Britain and France struggled to rebuild.
Coming less than a dozen years after World War I, the Depression struck hard at Europe. Despite hardship, however, Britain and France preserved democratic government.
'Muddling through" in Britain Because the British economy depended on foreign trade, the Depression hit Britain with great force. To meet the emergency, British voters in 1931 overwhelmingly elected an all-party coalition cabinet known as the National Government. Its prime minister was Ramsay MacDonald. MacDonald was the leader of the Labour party, which had replaced the Liberals as the main opposition to the Conservatives since World War I.
The National Government passed high protective tariffs, increased taxes, regulated the currency, and lowered interest rates to encourage industrial growth. These measures brought about a slow but steady recovery of the economy. By 1937, the unemployment rate had been cut in half, and production had risen above 1929 levels.
These gains, however, failed to lift Britain's mood of discouragement in the 1930's. Neither MacDonald nor his Conservative party successor, Stanley Baldwin, was a dynamic leader like Roosevelt. Nonetheless, the British avoided political extremes. Their moderate course allowed them to "muddle through" the Depression.
Weakness in France Unlike Britain, France in 1930 was still a heavily agricultural country. It was less dependent on foreign trade than was Britain. Thus, France was somewhat cushioned against the Depression. Nevertheless, by 1935, 1 million French people were out of work.
As we will see in the next section, the Depression brought anti-democratic groups to power m some European countries. In France too there were groups that wanted to end democracy and set up a dictatorship. This movement frightened both moderates and radicals. Therefore, moderates, Socialists, and Communists united to form a coalition. Known as the Popular Front, the coalition won power in the 1936 elections.
The Popular Front passed a series of reforms to help the workers. These reforms included pay increases, holidays with pay, and a 40-hour work week. Unfortunately, price increases quickly offset wage gains, and unemployment remained high-
By 1935, French industrial production had fallen to 79 perccnt of its 1928 level, while exports had dropped by 45 percent. The decline in production and trade brought a rapid rise in unemployment.
