Transcript Causes of the Depression

Causes of the Depression
The Dirty Thirties
Overproduction
1. People buying goods = Industries expand
2. Companies made profits
3. This money was spent on adding to factories/
building new ones
4. Huge supplies of products
5. Products stockpiled (sit in factories unsold)
6. Owners panic
7. Slowed production
8. Laid off workers
9. People cannot buy = industries shrink
Reliance on Exports
• Canada’s economy depended heavily on a few
basic products known as staples (crops, timber,
and minerals)
• As long as other countries kept buying them,
Canada’s economy stayed strong
• However, in 1929 the U.S., Australia, Argentina
etc. also had record numbers.
• Canadian producers were left with large
quantities of unsold goods
• Outcome: With increased competition, prices
dropped dramatically
Debt from the First World War &
Dependence on U.S.
• Canada was in Debt from WWI and borrowed
money from the U.S.
• Canada needed to sell products to the U.S. in
order to pay them back.
• In the late 1920’s the U.S increased tariffs on
foreign goods and international trade
decreased
• Outcome: Canada could not repay all debt
Over-Speculation of Stock Market
• Companies sold shares (stocks) because they wanted to
expand.
• Investors bought shares believing the companies would do
well. Many investors were buying-on-margin (purchasing
shares on borrowed money in hopes of making a profit). This
is called speculation.
• High demand of stocks drove their price up beyond real
value. As stocks fell people panicked and sold their shares.
Investors who borrowed heavily went bankrupt in a matter
of days.
• Overproduction also affected decline of stock value and
number of people who could afford to invest.
• Within a year millions of people were out of debt.
• See page 93 of reading
Dependence on the U.S
• Outcome: 40% of CAD exports sold to US.
When US economy crashed, the Canadian
economy was soon to follow.
Drought in the Prairies
• Overplanting crops by farmers
• In 1930s prairies had terrible drought (no
water) that lasted for 8 years.
• As drought deepened, windstorms blew up
dry topsoil creating massive, and constant
dust storms
• Grasshopper chaos!
• Outcome: Many families forced to abandon
land and livelihood.
Protectionism
• The U.S.A soon grew to rely only on their own
production of raw materials. They no longer
needed to trade with other countries.
• The U.S. became protectionist. The government
protected their own industries through tariffs on
foreign goods.
• Outcome: Extra taxes on Canadian goods into the
U.S. discouraged Americans from buying Canadian
• As a result Canada became protectionist and
increased their tariffs on foreign goods. This made
the situation worse.
Unemployment
• As depression deepened more and more
Canadians lost their jobs. By 1933, 1 in 4
Canadians were unemployed.
• Thousands collected “pogey” – this was gov’t
relief payments for those who did not have
income. These payments were very low and a
humiliating experience to come by.
• Charities helped where they could but it was
not enough.
Assignment
• Create a comic strip! It must highlight the causes and
conditions of The Depression.
• The comic strip must include an image of each
condition/cause, and mention how it contributed to
the Depression.
• You can work in pairs (or alone if you prefer)
• There must be at least one to two people in each
panel.
• Each person must have a speech bubble to support the
panel’s summary. See example provided by teacher.
• You can draw your own comic strip OR create one using
Comic life. The comic must be coloured.
Assessment
• SEE HANDOUT
• DEPRESSION SONG/MUSIC VIDEO
- highlight all 8 causes & conditions + trigger