The Great Depression

The Great Depression

A Shift in Ideas • The communist movement met very little support in Canada for many reasons • Belief in democratic principles • Prosperity • Ability of the powerful industrialists to influence the government

Prelude to Depression • The Canadian economy of the twenties was booming and the future looked bright • Record crops and a Laissez-faire attitude towards business seemed to herald an age of unchecked prosperity

Prelude to Depression • The Economy had three distinguishing features • Relied heavily on exports • It was closely tied to the American Economy • Canada had over expanded (using borrowed money for production) • This left the economy in a precarious position

Prelude to Depression • Competition from Europe increased as it recovered • The record crop of 1928 could not be sold • In order to protect domestic producer the United States introduced the Hawley-Smoot Tariff Act • This act raised tariffs on imported goods • The Mackenzie King Liberals also raised tariffs to protect Canadian producers

The Crash • On October 29, 1929 investors made fearful of falling prices began selling stock at an alarming rate • This led to a world wide economic collapse

The Depression Starts • The stock market crash of 1929 was the beginning of an era stretching from 1929-1939 known as the Great Depression

The Depression Deepens • The depression affected all aspect of the Canadian economy • Farming • Railways • Auto • Without the foreign markets people did not have a way to sell goods • Without a place to sell goods no one had money to buy goods

The Depression Deepens • As money became scarce business owners were forced to cut costs and fire employees • Unemployment skyrocketed

The Farmers • Drought also struck the prairies further limiting the ability to generate revenue in the Canadian west

The Farmer Cont… • Thousands of farmers were forced into bankruptcy. Nearly 250 000 Westerners migrated from the prairies.

Depression Politics • Prime Minister Mackenzie King promised to “contribute to relief” but said “not a five-cent to a province with a Tory administration”

Unprecedented Crisis and Traditional Answers • The Canadian government's response to the Depression was to maintain long-standing assumptions and practices concerning the role of government • Prime Minister Mackenzie King refused to provide the provinces with additional funds to alleviate the growing distress. • His inaction contributed to his government's defeat in the 1930 federal election.

The Bennett Years • Bennett becomes Prime Minister • Bennett started a program similar to that of Franklin Roosevelt’s “new deal”

Bennett’s Response • He was even more reluctant to initiate extensive government intervention in economic and social arenas. • He disliked spending money on massive public works or relief payments. • In his opinion, unemployment was a provincial and municipal responsibility, and neither level of government could expect significant funds from Ottawa.

What is a Man to Do? • While government "inaction" fuelled frustration among the unemployed. • The government feared that the thousands of unemployed would embrace communist beliefs and pose a threat to the political and economic status quo.

Idle Hands are the Devils Playground • Work camps were set up and men were paid $0.20 a day • The purpose of these camps was to keep the men out of the cities and keep them from becoming communists

On-To- Ottawa Trek • The camps were isolated, the work was hard, and the pay was poor. • By the summer of 1935, thousands had left the camps and congregated in Vancouver. • They decided to trek by rail to Ottawa and demand government action.

Of They Go • Hundreds of unemployed joined the On-to-Ottawa Trek as it traveled across the prairies.

Reading • The “On – To – Ottawa Trek” • In groups of Four – Five do the reading and then discuss the significance of these events • What impact does this have on the common person? • What impact does this event have on Canada? • Be prepared to share your discussion with the rest of the class.

The Bennett Years • Bennett also tried to reach out to world markets • Bennett tried once again to revive the idea of colonial preference • He succeeded in negotiating a deal where countries of the British Commonwealth would lower tariffs if it did not affect their own industry • This proved ineffectual

The Bennett Years • In 1935 with an election around the corner Bennett introduced his “new deal” of government spending on social programs • The Liberals attacked Bennett claiming that the programs were outside the rights of the Federal Government • Bennett was defeated and King returned to power

King…Again • King then sent Bennett’s “new deal” to the courts where it was determined that it was not constitutional • The powers for these reformed rested with the Provincial governments • Upon winning the election, King's Liberals quickly negotiated the Reciprocal Trade Agreement with the United States.

Overview • Classic Liberalism was not able to repair the damage of the depression • The market would not right itself • The idea of government involvement in the economy had become more accepted • The country had not fallen to communism

3 – 2 – 1 3 - Things you learned 2- Things you already knew 1- Question

The Great Depression