Unit 4 Great Depression Canadian History 1201

Transcription

1 Unit 4 Great Depression Canadian History 1201

2 Stock Market: From Boom to Bust The boomtime of the 1920s created such confidence in the economy that many people bought stocks in businesses Stocks: shares in a company that can be bought & sold Stock market: a place where businesses raise money by selling stocks, or shares, in their business

3 The Stock Market During the 1920s, a stock market boom developed as stocks increased in value It was a quick, easy way to get rich In1929 Canadian investors believed stocks would stay high By September, US stock prices began to drop & Canadian stock values followed

4 The Stock Market Investors lost confidence in the companies whose shares they d bought & wanted to sell before prices decreased any further As investors began selling off stock, people panicked & tried to sell their stocks, so values fell dramatically By Tuesday October 29 th, stock exchanges in New York, Toronto, & Montreal crashed

5 The Stock Market

6 Many Canadian investors were financially ruined Impacts of the Crash

7 Great Depression: Underlying Causes While the 1929 stock market crash was a catalyst, there were underlying causes: 1. Over-production 2. Purchasing stock/buying on margin 3. Purchasing on credit/high consumer debt 4. Overdependence on primary industries 5. Dependence on the U.S.A. for trade 6. High tariffs/limited trading partners/ protectionism

8 1. Over Production During the prosperous 1920s, agriculture & industry reached high levels of production Most industries were expanding with huge supplies of food, newsprint, minerals, & manufactured goods were produced & simply stockpiled

9 There was an oversupply while demand was low Example: 1930 over cars produced while was the most cars sold in a year 1. Over Production

10 1. Over Production Industrialists seemed to forget a basic lesson in economics: produce only as much as you can sell So warehouses became full of unsold goods, and factory owners had to lay off workers Laid off workers & families had even less money to spend on goods which slowed sales even more.

11 2. Purchasing Stocks/Buying on Margin In the 1920s, the stock market seemed an easy way to get rich quickly You could buy stocks on credit just as you could a car For only 10% down, a stock broker loaned you the rest of the money at a high rate of interest To buy $1000 worth of stock you needed only $100

12 2. Purchasing Stocks/Buying on Margin When stocks went up in value, you could sell them, pay back your broker, & pocket the profit This risky process was called buying on margin What if the stocks didn t go up? Or, worse still, what if they went down? You would have to sell your stocks at a loss and face financial ruin

13 2. Purchasing Stocks/ Buying on Margin This is what happened in October 1929 When stock prices fell, people freaked, and decided to sell all their stock Prices fell even lower as more and more stocks were dumped On Black Tuesday, Oct 29, 1929 stocks decreased by 50% Shareholders lost millions & many investors were wiped out in a few hours

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15 3. Credit Buying/ High Consumer Debt Throughout the 1920s, Canadians were encouraged by ads to buy now, pay later Why wait to buy a car when you could buy it now with a small down-payment? Many families got into debt with credit buying

16 3. Credit Buying/ High Consumer Debt The piano that cost $445 was purchased with $15 down & $12 a month for the next five years With interest payments, it ended up costing far more than it was worth - $735! Repossession of homes, cars, etc. when payments could not be met

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18 4. Dependency on Primary Industries Canada s economy relied heavily on primary products known as staples (wheat, fish, minerals, pulp & paper) Canada prospered as long as world demand for staples was strong But if a surplus of staples developed or if foreign countries stopped buying from Canada trouble! All Canada s apples were in one basket

19 5. Dependence on the U.S.A. Like today, Canada had close economic ties with the U.S.A. our largest trading partner In the 1920s, the USA was responsible for over 40% of our exports & 65% of our imports American investors also supplied much of the money used to finance Canada s economic development during the 1920s A downturn (recession) in the US economy would hurt the economy of Canada

20 6. High Tariffs / Protectionism Tariffs are taxes on foreign goods Using high tariffs to keep out foreign goods is called protectionism Every country tried to protect its own industries by taxing incoming foreign goods This slowed down the world economy

21 6. High Tariffs / Protectionism For an exporting country like Canada, when the foreign demand for our wheat, pulp & paper, & minerals decreased, many large Canadian businesses began to collapse

22 Impact on Canada

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27 The Dust Bowl of the 1930s Growing wheat drained the soil of nutrients and caused it to dry up. Droughts combined with high winds. Soil literally blew away. The Palliser Triangle in the southern prairies was particularly hard hit.

28 The Dust Bowl of the 1930s Swarms of grasshoppers appeared, destroying what crops there were. Many farmers had to declare bankruptcy.

29 Unemployment in the 1930s As more businesses closed, more people were out of work. They had little money to spend, so businesses that relied on them (restaurants, stores) closed also. This vicious cycle continued all over the country in all types of businesses.

30 Unemployment in the 1930s Many rural workers came to the cities looking for work and found none. Some just worked for food. Shanty towns (hobo jungles) were built in or near cities, full of unemployed people called 'hobos'.

31 Unemployment in the 1930s People travelled across the country looking for work. Sometimes they (illegally) 'rode the rails'; few people could afford cars.

32 Tolerance and Intolerance Many Canadians helped one another: extended families supported one another neighbours shared families provided meals to travellers

33 Tolerance and Intolerance Not everyone was treated equally: only men got relief assistance; women were denied Jews were discriminated against Aboriginal peoples were ignored it was assumed they could live off the land. Some could, but many had left that way of life.

34 Tolerance and Intolerance Immigration: Declined by 90% Non-farmer immigrants, especially Jews, Chinese, Blacks and Japanese, were blocked from entering Canada

35 Escaping the Depression DIONNE QUINTUPLETS: 5 identical girls born in Ontario in They were the 1st quintuplets to ever survive. They became a major tourist attraction and millions came to see them.

36 Escaping the Depression Movies People went to forget their problems Holywood s Golden Age

37 Newspapers & Magazines Newspapers cost 5 cents and were re-read by many people, then used as insulation or toilet paper. Glossy magazines gave glimpses of life in the rest of the world

38 Escaping the Depression Fairs, Exhibitions and Revival Meetings Canadians went to any kind of public event that was available: travelling preachers, agricultural fairs large exhibitions like the Canadian National Exhibition (CNE) in Toronto.

39 Canadian Identity The shared hard times brought Canadians closer together. All of the travelling for work allowed people to gain a greater appreciation of Canada. The CBC aired Canadian radio shows in the 1930s. Prior to this, it was mostly American entertainment.

40 Fighting the Depression Before the 1930s Canada had not given any support to people who were ill, poor or unemployed. Many believed if someone was poor it was their own fault. People in rural areas might be able to live off the land. But many in the cities were forced to go on relief, as there was nothing else to do.

41 Fighting the Depression At first, the federal government followed the US Smoot-Hawley Act & increased tariffs, which made matters worse. Most relief came from churches & charities Soup kitchens were set up in cities Milk was given to poor mothers Food shipments were sent to the Prairies

42 Fighting the Depression But the need was so great municipalities soon began giving out relief Called welfare or the dole, receiving it was humiliating

43 In 1929, Liberal William Lyon Mackenzie King was PM. The Depression is only temporary!

44 Political Solutions The government in the 1930s thought the best way to deal with the Depression was to wait, hoping things would get better They believed the capitalist business cycle would eventually fix itself.

45 In 1930, King made the biggest mistake of his career, believing aid a provincial responsibility, he would not give any money to Conservative provinces. I wouldn't give them a five-cent piece! This quote would haunt him in the next election. Political Solutions

46 During the 1930 election, King lost to Richard (RB) Bennett He believed that governments should not intervene in economic affairs. Bennett's policies were not about to help the economic crisis.

47 Some of Bennett s policies: 1. Bennett gave emergency funds, called relief to provinces, municipalities. 2. He set up military-style relief camps for single unemployed men. Paid 20 cents a day, meant to keep them out of cities where they could organize & cause trouble In 1935, thousands of men left BC by train for Ottawa to protest conditions in these camps. This became known as the On-to- Ottawa Trek.

48 Some of Bennett s policies: 3. He raised TARIFFS to the highest rates in Canadian history 4. He created the Canadian Wheat Board in an attempt to revive farm exports None of these policies helped fix the Great Depression

49 Canadians began to blame Bennett for all their problems Bennett Buggies: cars pulled by horses Bennett Coffee: Coffee made from roasted wheat

50 Canadians began to blame Bennett for all their problems Bennett Blankets: old newspapers used as blankets Bennett Borough: shantytown, Canadian version of Hooverville Economic aid provided was not enough to live on. Relief payments were kept low to discourage people from applying.

51 In the US, president Roosevelt (FDR) announced the New Deal, a new role for government.

52 Unfettered capitalism no longer works. We need the government to intervene.

53 The Search for Solutions Bennett knew that Canadians were increasingly angry with his government. In 1935, just before the next election, Bennett introduced radical reforms that were part of his "New Deal" such as: 1. Introduction of unemployment insurance and social security. 2. Limiting working hours.

54 The Search for Solutions 3. Fair treatment of employees 4. Minimum wage 5. Price controls so companies could not make unfair profits Even with these new ideas, Bennett still lost the election to King and the Liberals.

55 New Political Parties oduring the 1930s there was much dissatisfaction with the Liberals and Conservatives otheir policies could not fix the Depression

56 New Political Parties oso new political parties were created, promising new ideas and solutions oparties like the Reconstruction Party soon disappeared, while others remain in politics to this day

57 1. Communist Party o Gained popularity during the Depression o Communism wanted all people to equally share the wealth o The party was outlawed from because of fears that it was allied with Russia o Besides electing a few members after 1936, the party never became very popular

58 2. The Cooperative Commonwealth Federation (CCF): Founded in Calgary in Formed by farmers and workers who wanted social and economic reforms to end the human suffering caused by the Great Depression. Their leader was J.S. WOODSWORTH. They were a socialist party.

59 They believed that the government should provide basic services such as water, hydropower, transportation and banking. They wanted Canadians to have basic social services:

60 A. Pensions B. Health insurance(medicare)and welfare C. Family allowances D. Unemployment insurance E. Compensation for injured workers. The party evolved into the NEW DEMOCRATIC PARTY ( NDP) in 1961.

61 3. Social Credit In 1935, Social Credit formed the Alberta government. Leader William Aberhart wanted to give a "social credit" of $25 per month for each adult He believed that by putting purchasing power in the hands of citizens, they would start spending money again = more output = more jobs = more money, etc.

62 4. UNION NATIONALE: Founded in Quebec in Fought against high unemployment and economic hardship of the Great Depression. The party blamed the Englishspeaking business owners and the anglophone minority in Quebec for their economic problems. In 1936, under Maurice Duplessis the party became the government of Quebec

63 CONCLUSION: What ended the Great Depression? World War II The outbreak of war in 1939, created a large number of jobs in the armed forces and in factories supplying ammunition