Cumann na n gaedheal economic policy


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Cumann na n gaedheal economic policy

  1. 1. Cumann nGaedheal Economic Policy <ul><li>Leaving Cert History </li></ul><ul><li>Sovereignty and Partition 1912-1949 </li></ul>
  2. 2. Cumann nGaedheal Economic Policy <ul><li>Background </li></ul><ul><li>Political considerations </li></ul><ul><li>Agriculture </li></ul><ul><li>Industry </li></ul><ul><li>Specific Economic Measures </li></ul><ul><li>Impact of Economic Policies </li></ul>
  3. 3. Background <ul><li>Cumann na nGaedhael inherited a backward economy, burdened by Civil War debts and an overwhelming depression in agriculture. </li></ul><ul><li>Economic realities included: </li></ul><ul><li>- Realisation that the Irish economy was enmeshed with the British economy. </li></ul><ul><li>- Few cabinet members had economic experience. </li></ul><ul><li>- The world economy was in recession. </li></ul><ul><li>- Ireland was a predominant rural economy and the major industrial area had been partitioned off. </li></ul>
  4. 4. <ul><li>Generate support for the new State and confidence among certain crucial classes - the bankers, the large farmers and the Anglo-Irish community. </li></ul><ul><li>Government adopted a conservative policy - </li></ul><ul><li>- Concentrated on agriculture (2/3 of the population lived in rural areas and half the workforce were employed in agriculture). </li></ul><ul><li>- There was a belief that industrialisation could not be engineered. </li></ul><ul><li>- Maintained the link with Sterling which left the Irish pound over-valued - which avoided problems with inflation in the 1920s. </li></ul><ul><li>- The government needed to avoid bankruptcy </li></ul><ul><li>- adopted a policy of low taxation, avoidance of borrowing and balancing the budget. </li></ul>Political considerations
  5. 5. Agriculture – The Problems <ul><li>Small farms who had no money for new technology. </li></ul><ul><li>Conservative and old farmers who did not relinquish their farms to their heirs until they were relatively old, cautious and conservative. </li></ul><ul><li>Ireland had supplied poor quality produce to England during the war so her reputation for quality was poor. </li></ul><ul><li>Britain adopted a cheap food policy in post-war period </li></ul><ul><li>This meant that prices obtained for Irish produce declined. </li></ul>
  6. 6. Agriculture – The Policies <ul><li>Minister for Agriculture, Patrick Hogan </li></ul><ul><li>Set standards for production of butter, meat and eggs. </li></ul><ul><li>Advisory service to improve breeding stocks and crops. </li></ul><ul><li>Interventionist policy to improve standards in marketing. </li></ul><ul><li>Established the Agricultural Credit Corporation to make loans - few took advantage of it. </li></ul><ul><li>The 1923 Land Act completed the compulsory purchase of all land still held by landlords - but many farms were too small to be viable. </li></ul><ul><li>Income tax was kept low, cut from 25% to 15% between 1924 - 26. </li></ul>
  7. 7. Agriculture – The Outcomes <ul><li>Limited success in the early years. </li></ul><ul><li>Little change in volume of output or the structure of exports. </li></ul><ul><li>Value of butter exports rose very slowly. </li></ul><ul><li>The number of cows actually fell a little. </li></ul><ul><li>The total value of exports reached a peak in 1924 at £51.6m, fell to £42m in 1926, recovered to £48m in 1929 and did not reach that figure again until 1948. </li></ul><ul><li>Loss of tillage and a new dependence on imported foodstuffs. </li></ul><ul><li>Development of sugar beet as new cash crop - this was the exception. </li></ul><ul><li>Policies benefited the strong farmers, rather than the smaller ones. </li></ul>
  8. 8. Industry – The Problems <ul><li>N ot a priority for Government. </li></ul><ul><li>Home market was too small to cope with imports. </li></ul><ul><li>No source of power. </li></ul><ul><li>The government was convinced it was unlikely that industry would emerge without the help of protectionism, bounties or special financial provision. </li></ul><ul><li>Larger industries opposed protectionism </li></ul><ul><li>The exception was the Shannon Scheme at Ardnacrusha and the establishment of the 'semi-state company', the ESB. </li></ul>
  9. 9. Specific Economic Measures <ul><li>Cut wages of teachers, gardai and civil servants by 10% in 1923. </li></ul><ul><li>Cut in Old Age Pension by 10% in 1924. </li></ul><ul><li>Government used the building of the Ardnacrusha Shannon Scheme to drive down wages by up to 30%, provoking a nine month long strike in Limerick involving hundreds of workers. </li></ul>
  10. 10. Impact of Economic Policies <ul><li>Economic growth was slow. </li></ul><ul><li>Unemployment never fell below 6% and could have been much higher than this official figure (perhaps 17% in 1926) </li></ul><ul><li>Was deemed to be due to laziness of workers or restrictive trade union practices. </li></ul><ul><li>Emigration averaged 33,000 each year. </li></ul><ul><li>Income tax remained low, which meant that it was difficult to tackle intractable poverty and social problems. </li></ul>
  11. 11. <ul><li>Presentation prepared by: </li></ul><ul><li>Dominic Haugh </li></ul><ul><li>St. Particks Comprehensive School </li></ul><ul><li>Shannon </li></ul><ul><li>Co. Clare </li></ul><ul><li>Presentation can be used for educational purposes only – all rights remain with author </li></ul>