Africa, Great Depression in
AFRICA, GREAT DEPRESSION IN
African peasants were deeply affected by the steep fall in agrarian prices caused by the worldwide Depression of the 1930s. Like peasants in Asia, they would not have been affected by a fall in prices if they had relied solely on subsistence agriculture, but colonial taxation forced African peasants to produce for the market to earn cash for paying taxes. Unlike their counterparts in Asia, with its elaborate land revenue systems, African peasants did not pay taxes on land; rather, they paid a poll tax or a hut tax. Such taxes did not require a sophisticated system of assessment or a record of rights in land. Colonial governments in Africa did not bother much about land laws and protected "customary law" if it suited them.
The export of African produce was controlled by large European trading companies, and a few major ports provided the channels through which such exports had to pass. By collecting export taxes in those ports, colonial rulers could conveniently raise additional revenue.
The African colonies did not have currencies of their own; they depended on the currencies of their respective colonial rulers. At the time of the Great Depression, this gave rise to differentiation in the economic fate of the colonies. Great Britain and Portugal left the gold standard in 1931, and their currencies depreciated. France, on the other hand, which had returned to the gold standard only in 1928 but at a much lower parity than other nations, stuck to the gold standard until 1936. This caused competition that was particularly keen when the same type of produce was exported by colonies that were adjacent to each other but used different currencies. In this context, African peasants were sometimes forced to grow cash crops that gave them no returns.
A few regional case studies illustrate the fate of the peasants and the problems of the export of produce at the time of the Depression.
WEST AFRICAN PEASANTS AND EUROPEAN TRADING COMPANIES
The Ivory Coast, the Gold Coast (Ghana), Togo, and Nigeria were producers of palm kernels and cocoa. These products were exported by European companies, which were also active in the import trade. In the latter capacity they were interested in maintaining the purchasing power of their African customers, and lobbied colonial governments for a reduction of the export tax, arguing that this would help African peasants. But when the export tax was lowered, the poll tax had to be increased, which the companies did not mind because it forced the peasants to produce for the market. If the peasants rebelled, the government could suppress them. In the French Ivory Coast, everybody above the age of fourteen was required to pay a higher poll tax, a tax that had already been increased as recently as the late 1920s. At that time, the tax had been collected without difficulty, but when the government chose to raise rather than reduce it during the Depression, many Ivory Coast peasants left the countryside and disappeared into the slums of the towns.
The British Gold Coast levied no poll tax, and the government relied entirely on the export tax. The British departure from the gold standard gave the Gold Coast a competitive edge over the French colonies, and exports increased. The government in Togo, which was by that time a French mandate territory, relied heavily on the poll tax and had to repress a peasant rebellion in 1933. British Nigeria had a more diversified agrarian production, with palm kernels in the Southeast, cocoa near Lagos, and peanuts in the North. A poll tax, which had been introduced in southern Nigeria in 1927, was vigorously collected by 1931 and promptly caused peasant unrest.
The European companies, however, tried to make profits even at the worst of times. Many of them failed, and only larger companies, such as the United Africa Company and Lever Brothers, survived.
FORCED CULTIVATION IN THE BELGIAN CONGO
Sixty percent of exports from the Belgian Congo consisted of products from the mines; palm kernels and cocoa made up most of the remaining 40 percent. The colonial government in the Congo mainly depended on the poll tax; in 1930 this tax had only amounted to one-sixth of its revenue, but it had risen to one-fourth by 1932. Rebellions were brutally suppressed, and the government resorted to an old system of forced labor that had been replaced by the poll tax in 1910. During the Depression, the Congo's colonial rulers practically converted the whole colony into a huge plantation, ordering the peasants what to produce, dictating prices, and controlling delivery. While imposing this system of forced cultivation, the government also diversified production, pushing the cultivation of cotton, coffee, rice, and peanuts, in addition to the traditional crops, such as palm kernels and cocoa. Cotton exports from this region tripled from 1929 to 1937. The government could be proud of its economic success, but the peasants suffered.
SETTLERS AND PEASANTS: KENYA AND SOUTHERN RHODESIA
The presence of white settlers had a special impact on African peasants because many of them had to provide the settlers with cheap labor. The case of Kenya's "white highlands" was particularly striking. This area had been extensively cultivated in the past by Kikuyu tribesmen, but when white settlers arrived, they introduced a modern capitalist system of agriculture. The tribesmen, who were tolerated as "squatters" on the settlers' large landholdings, had few options but to work for them at low wages. Under colonial legislation, the breach of a labor contract was a criminal offence, and those who had entered into such contracts were practically treated like slaves. In shifting the burden of the Depression onto the shoulders of their African laborers, white settlers could survive the Depression. But some of these settlers found it difficult to make ends meet, particularly if they produced maize and not the more profitable cash crops, such as sisal, coffee, and tea.
Maize had become so inexpensive that it was hardly worth growing any longer. The colonial government in Kenya subsidized its cultivation, however, because it was required as food for the African laborers. The maize subsidy ceased when the government could no longer afford it. White maize farmers petitioned for a maize control act to regulate production, but its passage was prevented by other settlers who would have had to pay higher wages to their laborers so that they could afford to buy maize. The maize farmers then stopped producing maize, and turned their land over to African tenants. When the Depression ended under the impact of Word War II, the white settlers wanted to recover their land from these tenants, calling them "squatters" once more. This situation contributed to a growing unrest that culminated in the Mau-Mau rebellion.
In Southern Rhodesia maize was a major cash crop produced by white settlers. Since they did not face the resistance of other settlers here, Rhodesian maize farmers did manage to get a maize control act passed. According to this act, output was severely restricted, produce was procured by the government at a fixed price, and consumers had to buy maize at a price well above the export price. The maize control was exercised in such a way that only white settlers benefited from it. But the government soon realized that the restrictions prevented African peasants from producing for the market, and they were thus unable to pay the poll tax. The government then commuted the poll tax, offering the peasants the option of working for twenty-three days on road construction instead. But so many poor peasants took up this offer that the government had to withdraw it. There could not have been a more striking testimony to the terrible poverty that had hit the peasantry.
FRENCH COLONIES IN NORTH AFRICA
The Arab countries of North Africa that were under French colonial rule also experienced a peculiar competition between European settlers and indigenous peasants. The main crop in Algeria, Morocco, and Tunisia was wheat, but there were two varieties of it, hard wheat (Triticum durum) and normal wheat (Triticum vulgare). The latter was mostly grown by European settlers, whereas hard wheat was produced by indigenous people. Both varieties were exported, hard wheat mostly to Italy, where it was used for the preparation of pasta. When wheat became the first major crop whose price fell due to the Depression, the French colonial governments were pressed by the settlers (mostly French) to support the price of normal wheat; they did this to some extent, but showed no interest in the price of hard wheat grown by the Arabs. Similarly the colonial authorities ignored the problems of the indigenous producers of olive oil in Tunisia, many of whom became heavily indebted during the Depression and lost their land to their creditors.
At the opposite end of the continent South Africa provided another striking contrast to the rest of Africa. It was dominated by a white minority and enjoyed political independence as a dominion in the British Commonwealth. The country was rich in natural resources and was the world's largest gold producer. The average annual production in the 1930s amounted to eleven million ounces (311 metric tons). Under such conditions it could hold on to the gold standard even after Great Britain had abandoned it in September 1931.
South Africa was governed by the Nationalist Party, which was caught in a dilemma. It represented the white farmers, who were affected by the fall in prices and stood to gain from a devaluation, but the party was also pledged to upholding national autonomy as embodied in the gold standard. There was a fear that if South Africa abandoned that standard, gold would be given up as a standard of value worldwide and that this would harm South African gold production. The mine owners did not share this fear. Gold prices had risen after September 1931 and this made the processing of low-grade ore profitable, which would extend the life of the mines considerably.
In the meantime, speculators invested their money in the depreciating pound sterling in the hope that they could shift it back to South Africa at a profit once the South African currency was taken off the gold standard. Banking business in South Africa was in the hands of two British banks, Standard and Barclays, whose headquarters was in London. Thus, South Africa was intimately linked with the British financial market. In December 1932, these various pressures combined and forced South Africa to abandon the gold standard. The speculators then repatriated their funds. The South African economy was reflated. In February 1932, the South African currency was pegged to the pound sterling and maintained this relationship for a long time.
Great Britain absorbed the total production of South African gold and built up massive reserves for the sterling area. The fears that going off gold would harm gold production proved to be unfounded. From 1929 to 1936 world gold production increased by 50 percent and the price of gold rose by 66 percent. Because Great Britain and the United States stored vast amounts of gold in their reserves, the increase in the price of gold was not reflected in commodity prices. Nevertheless, reflation did push up prices in South Africa, which helped the farmers. The black farmhands who worked for the white farmers, and the miners in the gold mines did not share the benefits of reflation because the employers managed to keep wages down.
Egypt stood in contrast to the countries surveyed above. It had been a British colony but had achieved a kind of independent status in 1922. Its currency was still tied to the pound sterling, but the Egyptian government was free to impose a gold export embargo after Britain left the gold standard. In this way the distress gold of indebted peasants, which would have poured out of the country as it did elsewhere at that time, was retained by the Egyptian government and could be used for fighting the deflation of the national economy.
Another special feature of the Egyptian economy was its dependence on the cultivation of cotton. Cotton production was mostly controlled by absentee landlords, who relied on the state for protection of their interests. Egypt had expanded its cotton production from 0.27 to 0.38 million metric tons from 1920 to 1929, and cotton exports constituted about 75 percent of total Egyptian exports. The country was therefore particularly vulnerable to a fall in cotton prices. In June 1929 the world price of cotton stood at eighteen cents; by 1932 it had dropped to six cents per pound, its lowest price during the Depression. This two-thirds reduction within three years was more severe than the price drop for most other commodities. Nevertheless the rate of cotton production was not reduced because demand for it remained stable.
Egypt's system of taxation, a land revenue system of the Indian type, differed from tax systems in other African countries. The tax was fixed at about one-third of the rental assets, and was collected without remission even during the years of the Depression. The rigidity of this system was due to the fact that the income from this tax had been pledged to Egypt's foreign creditors.
Despite these problems there were attempts at sponsoring industries that produced goods such as textiles, which previously had to be imported. Egypt was the only country in Africa where such an industry existed. The availability of cheap cotton was a boon to an indigenous textile industry, and a group of Egyptian entrepreneurs who had also been behind the establishment of the Bank Misr as a "national" bank now tried their hand at this type of industrialization.
It is difficult to gauge the deterioration of the standard of living in Egypt, and in other African countries, during the Depression years. There are only a few indicators that throw light on the conditions of the people: The per capita consumption of food and grain, for example, dropped by about 26 percent, even though wheat and barley became much cheaper; school attendance receded; and the number of Muslim pilgrims who performed the hajj dwindled in 1933 to about one-tenth the 1920s figure.
In Egypt, as elsewhere in Africa, the burden of the Depression was mostly shouldered by the rural poor, whereas the urban classes, particularly those who received salaries that had been fixed in better times, lived very well. Thus the gap between town and countryside widened considerably in the 1930s.
THE AFTERMATH OF THE DEPRESSION
In terms of the value of world trade, Africa suffered less from the Depression than other parts of the world. Whereas the value of world exports declined by 66 percent from 1929 to 1934, the value of African exports declined only by 48 percent. Agriculturists were affected by this drop in value more than mine owners.
The European colonists who depended entirely on export production were discouraged by the experience of the Depression, and the declining revenues affected colonial governments. The possession of colonies was no longer profitable, but colonial rulers were also creditors, who did not wish to relinquish their control. In the long run, the Depression contributed to the decolonization of Africa.
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