Falling Off the Economic Edge Socials 11

Unemployment in 1929: 4.2% 1922-26 Canadian companies issued new shares to a value of $700 million Profits went up, share values went up Buying “on margin” – buying shares with only 10% down payment Loans readily available Price of stocks inflated beyond real value

Some cautious investors started selling their stocks in order to cash in on high profits Others rushed to follow their lead Sellers panicked as the value of stocks fell dramatically

October 29, 1929 – New York Stock Market crashed, followed by Toronto and Montreal Investors went bankrupt since they borrowed heavily Contributed to but DID NOT CAUSE the Depression!

Wheat Overproduction Protectionism Treaty of Versailles

1927 – price of wheat on the world market began to fall Supply and demand – more wheat was being produced than was being sold Canadian and U.S. wheat farmers depended on foreign markets (exports), but other countries were producing their own wheat Sales decreased -> income of farmers dropped -> farmers unable to meet mortgage and loan payments

Overproduction – more goods being produced than were being sold At first, manufacturers continued to stockpile, then they began to cut back production This led to layoffs -> less income -> less spending on consumer goods Vicious cycle

U.S. imposed high tariffs on foreign goods coming into the country Meant to protect domestic market by making foreign items more expensive Other countries then did the same in response -> slowdown in world trade as opportunities for export shrank

Germany unable to make reparations – economy in ruins France and Britain were relying on repayments in order to pay off their debts to the U.S.

A period of severe economic and social hardship, massive unemployment, and terrible suffering.

Canada’s economic weakness: dependency on the export of primary resources Wheat – supplied 40% of world demand Newsprint – supplied 65% of world demand

Demand for product falls People lose jobs People can’t buy goods People who make goods lose jobs Millions of Canadians out of work

Factories and businesses closed People evicted from their homes Loss of respect “pogey” – government relief payments given to those who had no alternative source of income long lines Public declaration of financial failure Swear that they had no home and nothing of value This would get them food vouchers

Used clothing and meals Soup kitchens

By 1933, ¼ of the workforce was unemployed Jobless men “hopped” freight trains - “riding the rods” – rode on the roof or clung to the underside of the train Shanty towns or “jungles”

1928 – drought begins, lasts almost 8 years 1930-31 – wind and dust storms Palliser’s Triangle especially badly hit Plague of grasshoppers 1935 – Prairie Farm Rehabilitation Administration Act for irrigation systems and reservoirs too late

Employment of women blamed for the depression. Poor got poorer Employment of women blamed for the depression. Aboriginal families on relief got only $5/month – expected to “live off the land” Chinese families were starving Provincial government started food kitchens, but they were not well-funded Expected Chinese men to cost ½ of what it cost to feed white men

Immigrants targeted Anti-Semitism: hatred and prejudice towards Jews Jobs closed to Jews – signs posted forbidding applications 10 000 immigrants deported in the first half of the Depression 1931 – government put a complete stop to immigration

Chapter 4 Test: November 2