From the Roaring 20s to the Dirty 30s

1920s1930s

1920s1930s

Employment 1920s1930s In 1933, nearly 25% of the total work force, 12,830,000 people, were unemployed

CAUSES OF THE GREAT DEPRESSION Hooverville

STOCK MARKET CRASH of 1929 “BUYING ON MARGIN” - buying shares with only 10% down payment under the assumption that when the prices of stocks increased, the remaining 90% would be paid off Loans for stocks were EASY to obtain and the rush to get rich quickly had driven the price of stocks up beyond their real value When some CAUTIOUS INVESTORS started selling their stocks in order to cash in on high profits, other investors rushed to follow their lead = PANIC to SELL Investors who had borrowed heavily to buy shares went BANKRUPT in one day

BLACK TUESDAY On October 24, 1929 the New York Stock Exchange crashed. The Montreal and Toronto Stock Exchange followed shortly after.

DEBT Credit was introduced in the 1920s. Into the 1930s, many Canadians were in DEBT. Like the concept of “buying on margin” the “buy now, pay later” concept behind credit intensified the effects of the Great Depression. Many Canadians would have their “toys of the 20s” repossessed or they were forced to sell them for food or other necessities.

DEPENDENCY ON THE U.S. Canada’s economy was closely tied to the U.S. The U.S. was Canada’s biggest TRADING PARTNER and largest INVESTOR Consequently, when the U.S. economy “crashed,” so did ours

OVERPRODUCTION More wheat was being produced than was being sold Canada depended on FOREIGN MARKETS – Canada exported 40% of the world’s wheat and 65% of the world’s newsprint – Demand for these goods began to DROP Sales dropped, which meant the income of farmers dropped too This decrease in production led to LAYOFFS in factories = less income for families = less spending on CONSUMER goods = less money into economy

PROTECTIONISM US imposed high TARIFFS on foreign goods to protect US economy – Tariff: a tax placed on imports (goods made outside of the country) Other countries placed tariffs in response to U.S. actions This caused a slowdown in world trade Opportunities for EXPORT declined significantly

GERMANY’S REPARATIONS The Treaty of Versailles demanded that Germany pay 132 billion gold marks which was far more than the total German gold or foreign exchange.

REPARATIONS CYCLE Germany was unable to meet the financial obligations of the TREATY OF VERSAILLES FRANCE and BRITAIN counted on these payments to rebuild after the war and repay the US the UNITED STATES needed these repayments from France and Britain

DUST BOWL Intensified the Depression in PRAIRIE provinces DROUGHT began in 1928 and lasted nearly 8 years – Drought = dry spell when very little or no rain falls Dust storms began in 1930 – MILLIONS of hectares of fertile topsoil blew away Plague of GRASSHOPPERS also hit the prairies – they were so bad that they stalled trains and buses and clogged car radiators

“Sometimes the infestation built up slowly. In other places, a sudden invasion would come out of nowhere and clouds of hoppers would devour every scrap of garden greenness, strip every leaf from hedges, and whirl on to devour a ripening grain crop in a strip a mile wide. In Winnipeg the hoppers even made the golf courses unplayable.” “Grasshoppers. Trillions. They would black out the sky when they passed and nothing would be left. I’ve seen an ordinary kitchen broom leaning against the side of a granary and when the hoppers were finished, all that was left of that broom was the metal band which kept the bristles held together. I’ve even seen them eat the leather off the seat of a John Deere tractor.”

3-D.R.O.P.S D UST BOWL, DEBT, DEPENDENCY ON U.S. & EXPORTS R EPARATIONS CYCLE O VERPRODUCTION P ROTECTIONISM S TOCK MARKET CRASH