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Some Background to the History of Motorcycling
Red Flag Act
In 1865 the British Government passed a law that required that any self-propelled road vehicle must be preceded by a pedstrian at least 60 yards ahead carrying a red flag.
The law stipulated that the speed limit was 4mph in the country and 2mph in towns, with a £10 fine for speeding. It was repealed in 1896 and the speed limit was raised to 14mph.
The 1907 "panic" was preceded by a minor depression in 1906, and a "slump" in 1905. Known as the 1907 Bankers' Panic or Knickerbocker Crisis, this was a financial crisis which began in the United States when the New York Stock Exchange lost a stagggering 50% of its value in October compared to the peak of the previous year.
Many motorcycle companies closed.
The war was not "over by Christmas". As battalions of workers left for France to die in the trenches, there were few left in Britain to build new motorcycles, and fewer still to buy them. The same was true throughout Europe on both sides of the conflict.
Early 1920s Recession
Britain initially enjoyed an economic boom between 1919-1920, as private capital pent-up over four years of war was invested into the economy. However, by 1921, the British transition from a wartime to a peacetime economy faltered, and a serious recession struck the economy between 1921-1922. With other major economies also mired in recession, the export-dependent economy of Britain was particularly hard-hit. Unemployment reached 17%, with overall exports at only half of their pre-war levels. In late 1922 and 1923, many British motorcycle companies failed. The situation was similar in most European countries.
In Germany, the economic recession was harder due to the imposition of the Treaty of Versailles, which many viewed as unfair and detrimental to the country's recovery. A period of hyperinflation during the Weimar Republic between 1921 and 1923 severely devalued the Mark and effectively crippled the German economy.
Successive German governments had made enormous errors by first borrowing to finance the war, betting that they could repay the debts from the territorial gains when they won, and then by printing money with nothing in the coffers to support it. During this period the exchange rate of the Mark to the US dollar grew from 4.2 Marks at the start of the war to 90 Marks in mid-1921. Due in large part to the reparations Germany was forced to pay to Britain and France the Mark then plummetted to 330 marks per dollar later in 1921. Hyperinflation soon took hold, and by the end of 1923 a loaf of bread cost 2 trillion marks, more than would fit in a wheelbarrow. The government took to printing half-million Mark banknotes.
After the war, a great many small motorcycle brands were established, but as the economic situation further deteriorated sales plummeted. In 1925 alone 150 German motorcycle manufacturers failed, and the dire situation saw the rise of the far right.
Sources: Wikipedia, et al
1929-1931 The Great Depression
Motorcycle sales in Europe plummeted as the world recession sank deeper into depression.
"The stock market crash of 1929 touched off a chain of events that plunged the United States into its longest, deepest economic crisis of its history", says ushistory.org, "The richest one percent of Americans owned over a third of all American assets. Such wealth concentrated in the hands of a few limits economic growth. The wealthy tended to save money that might have been put back into the economy if it were spread among the middle and lower classes. Middle class Americans had already stretched their debt capacities by purchasing automobiles and household appliances on installment plans."
The situation is now much the same.
"According to The New York Times, the richest 1 percent in the United States now own more wealth than the bottom 90 percent." ~ Wikipedia.
"The wealthiest 1 percent of American households own 40 percent of the country's wealth." Washington Post, Dec 2017.
Sources: ushistory.org, wikipedia, The Washington Post
1933 saw the import of foreign engines into Germany become increasingly difficult due to high taxes imposed by the Nazi government At the same time, foreign nationals were encouraged to leave and so, for example, Imperia lost the great designer Arthur F. Dom. Germans of Jewish heritage were forced to flee the country, their assets being stolen by the Nazi regime. BSW and Stock are examples.
A similar situation eventuated in Italy under Mussolini, forcing the closure of Italian firms which had long depended on British engines, gearboxes and other components.
Mussolini, a former Marxist leader, developed economic policies which led to major problems for the country. Wikipedia: Italy under fascism
1939-1945 Second World War
Molotov-Ribbentrop Hitler signed the Molotov-Ribbentrop Pact in August 1939, the treaty of non-aggression that declared neither Germany nor the Soviet Union would fight the other for 10 years. The Soviets would be allowed to invade Lithuania, Estonia, Latvia, and the eastern half of Poland, while Germany invaded Poland's western half. It was an unprecedented act of savagery.
On the 14th November 1940 the Luftwaffe bombed the city in an attack codenamed Moonlight Sonata and known to the English as the Coventry Blitz. A third of the city's factories were destroyed or severely damaged, among them many motorcycle factories. Triumph was blitzed, and restarted in Meriden in 1942.
Only London and Liverpool were more heavily bombed than Birmingham. The Lucas and BSA factories were severely damaged.
The Cars That Ate Paris (and London, and Rome...)
The Fiat 500 hit the road, making light cars affordable. France followed with the Citroen 2CV, Germany with the BMW Isetta. The motorcycle industry was devastated.
In 1956 Germany had some 300,000 motorcycles sitting in showrooms and warehouses awaiting buyers. That year, Horex produced 2790 motorcycles, representing a mere 15% of its 1953 output.
Italy saw several motorcycle factories close in 1957, including MM of Bologna, Fusi, Tappella-Fuchs, and Fimer.
Donald Trump elected President of the United States.
"Harley-Davidson Profit Wiped Out by Trump Tariffs" ~ Fortune, Jan 2019.
"Bloomberg reports that the motorcycle giant's retail sales figures dropped 10 percent in the final three months of 2018, marking their eighth straight quarterly decline. Harley shares fell 9.5 percent." ~ Rolling Stone, Jan 2019.
"Harley-Davidson's global mid-year revenue fell by around 40 percent between the first six months of 2020, compared with the same period one year earlier. In the first half of 2020, revenue generated from motorcycle sales more than halved from the previous year..." statista.com, Sept 16th 2020.
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