THE GREAT DEPRESSION
1929 - 1939
An Introduction
How do we go from this to this?
From Boom to Bust:
The Great Depression
1929-1939 “Dirty Thirties”
• The Trigger: October 29th, 1929 - the good times
of the 1920s abruptly came to an end when the
New York Stock Market crashed, followed by
stock crash in Toronto. This day in 1929 was called
“Black Tuesday” (the stock crash was a symptom
of other economic problems)
• The 1930’s depression became a time of despair
for many Canadians as they lost their savings,
their jobs, their automobiles and their homes.
• The Great Depression was the longest in human
history (10 years) and affected Canada and the
rest of the world!
WHAT TRIGGERED THE GREAT DEPRESSION?
•The 1929 Stock Market crash was a
CONSEQUENCE of deeper economic spending
problems from the 1920’s party era that
triggered the 1930’s Depression.
•The stock market crashed when people &
banks rushed to sell their stocks at once.
Prices and values dropped, profits fell, and
investors lost $30billion in total.
•Those who bought on credit could not repay
debts.
•1 out of 5 people would be unemployed
during the 1930’s depression.
What caused the 1930 Great
Depression that lasted 10
years?
Let’s play the blame game…
Task:
You will be placed in a group playing the part of overpaid
defense lawyers. You must represent your client by BLAMING
the other party for causing the Great Depression.
Identify at least 3 reasons to blame the other group and be
sure to explain the “significance” of how each problem they
created resulted in a personal/societal/economic/or polital
consequence for individuals or Canada as a whole.
1)The government & banks
OR
2) Canadian citizens and prairie farmers
WHAT WERE THE 5 MAIN
CAUSES OF THE GREAT
DEPRESSION IN CANADA?
REASON 1: Irresponsible spending and limited
government regulation during the 1920’s paved the way
to the Stock market crash of 1929 & The Great
Depression in the 1930’s:
•Canadians were going into debt by the late 20’s without
realizing it when times were good and living beyond
their means.
•Buying stocks “on the margin” (10% of price… risky if it
dropped, as they were then responsible for paying the
whole price at once).
•Buying goods on credit and living beyond their means
(what they could realistically pay for at the time of
purchase). Farmers and businesses borrowed money from
banks to pay for equipment and labour (loans the
couldn’t repay after the stock market crash of 1929).
•Consequence: Resulted in major debt for the country,
banks, individuals and economic crisis. Businesses shut
down & people lost savings & jobs!
Basically, the stock market crash of 1929 was due
to…
Irresponsible spending:
•People bought stocks with credit during the 20’s,
which allowed them to easily invest in the stock
market (purchasing margin shares for 10% of the
entire price of the stock was risky if stock goes
down).
•Limited government regulation, laissez-fair
approach enabled people to buy/sell easily without
thinking of whether they could afford their
purchases.
• Limited regulation enabled people to use credit
to live beyond their means, take out loans,
spend unwisely, and accumulate large debts.
REASON 2. Businesses were producing more goods than
they could actually sell.
•Industries in the 1920’s were expanding (with the change
from a war based industry to a consumer based industry…
building cars and small appliances instead of guns).
•Profits were spent on adding to factories or building new
ones during prosperity.
•HOWEVER, this MASS PRODUCTION of consumer products
(like cars, consumer goods, etc) resulted in a huge stockpile
supply of goods that couldn’t all be sold by the late 20’s.
•In other words, there was an over-supply of products with
not enough demand for them (consumers were not buying
enough of what was being made and sold by companies).
REASON 3. Canada was too dependent on exports of natural
resources (selling to other countries). Overproduction of raw
materials and the limited demand for products became a big
problem!
•With the prosperous 1920’s, Europe was starting to recover
after WWI and make their own consumer goods like Canada.
•They no longer needed Canada to export products like
wheat, paper, fish, coal or consumer products (this added to
the oversupply build-up problem of consumer products in
the late 20’s and little demand or need for all those
products that were manufactured in bulk)… leading to the
1930 depression/debt/poverty.
REASON 4. Canada’s economy was also too
dependent on the USA.
In the 1920’s, almost 40% of Canadian exports were
sold to the States, along with investments.
When the US economy failed with the Stock Market
Crash of 1929, Canada’s stock market followed
with devastating consequences, leading to mass
poverty and unemployment.
Protectionism tarrifs made this problem worse…
1920’s tariffs (duties or taxes on imported goods
coming into a country) hurt Canadian profits when
exporting/selling to other countries.
US protectionist taxes really hurt Canadian
business profits when exporting/selling to the
States.
REASON 5. The Dust Bowl HIT HARD
•Wheat prices hit rock bottom without
having anyone to export to. Farmers
lost their business in the prairies. Land
was also destroyed by over ploughing
in the 20’s during prosperity.
•To make matters worse, farmers took
a hard hit with the Dust Bowl (severe
drought hit farms).
•Farmers abandoned their farms and
hopped on trains illegally to hitch a
ride for work elsewhere.
The effects of
the depression
were made
worse by the
Dust Bowl
Decades of over-farming and
droughts in the Plains led to
windstorms that swept away
soil and made farming
impossible
• CONSEQUENCES!!!!
Major Consequences:
• Consequence: Resulted in major debt
for the country, banks and
businesses closed, individuals and
the economy were in major
economic /emotional/social crisis.
• Businesses shut down & people lost
savings & jobs!
• Massive unemployment throughout
the 1930’s (about 25%-30% of the
population were unemployed)
• People were afraid to buy anything
How you viewed the Great Depression depended on your age and what
happened to you.
Children:
• Never really saw this era as a miserable time
• Families have a lot of time for each other
• For entertainment, there were parlor games, the piano, church
community, radio
• Food may have been poor, but there was plenty of appetite
Adults:
•
Many were unable to find a job or pay the rent
•
Once your savings were gone, there was nothing else
•
Fishermen couldn't sell their fish (nobody had money to purchase
it)
•
Farmers watched the soil blow away as dust
•
Young men were often the most disadvantaged
Farmers often faired better than the urban dwellers because they
could eat what they managed to grow (unless the dust bowl
directly affected their crops out west in Canada along the prairies).
-For the farmers who managed, many were already poor, so they
could cope with more poverty.
Store owners sometimes extended credit knowing that they may
never be paid.
Teachers watched out for (and often fed) students who came to
school hungry.
Religious institutions played a major role by:
-Offering stability and comfort to families
-Providing counseling for those who were overwhelmed
-Shipping clothes and food to the prairies during the Dust
Bowl
Soup Kitchens and Breadlines – food stamps
and work camps
Rudy Vallee
“Brother Can You
Spare a Dime?”
Song plays for next 4 slides
Mortgage Foreclosures
Poverty in America
This is a Bennett Buggy –
a car with the engine and
windows removed and
pulled by a horse. –
Nicknamed after 1930’s
Prime Minister Richard
Bennett (blamed for not
fixing the Canada’s poverty
state).
This is an image of men
“riding the rods”. Why would
men do something so
dangerous?
What Were the Long-term Effects of
the Great Depression?
• The Great Depression profoundly affected
the world economy, especially in Europe,
where many countries had not fully
recovered from the aftermath of World
War One; In Germany, the economic
disaster and resulting social dislocation
contributed to the rise of Adolf Hitler.
• -We will discuss this further in the
following weeks
What Were the Long-term Effects of
the Great Depression…continued
• Not everyone suffered (rich corporations
fired people and cut costs to keep their
wealth. People who were already rich
managed just fine with the cheap prices at
stores).
• Yet it is generally agreed that complete
business recovery was not achieved and
unemployment ended until the government
began to spend heavily for defense during
World War Two.
Homework Questions:
80-81, 86-89
Consider…
1)How did Bennett respond to the Great
Depression?
2)Read pages 80-81 in your textbook. Do you think
it was fair to blame Bennett for the long-term effects
of the Great Depression?
3)How did the Great Depression affect the following
groups of people: Women, Aboriginal and First
Nations, Inuit Communities?
4)What was Bennett’s New Deal? Why was it
significant?
Canada and the Great Depression
…continued
• For all the unemployed there was a relief
program for families and all unemployed
single men were sent packing by relief
officers by boxcar to British Columbia.
There were also work camps established
for single men by Prime Minister Bennett's
Government.
• As the Depression carried on, 1 in 5
Canadians became dependent on
government relief. Around 30% of the
labour force was unemployed, where as the
unemployment rate had previously never
dropped below 12%.
Summary
• The era of the Great Depression (192939), also known as the “Dirty Thirties”,
wasn't like an ordinary depression where
savings vanished and city families went to
the farm until it blew over.
• The Great Depression affected everyone
in some way and there was basically no way
to escape it. The Socialist James S.
Woodsworth told the Federal Parliament in
Ottawa, "If they went out today, they
would meet another army of unemployed
coming back from the country to the city."
Summary…continued
• Many people turned to new political parties
to help solve the economic crisis, as
traditional political parties failed to offer
any real strategies to relieve the situation.
• Nothing world governments did to alleviate
the economic crisis was completely
successful. The employment and
production demands of World War Two
ended the Great Depression.