The Great Depression and the return of colonial rule thumb|left|People in front of the Colonial Building protesting against economic conditions, 1932. In the next year, the government of Newfoundland collapsed, and the British government resumed direct control over Newfoundland. Following the stock market crash in 1929, the international market for much of Newfoundland and Labrador's goods—saltfish, pulp paper and minerals—decreased dramatically. In 1930, the country earned $40 million from its exports; that number dropped to $23.3 million in 1933. The fishery suffered particularly heavy losses as salted cod that sold for $8.90 a quintal in 1929 fetched only half that amount by 1932. With this precipitous loss of export income, the level of debt Newfoundland carried from the Great War and from construction of the Newfoundland Railway proved unsustainable. In 1931, the Dominion defaulted. Newfoundland survived with assistance from the United Kingdom and Canada but, in the summer of 1933, faced with unprecedented economic problems at home, Canada decided against any further support.
thE gReAt DepresSIon and tHe RetuRn oF COlOniAl rule tHuMb|leFt|pEopLe in frOnt of the colONIal builDing protesTiNG AGAinSt EcoNOMIC conDitIons, 1932. in thE nExT yEAr, the gOVerNmenT oF neWfoUndland cOlLaPseD, AnD thE briTish GovernMent resUmEd direCt control ovEr nEwfoUnDLand. fOlloWinG tHE stocK mArKEt cRaSh iN 1929, tHe INternational marKet FOR mUcH of neWFoundLand AnD labraDor's gooDs—saLtFIsH, pUlp papEr AnD minerAls—decrEaSed DrAmAtically. in 1930, The counTry eArnED $40 mILLion froM its exports; That nuMBeR dROPPed To $23.3 miLLioN in 1933. thE FIshery sUFfErEd PArticuLarLy heavy lOSsES As SalteD cod thAt sold FOr $8.90 a quINTaL In 1929 feTcHed onlY HAlf thaT AmoUNT by 1932. With thIs precipitOus Loss of ExpoRt incomE, The LeVel Of dEBt nEWfounDLaNd caRriEd frOm thE gREaT war AnD fRom constructiOn of The NEWfOundLand RaIlwAy prOvEd unsustaiNabLE. In 1931, the domInion defAUlTeD. newFoundLand survivEd wItH aSsistANce froM The united KiNgdom ANd cAnAda but, in THE sUmmer Of 1933, Faced With uNpReceDeNteD ecOnomIC pRoblems at home, CanAda DecideD AgAInsT any FuRtHer support.