Transcript the great depression new_2015

“A
Decade of
Despair”
Great Depression
Canada’s Economic State
in the 1920s
 Image

of prosperous ’20s.
“Roaring” for all? No. Many left out.
 Reality:
boom and bust roller coaster.
Canada’s Economy:
USA Boom
 Late

1920s.
Resource boom.
 Growing

American influence.
Now largest investor; by 1926 Canada’s most
important trading partner.
Canada’s Economy:
Consumption
 New

consumer products.
Automobiles, silent films etc.
 Communications.

Airplanes + telephones + radios.
Bombardier – first
snowmobile,
1923
Canada’s Economy:
Gender + Class
 Women’s
increasing role in the economy
and politics.
 Middle-
 The
and upper-class consumption.
world’s financial centre moved from
London to New York.
Cycle of Prosperity
Regional Variations:
Energy
 Maritimes
and Prairies left out of the
“boom”?
 Coal
and steel in decline.
Regional Variations:
Food
 Low

wheat prices for much of the decade.
Vagaries of international markets; expansion
and borrowing of First World War & when
prices were good in parts of the 1920s.
Phases of the Economic Cycle
Topic 5 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.
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
Other terms-see terms of economic cycle worksheet-wiki
What was the Great
Depression?
 The
Great Depression was a severe
worldwide economic depression in the
decade preceding WWII.
The Great Depression:
Timing
 The
timing of the Great Depression varied
across nations, but in most countries it
started in about 1929 and lasted until the
late 1930s or early 1940s.
 It
was the longest, most widespread, and
deepest depression of the 20th century.
The Great Depression:
USA to the World
 The
depression originated in the U.S., starting
with the fall in stock prices that began around
September 4, 1929.
 It
became worldwide news with the stock
market crash of October 29, 1929 (known as
Black Tuesday) = from there, it quickly
spread to almost every country in the world.
The Great Depression:
Devastating Dirty Thirties
 The
Great Depression had devastating
effects in virtually every country, rich and
poor.
 The
Great Depression Era is known as the
``Dirty Thirties`` (1929-1939).
Intro: Scenes from the Great
Depression

http://www.youtube.com/watch?v=HoptH8TqasE&feature=fvw

http://www.youtube.com/watch?v=pgR2Buke5MQ&feature=rela
ted

http://www.youtube.com/watch?v=hEJR48F9cWw&feature=rel
ated
The Great Wall Street Crash &
Depression: Part 1 of 6

http://www.youtube.com/watch?v=ulVQ-kH1MAA

http://www.youtube.com/watch?v=zXa5nhMUdv0&feature=rela
ted
Assembly Line
The Main Causes:
Consumerism
1. Rise of consumerism led to the worldwide overproduction of manufactured
goods.
The Main Causes:
Consumerism
Radios, cars, kitchen appliances were made in mass
quantities on the assembly line and the demand for
these began to fall = more goods made than sold.


Spending $$ that was not theirs but loaned or credited
from the banks.

When banks asked for $$ there was none to repay so
people went bankrupt (lost homes, investments etc.).
Dust Bowl
Palliser’s Triangle
The Main Causes:
Overproduction
2. Overproduction of Wheat/Falling
Wheat Prices – led to problems for
Canadian farmers who bought new
equipment with credit.
The Main Causes:
Overproduction

Wheat prices peaked in 1924; crashed in 1928.

Over-cultivation of fields depleted nutrients in soil =
worsened the effects of the “Dust Bowl” when drought
began in the early 1930’s.

Farmers incomes dropped & they had to give up their
farms to repay bank loans.
Dust Bowl
https://www.youtube.com/watch?v=Yi1bF-MRF50
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The Main Causes:
Protectionism
3. Protective tariffs (taxes) - aka Protectionism

Made domestic prices cheaper than imported goods from
foreign countries; other countries retaliated with their
own tariffs.
The Main Causes:
Protectionism

Led to the decline in world trade (imports + exports),
and turned the Depression from a crisis in the USA into
a global problem.

Decline in international trade severely hurt Canada (2nd
worst off in world after US) because depended on
international demand for products (wheat, newsprint).
The Main Causes:
Stock Market Collapse
4. The Stock Market Collapse, 1929

Speculation (gambling) on the stock market by buying
stocks “on the margin” (borrowing money - 90% from a broker to purchase stock, putting down only
10% of your own money) led to the crash on “29/29”
= October 29, 1929 (known as Black Tuesday).

This was the “triggering event” of the Great
Depression.
The Stock Market Crash:
Big Investors

Some big investors (big business + the rich) figured that
the stock market was about to top out and they rapidly
sold their shares.

The market dropped slightly but panic struck and almost
everyone with shares/stocks decided to sell their stocks
and fast.
The Stock Market Crash:
Borrowed $$$

This resulted in the bottom falling out of the market and
the subsequent stock market crash on 1929.

The problem was that the market was built on borrowed
money (speculation/buying on the margin) and now
nobody could pay back their debts.

http://www.brainpop.com/socialstudies/ushistory/g
reatdepressioncauses/
Present-day example of buying-on
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 $295 (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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The Collapse
“Black Tuesday” 29 October 1929
The Stock Market Crash
Other Important Causes:
Reparations
5. Reparation Payments

Allies (France + Britain) could not repay the USA for
WWI War Loans.

Germany unable to make reparation payments.
Other Important Causes:
Banks
6. High Interest on Debt Repayment/Banks
Tightened Credit + Loans

More than many could afford.

Heavy Burden of Debt carried by individuals +
families + companies.

No World Bank Stabilizer/Regulator.
Note: Canadian Banks

Many banks (several thousands) across the USA had to
close down = they were not able to give money back to
the people who banked with them as they did not have it.

Canadian banks survived the Great Depression because
they were fewer in number and were much more
conservative = did not lend out money at will; held on
to money the in the banks.
Other Important Causes:
Government Ties
7. Dependence on the USA + Government
Cutbacks

The Canadian economy was closely tied to the US.

When they crashed, so did we.
Other Important Causes:
Government Ties

There was no or limited government expenditure or
assistance during this period of time.

Churches and charities would take care of society.

The free market would take care of the economy aka the economy would take care of itself = laissez
faire; let it be.
The National Effects:
Wages + Unemployment
1. Wages Declined = Unemployment Rose

It was said by the Federal Department of Labour that
a family needed between $1200 & $1500 a year to
maintain the “minimum standard of decency”.
The Effects:
Wages + Unemployment

During this time, 60% of men and 82% of women
made significantly less than $1000 a year.

1 in 5 Canadians (tens of thousands) became
dependant on government relief (other depended on
charity + food handouts) and 30% of the labour force
was unemployed, whereas the unemployment rate
had never dropped below 12%.
Income by Province
Canadian Unemployment
The Unemployed:
No Jobs or Income

For an unemployed individual person there were no jobs.

For those that had a job there was a high chance that it
could be lost; further there was little income from the
majority of jobs.
The Unemployed:
No Education

Difficult to keep young children in school because they
were needed on the farms to bring in as much goods as
possible.

University students were also dropping out all over the
country because tuition was too much to pay.
The Unemployed:
Women Workers

The home workers (women) of the houses had to find
part time jobs to "make ends meet" or opened up their
homes to renters – these became rooming/boarding
houses.
Women and Children
The Unemployed:
Riding the Rails

The men of many families chose to become transient
and “Ride the Rails” or “Riding the Rods” in search for
work in the west.

They often frequented soup kitchen, bread lines, and
“lived in the jungle,” eventually many would work in
government relief camps.
The Unemployed:
No Immigration

Canada’s immigration policy was highly restrictive =
Closed Door Policy.
Desperate Years-Social Effects
•Factory workers lose jobs
•Businesses close down
INFLATION (Please add)
It
is an upward movement in the
average level of prices
Evictions
rent)
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(people cannot afford

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/frei
ght trains

Some were so desperate they
committed suicide!
http://www.iasp.info/pdf/papers/mishara_suicide_and_the_economic_
depression.pdf
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Watch Online School summary
Cont’d
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
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•deported
•immigration stopped (restricted)
SHOW QUINN PALMER VID.
“Riding the Rails”
“Riding the Rods”
“The Jungle”
“Wandering”
Soup Kitchens and
Bread Lines
The Soup Kitchen
Cycle of the
Great Depression
The Effects:
National Economics
2. GNP + Import & Export Declined

It is estimated back in the thirties that 33% of Canada's
came from exports, so the country was also Gross
National Income affected by the collapse of world trade
= The Gross National Product (GDP) fell from $6.1
Billion in 1929 to $3.5 Billion in 1933 and the values of
industrial production halved.
Import + Export + Stocks

The export of Canadian products – such as wheat –
declined and the import of foreign goods became too
expensive because of tariffs = the production of
Canadian goods fell (supply and demand).
Import + Export + Stocks

The values of stocks were dropping rapidly and as the
demand for goods and services dropped business firms
ceased to exist.

Even the CPR, considered on the world's most reliable
income earners, didn't make enough money in 1932.
The Regional Effects:
The Prairies
3. Wheat Prices Decline and Drought

The four western prairie provinces were almost
completely dependent on the export of wheat.
The Effects:
Regions – The Prairies

The little money that they brought in for their wheat did
not cover production costs, let alone farm taxes,
depreciation and interest on the debts that farmers were
building up .

The net farm income fell from $417 million in 1929 to
$109 million in 1933.
Farmers, Wheat + Dust

To make matters worse, between 1933 and 1937 the
Prairies (particularly Saskatchewan) suffered a massive
drought which created the “Dust Bowl”.
The Dust Bowl
Farmers, Wheat + Dust

The money brought in for the wheat was at a record
low and the provincial income dropped by 90% in two
years, forcing 66% of the province into relief.

Where the previous yield per acre was 27 bushels, it
had dropped to as little as three in 1937.

The price of grain also dropped from $1.60 a bushel to
$0.28 a bushel in 1932.
The Effects:
Regional Resources
4. Decline in the Natural Resource Market
in BC, the Maritimes, Ontario & Quebec.
The Effects:
BC

In BC the fish, lumber and fruit markets were
considerably lower but they weren't as hard hit as the
majority of the provinces.
The Effects:
Maritimes

As for the Maritimes, they had entered provincial
economic decline in the 1920's so therefore they had less
of a margin to fall by; there was also a larger variety of
jobs so the whole income wasn't wiped out due to the fall
of one market.

Yet in 1934 Newfoundland had to surrender its
government responsibilities and had to ask for
financial aid from Britain.
The Effects:
Ontario + Quebec

Although Ontario and Quebec were experiencing
serious unemployment in mining and forest incomes
from exports had dropped, they were less effected due
to more diversified industrial economics, which, luckily
for them, protected their domestic market.
The Great Depression
Video Clips
Intro: Scenes from the Great
Depression

http://www.youtube.com/watch?v=HoptH8TqasE&feature=fvw

http://www.youtube.com/watch?v=pgR2Buke5MQ&feature=rela
ted

http://www.youtube.com/watch?v=hEJR48F9cWw&feature=rel
ated
The Great Wall Street Crash &
Depression: Part 1 of 6

http://www.youtube.com/watch?v=ulVQ-kH1MAA

http://www.youtube.com/watch?v=zXa5nhMUdv0&feature=rela
ted