The Great Depression had a pronounced economic and political effect on

South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. It is bounded to the south by of coastline that stretch along the Atlantic Ocean, South Atlantic and Indian Oceans; to the ...

, as it did on most nations at the time. As world trade slumped, demand for South African agricultural and mineral exports fell drastically. It is believed that the social discomfort caused by the depression was a contributing factor in the 1933 split between the "gesuiwerde" ( purified) and "smelter" (fusionist) factions within the National Party and the National Party's subsequent fusion with the

South African Party nl, Zuidafrikaanse Partij , leader1_title = Leader (s) , leader1_name = Louis Botha,Jan Smuts, Barry Hertzog , foundation = , dissolution = , merger = Het Volk South African PartyAfrikaner BondOrangia Unie , merged ...

. The sudden lack of demand destroyed prices on commodities that were profitable to many Afrikaner farmers. For example, the price of wool fell 75% between 1925 and 1933. A large portion of the agricultural industry were unable to repay

mortgages A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any ...

on their over-capitalized farms. Thus, the National Party found itself losing favour with one of its largest constituencies—conservative, rural Boers. South Africa was saved from a complete collapse by the

gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile me ...

mining industry—one of the largest and most advanced at the time—as the price of gold rose rapidly as

investors An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Type ...

sought a haven from the dead securities market. Growing gold exports compensated somewhat for the loss of other trade revenue. However, like the situation with the Boers, the National party lost support as the weak economy forced the gold corporations to replace white labourers with lower-paid blacks. The National Party-led government staved off bankruptcy by raising taxes on imports,

petrol Gasoline (; ) or petrol (; ) (see ) is a transparent, petroleum-derived flammable liquid that is used primarily as a fuel in most spark-ignited internal combustion engines (also known as petrol engines). It consists mostly of organic c ...

and

postage The mail or post is a system for physically transporting postcards, letters, and parcels. A postal service can be private or public, though many governments place restrictions on private systems. Since the mid-19th century, national postal syst ...

, amongst other things. This "unfair" taxation led to further dislike of the ruling government. The coalition government between

Jan Smuts Field Marshal Jan Christian Smuts, (24 May 1870 11 September 1950) was a South African statesman, military leader and philosopher. In addition to holding various military and cabinet posts, he served as prime minister of the Union of South Af ...

and J.B.M. Hertzog was successful in 1933 partly because Smuts presented the public with a mock budget showing how South Africa's economic malaise could be lifted by floating the South African pound and removing it from the

Gold standard A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the l ...

, thus making exports more attractive, and creating a scenario in which undue taxation could be removed.

References

{{United States–Commonwealth of Nations recessions

20th century in South Africa Economic history of South Africa

See also

References