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Effects of the Great Depression
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Unemployment skyrocketed
1. High Unemployment Generally 25% in industrialized countries With no “safety nets”, effects on individuals severe Led to decline in demand for goods, which caused the depression to deepen Unemployment skyrocketed
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2. Banking failures Banks use money deposited by clients to provide loans to businesses and farms When businesses and farms who owed $$ to banks went bankrupt, depositors often lost their life savings In USA – over 6,000 banking failures In Canada - most banks survived, but were affected by US
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3. Political Consequences
In some countries, such as Germany, their democracy did not survive the Great Depression (rise of fascism) In Canada – new political parties formed in reaction to the government’s inability to address the problems of the Depression Examples: The Canadian Cooperative Federation (CCF – later – NDP), the Social Credit Party in Alberta, and the Union Nationale in Quebec Nazism = Fascism
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If you were in government…
Imagine you were alive in the dirty 30’s Imagine you were so affected you wanted to make a difference What would your political party fight for in the 30s?
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3) a. Cooperative Commonwealth Federation (CCF)
first leader was J.S. Woodsworth, a sensitive man and devout Christian who held strong opinions on helping the less fortunate founded in Calgary in 1932 by a coalition of farmers, academics and Ottawa MPs associated with farmer & trade-union organizations
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CCF cont’ produced the “Regina Manifesto” in 1933, calling for the creation of a political vehicle that would rescue Canada from the Depression Outlining: Public ownership of key industries Creation of Welfare state: Universal pension Universal health care Children’s allowance Unemployment Insurance Workers Compensation
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CCF cont’ Later, on June 15, 1944 the CCF, led by Tommy Douglas, won Saskatchewan to form North America’s first socialist government King and his party responded to the CCF’s success by adopting some of the party’s most popular policies, cutting off “the threat on the left” and initiating the federal government’s involvement in social and economic affairs
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Political Results The Liberals hoped to prevent a post-war Depression and in the process laid the foundation for Canada’s welfare state Old Age Pension plan, unemployment-insurance scheme (1940) system of family allowances (1944) promoted policies to support home building, find work for demobilized war vets and increase federal assistance to health care
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b. Social Credit Party “Give each citizen a monthly
$25 prosperity certificate, guaranteed by the government, to spend on food, clothing, and shelter.” - William Aberhart
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Social Credit cont’ advocated the distribution of money, or "social credit," so that people might purchase the goods and services readily produced by capitalist enterprise in 1932 Alberta evangelist William ABERHART used his radio program to encourage other Albertans to adopt social credit as the means of rescuing the province and Canada from the drastic effects of the Great Depression
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c. Union Nationale Party
Led by Maurice Duplessis Won the 1936 Quebec provincial election preached social, economic and political reform Union Nationale was completely dominated by Duplessis until his death in September 1959
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Union Nationale cont’ Duplessis is infamous for The Padlock Act (1937)
Quebec statute empowering the attorney general (AG) to close, for one year, any building used for propagating "communism or bolshevism" (undefined) A judge could order the lock removed if the owner could prove that the building had not been so used during the preceding year empowered the AG to confiscate and destroy any printed matter propagating communism. Anyone printing, publishing or distributing such material could be imprisoned for up to a year, without appeal
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Charter of Rights Think back to our Government unit…
Although this happened before the addition of the Charter of Rights and Freedoms in 1982, how would this law have broken the Constitution?
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4. Changing Role of Government
Before the Great Depression, governments generally responded to economic downturns by “tightening their belts” and cutting back on government spending until it matched revenues
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Changing Role of Gov. cont’
Soon realized that government would have to take a more active role in caring for the poor Unemployment benefits, sick benefits, child benefits, welfare, etc. all directly or indirectly originated during the depression
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Gov Role cont’ Ever since the Great Depression, national economies have been strictly controlled by elected governments Citizens expect governments to manage the economy through: tax policy (increasing & decreasing taxes), monetary policy (raising & lowering interest rates), and fiscal policy (increasing and decreasing government expenditures)
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Effects - Overall Growth of “Protest Parties” (third parties) such as the CCF showed the naïveté of the federal government which seemed to have had no idea how desperate rural Canadians were. In 1931, when they finally gave emergency relief, the Depression had already been in full swing for three years. adopted a plan in 1939 for “arsenal of democracy” to help put people back to work Ultimately, the production of goods and weapons for WWII ended the Depression for Canadians.
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References Carrie Schlappner, (2009).
Cranny, M. & Moles, G. (2001). Counterpoints: Exploring Canadian Issues. Prentice Hall: Toronto. Nick VanIersel, 2009
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