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from Part Three - Elder Dempster And Company Limited
The Depression Deepens
The relatively rosy expectations for West African trade that existed at the beginning of 1929 were soon to be disappointed. The onset of a slump in world trade in 1929 and the deepening of this depression in 1930 and 1931 led to a sharp decline in shipping activity throughout the world. In common with other shipping companies, the West African lines suffered severely, for commerce fell to disastrously low levels. The magnitude of the fall is illustrated by the fact that aggregate net tonnage entered and cleared from the British West African ports showed a decline of eighteen percent in 1931 and thirty-two percent in 1932 when compared with the 1928 figure.
A more precise indicator of the impact of the depression is to be seen in the decline in imports and exports. Thus, imports fell from £29,858,000 in 1928 to only £12,184,000 in 1931 and exports were reduced from £32,593,000 to £16,167,000 during the same period. When these figures are expressed in real terms, however, the extent of the fluctuation was considerably less because of the steep decline in the price level. Measured in monetary terms, therefore, imports fell to forty-one percent and exports to fifty percent of the 1928 figures. If account is taken of changes in the price level, it will be seen that in real terms the decline was less marked, imports falling to 59.2 percent and exports to 60.1 percent.
The course of the depression after 1929 was such that every shipping route in the world was adversely affected and shipping companies generally suffered enormous losses. In the case of West Africa, however, the decline in trade from economic causes was aggravated by other factors. These included, firstly, a change in the competitive structure of the trade, and secondly, a breakdown in the financial organisation of the Royal Mail Group. Largely as a result of these difficulties the share of British tonnage on the route tended to fall:
Although the failure of the Royal Mail Group was ultimately to have serious repercussions for Elder Dempster, a more immediate and direct threat to its wellbeing was caused by the creation of the United Africa Company (UAC) in 1929.
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