The Thirties: A Decade of Despair

Falling Off the Economic EdgeSocials 11

Unemployment in 1929: 4.2% 1922-26

◦ 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

Recap: The End of the Boom

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

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!

Crash!

Wheat Overproduction Protectionism Treaty of Versailles

Causes of the Depression

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

Wheat

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

Overproduction

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

Protectionism

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.

Treaty of Versailles

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

Depression

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

Canada and the Depression

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

Cycle

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

Desperate Years

Used clothing and meals Soup kitchens

Private Charities

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”

Deepening Depression

1928 – drought begins, lasts almost 8 years 1930-31 – 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

Drought on the Prairies

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

The Disadvantaged

Immigrants targeted◦ Anti-Semitism: hatred and prejudice towards Jews◦ Jobs closed to Jews – signs posted forbidding

applications◦ 10 000 immigrants deported in the first half of the

Depression◦ 1931 – government put a complete stop to

immigration

The Disadvantaged

Chapter 4 Test: November 2

Questions?