materials and to ship capital equipment abroad to speed the development of the Colonies and other parts of the Commonwealth. By 1948 the sum total of our overseas earnings was nearly enough to pay our accounts abroad including a continuing heavy drain on overseas military expenditure. In 1949 we actually had a surplus on our current accounts with the rest of the world, the first time in fifteen years, and this after the loss of a great part of our overseas investments.

Bilateral trading agreements enabled us to import urgently-needed food and raw materials from countries who were willing to take goods in return — Danish food or Swedish timber for British coal and steel and textile yarns: Argentine beef and feeding-stuffs for coal, electrical apparatus, alkali and tinplate: Soviet grain and timber, in return for machinery, forestry and transport equipment from Britain, and wool, rubber and cocoa from the Commonwealth.

Bulk-purchase of our imported food and of certain raw materials was violently attacked by Tory politicians and commodity dealers. But an impartial United Nations Report fairly commented:

‘The explanation of the relatively low prices paid by the United Kingdom for the imports of food and raw materials appears to lie largely in the extensive use which it has made of long-term contracts and bulk-purchase agreements covering a large proportion of its purchases.’

An important part of Labour’s programme was the development of trade with the Commonwealth. Production of food-stuffs and certain raw materials such as cotton and tobacco was stimulated by some fifty separate long-term contracts. By 1949, 45% of all our imports came from the Commonwealth, compared with 36% in 1934 – 38. ehilce historyWhile 51% of our exports went to Commonwealth markets, against 43% in pre-war days. By these means, both in food and raw materials, we made great strides in substituting Commonwealth sources of supply for the dollar areas.

As part of the British Empire before WW2 and ‘The Commonwealth’ after WW2, the vehicle history of these countries is intertwined with our own. British exports provided their first bicycles, motorcycles and cars and helped establish local manufacturers.

The following pages will document both British bicycles exported to Commonwealth countries, as well as each country’s own cycle industry…

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AUSTRALIA:

australian bicycles 1

TO READ ABOUT THE CYCLE INDUSTRY 

IN AUSTRALIA

PLEASE CLICK HERE

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NEW ZEALAND 

rambler-bicycle

TO READ ABOUT THE CYCLE INDUSTRY 

IN NEW ZEALAND 

PLEASE CLICK HERE

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CANADA:

1930_Hercules_01

TO READ ABOUT THE CYCLE INDUSTRY 

IN CANADA

PLEASE CLICK HERE

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BRITISH EAST AFRICA: UGANDA

stanley bicycle

TO READ ABOUT THE CYCLE INDUSTRY 

IN UGANDA

PLEASE CLICK HERE

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Postwar intro on War Loans thanks to – http://en.wikipedia.org/wiki/Anglo-American_loan