The Great Depression (1930s)

A poster put up by a company during The Great Depression


Homeless people on the streets

The Great Depression (1930s)


A depression is a time when there is a great decrease in business activities with widespread unemployment. In the early 1920s companies in America made huge profits and their share prices rose. Buying shares seemed to be one way of making quick money. By 1929, many companies were losing money as they were not able to sell their goods. As a result, some people decided to sell their shares. This caused share prices to fall and more people also decided to sell off the shares. In 24 October 1929, the rapid plunge of share prices led to the collapse of the New York Stock Exchange. Some people who bought shares on credit had to sell their possessions to pay the banks what they owed. Many tried to withdraw their savings but some banks did not have the money to pay them and were forced to close down. With the increase in the number of poor people, the demand for goods fell because the unfortunate could not afford the goods. As a result, many people lost their life savings. As America companies were no longer making huge profits, they had to cut wages of workers. Many were also laid off and unemployment rose. While this event occurred in America, it affected many of her trading partners, including Singapore. Singapore was badly affected by this worldwide event as she depended on trade to survive.


Firstly, The Great Depression caused decrease in Singapore’s trade and business. Singapore, which was closely involved in the trading of tin and rubber, was affected as the demand for certain commodities including tin and rubber dropped. Because Singapore’s economy depended largely on overseas trade, the depression caused companies in Singapore to suffer losses. Second, it also resulted in high rates of unemployment in Singapore. Business sentiments were so poor that many businessmen, particularly those who depended on overseas trade, lost their wealth or became bankrupt. Others cut expenses by retrenching workers. Hence, there was a widespread of unemployment and hardship. In addition, it was extremely difficult for the unemployed to find new jobs as there were limited ones available. Due to this, many Indians and Chinese returned to their homeland when their family and friends could no longer support them financially. In 1931, about a third of the working population was unemployed. Thirdly, the Depression also caused the British to have restrictions on immigration. To alleviate the economic situation, the government passed a law in 1930 to reduce and restrict the number of immigrants entering Singapore so large numbers of unemployed Chinese and Indians were sent back to their homeland.

Read the source below to find out the impact of immigration law on the number of immigrants coming into Singapore:

Quotas were imposed on Chinese immigrants, and these were reduced in 1931 and further in 1932. The effect was dramatic. Chinese immigrants dropped from from 242,000 in 1930 to less than 28,000 in 1933.

Adapted from A History of Singapore, 1819-1988 by Constance Mary Turnbull

With many of America’s important businessmen and companies suffering from financial difficulties, Singapore’s economic decreased immensely. By 1934, as business conditions in America and other countries improved, exports from Singapore began to increase again.