The GD lasted for ten years.
It was the worst economic
disaster- it brought terrible
suffering to many people.
Stock Market Collapsed !
Businesses went bankrupt !
Workers lost their jobs!
Prairie farmers in Western
Canada experienced a
terrible drought.
 Dependence on the sale of exports of natural resources.
Too much optimism about the future.
Growing dependence on credit.
High Tariffs
Low Incomes = low standard of living!
Canada’s income drew
upon natural resources:
Wheat
Fish
Paper
Minerals
Coal
Wood
The good times were
dependent upon the
continued sale of these
products!!!!
 Society believed that the
good times would last forever.
Farmers borrowed money
from financial institutions to
purchase more land.
They bought more factories
and machines and hired extra
workers.
It was based on the belief that
the demands for goods would
increase!
Banks lent money out because they
felt confident about the future.
Buying on credit became popular.
People were buying every product
ranging from:
Homes
Cars
Appliances
Entertainment
Some people even bought shares of a
company stock on credit, called buying
“on margin”.
A share is one unit of ownership in a
company that can be purchased or sold
in a placed called a stock market.
Investors were buying on margin
offering up their homes, business, cars
and other assets.
This was risky, but there was a belief
that shares would steadily increase in
value and that they would be cashed in
later at a higher price.
Many businesses found that they
had over produced, and began to
stockpile their goods in a
warehouse.
Suddenly, there was less demand
for Canadian natural resources.
Factories in other countries had
large stockpiles of goods, they to
started to produce less.
Therefore, they didn’t need to
depend on Canadian exports.
The Canadian government
decided to raise the tariffs on
foreign imported goods.
In turn, other countries raised
their tariffs on imports which
resulted into less trades.
Consequently, the demand for Canadian
goods, fell dramatically.
Canadian workers were laid off.
Economic clouds were gathering in the
later 1920s, but few people noticed …
 A terrible drought hit the prairies in 1929—it lasted ten years.
For example, lack of rain, over farming, high temperature, and
plagues of locusts turned sections of the Canadian West.
The drought lasted for ten years.
Between 1931-1941 250,000 farmers abandoned their farms in the
West and joined the ranks of the unemployed.
The start of the GD was
triggered by the stock market
crash on October 29th, 1929.
This day was called “Black
Tuesday” because prices for shares
collapsed in the US and in Canada.
Investors suddenly realized that
their stocks were over priced, and
tried to sell them all at once.
On this day in NY over 16 million
shares traded, lost half their value
(9 billion).
16 Companies lost 300 million.
Many investors lost their savings
and went bankrupt.
Some even committed suicide.
The crash resulted into a
mass unemployment.
This meant that there
was less money in the
economy and less
purchasing power.
With the collapse of the
stock market in 1919,
companies that had over
spent and over produced
misjudged their markets
and went bankrupt.
PM King thought that the
stock market crash would
be a temporary setback for
the Canadian economy.
For one cause or another, it has become
necessary to impose restrictions upon the use
of many commodities, including not a few of
the necessities of life.
Mackenzie King
The next election was being held in 1930—King
had a new opponent Richard Bennet.
However, King believed that he could win the
election for these reasons:
He lowered taxes
Created a balanced budget
Increased trade with Britain
Despite King’s efforts, Bennett won and passed
laws to subsidize or provide funds. For example,
he helped farmers transport their grains. He also
lowered taxes.
Consequently, many voters blamed King for
doing nothing to correct the bad times.
One quarter of Canadians were unemployed
and looking for work.
The Depression was world wide and people
were desperate.
This created opportunities for dictators. (Next
week’s lesson – the rise of totalitarian
governments in Europe).
Please complete the following questions for homework:
1. How did the economic conditions of the 1920s, compare with
those of the 1930s?
2. What role did the government play in the lives of Canadians in
the 1930s?
3. Explain what was wrong with the Canadian economy based on
the following headings:
o Natural Resources
o Buying on credit
o Over production of goods
o Raising tariffs
o A low standard of living
4. How did the drought in the West make the Great Depression
worse?
5. Why did the stock market collapse on October 29th, 1929.
6. In the library or at home – Research the following: What was the
Co-operative Commonwealth Federation?
7. Explain the difference between Communism and Socialism.
8. Who was Agnes Macphail?