1. Government Response to the Great Depression

2. Downward Economic Cycle
The prosperity of the 1920s was based on false optimism
the global economy was very weak
Easy access to credit made the economy appear stronger than it was

3. From “Recession” to “Depression”
The Psychological Effect
A weakening economy can have a powerful psychological effect on consumers
Fear of job losses and decrease in value of goods and stocks consumers save decrease demand

5. Government Response The Failure of Ideology
Most governments believed in laissez-faire economics
“leave it alone”
The economy will regulate itself – government regulations will make things worse
Prime Minister Mackenzie King did nothing to correct the situation – economy would eventually correct itself
King, and other world leaders, failed to grasp that the sharp decline in prices and rising #s of unemployed were not part of normal business cycle

6. From Bad to Worse… R. B. Bennett
Mackenzie King lost the election of 1930 to Richard Bennett (conservative)
Bennett promised to take action to solve economic crisis:
Rise tariffs against countries that riased tariffs against Canadian products (USA)
Millions of $ for building projects
Relief for unemployed

7. And Worse…
Bennett also promised to decrease tariffs on countries that would decrease tariffs on Canadian products (USA)
USA not interested in Free Trade
Canada had little economic influence and were deeply dependent on global trade
Canadian economy continues to worsen

8. And Worse…
British economist John Maynard Keynes suggested government should go into debt and spend $$$ - build infrastructure - to put people back to work and stimulate the economy

9. And Worse…
Bennett’s ideas were good but he rejected the idea of government debt – therefore his government did not take any direct action to solve the problem
Result: families evicted to streets, 30% of work force!

10. Unemployment
million Canadians depended on government relief
Government gave unemployed relief vouchers – must prove you had no $ to qualify
Store owners did not like to take vouchers – government would take a long time to pay
The unemployed “drifters” travelled around looking for work - they were viewed with suspicion

11. Living Condiditons
Top Picture: “Bennett buggies” – people could not afford gas reverted to hooking a horse or ox to their car
Middle: “Riding the rails” – unemployed men would hitch rides on open freight cars to travel around looking for work
Bottom: “Hobo jungles” or “shanty towns”

12. Relief Camps
1932 – Bennett establishes work camps to offer “relief” to the unemployed
Really, government feared communism would spread amongst unemployed
Camps were established in isolated locations under the control of the army
Workers worked for 20¢ per day

13. Protest: “On to Ottawa”
1935 – relief camp workers went on strike
1000 strikers boarded freight trains and headed for Ottawa – take their demands to Bennettt
Eventually over 2000 “Trekkers” joined the movement
Government feared a Communist revolution
RCMP stops the strikers in Regina – riots break out, the strike leaders are arrested

14. The Dust Bowls…
The economic collapse coincided with a natural disaster in the prairies
A severe drought would begin in 1929 and last 10 years
The rich fertile land – bread basket of Canada – turned into a virtual desert

17. And Locusts
If the drought wasn’t bad enough, the 1930s also saw a plagues of locusts (large grasshoppers) that would destroy what little crops farmers did manage to harvest!

18. And worst of all…the bankers!
Due to these natural disasters many farmers were not able to make their mortgage payments – bankers would seize their farms and sell them
250,000 farmers abandoned their farms between !

19. Alternative Solutions New Political Parties
The Great Depression:
Alternative Solutions New Political Parties

20. Alternate Solutions
Although Bennett had some good ideas about solving the Great Depression he was not prepared to go into debt to spend his way out of the recession
He would occasionally send his own money to people who asked for assistance – but this was not solution
Many people began to look for radical solutions to the problem

21. The Communist Party of Canada
Most radical political party
Committed to a workers revolution to overthrow democratic government
Eliminate private property and business and banks
Leader, Tim Buck, was arrested and convicted of plotting to overthrow government of Canada – sent of Kingston Penitentiary

22. The Co-operative Commonwealth Federation (CCF)
Leader: James S. Woodsworth
Democratic Socialism
Believed in democracy and supported private private property
Big business, utilities and banks should be owned by the government
1944 Tommy Douglas elected as Premier of Saskatchewan – introduced health care, human rights laws and government run hydro electricity
In 1961 CCF joined with the the Canadian Labour Congress to form the New Democratic Party
James S. Woodsworth

23. The Social Credit Party
Began in Alberta
Leader: William Aberhart
Solution to GD – give people money sitting in banks
Government would use its credit to print money & give $25 to every adult per month
Federal government vetoed this idea

24. Union Nationale Quebec based party Leader: Maurice Duplessis
Promised higher minimum wage, workers’ compensation & government owned hydro-electricity
Duplessis won election of 1936 but failed to bring in reforms
Allowed Roman Catholic Church to influence social policy & English protestants to dominate business
Government plagued by corruption