The Great Depression
The Regina Riots of 1935
How “roaring” were the 1920’s?
After WWI, the U.S. did not face the
type of destruction found in Europe.
The U.S. came home-isolated themselves
and got to to work.
The 20’s were a time of great prosperity
for the U.S.
The nation’s overall income rose from
$74 billion in 1923 to $89 billion in
1929.
Prosperity for All?
Behind this façade of success, masked an
incredible inequality in the distribution of
wealth.
Henry Ford was the classic example of this:
He reported $14 million, while the average
income was $750.00!
Said another way, 1% of the population
enjoyed 75% of the nation’s disposable
income.
Manufacturing increased 32%, but worker’s
wages only increased 8%. These profits
went directly to the corporations, which rose
62%
An Unstable Economy
Unequal distribution of wealth causes
instability within the economy because total
supply and demand do not equal each other.
There was an over supply of manufactured
goods-the middle class wanted to buy more,
but didn’t have the money. The wealthy did
buy goods, but only spent a small portion of
their income.
How the Economy Kept Going
The economy of the 1920’s relied on two
things: credit and the luxury spending and
investing of the rich.
Installment buying or buying on credit
reached all time levels in 1929. 60% of all
cars and 80% of all radios were purchased
on credit.
An artificial demand was created for products
for which people could not ordinarily afford.
This worked as long as people remained
confident in the economy.
The Stock Market
Massive speculation began in the late
1920’s.
Many people bought stocks on margin. You
could put $10 up of your own money and
borrow $75 from a banker. Sold at a profit a
year later, people at times were making a
4300% profit.
There was also unequal distribution of wealth
among companies. The radio and
automotive companies controlled the
manufacturing sector. Agriculture at this time
was virtually ignored.
The Problem with Europe
Unequal distribution of wealth around the
world-the U.S. was prospering, but Europe
was not.
By 1929, $1.25 billion had been loaned to
Europe, most of which was used to buy U.S.
goods.
The U.S. kept tariffs high to protect American
goods and the U.S. tried to be as selfsufficient as possible.
The U.S. would not buy products from
Europe and after a time, Europeans could
not pay back the interest on their loans-let
along buy more products. U.S. exports fell
by 30%
When Confidence Fades
Low stock prices beginning in Oct. of 1929
began to shake people’s confidence in the
economy.
Stock prices could not stay high forever.
The rich stopped investing in stocks and
luxury items. The middle class and poor
stopped buying on credit for fear of losing
their jobs.
The stock market crash on Tues. Oct. 29,
1929 was the spark that set off an already
unstable economy.
A Vicious Circle Begins…
The middle class and poor could not afford to
pay the interest on their loans.
Manufacturing was decreased by 9%, people
began to lose their jobs.
More loans were defaulted on, radios and
cars were returned and manufactured goods
began piling up in warehouses.
Industries associated with radios and autos
began falling apart-people no longer needed
tires, gasoline or increased electricity.
Banks become part of the “Circle”
During the 1920’s banks and bankers had
been heavily investing the stock market.
Banks were the primary source of money for
speculators or those people who bought
stocks on credit.
Banks were also independently investing in
the stock market as well.
As people put money in banks, this was the
money that was used for loans and stocks.
As people’s confidence weakened, a rush on
the banks began.
Banks soon ran out of money (as most of it
was loaned or lost in the stock market) and
what people had put in the bank was lost!! In
the 30’s, over 9,000 banks closed.
The Effects of the Crash
Internationally
After the stock market crash, the rich
stopped loaning money to Europe.
The U.S. raised tariffs even higher to
protect the weakened manufacturing
industry. (Hawley-Smoot Tariff of 1930)
Countries all around the world stopped
buying American products--which lead
to….
And the Circle Broadens
….the loss of more jobs, the closing of
more stores, the closing of more banks
and factories.
Unemployment grew to 5 million in
1930 and 14 million by 1932.
One Final “Issue” to Deal With
The Dust Bowl-while not a direct cause of the
depression, greatly affected agriculture,
which had been an ignored industry in the
1920’s.
Poor agricultural practices of plowing and
planting were exacerbated by the drought.
The drought lasted from 1931-1939, with the
worst coming in May of 1935. May 14th is
actually called “Black Sunday”.
The Dustbowl
By 1940, 2.5 million people migrated from the
Great Plains in search of work, food, landsurvival!
Most of these people were called “Oakies”,
even though Oklahoma was only one of the
states affected.
Many other people lost their farms or were
unable to pay their farm mortgages without
government assistance.
So What Actually Caused the
Depression?
Even historians and economists do not
agree!
More than likely it was a multitude of different
causes all happening at the same time (WWI
anyone?)
The depression was certainly more
complicated than just the crash of the stock
market.
You must come to your own conclusions,
but do not underestimate the power of
confidence in an economy!
The Depression Globally
By no means did the Depression just
affect the United States.
Each country suffered and handled the
issues differently. You will have the
opportunity to explore that idea later
this week.
For the next few days we will be taking
a look at the depression in Canada and
in particular the Regina Riots of 1935.
The Depression in Canada
Canada was affected as much, if not
more than the United States.
GNP dropped 40% and unemployment
reached 27%.
1 in 9 people were on government relief
The Western prairies were also affected
by dust storms and draught
Bread lines at Yonge St. in Toronto
The Beginnings of the Riot
Also known as the On-to-Ottawa Trek began
in 1935.
Relief did not come for free-Prime Minister
Bennett required those on relief to join work
camps in the west.
The conditions in the relief camps were
dismal and workers were given $.20 per day.
Workers began to demand access to first aid,
workers’ compensation and the right to vote
in federal elections.
The Decision to go to the
Government
In April 1935 1,600 workers called for a
strike and headed to Vancouver, BC to
protest.
After two months (June 3), hundreds of
workers traveled to Ottawa to formally
to take their grievances to the federal
government.
Workers traveling to Ottawa
An Unscheduled Stop
Once the protestors reached Regina
Saskatchewan, Prime Minister Bennett
invited 8 leaders to meet with him.
The other protesters were watched by the
Royal Canadian Mounted Police.
The meeting did not go well-it essentially
turned into a shouting match.
Bennett accused the “Trekkers” of being
radicals.
The Regina Riots Begin
On July 1, 1935 all the protesters reunite and
call a public meeting in the town square.
1,500-2,000 people attended of which only
300 were Trekkers.
3 large vans around the square hid Royal
Canadian Mounted Police riot squads.
At 8pm, a whistle was blown and the RCMP
and Regina police charged.
The Riots Continue
People fought back with anything they had
available-sticks and stones, etc.
Police attacked with clubs, fired revolvers
into the crowd and used tear gas.
Store windows were broken, but none of the
stores were looted.
After it was over, 120 Trekkers had been
arrested and the police claimed 39 injuries.
1 plainclothes police officer was killed as well
as one rioter.
After the Riots
The participants are gathered into exhibition
grounds and guarded by police and machine
guns.
A barbed wire stockade was built and
Trekkers were denied food and water.
Trekkers called Premier Gardiner, who
accused the police of inciting a riot. He also
called for food and transportation for the
Trekkers back home or to the camps.
The Results
During the on-going trials, a Justice Minister
made the statement that shots were fired by
the protesters and returned by the police.
This was never proved during the lengthy
trials.
The riot made national news all across
Canada. Bennett and his conservative party
lost much support.
The communist party gained strength in
Canada.
The relief camps were disbanded or taken
over by the provinces.
The Regina Riots in Action