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Frontier Of Dreams

Sundays 6.40am | TV ONE

The Great Depression

In October 1929 the US stock market crashed in the most catastrophic collapse in share prices of all time. The Wall Street crash set off a ten-year, world-wide economic depression, the like of which had not been seen since the 19th Century.

In New Zealand the effects were devastating. The security we had come to enjoy in the previous decade was shattered and the 'Great Depression' became a defining period in our history.

Contrary to what most people believed the root cause of the Depression was outside our government's control. New Zealand's economy was dependent on trade and the dramatic collapse of overseas prices for wool, meat and dairy products ruined the economy. The warehouses of Britain, our chief market, filled with cheap products from other countries; ours filled with products we couldn't sell.

Soon after the Depression hit the then Prime Minister, the uninspiring George Forbes, threw in the towel. A coalition was formed. Forbes remained Prime Minister but Gordon Coates was effectively back in charge.

The coalition faced huge problems. The first was to how to pay back all the money we had borrowed from British banks in the 1920s. The government called together all the political parties to help find a solution.

The massive borrowing for public works and those mortgages for 'happy homes' had left the country with huge debts. There was a very real danger that as the Depression squeezed Britain, its banks would call in the New Zealand loans. The government couldn't default because it depended on loans. 

Unexpectedly, during the Depression crimes of violence didn't go up but theft did and so did suicide. Even nature added to the distress that New Zealand was suffering. In February 1931 an earthquake measuring 7.9 on the Richter scale hit Napier and Hawkes Bay, killing 256 people.

The effects of the Depression were uneven. Many people were unemployed. But those with jobs could enjoy the fact that the prices for most things came down. Sales of some products actually rose during the Depression as electrical goods, cars and electricity use in homes all went up.

But the Depression still hurt a lot of people and they were looking for something to give them hope. Their old leaders seemed to have failed them and people yearned for a new vision.