Review Budget Currency Revenue Expenditures Deficit Demand Supply ____ Money taken IN by the government ____ The money used in a particular country ____ The availability of a certain product ____ Any money SPENT by the government ____ A spending plan developed by the government ____ A budget where expenditures and revenues are equal ____ A situation where the government spends more than it takes in ____ An economy where individual producers/consumers determine the goods and prices ____ How badly people want a product Budget Currency Revenue Expenditures Deficit Demand Supply Balanced Budget Market Economy

From the Roaring Twenties to the Dirty Thirties… The Great Depression From the Roaring Twenties to the Dirty Thirties…

After WWI: The Economy in the 20s The world’s financial centre was New York In the late 1920’s the economy was going very well: prosperity, lots of consumer goods, jobs, etc. Most people from the middle and upper classes were purchasing stocks at an alarming rate and making money on their investment.

Huge supplies are produced but are not sold. Causes of the Great Depression Overproduction Huge supplies are produced but are not sold. Farmers who produced goods were noticing that people in their own countries were buying less. THE FARMERS WERE OVER PRODUCING PRODUCTS. Factories were also over producing. When companies realized this, they slowed down production and fired workers to save money.

Factories/farms slow down production Workers fired Less money to spend on buying goods

Reliance on Exporting Staple Products Causes of the Great Depression Reliance on Exporting Staple Products Staples: crops (wheat), pump & paper, fish, minerals Meant that other countries had to keep buying those staples from us for our economy to remain strong Other countries started producing MORE… so they needed less from us = unsold staples in Canada

Drought – “Dustbowl”

DROUGHT ON THE PRAIRIES No rainfall = dying crops = no wheat shipped = railways and flour mills lost business. Mass migration of farmers looking for work Saskatchewan the hardest hit province

Canada’s Dependence on USA Causes of the Great Depression Canada’s Dependence on USA “When the United States sneezed, the rest of the world got pneumonia.” 40% of our exports were sold to the USA 65% of our imports were from the USA USA was our most important trading partner, and our economy was linked closely with theirs

Tariffs & Protectionism Causes of the Great Depression Tariffs & Protectionism Tariffs: money collected on goods coming into a country Protectionist: protecting your home country’s products/industries and discouraging imports through tariffs.

Tariffs & Protectionism Causes of the Great Depression Tariffs & Protectionism Countries throughout the world were raising tariffs, which made it harder to trade…

International Debt after WWI Causes of the Great Depression International Debt after WWI USA lent money to foreign nations Foreign nations depended on US exports to raise money. Protectionist movement (tariffs) reduced this trade and Foreign nations could not afford to pay back loans.

THE STOCK MARKET CRASH (Oct 1929) Causes of the Great Depression THE STOCK MARKET CRASH (Oct 1929) In Oct 1929 the New York Stock Exchange collapsed. Prices of stocks fell very quickly and thus the stock owners wanted to sell all they had = downward spiral More than 23 million shares changed hands in one day.

ECONOMIC TRAGEDY Because stocks had been so profitable people had been getting loans from the bank, and paying for STOCKS ON MARGIN STOCKS ON MARGIN were stocks that were bought with only a 10% down payment. It was assumed that the rest of the cost would be covered with the profit from the stocks. BANKS WERE EVEN INVESTING money from peoples accounts in stocks without the owners knowledge. BECAUSE STOCKS LOST THEIR VALUE OVERNIGHT the people who had heavily invested WENT BANKRUPT OVERNIGHT.

The IMPACT Some wealthy/middle class people did not see huge lifestyle change Most people, especially factory workers, lost their jobs. People were evicted from their homes (couldn’t pay rent) Factories and businesses closed. Many families depended on government relief payments and soup kitchens/free food organizations By 1933 ¼ of Canada’s workforce was unemployed MANY MEN TRAVELED TO TRY TO FIND WORK: They would take trains to towns all over Canada. This was called RIDING THE RODS.