1. Causes of the Great Depression
Interwar Years
Causes of the Great Depression

2. Recession/Depression
What is it?
What are some examples that we have seen?
What is going on in Canada today? What about China?

3. The Business Cycle

4. The Business Cycle
The economy tends to experience different trends. These can be categorized as the trade cycle and may feature boom, slump, recession and recovery
BOOM: A period of fast economic growth. Output is high due to increased demand, unemployment is low. Business confidence may be high leading to increased investment. Consumer confidence may lead to extra spending.
SLUMP: A period when output slows down due to a reduction in demand. Confidence may begin to suffer.
RECESSION: A period where economic growth slows down and the level of output may actually decrease. Unemployment is likely to increase. Firms may lose confidence and reduce investment. Individuals may save rather than spend.
RECOVERY: A period when the economy moves between recession and a boom.

5. What happens in a Boom?
- Businesses produce more goods - Businesses invest in more machinery - Consumers spend more money. There is a FEELGOOD FACTOR - Less money is spent by the Government on unemployment benefits - More money is collected by the Government in income tax and VAT - Prices tend to increase due to extra demand

6. What happens in a Recession?
- Businesses cut back on production - Some businesses may go bankrupt - Consumers spend less money. Fall in FEELGOOD FACTOR - Individuals may lose their jobs - More money is spent by the Govt on unemployment benefits - Less money is collected by the Govt in income tax - Prices start to fall

7. REASONS FOR DEPRESSION
STOCK MARKET CRASH
buying on margin (buying shares with 10% down and using stock profits to repay loans
Loans very easy to obtain
Stock prices over inflated
October 29, 1929 New York Stock Exchange collapsed and others followed
Investors bankrupt in a day

8. REASONS FOR DEPRESSION
PRICE OF WHEAT FALLS
1927 price of wheat plummets globally
Farmers unable to pay mortgages and loans
Leads to decrease in production, economy slows, layoffs occur
US tariffs (taxes on imported goods) and protectionism slows trade
Canada dependent on export of primary resources (wheat prairies, newsprint BC, Ontario, Quebec)

9. REASONS FOR DEPRESSION
REPARATION PAYMENTS
Germany burdened with reparation payments
France and Britain have major loans to United States (money to rebuild after WWI)

10. REASONS FOR DEPRESSION
DROUGHT
1928 – 1936
Wind blew topsoil away – constant dust storms
Grasshopper infestation
No irrigation systems and reservoirs

11. Causation: Immediate Vs Underlying
Of the causes that we looked at, what were “immediate” and what were “underlying” causes?
The criteria for Immediate Causes:
Immediate Causes are often the most obvious and easily identifiable.
Immediate Causes directly cause the event in question.
Often, the removal of the immediate cause will do little to prevent a similar event from occurring again. For this reason, immediate causes are often seen as being less important than underlying.
The criteria for Underlying Causes:
The underlying cause is usually less obvious and more difficult for the historian to identify
The underlying cause is often an underlying belief, ideal, or practice amongst a group of people, and not isolated to a single historical event.
Often, the removal of the underlying cause will prevent a similar event from occurring again. For this reason, underlying causes are often seen as being more important than immediate.

12. For example…
Instructions: Read the following case study and decide which of the mentioned causes are underlying, and which causes are immediate. Prepare to defend your position.
Case Study: March 8, 2004
During a hockey game between the Vancouver Canucks and the Colorado Avalanche, Canucks player Todd Bertuzzi skated behind Avalanche player Steve Moore, grabbed his jersey, and punched him in the head. After crumbling to the ice, doctors found that Moore’s neck had been broken in the scuffle. Almost immediately after the incident people began to ask the question “what caused this event?”

13. Causation: Immediate Vs Underlying
Which one is which?
Todd Bertuzzi was a vicious and violent player. _______________________________
The punch was retaliation for a hit Moore had laid on one of Bertuzzi’s teammates the prior game. ________________________________
Coach Marc Crawford had encouraged his players to hurt Moore __________________________
The incident was a result of the violent culture in the NHL. _______________________________
The incident was caused by the removal of the instigator rule. ____________________________

14. Now it’s your turn…
Fill out the worksheet with underlying or immediate causes.
Support your answers using evidence from the text.

15. EFFECTS OF DEPRESSION MIDDLE CLASS WIPED OUT
Canadians lost their jobs, homes, farms, businesses, high suicide rate
Pogey, relief, dole, welfare, vouchers, soup kitchens
Reliance on charities and gov’t aid not enough

16. EFFECTS OF DEPRESSION ANGER AND DESPAIR
1933 – ¼ of Canadians unemployed
Young, homeless, jobless men drifting, hopping trains (riding the rods), looking for work
Arrested for vagrancy for not having addresses
Shanty towns (jungles)

17. EFFECTS OF DEPRESSION DISADVANTAGED HURT EVEN MORE
Fewer jobs for women (domestic service)
Aboriginal families expected to ‘live off land’ so received less relief
Chinese population: starvation not uncommon
Immigrants viewed with hostility as seen as threats to jobs
Jewish anti-Semitism (no Jews allowed signs)