The Depression – Notes and Handouts
Prosperous Times (20s)
Depression Times (30s)
The Depression
• Stock Market Crash
• late 1920s - Canada’s economy and stock exchanges were booming.
• 1921-autumn 1929 - level of stock prices increased more than 3X
• stock market crash on Black Tuesday, October 29, 1929, in New York, Toronto, Montréal and other financial centers in the world.
• Shareholders panicked - sold stock for whatever they could get.
• Dumping stock caused panic and prices plummeted as investors liquidated stock into cash.
• there were early signs that the crash was coming.
• Early in 1929, stock prices had been volatile.
• Economic slowdowns in May and June hinted that the booming economy was heading for a recession.
• Export earnings were declining and the price of wheat plummeted.
• Causes
STOCK MARKET CRASH:
• THE PRICE OF STOCKS DECLINED AND MANY INVESTORS LOST MONEY. COMPANIES RECEIVED LESS MONEY FROM THE SALE OF STOCKS AND CLOSED OR LAID OFF WORKERS.
DEFLATION:
• WORLD WIDE DROP IN PRICES. FARM PRODUCT PRICES DROPPED IN HALF. AS MOST CANADIANS WERE FARMERS EVERYONE IN THE CANADIAN ECONOMY SUFFERED FROM THIS DROP
TIGHTER MONEY:
• LESS CREDIT BECAME AVAILABLE. BUSINESSES FOUND IT DIFFICULT TO BORROW MONEY, AS A RESULT THEY COULD NOT EXPAND AND A SLOWDOWN OCCURRED.
HIGH TARIFFS:
• A TARIFF IS A TAX ON FOREIGN GOODS COMING INTO THE COUNTRY.
• COUNTRIES BEGAN FOLLOWING A POLICY OF PROTECTIONISM. THIS MEANT THAT THEY RAISED TARIFFS SO THAT CANADIANS WOULD BUY GOODS MADE INSIDE THE COUNTRY. THE RESULT OF THIS POLICY MEANT THAT WORLD TRADE DECLINED DRASTICALLY AS COUNTRY AFTER COUNTRY SHUT ITS DOORS TO GOODS FROM OTHER COUNTRIES.
BUYING ON CREDIT
• A. BUYING STOCKS ON MARGIN (10% DOWN - PAY THE REST LATER)
• B. BANK LOANS
• C. INSTALLMENT BUYING - SO MUCH DOWN AND PAY THE REST LATER
DROUGHT
• THE PRAIRIES EXPERIENCED A DROUGHT FOR 6 YEARS. FARMERS LOST THEIR FARMS
• Canada and The Great Depression
• Second worst hit by GD after the US
• William Lyon Mackenzie King – Laissez-faire answer
• The economy would heal itself
• Life in the Depression
• The hardest hit group was young single men The hardest hit area was the Prairies
• In effort to stop revolution the Canadian government created work camps
• The work camps were run by the Department of National Defense
• Workers worked 8 hours a day 6 days a week - they built roads dug ditches and planted trees
• They worked for a bed, food, clothes and $0.20/day
• The men were not happy, they were bored, cramped and felt isolated from the rest of the world
• William Lyon Mackenzie King and Richard Bennett
• William Lyon Mackenzie King was Prime Minister from 1921 - 1930
• Change in government because people wanted solutions to the Depression
• Mackenzie King's policy was to let the Depression run its course Mackenzie King would not give federal money to provinces for "relief
• Richard Bennett became Prime Minister and promised action to solve the nation's problems.
• Bennett introduced: High tariffs on imported goods
• Unemployment Relief Act ($20,000,000 in relief) Developed a Commonwealth Trading
• Bennett's policies provided little effect on Canadians - people were still out of work
• In the United States President Franklin Delano Roosevelt (F.D.R.) announces his "New Deal" in 1933 - government spending to help end the depression
• /I" Bennett introduced his version of the "New Deal" in 1935. Bennett proposed an 8 hour work day, minimum wage, unemployment insurance and price controls
• That year (1935) Mackenzie King defeats Bennett to once again become Prime Minister.
• Life
• SOME WEALTHY AND MIDDLE CLASS CANADIANS NOTICED LITTLE CHANGE IN
THEIR LIFESTYLE
• MANY SUFFERED TERRIBLY:
FIRED FROM JOBS
BUSINESS FAILED
EVICTION (PEOPLE COULD NOT .AFFORD TO PAY THEIR RENT)
POGEY (RELIEF PAYMENTS)
• THOUSANDS EXISTED ON POGEY, HOWEVER CANADIANS FELT IT
SHAMEFUL TO ACCEPT GOVERNMENT ASSISTANCE. (PRIDE/SELF- RELIANCE)
• PRIVATE CHARITIES AND SOUP KITCHENS HELPED TO PROVIDE CLOTHING AND MEALS
• SINGLE MEN TRAVELLED ACROSS THE COUNTRY BY "RIDING THE RAILS" IN SEARCH FOR WORK.
• Escapism
• THROUGH THE GREAT DEPRESSION, THERE WAS ONE ASPECT OF LIFE THAT CHANGED LITTLE - ENTERTAINMENT
• MOVIES/MAGAZINES
• IGNORED THE HARD ECONOMIC TIMES AND FEATURED INSTEAD ROMANCE, ADVENTURE AND GLAMOUR
• Applying for Relief
• In order to apply for relief one had to do the following:
• - Prove that you are not able to support yourself and that no
relative can help
• - Be a man supporting a family. (in some parts of Canada,
relief was given to single men.)
• - Have been a resident of the municipality for at least one
year before applying. (in some cases, a three-year residence
was required.)
• - Turn over your liquor permit
• - Turn in your automobile plates and driver's license.
(Owning a car was an unnecessary luxury)
• - Remove your telephone from your house.
• - Register at the local unemployment office to show your
willingness to work.
• - Work on municipal projects from time to time (eg cutting
grass, digging ditches)
• - Allow a relief investigator to come to your home to check
these rules were being followed.
• Response to the Depression
KING'S RESPONSE
• OTTAWA WAS UNPREPARED TO DEAL WITH A CRISIS ON THE SCALE OF THE DEPRESSION.
• P.M. MACKENZIE KING BALANCED THE BUDGET BY SLASHING GOVERNMENT SPENDING
• MOST PROVINCES AND MUNICIPAL GOVERNMENTS HAD OVEREXTENDED THEMSELVES DURING THE GOOD YEARS OF THE 1920'S (GREAT DEBT). THEREFORE, TO PAY FOR RELIEF THEY CUT SERVICES, BUT THE RESULT ONLY INCREASED UNEMPLOYMENT.
• KING NEVER UNDERSTOOD THAT UNEMPLOYMENT WAS A MAJOR ISSUE FOR CANADIAN VOTERS.
• KING LOST THE 1930 ELECTION TO THE CONSERVATIVES UNDER R.B.BENNETT.
BENNETTS RESPONSE
• BENNETT WAS NO MORE IN FAVOUR OF RELIEF THAN KING
• BENNETT GRUDGINGLY PASSED THE UNEMPLOYMENT RELIEF ACT PROVIDE ASSISTANCE TO THE UNEMPLOYED
• CANADIANS SOON REALIZED THAT BENNETT COULD NOT DO MUCH MORE TO SOLVE THE PROBLEMS OF THE DEPRESSION THAN KING HAD DONE.
• BY 1932, ONE THIRD OF CANADA'S WORK FORCE WAS UNEMPLOYED.
• UNEMPLOYMENT RELIEF~CAMPS - ESTABLISHED BY THE FEDERAL GOVERNMENT TO PROVIDE WORK, FOOD AND SHELTER TO HOMELESS MEN.
Dear Sir:
• I am writing you as a last resource to see if I cannot, through your aid,
obtain a position and at last, after a period of more than two years,
support myself. The fact is this day I am faced with starvation and I
see no possibility for counteracting it or even averting it temporarily.
• I have applied for every position that I heard about but there were
always so many girls who applied that it was impossible to get work...
First I ate three very light meals a day; then two and then one. During
the past two weeks I have eaten only toast and a drunk a cup of tea
every other day.
• Day after day I pass a delicatessen and the food in the window look
oh, so good! So tempting and I'm so hungry!...The stamp which
carries this letter to you will represent the last three cents I have in the
world, yet before I will stoop to dishonour my family, my character or
my God, I will drown myself in.
Dear Mr.Bennett:
• I suppose I am silly to write this letter but I haven't anyone else to
write to...we are just one of many on relief and trying to keep our
place without being starved out...trying to get a start without and
money and 5 children, all small... I am sure we can make a go of this
place...if we could just manage until next fall. Just had 70 Acres in last
year and the dry spell just caught it right along with the grasshoppers.
• Please help me by standing me some money and will send you my
engagement ring and wedding ring as security...My two rings cost
over $100 over 15 years ago but what good are they when the flour is
nearly all done and there isn't much to eat in the house...
Dear Sir:
• I wish to give my opinion of relief. First it is a shame for a strong man
to ask for relief in this country... The best thing that can happen to a
young man is to toss him overboard and compel him to sink or swim, in
all my acquaintance I have never known one to drown who was worth
saving...It takes hardship to make real men and women so cut out of
relief...There are some people in this country who are in hard
circumstances, but I can safely say there is no one having hardship that
we pioneers had 28 or 30 years ago
• What are some similarities between these letters?
• What are some differences?
• How do these letters express the feelings of Canadians during the 1930s?
Write your own letter to R.B. Bennett discussing your situation and what he can do to help you. Make sure it is ½ page long at least
BENNETT'S NEW DEAL
• INTRODUCED BY BENNETT AS THE 1935 ELECTION APPROACHED
• IT WAS A PACKAGE OF REFORMS THAT WOULD BE INTRODUCED IF HE WAS RE-ELECTED.
• IT INCLUDED: HEALTH .AND UNEMPLOYMENT INSURANCE, MAX WORK WEEK, FINANCIAL ASSISTANCE TO FARMERS AND THE CREATION OF AN ECONOMIC COUNCIL OF CANADA.
• HAVING LOST FAITH IN THE CONSERVATIVES, CANADIANS VOTED THE LIBERALS (UNDER KING) INTO POWER.
Relief Camps
On-To-Ottawa Trek
• 1,500 men left the relief camps in British Columbia to go on strike in April 1935 and head toward Vancouver, alleging that the relief camps offered them no viable future.
• Were told to return to the camps and to finance a delegation to send to Ottawa in order to discuss their demands – workers refused
• On June 3rd and 4th, after seeing the government's indifference to their plight, more than 1,000 men decided to go to Ottawa to present their grievances
• set out by train, but received a decree from Prime Minister Bennett - were denied access to the train cars.
• Eight men undertook the walk to Ottawa to argue their case, while 2,000 others settled in Regina
• The Prime Minister refused the delegation's demands and the eight returned to join the Regina group.
• On July 1st, 1935 they organized a public protest that was broken up by police squads who came to arrest Arthur Evans and a number of other speakers
1920s and 1930s Review
1. What was a “flapper”
2. Name 2 new electric appliances available in the 1920s
3. What was a “rum runner”?
4. What was “prohibition”?
5. What was the date of the stock market crash?
6. What is a stock?
7. What part of Canada was hit hardest by the depression?
8. Briefly describe the conditions in relief camps
9. Describe what happened in the ‘On-to-Ottawa Trek’.
10. What was “buying on margin”?
11. Who was in favour of prohibition?
12. What was the “Persons Case”?
13. What happened during the Winnipeg General Strike?
14. What kinds of problems were farmers facing during the late 20s and early 30s?
15. What is buying on “margin”?
16. What did R.B. Bennett include in his New Deal?
17. What was a “Bennett Buggy”?
18. What was a “Bennett Blanket”?
19. Who operated relief camps?
20. Where were relief camps located?
21. List 3 advantages and 3 disadvantages to prohibition.
22. What was the temperance movement?
23. Who lead the “Persons Case”?
24.What ended the Great Depression?
25. Why did the stock market collapse?
26. Describe conditions in Canada after WWI.
27. Why was there a movement to start unions and strikes in the 1920s?
28. What is a branch plant? What country owns most of the branch plants in Canada?
29. Why would a country want to establish a branch plant?
30. Why was prohibition introduced in Canada and the US?
31. What were positives and negatives of prohibition?
32. Describe how women’s lives changed in the 1920s.
33. Define the following terms: riding the rails, relief, tariff, dustbowl
34. What happened in the Regina Riot?
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