The economy of the British Empire during the intermilitary period continued to become stronger: export to colonies and dominions increased with 32 to 39% of all overseas export, import — with 24 to 37%.
New threat to the world order which has developed in the XIX century was created by strengthening of Japan and the USA, as sea powers, and also growth of movement for independence in India and Ireland. The British Empire had to choose between the union with Japan and the union with the USA. Originally Britain chose Japan, having signed in 1922 the Washington sea agreement which the USA at the same time admitted the sea power equal with Britain. The union with Japan in Great Britain was exposed to criticism in the 1930th years after the militarists who have made the union with Germany came to the power in Japan, leaving the Great depression. Britain started being afraid that won't be able to endure simultaneous attack of both of these states.
The Irish republican army began guerrilla war against the British administration. The Anglo-Irish war ended in 1921 with signing of the Anglo-Irish agreement. According to it the Irish Free state, the dominion as a part of the empire was created.
Northern Ireland representing 6 of 32 Irish counties, still remains as a part of the United Kingdom according to the Act of the government of Ireland of 1920.
Similar fight was developed in India; The Act of the government of India of 1919 didn't satisfy supporters of independence. The British colonial authorities were afraid of large-scale communistic and foreign plots for the purpose of overthrow of an existing system and resorted to repressive measures, in particular, in Punjab. In reply Mahatma Gandhi initiated Movement for not the cooperation which has actually become campaign of boycott of British from the population of India.
The British armies were present at Egypt before signing of the Anglo-Egyptian contract of 1936. It provided withdrawal of troops, behind the exception, remaining for protection of the Suez Canal. After that Egypt joined League of the Nations. On management which Britain received Iraq, the mandate in 1919, in 1936 also became independent and joined League of the Nations.
Under pressure of Ireland and South Africa, Imperial conference of 1926 adopted Balfur's declaration which recognized dominions "as autonomous communities as a part of the British Empire, having the equal status, and in no way each other not submitting". Actually it was disintegration of "The second empire", and the term "British Commonwealth of the Nations" became current further.
Balfur's declaration was legalized by the Westminster statute of 1931. From this point parliaments of Canada, Australia, New Zealand, South Africa, the Irish Free state and Newfoundland became independent of legislative system of Britain. They could cancel the British laws in the territory, and the mother country lost opportunity to carry out laws without support of dominions. Ireland continued to move away further from Great Britain, having adopted in 1937 the new Constitution which has made its independent republic in everything, except the name.
