BMEWS
 
Sarah Palin's enemies are automatically added to the Endangered Species List.

calendar   Monday - January 05, 2009

Mutiny?  In the 20th century English Navy?  Not possible.  Oh yeah?  Some interesting history.

I forgot I had this among all the things here. Better late then never I guess because this is some interesting history both naval and economic.

You might like reading this. Well try anyway. Ya never know.

Six vital lessons of the 1931 depression
As we enter a second year of slump, history has some key pointers to the best way forward
William Rees-Mogg

Those of us who were alive at the time, or who have seen the film, have vivid memories of the sinking of HMS Hood in 1941, and of the pursuit and subsequent sinking of the German battleship Bismarck. Ten years earlier the Hood had been involved in another episode of naval history, which had a significant influence on British economic history.

On September 19, 1931, Captain J.F.C. Patterson, the acting Senior Officer, Atlantic Fleet, sent a signal to the Admiralty: “For two days, the ships at Invergordon of the Atlantic Fleet were in a state of open mutiny... large numbers of men were massed on the forecastles of Hood, Rodney and Dorsetshire. Men on the forecastle of Hood had refused to allow any work to be done to commence on unmooring, and it became evident that neither Hood nor Rodney could go to sea.”

Patterson had some sympathy with the underlying grievance. He informed the Admiralty: “The use of force was in my opinion quite out of the question,” and that “with regard to the causes of the outbreak, there is no doubt that first and foremost was the disproportionate reduction (in pay) of the lower ratings who entered before 1925”.

On the same day that Patterson sent his report of the Invergordon mutiny, a small conference was held at 10 Downing Street; the Prime Minister, Ramsay MacDonald, reported that he had had a discussion with Stanley Baldwin, the leader of the Conservative Party, and Sir Herbert Samuel, the leader of the Coalition Liberals.

* October 3, 1931: The ‘Daily Worker’ articles - incitement to mutiny over navy pay cuts

The result had been an agreement that it was essential to get legislation that would release the Bank of England from the obligation to pay out gold. E.R. Peacock, a director of the Bank of England, commented: “A sudden blizzard has struck the world. People have got anxious about their bank, that is to say, Great Britain, and they are gravely anxious about themselves.” The Downing Street meeting agreed to take Britain out of the gold standard.

The sailors at Invergordon were loyal and patriotic - many were to die for their country in the Second World War. But they were not prepared to have their pay docked - unfairly as they thought - to defend the convertibility into gold. In this, they were good Keynesians. In September 1931 the gold pound lost the confidence of British sailors, Cambridge economists and French bankers. That combination was irresistible.

September 19, 1931, was approximately the second anniversary of the start of the Great Depression in 1929. The mutiny and the decision to leave the gold standard proved to be the recovery point for Great Britain. From that point on, recovery became possible.

Two lessons were taught by Invergordon and the withdrawal from the gold commitment: governments should not try to balance the budget by cutting the pay of essential public servants; and they should not defend at all costs an overvalued fixed exchange rate. Britain does not now have a fixed exchange rate, although some people still want to join the euro. If we were in the euro, we would probably be arguing about when to leave.

The year 2009 can be paired with 1931. Both are the second year after the start of a big recession: 1931 was, beyond question, a year of depression. In the US the Federal Reserve Board kept statistics of the profits of 500 companies. In 1929 the index had been 998; in 1930 it had fallen to 760; in 1931 it was 370, and went as low as 267 in the final quarter.

Between 1929 and 1931 US employment fell by a third. If we based a forecast for 2009 on 1931 we would produce ghastly figures. The American recovery really began only in March 1933, after the inauguration of President Roosevelt. Britain had a lighter and shorter recession.

However, we can follow, and perhaps guard against, the acceleration of “the vicious spiral” of depression in 1931 itself. The turning of the screw actually began in June 1930, with the disastrous Hawley-Smoot tariff. Intended to protect US industry from excessive imports, it aroused international resentment and retaliation against US exports. If British experience offers the first two lessons, this would be the third: do not raise tariffs in a recession.

In May 1931, the Credit Anstalt, the leading bank in Austria, became insolvent and had to close. As the American economist, Irving Fisher, observed: “It was a great bank, and its collapse embarrassed both Germany and England.” Lesson four: do not allow systemic banks to fail. This was not applied to Lehmann Brothers, which may be regarded as the Credit Anstalt of the Wall Street panic of 2008. In June 1931 after runs on other Austrian banks, its Government belatedly guaranteed the liabilities of the Credit Anstalt.

In July 1931, the Bank of England rescued the German Reichsbank, which had been embarrassed by the failure of the Credit Anstalt. The French withdrew gold from Germany and the Bank of England for having taken the risk of supporting Germany. Lesson five: do not depend on central bankers in a panic.

On September 21 Britain left the gold standard, followed by 23 other nations. The US and France maintained gold convertibility.

In October 1931 President Hoover proposed the creation of the Home Mortgage Corporation, the ancestor of Fannie Mae and Freddie Mac, the mortgage banks that did not become insolvent until 77 years later.

In December Hoover announced his relief programme. Fisher commented: “To meet the rapidly developing emergency, each step was too small and by the time it was enacted into law, it was too late.”

Lesson six: in a depression, too much and too early is safer than too little and too late.

TIMES


avatar

Posted by peiper   United Kingdom  on 01/05/2009 at 04:29 PM   
Filed Under: • EconomicsHistory •  
Comments (2) Trackbacks(0)  Permalink •  
Page 1 of 1 pages

Five Most Recent Trackbacks:

Once Again, The One And Only Post
(4 total trackbacks)
Tracked at iHaan.org
The advantage to having a guide with you is thɑt an expert will haѵe very first hand experience dealing and navigating the river with гegional wildlife. Tһomas, there are great…
On: 07/28/23 10:37

The Brownshirts: Partie Deux; These aare the Muscle We've Been Waiting For
(3 total trackbacks)
Tracked at head to the Momarms site
The Brownshirts: Partie Deux; These aare the Muscle We’ve Been Waiting For
On: 03/14/23 11:20

Vietnam Homecoming
(1 total trackbacks)
Tracked at 广告专题配音 专业从事中文配音跟外文配音制造,北京名传天下配音公司
  专业从事中文配音和外文配音制作,北京名传天下配音公司   北京名传天下专业配音公司成破于2006年12月,是专业从事中 中文配音 文配音跟外文配音的音频制造公司,幻想飞腾配音网领 配音制作 有海内外优良专业配音职员已达500多位,可供给一流的外语配音,长年服务于国内中心级各大媒体、各省市电台电视台,能满意不同客户的各种需要。电话:010-83265555   北京名传天下专业配音公司…
On: 03/20/21 07:00

meaningless marching orders for a thousand travellers ... strife ahead ..
(1 total trackbacks)
Tracked at Casual Blog
[...] RTS. IF ANYTHING ON THIS WEBSITE IS CONSTRUED AS BEING CONTRARY TO THE LAWS APPL [...]
On: 07/17/17 04:28

a small explanation
(1 total trackbacks)
Tracked at yerba mate gourd
Find here top quality how to prepare yerba mate without a gourd that's available in addition at the best price. Get it now!
On: 07/09/17 03:07



DISCLAIMER
Allanspacer

THE SERVICES AND MATERIALS ON THIS WEBSITE ARE PROVIDED "AS IS" AND THE HOSTS OF THIS SITE EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, TO THE EXTENT PERMITTED BY LAW INCLUDING BUT NOT LIMITED TO WARRANTIES OF SATISFACTORY QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SERVICE OR ANY MATERIALS.

Not that very many people ever read this far down, but this blog was the creation of Allan Kelly and his friend Vilmar. Vilmar moved on to his own blog some time ago, and Allan ran this place alone until his sudden and unexpected death partway through 2006. We all miss him. A lot. Even though he is gone this site will always still be more than a little bit his. We who are left to carry on the BMEWS tradition owe him a great debt of gratitude, and we hope to be able to pay that back by following his last advice to us all:
  1. Keep a firm grasp of Right and Wrong
  2. Stay involved with government on every level and don't let those bastards get away with a thing
  3. Use every legal means to defend yourself in the event of real internal trouble, and, most importantly:
  4. Keep talking to each other, whether here or elsewhere
It's been a long strange trip without you Skipper, but thanks for pointing us in the right direction and giving us a swift kick in the behind to get us going. Keep lookin' down on us, will ya? Thanks.

THE INFORMATION AND OTHER CONTENTS OF THIS WEBSITE ARE DESIGNED TO COMPLY WITH THE LAWS OF THE UNITED STATES OF AMERICA. THIS WEBSITE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF AMERICA AND ALL PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE AMERICAN COURTS. IF ANYTHING ON THIS WEBSITE IS CONSTRUED AS BEING CONTRARY TO THE LAWS APPLICABLE IN ANY OTHER COUNTRY, THEN THIS WEBSITE IS NOT INTENDED TO BE ACCESSED BY PERSONS FROM THAT COUNTRY AND ANY PERSONS WHO ARE SUBJECT TO SUCH LAWS SHALL NOT BE ENTITLED TO USE OUR SERVICES UNLESS THEY CAN SATISFY US THAT SUCH USE WOULD BE LAWFUL.


Copyright © 2004-2015 Domain Owner



GNU Terry Pratchett


Oh, and here's some kind of visitor flag counter thingy. Hey, all the cool blogs have one, so I should too. The Visitors Online thingy up at the top doesn't count anything, but it looks neat. It had better, since I paid actual money for it.
free counters