Observations at a vintage car rally

Last weekend I attended a vintage car rally in aid of the St John's ambulance. The stars of the show had this event were a 1928 Bentley and a 1936 MG that was built while across the Atlantic America was still in the throes of the great depression. It is strange to think that a beautiful sports car could have been built and sold during this period of economic turmoil. However the reason for this was that on the side of the Atlantic the great depression was not so great. In great question the great depression was not much more than an particularly bad recession, a fact that can be indirectly attributed to the Royal Navy.

While in America Herbert Hoover and then later Roosevelt spent huge quantities of money in an attempt to kick start their economy, in Great Britain in more orthodox approach was taken. The orthodoxy at this time was when the government did not have any money it have two cut back, and that a sound currency backed by gold was a vital part of running a sound economy. Terrified by the financial Armageddon that was enveloping them the government cut back hard, and it started with the Royal Navy.

The way that the government decided to cut the Navy was as simple as it was brutal. They decided that they would simply take one shilling from everybody's pay. It was decided to announce this cart while the home fleet was on manoeuvres off Invergordon in Scotland. It must have been hoped that occupying them with a set of fleet manoeuvres might help give them time for the news to sink in with the minimum of discomfort. However that is not what happened, what happened was one of the largest mutinies in the history of the Royal Navy.

Terrified that the most powerful fleet of war ships in the world at that point was suddenly going to become a fleet of putemkins And potentially trigger a revolution that could sweep away the old order the government back down. By biking down on the cuts they were forced to junk not one but both of their economic orthodoxies and leave the gold standard and allow the British pound to float freely on the markets. Had they not done so terrified investors could easily have drained the bank of England's gold reserves as they attempted to move their money to safer climes.

As it was allowing the currency to leave the gold standard was the best thing that the government could have done. The economy started to recover very shortly afterwards, in fact there is a strong correlation between when countries left the gold standard and when their economies started to recover. So had the sailors of the home fleet had not mutinied then the government would not have been forced to leave the gold standard, which would have meant that the economy would not have recovered as quickly as it did and the economic conditions might have meant that the beautiful 1936 MG that I was admiring this weekend might not have been built.