Canada and the Great Depression: 1930s

Consumer-Based Society Canada had evolved into a mass, consumer society by the 1920s. Canada had evolved into a mass, consumer society by the 1920s. Manufacturers were turning out consumer goods and new labour-saving devices that were being gobbled up by anxious buyers. Manufacturers were turning out consumer goods and new labour-saving devices that were being gobbled up by anxious buyers. Canadians wanted to participate in a lifestyle that included new appliances, cars, and entertainment. Canadians wanted to participate in a lifestyle that included new appliances, cars, and entertainment. However, things were changing… However, things were changing…

The Health of the Economy The Canadian economy - and indeed the world economy - was in poor shape well by October 29, 1929 The Canadian economy - and indeed the world economy - was in poor shape well by October 29, 1929

Over Production One underlying economic problem was that wages and demand were outpaced by production and supply. One underlying economic problem was that wages and demand were outpaced by production and supply. Manufacturers, in their frenzy for greater profits, simply produced more goods than what could be purchased. Manufacturers, in their frenzy for greater profits, simply produced more goods than what could be purchased.

Results of Over Production Lead to layoffs and downsizing of companies. Lead to layoffs and downsizing of companies. Many businesses would simply have to shut down production. Many businesses would simply have to shut down production.

Easy Money and Credit Following WWI, Canada and in the world needed money to convert to peace-time production. Following WWI, Canada and in the world needed money to convert to peace-time production. They raised it by going into debt, either by borrowing from banks, selling bonds, or offering shares on the stock market. They raised it by going into debt, either by borrowing from banks, selling bonds, or offering shares on the stock market.

Results of Credit Eager investors, optimistic about the future, gobbled up the offered shares. Eager investors, optimistic about the future, gobbled up the offered shares. When they went to sell their stocks they struggled to find any buyer, even offering shares that had been worth dozens of dollars for a few pennies. When they went to sell their stocks they struggled to find any buyer, even offering shares that had been worth dozens of dollars for a few pennies.

Black Tuesday: Stock Market Crash On October 24, 1929, almost 16.5 million shares were sold as panicked investors attempted to get pennies on stocks that had been worth fortunes before. On October 24, 1929, almost 16.5 million shares were sold as panicked investors attempted to get pennies on stocks that had been worth fortunes before. There was a sudden realization that all those rising stocks were illusionary. There was a sudden realization that all those rising stocks were illusionary. Shares lost half their value, or over $9 billion. In a single day! Shares lost half their value, or over $9 billion. In a single day!

Result of Black Tuesday As the prices plummeted, fear and panic rose. Many investors lost their life savings. As the prices plummeted, fear and panic rose. Many investors lost their life savings.

Resource-Based Economy About one-third of Canadians still derived their income from farming, with wheat production being the most important. About one-third of Canadians still derived their income from farming, with wheat production being the most important. Immediately after World War One, a bushel of wheat fetched $2.45 Immediately after World War One, a bushel of wheat fetched $2.45

Changing Wheat Prices In 1932, the price of wheat plummeted to 34 cents a bushel. In 1932, the price of wheat plummeted to 34 cents a bushel. That was a disaster for the Prairie farmers, hundreds of whom lost their farms. That was a disaster for the Prairie farmers, hundreds of whom lost their farms.

The High Tariff Trap In the 1920s, governments raised tariff barriers hoping to protect jobs within Canada. In the 1920s, governments raised tariff barriers hoping to protect jobs within Canada.

Results of Higher Tariffs Different national governments competed with one another to raise ever higher and higher tariffs. Different national governments competed with one another to raise ever higher and higher tariffs. Made the cost of trading with other Countries extremely expensive. Made the cost of trading with other Countries extremely expensive.

“Dust Bowl” During the 1920s, Saskatchewan was one of the most prosperous farming areas in the world. During the 1920s, Saskatchewan was one of the most prosperous farming areas in the world. Drought conditions first appeared in 1928 but grew steadily worse. Drought conditions first appeared in 1928 but grew steadily worse. In 1928, precipitation was half what had been the previous year. In 1928, precipitation was half what had been the previous year.

Result of the “Dust Bowl” The drought continued for the next eight years and as it did, vital subsoil moisture disappeared. The drought continued for the next eight years and as it did, vital subsoil moisture disappeared. About one quarter of all of Canada's farm land was affected by drought. About one quarter of all of Canada's farm land was affected by drought.

Final Result 30% of the labour force within Canada were unemployed. 30% of the labour force within Canada were unemployed.

Individual Activity It is now your job to rank the different causes of the Great Depression from the one that had most impact, all the way to the cause you think had the least impact. It is now your job to rank the different causes of the Great Depression from the one that had most impact, all the way to the cause you think had the least impact. You must justify and explain why you placed them in the order that you did. You must justify and explain why you placed them in the order that you did.