Government Response to the Great Depression Politics During Hard Times

Government Intervention? Laissez Faire Minimal government involvement Keynesian Economics Governments should jump start economy and spend their way out of the Depression Governments should borrow money to spend on huge employment projects

Question to Consider With a partner answer the following question: Do you think Keyne’s theory of government spending could lift a country out of a depression? Why or why not?

U.S. Response to Great Depression President Roosevelt Took office in 1933 Supported Keyne’s theory Did not pull U.S. out of the depression but did help millions survive

Roosevelt’s Response Introduced the New Deal Created public work programs for unemployed and farmers Introduced Social Security Act provides several social assistance programs Public Works Project: Bonneville power dam in Oregon

How did the Canadian Government Respond to the Great Depression?

Mackenzie King Leader of Liberal party Prime Minister from 1921-1930, a few months in 1926 and from 1935-1948 Unprepared

Mackenzie King Thought provincial and municipal governments were responsible to help desperate Canadians “Not a five cent piece” to any Conservative provincial government

1930 Election King’s attitude towards the Depression cost him the 1930 election R.B. Bennett, leader of Conservatives, becomes Prime Minister

Bennett’s Response 1930-1935 Gave provinces $20 million for work-creation programs/relief such as relief camps and pogey Increased tariffs by 50% Prairie Rehabilitation Act Economy does not improve

Bennett’s New Deal (1935) Based on FDR’s New Deal Called for: Taxes based on income Max. # of hours in work week Min. wage Regulation of working conditions Unemployment insurance Health and accident insurance Support for farmers and seniors Too little, too late

Blame it on Bennett Became a target for people’s anger Bennett barnyard Bennett blanket Bennett coffee Bennett Buggy

Federal Election Time! 1935: voters fed up with Bennett Mackenzie King (Liberal) returns to power

Mackenzie’s Response Lowers tariffs Closes relief camps Seeks solutions for farmers National Employment Commission (1936) - recommended spending millions to create jobs King spends a fraction of recommended amount Royal Commission on Dominion Provincial Relations (1937): Rowell-Sirois Report Recommended federal gov’t give $$ to provinces Use pp. 86-88 to complete part 3

Looking to Alternative Parties CCF (Cooperative Commonwealth Federation) created in 1932 Socialist party Regina Manifesto (platform) Supported social programs, public works and public ownership of key industries Leader: J.S. Woodsworth

The Social Credit Party Leader William Aberhart Thought government should release money into the economy so people could spend it Promised citizens a “basic dividend” - $25/month Won election in 1935 in Alberta

Provincial Response

In Ontario Liberals gain power in 1934 Premier: Mitch Hepburn Did little for the unemployed Railed against big businesses

In Quebec Maurice Duplessis- brought Union Nationale party to power in 1936 Nationalistic French-Canadian party Blamed many of Quebec’s social and economic problems on the English minority Did little to improve situation in Quebec

In British Columbia Dufferin Pattullo (liberal) elected as premier in 1933 Believed in greater provincial spending Reforms: shorter work day, higher min. wage and increased relief payments by 20% Launched public works projects: Fraser River Bridge and Vancouver City Hall Projects short lived