Great Depression
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–After the booming 20s came
the Thirties: A Decade
of Despair
Crop failures
Jewish refugees
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Phases of the Economic Cycle
•
•
•
•
Recovery=upward spiral after a recession
Expansion (Prosperity)=economic expansion (or boom).
Decline (recession)=downward economic spiral
Depression: Employment is low, incomes are low, and business
production is low.
• Other terms-see terms of economic cycle worksheet
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Falling off the Economic
Edge-Causes
1)Buying on the Margin
•1922-26 Canadian companies issue new shares ($700 Million)—profits increase
•many investors buy shares with only a 10% down payment (assumed that when prices of stocks increased
remaining 90% paid)-buying on the margin
•loans for stocks easily obtained
•people want to get rich quickly, so buy stocks
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•careful investors start selling stocks to get money
•value of stocks go down people go bankrupt
Present-day example of buyingon the margin
Let’s say I wanted to get rich fast!!!
I would think about investing in stocks. I wanted
to buy some Nike stocks which are selling for
$4.95. If I’m a big player I would buy about 100
stocks. Obviously, I don’t have $495.00, so I
would have to borrow the money from a bank
and put down a small down payment (let’s say
$200). If the value of the stocks increase I’m
making money. Let’s say the stock goes up to
$5.00, and I have a 100 stocks that means my
stock is now at $500, so I made $5! Good times!!
But what would happen if my stock went down
to $1.00. That means that the value of my stocks
is now $100. I owe the bank $100 (with growing
interest) and I’m not making any extra money!
Bankruptcy! That is what happen to those buying
stocks during the G.D.
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•Oct. 29, 1929-Black Tuesday
•NY market Collapsed—Toronto-Montreal Stock markets collapse
•Devastating effects-investors go bankrupt
•Beginning of Depression (severe socio-economic hardships, massive unemployment,
suffering)
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YOuTube Clip Then and Now Tent Cities
Stock Market Crash
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Causes of Depression
2. Rise of consumerism led to the overproduction of
manufactured goods
– Radios, cars, kitchen appliances were made in mass
quantities on the assembly line
3. Overproduction of wheat – led to problems for Canadian
farmers who bought new equipment with credit
– Wheat prices peaked in 1924
– Over-cultivation of fields depleted nutrients in soil
which worsened the effects of the “Dust Bowl” when
drought began in the early 1930’s (led to soil erosion!)
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Assembly Line
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Dust Bowl
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3.Causes
Protective of
tariffs
made domestic
the(taxes)
Depression
– cont’d
prices cheaper than imported goods
from foreign countries.
– Led to the decline in world trade,
and turned the Depression from a
crisis in the USA into a global
problem
• US imposes high tariffs on foreign
goods to protect US domestic market
• Link to 21st century recession-youtube
clip
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Canada and the Depression: Why does Canada
go deep into a depression?
Great Depression relief project in British Columbia
•Dependency on the export of primary
resources (wheat/newsprint)
•Markets no longer able to afford
Canadian wheat and
newsprint=unemployment
•Unemployed cannot afford commodities
(cars, radios, telephones)=more
unemployment for factory workers
•Canada’s economy was affected by
depression because it was dependent on US
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Drought on the Prairies
•collapse of wheat market
•families struggle
•drought, dust storms, plague of grasshoppers
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Desperate Years-social
Effects
•Wealthy/middle class Canadians not as
affected
•Factory workers lose jobs
•Businesses close down
•Evictions (people cannot afford rent)
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Cont’d
• Loss of job=loss of respect
• Government relief payments given
(people wait in queues, declare
financial failure, receive voucher
for food)
• Private charities-Soup kitchens
• 1933=unemployment/homeless/fre
ight trains
• Some were so desperate they
committed suicide!
http://www.iasp.info/pdf/papers/mishara_suicide_and_the_eco
nomic_depression.pdf
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Effect on Minorities
•Women
•few jobs
•blamed for “taking the jobs” of men after the war
•Aboriginals
•on relief
•got $5/month
•expected to “live off the land”
•Immigrants
•viewed with hostility when competing for scarce jobs
•Jews (anti-semitism) not allowed to work particular jobs/barred
from organizations/club
•deported
•immigration stopped (restricted)
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Responding to the Depression - Political
•King who was PM when the Depression hit had no answers
•The federal government tried to pass off responsibility to the provinces
•Provinces passed the buck to cities and towns
•Towns and cities passed the responsibility to churches and local charities
•Everyone blamed Ottawa
•King in a moment of stupidity promised not to give “a five- cent piece” of relief to a province with
a Tory government (provincial exam question)
•R.B. Bennett promised he would end unemployment or perish in the attempt
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•Gets elected as PM
Read their biographies in counterpoints
“One of the greatest assets any man or woman can
have on entering life’s struggle is poverty” R.B.
Bennett
• Bennett defeated the King
government
• Bennett born in New
Brunswick was a Calgary
lawyer and a business
tycoon
• Bennett believed in the
free enterprise system
(Laissez-faire approach!)problem with this?
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What did Bennett do?
•Gave $20M for work-creation programs, but economy didn’t improve
•Raises tariffs=other countries do the sameWe can’t sell our goods our economy suffers!
•Bennett the target of people’s anger=still jobless, homeless
•Bennett feared a revolution would start by Communists=bans Communist Party
•Federal Government=creates work camps for unemployed and single men (known as relief camps)
•“Pogey”—modern day welfare system (lower than the lowest paying jobs to discourage people from
wanting to go on it)starvation/diseases
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THE NEW DEAL
Elements of the “New Deal”:
• Progressive taxation (the more you make the more
you pay); maximum number of hours in a work
week, minimum wage (provincial responsibility);
stronger regulation of working conditions;
unemployment insurance (not a federal
responsibility until 1940) ; health and accident
insurance (provincial); revised old age pension
plan (not federal till 1951); agricultural support; a
board to regulate wheat prices-do you see the
problem with the new deal?
• Prairie Farm Rehabilitation Administration Act,
1935 helped farmers build irrigation systems and
reservoirs—people leave farms/more elsewhere
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Depression ~
Prime Ministers
Bennett
King
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Bennett’s Infamy
Even though Mackenzie King had very little success helping
Canada emerge from the Great Depression, PM Bennett has taken
the greatest amount of criticism for his policies.
As a result, he has left behind a legacy of jokes such as Bennett
buggies and Bennett blankets
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Riding the Rods and
•Slave Labour in Canada
Displaced workers began “riding
the rods”
•Big fear of “red menace” this
would lead to a revolution!
•Jumping rail cars in search of
work
•Many moved towards the west
coast
•Bennett started deporting
immigrants without jobs
•As many as 30,000 new
Canadians were deported
•Bennett over reacted and set up work
camps-To stop a revolution
•These work camps were for unemployed,
single men.
•Working in the “bush” these men were
paid 20 cents a day.
•They worked on projects such as building
roads, clearing land, and digging drainage
ditches.
•The food was terrible and the bunks were
often bug-infested.
•Over 170,000 men lived and worked in
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these terrible conditions.
Result?
The On-to-Ottawa Trek
1935
• Protest against camp conditions in BC
• Relief Camp Workers Union-decide to take
complaints to Ottawa=On-to-Ottawa
Trekstarted in BC and picked up protestors
along the way.
• The RCMP confines them in local stadium when
they arrive in Regina—only leaders allowed to
proceed to Ottawa.
• Union leaders meet with Bennett—labeled them
radicals/troublemakers (leave
unsatisfiedRCMP ordered to clear trekkers
from stadium-chaos-1 killed many arrested.
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•Trouble in Vancouver
•Last protests by the unemployed in Vancouver
•Federal government closed relief camps (1937)
•Provincial government reduced relief payments=workers feel lack of
support
•April 1937—1600 protesters occupy Vancouver Art Gallery/main post
office/Georgia Hotel/”sit-ins”/battles between police and protesters
Politics of Protest
•Ottawa struggles for solutions to Depression
•Canadians lost trust in government=look at
other political parties
Camping out to
protest lack of
affordable housing is
nothing new in
Vancouver-in the
Dirty Thirties, out-ofwork men took to the
streets and built
shacktowns from tin
and scrap wood.
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Bennett the Good!
• R.B. Bennett was not a likeable man, however
he did a number of good things.
• 1932 saw the creation of Canadian Radio
Broadcasting Commission forerunner of the
CBC.
• In 1934 he created the Bank of Canada to
regulate currency and monetary policy.
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“Bennett never forgave Canada for
failing him”
• In 1935 under the banner of “King or Chaos” the
Liberals returned to power
• Bennett left Canada to become a member of the
British House of Lords and is buried in Britain.
• King passed Bennett’s New Deal to the Supreme
Court where it was ruled unconstitutional because
most were provincial matters.
• Canada’s First Nations were neglected.
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Politics of Protest
Communist Party
• The Communist Party of
Canada was formed June
1921 in Guelph, Ontario.
• The Communist Party
was outlawed during the
depression.
• In August 1931 Tim Buck,
the leader, and eight
other members were
imprisoned for holding
the wrong ideas.
• Buck avoided
assassination in prison.
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Politics of Protest=Cooperative Commonwealth
Federation=Federal Alternatives
•Both PMs had a laissez faire approach to the economy this led to people looking to new parties for support!
•Appealed to disillusioned Canadians (formed in 1932)
•Included farmers, labourers, socialists, intellectuals and discontented liberals
•Leader Woodsworth-Socialist Party
•supported the workers
•Regina Manifesto—support for public ownership of key industries
•for social programs to assist people( the elderly, the unemployed, the homeless, the sick etc)
•urged the government to spend money on public works to create employment
•“Create a minimum wage and a system of social insurance for workers. Build public works to create
employment.” 1932 (provincial exam)
•The party did not win many seats in the 1930s but it did provide people with an alternative.
In 1961 the CCF joined with the Canadian Labour Congress to form the New Democratic Party.
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The Original “NDP”
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Acting on its monetary theory, Alberta's Social Credit
government printed 'Prosperity Certificates' which were
issued in lieu of money. However, the federal government
declared them illegal.
Social Credit Party
•1935-Election in Alberta
•leader William Aberhart (“Bible Bill)-capitalism not good-banks collected money,
prevented customers from buying goods.
•Government should release money into the economy so people can spend it
•Appealed to Albertans because Depression ruined their economy—did not like power
and control of banks
•Promised $25 month to each citizen
•Federal government thought it was wrong for province to make their own
money/Supreme Court did not allow Alberta to do this
•Social Credit popular
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•Provincial exam very popular – m/c question!
Provincial Solutions
Quebec (1936)
Union Nationale Party (Maurice Duplessis), Nationalist French-Canadian Party, support of
Catholic Church/rural voters
Blamed English minority for Quebec’s socioeconomic problems
Padlock Law=Which Charter of Rights and Freedoms does it violate?
http://www.mysteriesofcanada.com/Quebec/padlock_law.htm
B.C. (1933)
Pattullo, Liberal, believed in provincial spending power, the New Deal from US (=introduced
reforms to better working condition/public works projects) Federal government did not like
Pattullo
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A Change in
Government
•1935—voters against Bennett
•King PM again, still did not intervene to better economy
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•National Employment Commission: “unemployment still a problem-government
spend money to create jobs”
•Increased Tension in Federal-Provincial Relations
•King creates another Royal Commission (1937), Rowell-Siroise Commission, examined
federal-provincial relations
•Cause of bad relationship between federal and provincial governments=unemployment,
tax money (which government should collect tax money/spend money to assist people??)
•The Commission Federal government should control taxation and give money to
poorer provinces (=equalization payments)be responsible for social and employment
assistance (UI and Welfare)
•Commission wasn’t important because economy began to turn around and WWII began
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to take place
Distractions from Despair
Entertainment=movies, magazines, and radio become popular
US programs more popular Fed. Government responds with creation of the
Canadian Broadcasting Corporation (CBC) in 1936 in an effort to win over Canadian
listeners
1934-birth of the Dionne quintuplets—“miracle babies” were placed under the Ontario
government’s control put on display and government earned millions from them
Grey OwlEnglishman Archie Belaney lived the Aboriginal way of life and took on
identityspent years on preservation of Canadian forests and the disappearing
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beaver=conservation
Road to World War-Rise of Dictators
•European countries also suffered a period of Depression
•People became divided =some believed in communism to solve
economic and social suffering, others believed strong military to
restore law and order
Stalin=Soviet Union/Russia
•Ruthless and cruel leader whose policies caused million of deaths
amongst Soviet Union workers
•Leader of Communist Party
•Totalitarian State=an undemocratic state in which the government
demands total obedience from citizens and controls all aspect of
society)
Mussolini
•Il Duce
•Fascist Government=totalitarian and nationalist
•Opposed Democracy
•Extreme loyalty and love for country (Extremely nationalistic)
•Relied on military and police power to maintain absolute
control=media, propaganda
•Influenced Hitler and his creation of the National Socialist Party
(Nazi)
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Germany after the War
•Unhappy with Treaty of Versailles
•“War Guilt Clause” and reparations angered them
•Economy ruined after the war=it could not pay reparations and make its own
country strong
•Printed a lot of currency=value of money decreased
•Inflation=prices of products was really high
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•Great Britain, France and US decrease reparations to help Germany
•Economy gets better, but STOCK MARKET CRASHES=ECONOMY weakens
Hitler comes to Power
Hitler’s government was against the government, which agreed to Treaty of Versailles.
Depression helped him gain power.
1933=Hitler became Chancellor (prime minister)-->party controlled government
Stopped paying reparations
Expanded armed forces (action against the Treaty)
Helped farmers rebuild farms
Built Autobahn=public project which create highways
Unemployment went down and economy improved
Abolished all political parties and trade unions
A.K.A Der Fuhrer (The leader)
Ruled by Fear and intimidation like Mussolini-->killed anyone who opposed
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On the Road to War
In 1935, Emperor Haile Selassie of
Ethiopia condemns the Italian
invasion of Abyssinia in his address
to the League.
On the Road to War
1931: Manchurian incident=Japan invaded Chinese industrial province of Manchuria
Chinese asked the League of Nations for help=supposed to promote world peace, but was weak-->said that
Japan’s action was wrong and tried to make peace between Japan and China
Japan did not listen-->withdrew membership
1935=Abyssinia Crisis-->present-day Ethiopia
Italy invaded
League imposed trade sanctions on Italy-->stopped trading, but still allowed Italy to import oil (important in
powering war machine)-->poor decision by League
Germany on the Offensive
1936
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Hitler orders troop into Rhineland (demilitarized zone)
League and Nations around the world did nothing to stop Hitler
1936
•Spanish Civil War=Fransisco Franco and fascist army
attacked Spanish government
•Support from socialist countries=Mussolini and Hitler
•Becomes leader-->Spain a fascist state-->again
Democratic countries did nothing.
The Policy of Appeasement
•No one wanted to go to war-->made concession
(allowances) to Hitler=peace
•1938
•Germany takes over Austria-->German-speaking
country
•Demanded to be able to take over Sudetendland, a
German –speaking part of Czechoslovakia
•Munich Conference-->Britain, France, and Germany->Germany promises this will be the last territory
claimed
•1939
•Takes over the rest of Czechoslovakia
•1939
•Wanted to invade Poland, but feared that Russia
would fear this move and start war
•Non-aggression Pact with Stalin=they would not fight
each other in case of war
•Divided Poland
•Hitler invaded Poland
•Britain and France told Hilter to take troops out of
Poland-->he didn’t listen-->WWII began!
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Canada’s Response to Growing Tensions
Isolationism=interested in internal affairs not external
•Viewed Treaty of Versailles as harsh-->Pacifist attitude because so many Canadians died in WWI
•King visited Hitler in 1937-->didn’t believe that Hitler wanted war
•BUT he showed his isolationist and anti-semetic attitude when he didn’t allow Jewish refugees who were
escaping persecution from Hitler
•1939
•St. Louis Incident, a ship filled with 900 Jewish refugees, went to CAN. They were sent back to Europe-->died in
concentration camps-->Canada=Anti-Semitic
•Not all of Canada was Anti-Semitic=protest. (SHOW VISUAL!) http://www.ushmm.org/museum/exhibit/online/stlouis/story/voyage/
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Policy of Isolationism-Protectionism
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