Falling Off the Economic Edge
Socials 11
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Unemployment in 1929: 4.2%
1922-26
◦ Canadian companies issued new shares to a value
of $700 million
◦ Profits went up, share values went up
◦ Buying “on margin” – buying shares with only 10%
down payment
◦ Loans readily available
◦ Price of stocks inflated beyond real value
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Some cautious investors started selling their
stocks in order to cash in on high profits
Others rushed to follow their lead
Sellers panicked as the value of stocks fell
dramatically
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October 29, 1929 – New York Stock Market
crashed, followed by Toronto and Montreal
Investors went bankrupt since they borrowed
heavily
Contributed to but DID NOT CAUSE the
Depression!
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Wheat
Overproduction
Protectionism
Treaty of Versailles
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1927 – price of wheat on the world market
began to fall
◦ Supply and demand – more wheat was being
produced than was being sold
◦ Canadian and U.S. wheat farmers depended on
foreign markets (exports), but other countries were
producing their own wheat
◦ Sales decreased -> income of farmers dropped ->
farmers unable to meet mortgage and loan
payments
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Overproduction – more goods being
produced than were being sold
At first, manufacturers continued to
stockpile, then they began to cut back
production
This led to layoffs -> less income -> less
spending on consumer goods
◦ Vicious cycle
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U.S. imposed high tariffs on foreign goods
coming into the country
Meant to protect domestic market by making
foreign items more expensive
Other countries then did the same in
response -> slowdown in world trade as
opportunities for export shrank
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Germany unable to make reparations –
economy in ruins
France and Britain were relying on
repayments in order to pay off their debts to
the U.S.
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A period of severe economic and social
hardship, massive unemployment, and
terrible suffering.
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Canada’s economic weakness: dependency on
the export of primary resources
◦ Wheat – supplied 40% of world demand
◦ Newsprint – supplied 65% of world demand
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Demand for product falls
People lose jobs
People can’t buy goods
People who make goods lose jobs
Millions of Canadians out of work
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Factories and businesses closed
People evicted from their homes
Loss of respect
“pogey” – government relief payments given
to those who had no alternative source of
income
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long lines
Public declaration of financial failure
Swear that they had no home and nothing of value
This would get them food vouchers
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Used clothing and meals
Soup kitchens
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By 1933, ¼ of the workforce was unemployed
Jobless men “hopped” freight trains - “riding
the rods” – rode on the roof or clung to the
underside of the train
Shanty towns or “jungles”
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1928 – drought begins, lasts almost 8 years
1930-31 – wind and dust storms
Palliser’s Triangle especially badly hit
Plague of grasshoppers
1935 – Prairie Farm Rehabilitation
Administration Act for irrigation systems and
reservoirs
◦ too late
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Poor got poorer
Employment of women blamed for the
depression.
Aboriginal families on relief got only
$5/month – expected to “live off the land”
Chinese families were starving
◦ Provincial government started food kitchens, but
they were not well-funded
◦ Expected Chinese men to cost ½ of what it cost to
feed white men
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Immigrants targeted
◦ Anti-Semitism: hatred and prejudice towards Jews
◦ Jobs closed to Jews – signs posted forbidding
applications
◦ 10 000 immigrants deported in the first half of the
Depression
◦ 1931 – government put a complete stop to
immigration
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Chapter 4 Test: November 2