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Malta's Economy in the 19Th Century

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Malta's Economy in the 19Th Century MALTESE HISTORY Unit J 19th and 20th Century Social & Economic History Form 4 1 Unit J.1 Malta’s Economy in the 19th Century 1. Marsamxett Harbour in 1800. 2. Cargo Ships in Grand Harbour (1870s) 3. The Suez Canal, 1869 1. Malta’s economy during the Continental System (1806-1812) During the Continental System the first commercial banks were set up in Malta. These were the Anglo- Maltese Bank, and the Banco di Malta. The number of British ships entering the harbour annually between 1801 and 1812 went up from 291 to 3,000. British contraband goods were smuggled into Europe controlled by the French. Many Maltese found work in foreign trade more than ever before especially since the British made corsairing illegal. 2. The Plague of 1813 and its effects on the economy The collapse of the Continental System in 1812 and the Plague of 1813-14 brought trade with foreign countries to a sudden and tragic end. British merchants re-established their previous commercial contacts in Italy. Thus Malta’s harbour lost most of its activities. Strict quarantine regulations were imposed against Maltese ships by foreign governments because of the plague. Custom duties collected by the Government discouraged foreign merchants to use Malta’s harbours as a centre for transit trade. Other forms of income for the government were quarantine dues and the tax on imported grain (bread tax). 3. The effects of the Crimean War (1854-1856) on Malta’s economy The Crimean War had considerable socio-economic effects on Malta. After the war the British spend more heavily in their military and naval establishments. There was a larger demand for local and foreign goods for the use of the British troops kept in Malta. The Government bought supplies for the army from private firms in great quantities. All these factors helped to stimulate local business. As a result wages and prices went up. In 1856 the sterling became the only legal tender in Malta. These years were a ‘golden age’ for the retail business in Malta. New consumer products were introduced in Malta during these years. A British official reported that: ‘Money is circulating in profusion...and it is so plentiful that people though they grumble at the high prices of provisions, feel no real inconvenience for them.’ This rise in prices affected many food items such as bread, fish, butter, cheese, sugar, rice, tobacco, meat, coffee and tea. Unfortunately not all the Maltese benefited from these years of prosperity. Those who benefited most were the businessmen, the retailers in the harbour towns, the harbour labourers and the farmers. Those who benefited least were the rural labourers and the government employees who received fixed wages. The Crimean War made Malta a more prosperous and at the same time more expensive place to live in. A foreign tourist who came to Malta in 1861 noticed that: ‘Before the Russian War, Malta was one of the cheapest places in the world, but now things are considerably dearer than in France or England.’ The Crimean War showed how important was Malta as a military and naval base. Since that war the British Government started giving an average £450,000 a year as grants to help the Governor balance the income and expenditure of the colony. 2 Unit J.1 Malta’s Economy in the 19th Century 1.1 How did the British use Malta during the war against France and Napoleon? ___________________________________________________________________________ (1) 1.2 How did this development affect the livelihood of the Maltese? ___________________________________________________________________________ (1) 1.3. The Maltese economy declined considerably between 1813 and 1850. Mention two examples that show this decline. _________________________________ _____________________________________ (2) 1.4 Find from the text three main sources of income for the Government in 19th century Malta? ___________________________________________________________________________ (3) 1.5 When did the British Government start giving aid to the Maltese economy? ___________________________________________________________________________ (1) 1.6 Why did it do so? ___________________________________________________________ (1) _ 1.7 Write true or false in the blank column for these statements. (5) a During the Continental Blockade there was nearly full employment in Malta. b Custom duties were abolished in Malta by the British. c During the Crimean War there was a sharp rise in the cost of living. d Malta’s economy suffered an acute depression between 1800 and 1856. e The Plague nearly stopped all trade between Malta and other countries. 1.8 Use the text to help you continue these sentences. (a) During the Continental System the number of ships _______________________________ ________________________________________________________________________ (2) (b) With the end of the Continental System in 1812, the Maltese economy _______________ ___________________________________________________________________________ (2) 1.9 Mention one good and one bad effect of the Crimean War on the Maltese economy. (a) Good effect: _____________________________________________________________ (1) (b) Bad effect: ____________________________________________________________ (1) (Total 20 marks) 3 Unit J.2 Agriculture, Cotton, Booms and Slumps in 19th Century Malta Boatmen in Grand Harbour (1850s) Grand Harbour in the early 1900s 1. The state of Malta’s agriculture in the 19th century For most of the 19th century Malta was mainly an agricultural country. One reason that made agriculture backward was the fact that farmers did not have the money and the know how to use machinery and fertilizers. Narrow field strips and terraced fields were too small for the bulky machinery of the time. Often water was short and made output low. Products were so low that they managed to feed the whole population for only four months in a year. For the rest of the year large quantities of food had to be imported from abroad. Those farmers having a large family lived close to subsistence level. Farmers often used members of their own family instead of employing farm labourers during harvest-time. Rent was higher for the most fertile fields and this reduced further the farmer’s income. Money needed to buy tools and seeds was often borrowed from rich landlords at very high interest. 2. The decline of the cotton industry in the 19th century Since the Middle Ages cotton was the most valuable crop for the Maltese farmers. Since the late Middle Ages, Maltese cotton had been exported to Catalonia in Spain. But in 1800 this market was closed because Spain was an ally of France in the war against Britain. From that date onwards the cotton industry entered into a slow but steady period of decline. Maltese hand-made cotton fabric was coarse while foreign machine-made cotton was softer. The cultivation of cotton started to decline because of cheaper cotton from Egypt and the USA. The Maltese cotton industry recovered for some years during the American Civil War (1861-65). But with the end of that war Maltese cotton went into a period of rapid decline. Hundreds of farmers abandoned cotton cultivation and migrated to the harbour area – there new jobs were being created with the opening of the Suez Canal (1869). Those farmers who stayed in the villages, started cultivating the potato crop instead, which soon became very much sought by the British services and the Maltese. 3. Years of booms and slumps between 1870 and 1914 In the 1870s and 1880s the Maltese economy was improving. The middle classes were becoming richer. The wages of labourers increased. More and more people went to live and work near the harbour towns. Those who did not find work here emigrated to Mediterranean towns abroad. But then in the mid-1890s there followed a decade of economic depression. The Black Sea grain trade and coal bunkering declined. Steam ships had become more efficient ships started by-passing Malta’s harbour on their route to the Black Sea or the Suez Canal. Thus the number of ships entering harbour for servicing and re-fueling went down sharply. Jobs and wages in the harbour and the dockyard declined as well. The construction of the Breakwater (1903) in Grand Harbour solved the unemployment problem for some years. The only practical way to reduce unemployment was to encourage the Maltese to emigrate to other countries. Wages went down and people bought less and less goods. The result was that Government revenue from custom duties fell too. 4. The Royal Commission of 1911 In 1911-1912 another Royal Commission came to investigate the causes of this economic setback and to suggest solutions to it. The Commissioners criticized Malta’s system of taxation. It said that the main burden of the taxes fell upon the working class, because the largest share of the Government’s revenue came from the unpopular bread tax. They told the Government to reduce the bread tax by half and introduce new taxes on property, entertainment and wills. In this way the working class would be spared some of the tax burden since the new taxes would fall upon the middle and upper classes. They proposed that the Government should help the Maltese to emigrate by subsidizing (pay part of) the cost of the trip. The Imperial Government could give more money grants for public works projects. Most of these suggestions, however, could not be implemented until the end of World War I in 1918 4 Unit J.2 Agriculture, Cotton, Booms and Slumps in 19th Century Malta Source A. The Saqqajja at Rabat in the early 1800s. Source B. Amateur painting
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