3.2 from boom to_bust_website
TRANSCRIPT
From Boom to Bust
Election of 1921
Mackenzie King was elected Prime Minister of Canada and led Canada’s first minority governmentKing announced that Canada would
now sign its own international agreements
The first was the Halibut treaty of 1923 signed between Canada and the United States
1921-1925Between 1921 and 1925 the
depression in Canada easedAutomobile factories and mines
helped to ease the tensionsWhen King was elected in 1921 he
had promised the Maritimes many things, which he did not live up to
Election 1925King lost much support in the East and as
a result, the election of 1925 saw the Liberals finish second to the Conservatives who failed to win a majority
There was also much pressure from the United States to stop Canadians from selling liquor South of the border where prohibition was still in effect.
Because of this lack of a majority King refused to dissolve his parliament
King-Byng CrisisIt became evident that some of
King’s ministers were protecting the individuals and even profiting off of the illegal liquor sales to the United States
King approached Governor General Lord Byng, and requested that an election be called only months after one had just been held!
King-Byng Crisis cont’d…
Byng refused to concede to King’s demands and rather than face his own party, King chose to resign.
In 1926, Arthur Meighen took over as Prime Minister of Canada, reluctantly because he had not won by election.
The liberals and King argued that there had been a violation of the Constitution
King-Byng Crisis cont’d…
Although no violation of the Constitution arose, King managed to convince the Progressives the Governor General was wrong to not support the PM.
Because the Progressives had originally supported the Conservatives, Byng was forced to call an election.
Sept 14, 1926, King won majority.
BoomThe outcome of the 1926 election
was due in large part to prosperityWorkers in factories North and South
of the border were pouring out radios, refrigerators, cars and other consumer products
Grand hotels were being built across the country drawing American tourists
AmericanizationProsperity came from a
new sourceCanada had formerly
traded East and West with Britain and Asia
Britain could no longer afford to invest in Canada following the war.
The United States had made a lot of money from the war and was looking to Canada as a consumer market, and vice versa
Americanization Cont’d…
Many American companies created branch plants in Canada to avoid tariffs.
Many highways were built linking Canada to the United States, and we began driving on the right side of the road
Air travel, radio, and telephone links began to network into the U.S.
Average work week was reduced from 50-60 hours per week to 44-50 hours increasing leisure time substantially
The Roaring 20’sMore and more powers being turned
over to provincial governmentsWomen voters demanded pensions
for widows, low income mothers, and the disabled
Much of Canada relied on natural resources which fell under provincial jurisdiction.
The Roaring 20’sQuebec, BC, and Ontario were the big
winners under this systemIn 1929 after five years of good times, the
average household income was $1200 dollars.
Canadians read American books and watched American movies
Emergence of service clubs such as Kiwanis and Knights of Columbus
American entertainment at it's finest: what we watched in the 1920's.
The Roaring 20’sA nation of 10 million was buying 2
million movie tickets a weekAmerican pro baseball became the
big pass time in North AmericaThe NHL had 6 teams, (2 Canadian)Artwork became prominent and work
such as that by the Group of 7 and Emily Carr became well known.
Red Maple by A.J. Jackson
Roots of Depression
Canada’s prosperity in the 1920’s had two great flaws:
Most Canadians could not afford the mass goods being produced
Canada was a resource export economy, meaning we were heavily dependent on the world economy
Signs of Sickness
The wheat market had been dominated by Canada for much of the 1920’s however many other countries were now exporting
Drought destroyed much of the 1929 crop in Canada, and wheat prices were falling quickly from $2 to $1.09 per bushel
Black TuesdayEurope had no money to buy Canadian
goodsUS raised tariffs to highest ever to protect
their own goodsCanadian factories began to closeShareholders in companies began to sell
and prices fell quicklyOctober 29, 1929 the stock market
crashed
R.B. BennettThe new Conservative leader in CanadaKing was convinced that Bennett was trying to blame the depression on himMost people thought the depression would
be over in months.King announced that Ottawa had financial
aid for western farmers, but not even a “five cent piece” for conservative supporters.
The Business Cycle• The business cycle is marked by three stages• 1. The first stage is a period of prosperity where the
economy approaches full employment. This stage is often accompanied by inflation as full employment and high income levels drive up the price of labour and goods.
• 2. In stage two the economy slows down bringing about a recession. Few new jobs are created and some jobs are lost, as companies reduce their production of goods and services. This is known as cyclical unemployment.
• 3. The final stage is a period of economic recovery where production increases in response to increased consumer demand. New jobs are created and the cycle starts over.
A depression occurs when the period of economic decline is prolonged and severe. During a depression prices of goods and services fall dramatically. This is known as deflation. Wages also fall. Generally wages fall faster than prices during a depression
An Example of the Economic Cycle
Note how the unemployment always goes up and down, with varying severity.