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The Crash and Initial Impact

The collapse of the New York Stock Market on BlackThursday or October 29, 1929, had immediate andprofound effects on the Canadian economy.

The gigantic American market was closed off bypunishing tariffs; American investment abroad ceased;

and American bankers began recalling their loans. Because Canadas market was so deeply linked to the

US, it was the most desperately affected.

The Canadian economy was geared toward the export

of minerals, lumber, newsprint, fish, and especiallywheat.

Overproduction during the 1920s had created a glut ofmaterials which suddenly had no available consumers.As a result prices fell dramatically.

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The Crash and Initial Impact

Canada received one third of its national incomefrom abroad, but now it was forced to fend foritself.

As the economy ground to a halt hundreds ofthousands of Canadians found themselves on thestreet without jobs, money or security.

Recall that at this time there was no relief, nosocial welfare, and no unemployment insurance.

The rich and elite in Canada viewed this massemployment as an indication of characterweakness rather than as a failure of the capitalisteconomic system.

For example, the wealthy John Eaton argued thatthe Depression was a worthwhile experience sinceit taught men the value of a job.

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Impact on Western Canada

The western provinces were the hardest hit by theDepression

Saskatchewan suffered the most.The price of wheat per bushel fell from $1.65 in

1929 to $0.30 in 1931

This devastated the provincial economy that was sodependent on the crop.Natural disasters such as grasshoppers, rust, drought

and drifting soil further compounded the troubles inagriculture.

Alberta was also hit hard.As a younger province Alberta couldnt afford high

interest rates, yet theirs were the countrys highest.Their problem was one of debt, not destitution.

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Impact on Western Canada

In Manitoba, the economy of Winnipeg collapsed when the East-West

railway trade slowed down. Thousands of unemployed residents werejoined by indigent farmers and labourers drifting into the city looking fornon-existing jobs.

In B.C, a province dependent on the export of minerals and lumber,unemployed workers poured into Vancouver.

One disgusted citizen remarked that Vancouver had become just ablamed summer resort for all the hoboes of Canada

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Impact on the Rest of Canada

The impact on the Maritimes was felt to a lesser degree because theregion had been in a continuous depression since Confederation.

In Southern Ontario and Montreal unemployment reached new highs asthe huge manufacturing complex of Canadas industrial heartlandground to a halt.

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Initial Response of Mackenzie King

The Prime Minister at the start of the

Great Depression was Liberal WilliamLyon Mackenzie King.

King was a born conciliator andtraveled a middle road which allowed

him to govern for longer than anyother PM in Canadian history.

King believed that the Depressionwas only a temporary seasonal

slackness

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Initial Response of Mackenzie King

His remedies of balancing the budget and slashinggovernment expenditures were useless and name. Allthey did was make the economic crisis worse.

When King received desperate requests from provincialand municipal government for financial assistance, he

passed them off as a Tory (Conservative) plot toundermine his Liberal government.

As King told the House of Commons in April, 1930:as far as giving moneys out of the federal treasury to any

Tory government in this country for these alleged

unemployment purposes I would not give them a five centpiece.

Although he later regretted the comment, thedamage was done and King was seen as wildlyindifferent to the conditions of the unemployed.

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The 1930 Election and Bennett in Command

R.B. Bennett, leader of the ConservativeParty, was ready and waiting in the wings

after Kings 5 Cent gaff.

Bennett was tall, imposing andimmaculately groomed.

A millionaire, he was rarely seen withouthis top hat, tail coat, patent leather shoesand cane.

Nicknamed bonfireBennett, he was afiery speaker who was once clocked at 220words per minute.

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The 1930 Election and Bennett in Command

During the 1930 election campaign, King tied to avoid the issue of theDepression while Bennett emphasized his solution of a tariff that wouldblast a wayfor Canadian goods into world markets.

14% of the Canadian workforce was unemployed but King didnt reallyrecognize it as a priority campaign issue.

This was the first federal campaign in which radio was extensively usedand Bennett proved to be superior to King as a communicator.

The Tories won the election by a landslide and the Depression becameBennetts problem to solve.

There was no way that someone with Bennetts background andphilosophy could solve the problems of the greatest economic crisis inCanadian history

Bennett was a conservative who believed in sound, hard currency and

disliked spending money on massive public works or relief payments. Hebelieve that a balanced budget would help right the Canadian economy.

He also shared the elitist attitudes of upper-class citizens. He onceremarked, one of the greatest assets a man can have on entering lifesstruggle is poverty.

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The 1930 Election and Bennett in Command

Bennett did have some early accomplishments. First, he followed through on his election promise and raised the tariff

Second, he did spend ten times more on relief for the out of work thanhad been spent in the previous decade.

Still, Bennett argued that provinces and municipal governments wouldhave to pay for most of the costs of dealing with the Depression.

Bennetts higher tariff did not have the desired effect and even hiscreation of the Bank of Canada to give greater stability in nationalfinances was left to the private sector.

Bennetts attempts closer economic relations with Britain were alsorebuffed.

By 1933, almost one-third of Canadians were out of work during theworst year of the Depression.

Bennetts lack of solutions had made him a highly unpopular PrimeMinister. A newspaper came to be called a Bennett blanket and apermanently out of gas car pulled by horses was referred to a Bennettbuggy.

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Relief Camps and the On-to-Ottawa Trek One of Bennetts few

attempts to address the

issue of unemploymentbackfired.

The thousands ofunemployed men travelingthe country by rail came tobe seen as a threat andwere being arrested forvagrancy.

Bennett created relief work

camps run by theDepartment of NationalDefense that provided work,food and shelter for thesesingle homeless persons

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Relief Camps and the On-to-Ottawa Trek

175,000 inmates passed through the work camps. Though some camps were well run, comfortable and treated

workers with respect, many were more like prisons.

The pay was 20 cents per day, food was terrible, and bedbugsplentiful.

The work of clearing land for highways and airports in swampy,mosquito-infested areas was hard. Also, camps were isolated in the bush, did not allow women

inside and forbade entertainment or alcohol.

Relief camp workers began to organize a Relief Camp WorkersUnion and took their case to the city of Vancouver. They

demanded better conditions and better pay. From there, they decided to go directly to Parliament Hill to

complain.

Hopping on east-bound freight trains the On-to-Ottawa Trek hadbegun.

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Regina Riot This picture shows trekkers in

Regina before the riot.

The trekkers gathered moreunemployed workers as theystopped in every city.

After talks collapsed betweenBennett and march leaders, the

order for trekkers to clear out ofRegina was given.

The resulting Regina Riot on July1, 1935 saw trekkers battleMounties and city police until thecity was cleared.

A city detective had died in thefighting and 130 strikers werearrested.

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Regina Riot Bennett saw the On-to-Ottawa trek as the

work of dangerous subversives in theCommunist party and, indeed, there werenumerous communists involved in organizingthe campaign.

Bennett used Section 98 of the CriminalCode to arrest prominent Communists likeparty leader Tim Buck and, when possible,

to deport radicals. The R.C.M.P. was order to infiltrate trade

unions, organization of the unemployed andother subversivegroups.

Civil liberties were trampled in the anti-

redhysteria of the time.

Bennetts handling of the On-to-Ottawa Trekand the Regina Riot was seen by many asheavy-handed and King was able to exploitthis during the 1935 federal election.

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Impact on Canadian Women

Wages for domestic workers were abysmally low, insome cases less than $4/week

Between 1921 and 1936 the number of domesticworkers doubled but their wages decreased by half.

Also, minimum wage laws which were passed toprotect women backfired when employers firedwomen to employ the cheaper and unprotectedlabour of male workers.

There were no specific measures for unemployed

women as there were for men no work camps, nopublic works programs.

The hardest hit among women turned to prostitutionif they could not find a male to support them.

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New Ideas For the first time a significant number of

Canadians began to examine the existingeconomic, social, and political systems andfound them unsatisfactory.

Both the Liberal party under Mackenzie Kingand the Conservative party under Bennett hadprovided very few concrete solutions to theproblems facing Canadians during the

Depression.

It was in Western Canada that manyalternative parties began.

In 1932 the Co-operative Commonwealth

Federation was founded out of an alliance offarmer groups, socialists and labour parties.

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New Ideas

The CCFs Regina Manifesto called for an end to the capitalist

system based on domination and exploitation. The CCF promoted public ownership of a financial institutions,

public utilities, and transportation companies. It favouredproduction for use rather than production for profit.

J.S. Woodsworth, a Methodist minister, was the CCFs founderand used the Social Gospel of Christianity, rather than Marxism,

to argue for socialism. The CCF had some early successes. A handful of members sat as

M.Ps in parliament, while the party became the officialopposition in B.C. and Saskatchewan.

Despite its moderate tone and non-violent approach, to some theCCF still seemed too similar to communism.

The right-wing party that emerged during the thirties was SocialCredit.

William Bible BillAberhart was a fundamentalist lay preacherwhose fiery sermons attracted very large radio audiences inAlberta.

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Social Credit Social Credit argued that since there

was never enough money availableto buy the always available goodsand services, governments shouldissue social dividends, or cashpayments, to everyone.

While most economists dismissed this

theory, Aberhart forged on inspiredby his new economicfundamentalism.

During the 1935 election, Aberhartcapitalized on the demoralized and

scandal-ridden nature of the JohnBrownlee administration. Aberhartwon a landslide victory to becomeAlbertas Premier.

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Social Credit

When Aberhart attempted to implement his Social Credit policies, theywere disallowed by the federal authorities or by the courts.

Social Credit ended up providing Alberta with a solid, free-enterprise,conservative government for the next generation, but its theories were onlyused for campaign rhetoric.

Thus, one of the important effects of the Great Depression in Canada wasthe emergence of viable Third partiesand an end to the two-partysystem.

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Bennetts New Deal

By the end of 1934, the economy was worsening, western sectionalism

was rising, and every Conservative provincial government was gone.

Bennett, a champion of the status quo and a classic conservative,began doubting his own policies and made a surprising swing to theleft.

Bennett drew inspiration from US President Franklin D. Roosevelt and

his New Deal. In January 1935 Bennett made a national radio broadcast in which he

declared that the old order was gone and that it was time for a newsociety.

This would include unemployment insurance, subsidized housing, andminimum wage legislation.

Capitalism was in need of reform and Bennett argued that he wasready to do it.

Bennett quickly brought in one of the most far-reaching reformpackages in Canadian governmental history.

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Bennetts New Deal

Government money flowed into New Deal programs such as:

The Prairie Farm Rehabilitation Act (to restore and preserve drought-affected lands)

The Canadian Wheat Board (to administer the sale of grain andpromote higher prices for wheat)

The Natural Products Marketing Board (to allow marketing boards to

help farmers get higher prices for their products than the free marketcould provide.)

Bennett proposed legislation to pave the way for unemployment insuranceand national health insurance, but these programs were thwarted by thecourts.

The Bank of Canada Act created a central bank to regulate credit andcurrency in the best interest of the country. This government agency couldset more reasonable interest rates and increase the monetary supply inorder to stimulate the economy.

Many Canadians viewed Bennetts adoption of the New Deal as a ploydesigned to save his highly unpopular government from defeat in theupcoming election.

Woodsworth derided Bennetts New Deal as a deathbed conversion

Ki B k i Offi

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King Back in Office

During the 1935 election campaign Bennett hoped hisNew Deal would sway Canadians. Bennett attemptedto copy Roosevelts and Aberharts successes in usingthe radio, but to no avail.

King made few promises but did pledge to close down

the relief camps. King also ran on a campaign of King or Chaos,

criticizing Bennett for his heavy-handed repression ofthe On-to-Ottawa Trek.

The October results saw Kings Liberals grab 125 seats

in the House of Commons while Bennett

s Tories werereduced to only 40 seats. Unfortunately, 5 years in opposition seemed not to

have changed King in the slightest.

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King Back in Office

King would say,what is needed more than a changein economic structure is a change of heart.

King promised to balance the budget and slashgovernment spending.

He also kept his promise to close the relief camps,but mostly because he viewed them as being tooexpensive.

King lowered the tariff and signed a trade deal withthe United States in an attempt to kick-start theCanadian economy.

King did adopt a few of Bennetts New Deal policies,

but on a whole he moved slowly and cautiously. Canadians would have to wait another 5 years before

the effects of the Depression began to subside.

D i E C lt i C d

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Depression-Era Culture in Canada Longshoremenby Miller Brittain is a

portrayal of unemployed longshoremen

in his home town of Saint John, NB. There was unparalleled cultural activity

during the 1930s.

In the world of painting, the Group ofSeven had come together and Emily Carrwas finding an audience for her work.

While the 1920s had seen paintersexperimenting in abstract works, the1930s saw a return to realism as artists

portrayed images of the unemployed,foreclosed farms and the helpless.

D i E C l i C d

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Depression-Era Culture in Canada

Canadian novels in the 1930s were escapist

anadventure, a historical romance, or a comedy. The

grief of the decade was too overwhelming to writeabout.

Canadians flocked to Hollywood movies and tuned

into their radios for American comedy and varietyshows such as Amos n Andy.

In the depths of the Depression, people wanted tobe entertained and a growing cultural influence

came from the USA.Foster Hewitt and Hockey Night in Canada

continued to be a favourite of Canadians

The CBC, created in 1936, brought popular programssuch as The Happy Ganginto peoples homes.