Technology and Invention (57-58) and A Booming Economy (59-62)
1. With reference to the telephone, air travel, the discovery of insulin and
radio, EXPLAIN how the 1920s was an era of innovation and discovery.

Telephone
o At beginning of decade only 25% of Canadian homes had a telephone
o These phones required a crank and the mouth and ear piece were
separated
o Dial telephone appeared in Toronto in 1924, and phones now had a
combined mouthpiece and earphone
o By end of decade, almost 75% of Canadians had telephones in their
home
 Easier form of communication that is faster, and more efficient
 Also allows people over great distances to stay connected

Air Travel
o Pilots returning from war were eager to continue flying and thus
travelled the country performing stunts
o In 1924 government created the RCAF to conduct surveys, patrol for
forest fires and watch out for smugglers
o In 1927, post office hired pilots to fly mail to remote areas
 Allows for easier transport of people, medical aid, food etc

Discovery of Insulin
o Frederick Banting and his medical student Charles Best worked to
isolate insulin in animals so he could treat people with diabetes
o In January 1922, he injected insulin into Leonard Thompson
 It was one of the most revolutionary discoveries in medical
science

Radio Radio- Impact of US on Canadian Culture
o The radio made the world seem smaller and ended isolation
o Inexpensive entertainment and brought families together to listen to
the latest news, sports, music and drama.
o At beginning of decade radios were a status symbol, however by the
end of the decade, there were more than 60 radio stations in Canada
and almost a third of Canadian homes had a radio.
o The Aird Report recommended that a government board operate a
coast to coast radio system (later the CBC)
 PROTECT CANADIAN CULTURE BY PROVIDING CANADIAN
CONTENT
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2. EVALUATE what you think was the most significant innovation during the
1920s. Justify your choice.

Answers will vary
3. Why would few have predicted the booming economy that lay ahead?


In 1923, unemployment was at 17 per cent.
Inflation was eating up people’s life’s savings.
o Rising cost of living- meaning prices of goods rise more quickly than
people’s salaries
 Exports to war-ravaged Europe were on the decline
4. Using information found on page 50 complete the flow chart found on
page 63.
Natural Resources
Agriculture- crop prices rise (1925-28)
Farmers invested profits to buy better equipment
Pulp and Paper- largest supplier of newsprint
supplying newsprint to the USA (2nd largest industry)
Mining- growing demand for minerals and metals
demand for metals linked to demand for automobiles
and electric appliances
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Energy- petroleum and hydroelectricity
Linked to automobiles (oil and gas) and mining
5. Make a t-chart comparing the negative and positive consequences of the
automobile industry in Canada since the 1920s. IMPACT OF USAEconomic
Negative Consequences
– The problem of branch plants
o American companies set up
offices in Canada & all
proceeds go to US
–
Amalgamation and the end of the
Canadian automobile companies
–
The decline of downtowns with the
growth of suburbs, traffic jams,
pollution
Positive Consequences
– Jobs
–
Spin off industries (road making,
rubber tires, gasoline stations,
motels)
o Development of
infrastructure
–
Greater freedom to travel, date, and
work at a distance
–
The creation of suburbs
6. What is a share and how is it used to finance the growth of companies?


A share is part ownership of a company
Shares are sold to investors to raise money
7. How did the investment strategies of Great-Britain and the United States
differ? (IMPACT OF USA and GB on CANADA)

British financiers had invested in Canada by buying bonds
o Bonds do not involve ownership but provide guaranteed interest
payments

American investors preferred to buy shares in natural resource companies
o By 1930, American investors controlled 20% of Canada’s industries,
rising to 40% in the mining, smelting and petroleum industries
o American investments surpassed Great Britain’s by 1926
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8. During which period did American investments increase most rapidly?
Why? (Hint: Use the pie charts on page 62)




Between 1914 and 1920 American investments increased by 21%.
The most important reason for this growth was the First World War.
Since Great Britain was strapped for money, Canada turned to the US for
loans and financial help.
Canadian minerals and other natural resources were in great demand during
the war, and many American investors saw an opportunity to make money by
owning these resources.
9. How did American companies avoid paying tariffs on goods?


10.
American companies established branch plants
o A branch plant is a factory or business owned and controlled by a
larger company that is based in a foreign country
o Avoid National Policy- protectionist economy
Although these firms were run by American managers and returned profits to
the home office, the produced “made in Canada” goods and thus avoided
paying tariffs
What was the result of the establishment of American Branch Plants?



With the establishment of American branch plants, Canada lost control of its
major industries resulting in a strong dependence on the US economy
By the end of the decade, Americans owned:
o 82% of Canada’s auto production
o 68% of Canada’s electronics industry
o 64% of Canada’s rubber industry
o 42% of machinery
o 41% of chemical production
Economically, Canada was becoming tied to the United States and Canadians
became concerned about foreign investment
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