Tuesday, 29th October 1929, saw the world's economy go into recession as the New York Stock Exchange collapsed and saw shocked investors withdraw their investments, with many losing all their money and scores committing suicide. This set of the world wide depression of the 1930s, which at its worst saw one in three people unemployed in the United States
In South Africa, the Great Depression had socio-economic as well as political implications. The lives of millions were affected and resulted in the loss of land, urbanization and an increase in poverty as people battled to find employment. The diamond and the agricultural sectors were the hardest hit. During this period diamond exports fell in value from 16.5 million pounds in 1928 to 1,4 million pounds in 1934. In the agricultural sector, the price of wool fell from 16.6 pence in 1928 to 4.4 pence in 1931-32. In 1933 a devastating drought together with a lower demand for good on the international market saw an increase in urbanization as farmers could no longer make a living on their farms. Likewise farm workers had to seek work in the cities due to the closure of farming production.
The political implications of the Great Depression was that a political reorientation was made by the Hertzog government to avoid a repetition of the fall of the Smuts government in 1924 which was partly attributed to the depression that followed the end of the First world war.