Chapter 6 Prosperity and Depression Decades of Change Chapter 6 Prosperity and Depression

Key Questions What factors led to prosperity in the 1920’s? How did new technology impact lifestyles in the 1920’s? What were the causes of the Great Depression? How did the Great Depression affect society, politics, and the economy in the 1930’s?

Two Contrasting Decades The 1920’s were considered the years of economic growth and prosperity in Canada. Newly developed technologies became a part of everyday life for many Canadians. The events of the 1920’s, however, lead to the Great Depression of the 1930’s. Canadians experienced severe economic hardship in the 1930’s.

The War is Over When WW1 ended in 1918, Canadians hoped life would return to normal. During the war, products for the war, made in Canada, were in great demand in Europe. This included food, manufactured goods, weapons, and ammunition. Demand for goods diminished, causing a short slump in Canada’s economy.

A decrease in demand for goods results in an increase in the cost of goods to Canadians. Returning soldiers from the war were shocked to find items costing twice as much as before the war. Wages didn’t increase, many couldn’t afford to buy things they needed. Unemployment increased and many soldiers weren’t able to find work.

A Buoyant Economy for Some By 1923, Central Canada, BC, and the Prairies started to recover from the slump. Agricultural production increased on the Prairies. Mining (iron ore, nickel, zinc, copper) increased in BC, Manitoba and Central Canada. Trade with USA increased, especially for pulp & paper products.

Changing Technologies By the 1920’s, electricity was in wide-use in most homes in urban areas. Use of electricity and gas-powered machinery in factories increased productivity. Introduction of the “assembly line” greatly increased the number of products that could be made. New inventions expanded manufacturing and retail businesses.

Stalled Economy for Others Maritimes didn’t share in the same economic boom. Nfld.’s main economy had been in shipbuilding. This economy was in decline. Cities like Halifax and St. John couldn’t modernize fast enough to keep up with places like Montreal.

Federal policies like the increase in railway freight rates hurt Atlantic Canada industries. They had to increase prices of their goods. Higher prices made products less desirable, causing the industry to lose customers. Between 1920-26, 42% of jobs were lost in Atlantic Canada. Many left the region to find work in Central Canada or the US.