The Great Depression in Estonia

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The Great Depression, that had started in the United States of America in 1929, reached Estonia by 1930. It brought along a large economical decline, especially in industrial production and export volumes. By 1932 crisis had reached its peak: there were 32,000 unemployed.

This was a favorable time for the communist movement, which tried to gain control over the unemployed work force. Their attempts, however, were unsuccessful. The government played an important role this, organizing many large-scale works to aid the unemployed, such as building railroads, highways and airfields. Also, the Central Archive of Estonia in Tartu was rearranged with the help of unemployed scholars, so in a way, the years of crisis were a kind of golden age to the archivists.

In general, the economic state of Estonia was dreadful, and the politicians could not improve the situation in any way. This became apparent in 1932, when four governments were in office, all trying to use different measures to end the crisis. Unfortunately, their efforts were in vain.

It seemed that the only choice was to devalue the Estonian kroon, but no head of state wanted to make such an unpopular decision. Päts's government (in power from November 1, 1932 to May 13,1933) even prohibited spreading the idea of devaluing the kroon, and threatened with a criminal sentence.

The painful decision was finally made by Jaan Tõnisson's government (May 18-October 21, 1933) after which the economic state of the country started to gradually improve. The economic crisis had gone on for too long, and brought along a political crisis. People's support to all the political parties had substantially decreased, and the radical group called the Union of Participants in the Estonian War of Independence (or Vaps movement) had become increasingly popular since 1930.

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