The Interwar Years (1920–41)

Abstract

Whereas for much of the nineteenth and early twentieth centuries these countries had experienced the external stimulus of rising demand for primary commodities, engendering a major expansion in productive potential, they now entered a period in which demand fluctuated very strongly, leading to extended periods of slump (1920–22, 1929–32) which revealed substantial excess in supply capacity. However, the situation in the interwar years was not continually adverse. There was a recovery following the 1920–22 downturn, led by the US economy, which created boom conditions in the mid-1920s.

Between 1913 and 1950 the tropics passed through a long depression, associated with world wars and adverse terms of trade. The rate of growth of tropical trade [volume] fell to 2.2 per cent per annum between 1913 and 1955 [compared to 3.6 per cent between 1883 and 1913].

(Lewis, 1969, 8)