1. The Thirties: A Decade of Despair
Falling Off the Economic Edge
Socials 11

2. Recap: The End of the Boom
Unemployment in 1929: 4.2%
Canadian companies issued new shares to a value of $700 million
Profits went up, share values went up
Buying “on margin” – buying shares with only 10% down payment
Loans readily available
Price of stocks inflated beyond real value

3. Crash!
Some cautious investors started selling their stocks in order to cash in on high profits
Others rushed to follow their lead
Sellers panicked as the value of stocks fell dramatically

4. Crash!
October 29, 1929 – New York Stock Market crashed, followed by Toronto and Montreal
Investors went bankrupt since they borrowed heavily
Contributed to but DID NOT CAUSE the Depression!

5. Causes of the Depression
Wheat
Overproduction
Protectionism
Treaty of Versailles

6. Wheat 1927 – price of wheat on the world market began to fall
Supply and demand – more wheat was being produced than was being sold
Canadian and U.S. wheat farmers depended on foreign markets (exports), but other countries were producing their own wheat
Sales decreased -> income of farmers dropped -> farmers unable to meet mortgage and loan payments

7. Overproduction
Overproduction – more goods being produced than were being sold
At first, manufacturers continued to stockpile, then they began to cut back production
This led to layoffs -> less income -> less spending on consumer goods
Vicious cycle

8. Protectionism
U.S. imposed high tariffs on foreign goods coming into the country
Meant to protect domestic market by making foreign items more expensive
Other countries then did the same in response -> slowdown in world trade as opportunities for export shrank

9. Treaty of Versailles
Germany unable to make reparations – economy in ruins
France and Britain were relying on repayments in order to pay off their debts to the U.S.

10. Depression
A period of severe economic and social hardship, massive unemployment, and terrible suffering.

11. Canada and the Depression
Canada’s economic weakness: dependency on the export of primary resources
Wheat – supplied 40% of world demand
Newsprint – supplied 65% of world demand

12. Cycle Demand for product falls People lose jobs People can’t buy goods
People who make goods lose jobs
Millions of Canadians out of work

13. Desperate Years Factories and businesses closed
People evicted from their homes
Loss of respect
“pogey” – government relief payments given to those who had no alternative source of income
long lines
Public declaration of financial failure
Swear that they had no home and nothing of value
This would get them food vouchers

14. Private Charities
Used clothing and meals
Soup kitchens

15. Deepening Depression By 1933, ¼ of the workforce was unemployed
Jobless men “hopped” freight trains - “riding the rods” – rode on the roof or clung to the underside of the train
Shanty towns or “jungles”

16. Drought on the Prairies
1928 – drought begins, lasts almost 8 years
– wind and dust storms
Palliser’s Triangle especially badly hit
Plague of grasshoppers
1935 – Prairie Farm Rehabilitation Administration Act for irrigation systems and reservoirs
too late

18. The Disadvantaged Poor got poorer
Employment of women blamed for the depression.
Aboriginal families on relief got only $5/month – expected to “live off the land”
Chinese families were starving
Provincial government started food kitchens, but they were not well-funded
Expected Chinese men to cost ½ of what it cost to feed white men

19. The Disadvantaged Immigrants targeted
Anti-Semitism: hatred and prejudice towards Jews
Jobs closed to Jews – signs posted forbidding applications
immigrants deported in the first half of the Depression
1931 – government put a complete stop to immigration

20. Questions?
Chapter 4 Test: November 2