conomcscMALTESE HISTORY
J. Social & Economic History 19th and 20th Century

Form 4

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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 AngloMaltese Bank, and the Banco di Malta. The number of British ships entering the harbours annually between 1801 and 1812 went up from 291 to 3,000. The 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. 3. The effects of the Crimean War 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 stimulated 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.

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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?

____________________________________________________________________________
1.5 When did the British Government start giving aid to the Maltese economy?

(3)

___________________________________________________________________________ (1) 1.6 Why did it do so?
_

___________________________________________________________ (1) (5)

1.7 Write true or false in the blank column for these statements. a b c d e During the Continental Blockade there was nearly full employment in Malta. Custom duties were abolished in Malta by the British. During the Crimean War there was a sharp rise in the cost of living. Malta’s economy suffered an acute depression between 1800 and 1856. 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 _____________________________ __________________________________________________________________________ (b) With the end of the Continental System in 1812, the Maltese economy ______________ __________________________________________________________________________ 1.9 Mention one good and one bad effect of the Crimean War on the Maltese economy. (a) Good effect: ____________________________________________________________ (b) Bad effect: ____________________________________________________________ (1) (1) (2) (2)

(Total 20 marks)
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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 live 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 when because of cheaper 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 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 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 1911-12 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 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.
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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 of a farmer and his wife.

1.

From the text find three drawbacks for farmers in 19th century Malta. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ (3)

2.

From the text find two reasons for the decline of the cotton industry in the 19 century. ___________________________________________________________________________ ___________________________________________________________________________ (2)

th

3.

What did some farmers do when the cotton industry declined after 1865? ___________________________________________________________________________ (2) (1) (1)

4. 5. 6.

Which category of people can you notice in the sources A and B above? ________________ What caused the years of boom in Malta’s economy after 1870? _______________________ Why did this period of prosperity come to an end? __________________________________ ___________________________________________________________________________

(2) (3)

7.

Which three of these brought employment and prosperity in Malta in the 1870s and 1880s: (coal bunkering, the dockyard, emigration, cotton industry, farming, the grain trade, tourism)

8. What did the Government do to reduce the effects of this economic slump? Find two measures. ____________________________________________________________________________ ____________________________________________________________________________ 9. Mention two solution to the economic problem put forward by the Royal Commission of 1911? ____________________________________________________________________________ ____________________________________________________________________________ 10. Why were the proposals of the Royal Commission not put into practice at once? ____________________________________________________________________________ (2) (2) (2)

(Total = 20 marks)
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Unit J.3 The Dockyard and the Harbour in the 19th Century
The experience of the Crimean War (1854-56) showed that in time of war, Malta’s harbours and docks had to be in able to receive more ships at the same time. In 1858 also the first iron clad warship was constructed by the French navy. These iron warships needed a larger dock. Thus the Admiralty the built a first class dock there. In 1859 the Government started a project to deepen the Marsa Creek and to construct stores. This innermost part of the Harbour became known as Portu Novu (New Port) and it was reserved for merchant and cargo ships. When the Suez Canal was opened in 1869 Portu Novu became a coal bunkering station as well. The new dock was completed in 1871 and was named Somerset Dock. More improvements continued to be made in the Grand Harbour and in the Dockyard for the rest of the 19th and early 20th centuries, as shown in the time-line below. Dockyard Projects 1844 1857 1862 1864 1892 1899 1903 1904 No. 1 Dock begun and completed 1848 Dockyard school set up Inner Dock No. 1 completed and called Dock No.2 New iron sheer legs at the Macina Hamilton Dock inaugurated House of Commons voted money for new docks. Ghajn Dwieli tunnels completed Hamilton Dock enlarged Grand Harbour Projects 1801 1832 1844 1858 1861 1885 1894 1903 1905 1906 1909 1910 Grand Harbour declared a free port Bighi Hospital completed at Kalkara Bakery, Corradino Wharves and coal stores completed Gas plant at Mill Wharf Marsa Portu Novu begun at Marsa (completed 1874) Grand Harbour sewage out fall starts functioning Electric light power station inaugurated at Crucifix Hill Breakwater foundation stone laid Ricasoli Breakwater completed. Steam ferry service inaugurated. St Elmo Breakwater completed Corradino oil tanks completed

1867 Somerset Dock begun and completed 1871

1.The 19th century docks

2 Sonmerset Dock, 1871

Source 3. The Malta Dockyard in the 1870s

4. (Left) Plan of the Breakwater, 1903

5.(Right) Sheer legs at Mistra Bay, 1903

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Unit J.3 - The Dockyard and the Harbour in the 19th Century

1.

Mention two events in the 1850s that made the Admiralty enlarge the Malta dockyard? ___________________________________________________________________________ ___________________________________________________________________________ (2)

2.

Name the two projects that were undertaken in Grand Harbour and in the dockyard in the 1860s. (a) Dockyard: _________________________ _____________________________ _____________________________ (2) (2)

(b) Grand Harbour: _________________________ 3.

(a) What important development occurred in 1869 which greatly increased the strategic value of Malta’s harbour and dockyard to the British navy. ___________________________________________________________________________ (b) What important harbour activity did this new development bring about? ___________________________________________________________________________ (1) (1)

4.

Why was Portu Novu constructed at Marsa in the 1860s? ___________________________________________________________________________ ___________________________________________________________________________ (2) (1) th 5. 6.

Which plant was inaugurated in Malta in 1894?

____________________________________

How was the Grand Harbour made more secure against storms and enemy attack in the early 20 century? ___________________________________________________________________________

(1)

7.

Why were Għajn Dwieli and Corradino tunnels constructed in the early 20th century? ___________________________________________________________________________ (2)

8.

(a) benefits did all these projects bring to the Maltese living in the Grand Harbour area? ___________________________________________________________________________ (b) Which two categories of Maltese working people benefit most by these projects? _____________________________________ ___________________________________ (2) (2) (1)

9.

Look at source 1. Colour the docks shown in the source.

10. Look at source 5. What can you say about the machinery used to construct the breakwater? ___________________________________________________________________________ ___________________________________________________________________________ (2)

(Total = 20 marks)
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Unit J.4 Post-War Economic Development (1)

1. Rundown cartoon, 1957

2. Maltese emigrants to Australia, 1964

3. Malta Drydocks in the 1950s

1. Effect s of World War II With the end of World War II the Maltese passed from some years of social and economic hardships. Many houses damaged or destroyed by bombing, trade and commerce had nearly stopped during the war, the British started sacking hundreds of Maltese males from the dockyard and in the British army and navy. The Maltese were given self-government again in 1947. The efforts of the local government were to improve the economy and the living standard of the Maltese. To reduce unemployment it tried to open emigration in English speaking countries (Australia, USA, Canada, UK). The years 1948-75 was the period of mass emigration because about 5,000 Maltese emigrated to these countries every year.

2. Post-War Economic Reports After the war the British Government commissioned a number of economic reports aimed at improving the Maltese economy. Sir Wilfred Woods Report (1945-50) suggested the introduction of income tax, a tax on property and the introduction of social services on a contributory basis by the employers and the workers. Woods fixed Malta’s War Damage aid for reconstruction for £31 million, but the British Government gave Malta £20 million. There were two other reports in the 1950 and 1955. These advised the Maltese Government to reduce expenditure, reduce food subsidies, build a new electricity power station, set an emigration target of 10,000 a year, open technical schools, improve upon the existing industries of agriculture and fishing and open industrial centres for new manufacturing industries. The aim of the commissioners was to put these proposals into effect by 1961. 3. The Services Rundown In 1957 the British Government published a defence white paper. The aim was to reduce military personnel (rundown) and military spending in the colonies by half. In Malta this would have reduced the number of Maltese employed by the British Services by about 7,000. There was growing uncertainty about the future of the Malta Drydocks itself. The Royal Navy reduced the number of battleships and the Admiralty decided to hand the dockyard to a private company (Bailey & Co. Ltd). It was at this point that the Maltese Parliament passed unanimously the ‘Break with Britain Resolution’ (Dec. 1957). Another similar rundown of the took place after Independence, in 196-67, which reduced further the number of British Services personnel in Malta.

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Unit J.5 Post-War Economic Development (2)
1. The Diversification of the economy – the Development Plans The fear of widespread unemployment made PM Dom Mintoff to resign in protest. The Governor declared a state of emergency and took over the day to day running of the Government. In 1959 the British Government published its first Five-Year Development Plan (DP). The purpose of this plan was to set targets for economic development by diversifying (changing) the Maltese economy from one based on British military base and military services into one based, primary industries (agriculture, fishing, quarrying and construction) manufacturing industries (industrial estates were built in Marsa, Bulebel, San Gwann, Mrieħel) and tertiary industries (trade with foreign countries, banking, tourism). The 2nd DP (1964-69) set up the MDC and the Central Bank. The 3rd DP (1973-80) opened more industrial estates and expanded tourism by building hotels and improving roads, electrical and water supply. 2. The development of early tourism The Tourism Development Act of 1958 aimed at establishing tourism as a pillar of the Maltese economy. The tourism industry could be one of the solutions to the problem of services rundown. It would increase local production and attract more foreign investment. In 1958 the new Tourist Board started issuing brochures about Malta and organized guided tours in English. The Maltese Islands were advertised as a tourist destination for their: sun and unspoiled seas and countryside, a friendly people and rich historical and cultural heritage. Resort tourist sites marked for development were St. George’s Bay, Ghajn Tuffieħa Bay, Paradise Bay and Ghadira Bay and Comino. The 2nd DP developed Marsamxett Harbour as a yacht marina. The tourist industry soon created new jobs in other sectors: realestate, travel agencies, banking and insurance, the leisure sector and retail outlets. The 14,600 jobs in tourism by 1970 had made up for the loss of 5,400 jobs in the Services Departments. One disadvantage of early tourism in Malta was that British tourists accounted to 74% of all tourist arrivals.

2. Phoenicia Hotel, Malta’s first hotel in 1930.

1. Property held by the British Services Departments in the 1950s 9

3. On of the first Malta Tourism Board brochure

Unit J.6 Post-War Economic Development (3)

1. Exporting potatoes in the 1950s

2. A cart farmer and a fisherman like these could be seen even in the 1960s.

3. Improvements in agriculture By the mid-1950s agriculture was the third largest employer in Malta. But Maltese agriculture was 50 years behind the advanced countries of Europe and 75% of the work was still done by hand. Farmers’ incomes were lower than incomes earned in ‘easier jobs’. Older farmers did not known how to use mechanized tools. Many fields could only be reached on foot, implying that they could not be reached by motorized tools. In 1956 the Government passed the Agriculture and Fisheries Act to help farmers and fishermen buy machinery, fertilizers, fodder, seeds and insecticides. The Cattle Disease Eradication Scheme of 1956 gave free vaccination of poultry animals, rabbits and swine. The Government also encouraged farmers to make use of Malta’s warm climate to cultivate high-priced crops such as tomatoes, strawberries, mushrooms and grapes for wine production. 4. Improvement in the fishing industry Before 1964 fishing employed only 1% of the Maltese workforce. Fishermen did not have trawlers to fish in international waters and a cold stores to store fish during the summer months. The Fish Marketing Regulations of 1957 were aimed to develop the fishing industry by helping fishermen start using modern fishing methods. The Fisheries Department opened area offices at Marsaxlokk and Mġarr Gozo to give free technical advice. Fishermen were to be helped by a loan to buy new boats and equipment. The Valletta Pixkerija was upgraded to modern standards. Aquaculture was introduced in the late 1980s when the first private fish farms were set up at Marsaxlokk Bay. The number of trawlers went up from 0 in 1956 to 10 in 1964 and an overall increase of 25% in the annual catch. But notwithstanding these improvements, the number of full-time fishermen decreased by 33% by 1970. Fishermen simply left their trade and looked for employment in other industries.

5. Economic developments in the 1970s The 1970s set up the basis of Malta’s economic structure with the setting up of various manufacturing and services industries: BOV, Mid-Med Bank (today’s HSBC), Air Malta, Sea Malta, Telemalta, Enemalta (today’s WSC), and Xandir Malta (today’s PBS). These were set up as public corporations, that is owned and run by the Government. Since the 1990s these companies have become privatised in line with free trade principles and EU policy. 6. The Maltese economy and globalization Since independence Maltese Government started giving incentives to bring foreign multinational companies to open company branches in Malta. The aim was to bring the latest technology to Malta and to increase exports. By the late 1990s, some well known international companies had opened branches in Malta: SGS Thompson, Baxter, Brand International, Dowty, Vodaphone, HSBC, Microsoft. These companies brought to Malta new services, products and jobs. Malta’s entry in the EU (2004) and the adoption of the euro (2008) tied the Maltese economy with the global economic system. Under these new circumstances, the Maltese economy faces new challenges in the world wide competition to win foreign markets.

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Unit J.4 – J.6 Post-War Economic Development (1, 2, 3)
1. Match column A with column B. A B C D E F 2. Woods Report The Services Rundown The Development Plans The new industries Traditional industries Membership in the EU diversification of Malta’s fortress economy Globalization of the Maltese economy War Damage set at £20 million farming, fishing, the dockyard privatization of the dockyard tourism, manufacturing, financial services (6)

Continue these phrases to form historically correct sentences: (a) Mass emigration resulted in ______________________________________________ _____________________________________________________________________ (b) The Defence White Paper of 1957 _________________________________________ _____________________________________________________________________ (1) (1)

4.

State one target for each of the three development plans: (a) The 1st DP: (b) The 2 DP: (c) The 3 DP: rd nd

__________________________________________________________ __________________________________________________________ __________________________________________________________

(1) (1) (1)

5.

Identify one drawback and one improvement in the 1960s for these Maltese industries: (a) farming: ______________________________________________________________ ______________________________________________________________ (2)

6.

(b) fishing:

______________________________________________________________ ______________________________________________________________ (2)

7.

What has become the major challenge for Malta’s economy since EU membership in 2004? __________________________________ __________________________________ __________________________________ (2)

8.

(a) Identify the subject matter of the map source on the left. __________________________________ (1) (b) Mention two such examples shown in the map. _________________ _______________ (2) (Total 20 marks)
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