Effects of Effects of the Great Depressionthe Great Depression

1. Less Purchasing by 1. Less Purchasing by EveryoneEveryone

With the stock With the stock market crash and the market crash and the fears of further fears of further economic woes, economic woes, individuals from all individuals from all classes stopped classes stopped purchasing items. purchasing items.

led to a reduction in led to a reduction in the number of items the number of items produced and thus a produced and thus a reduction in the reduction in the workforce. workforce.

Less Purchasing – cont’Less Purchasing – cont’ As people lost their jobs, As people lost their jobs,

they were unable to keep they were unable to keep up with paying for items up with paying for items they had bought through they had bought through installment plans and installment plans and their items were their items were repossessed. repossessed.

More and more inventory More and more inventory began to accumulate. The began to accumulate. The unemployment rate rose unemployment rate rose above 25% which meant, above 25% which meant, of course, even less of course, even less spending to help alleviate spending to help alleviate the economic situation.the economic situation.

reposesse

d

2. High Unemployment2. High Unemployment

Generally 25% in Generally 25% in industrialized industrialized countriescountries

With no “safety nets”, With no “safety nets”, effects on individuals effects on individuals severesevere

Led to decline in Led to decline in demand for goods, demand for goods, which caused the which caused the depression to deependepression to deepen

Unemployment

skyrocketed

3. Banking Failures & 3. Banking Failures & ClosuresClosures

Banks use money Banks use money deposited by clients to deposited by clients to provide loans to businesses provide loans to businesses and farmsand farms

After stock market crash - After stock market crash - businesses and farms who businesses and farms who owed $$ to banks went owed $$ to banks went bankruptbankrupt

Bank deposits were Bank deposits were uninsured and thus as uninsured and thus as banks failed people simply banks failed people simply lost their savingslost their savings

Surviving banks, unsure of Surviving banks, unsure of the economic situation and the economic situation and concerned for their own concerned for their own survival, stopped being as survival, stopped being as willing to create new loans. willing to create new loans. This exacerbated the This exacerbated the situation leading to less situation leading to less and less expenditures. and less expenditures.

• In USA – over 9,000 In USA – over 9,000 banking failuresbanking failures

• In Canada - most banks In Canada - most banks survived, but were survived, but were strongly affected by USstrongly affected by US

4. Massive Poverty4. Massive Poverty

5. Homelessness 5. Homelessness

6. Emotional Depression6. Emotional Depression At this time, men were At this time, men were

expected to support their expected to support their families financiallyfamilies financially

suffered anxiety and a suffered anxiety and a feeling of worthlessness feeling of worthlessness for failing to provide for for failing to provide for their familiestheir families

Many, driven by Many, driven by desperation, resorted to desperation, resorted to stealing food and money stealing food and money just to get by just to get by

Many distressed Many distressed fathers...committed fathers...committed suicide during this difficult suicide during this difficult decade[1930s]decade[1930s]

7. Birth &7. Birth &Urbanization Rates FallUrbanization Rates Fall

Canada's birthrate dropped Canada's birthrate dropped from 13.1 live births per 1000 from 13.1 live births per 1000 in 1930 to only 9.7 by 1937, in 1930 to only 9.7 by 1937, the lowest ratio until the the lowest ratio until the 1960s1960s

50 years of urbanizing 50 years of urbanizing momentum were reversed as momentum were reversed as Canada's rural population Canada's rural population (outside of Saskatchewan) (outside of Saskatchewan) grew more rapidly than its grew more rapidly than its urban populationurban population

For many unemployed "going For many unemployed "going back to the land" was back to the land" was preferable to a miserable preferable to a miserable existence on urban reliefexistence on urban relief

8. Immigration Rates Fall8. Immigration Rates Fall Immigration in Canada dropped from Immigration in Canada dropped from

164,993 people in 1929 to 11,277 in 164,993 people in 1929 to 11,277 in 19351935

9. Farmers & Drought9. Farmers & Drought The depression was The depression was

devastating to devastating to Canadian farmers Canadian farmers

In western Canada In western Canada prolonged drought, prolonged drought, compounded by compounded by years of poor soil years of poor soil conservation conservation techniques, techniques, devastated vast devastated vast areas of farmland in areas of farmland in southeastern southeastern Alberta, southern Alberta, southern Saskatchewan, and Saskatchewan, and southwestern southwestern Manitoba Manitoba

• Thousands of farmers Thousands of farmers abandoned their lands to the abandoned their lands to the drifting soil and moved west drifting soil and moved west to British Columbiato British Columbia

10. Political Consequences10. Political Consequences In some countries, such as In some countries, such as

Germany, their democracy did Germany, their democracy did not survive the Great Depression not survive the Great Depression (rise of fascism)(rise of fascism)

In Canada – new political parties In Canada – new political parties formed in reaction to the formed in reaction to the government’s inability to address government’s inability to address the problems of the Depressionthe problems of the Depression Examples: The Canadian Cooperative Examples: The Canadian Cooperative

Federation (CCF – later – NDP), the Federation (CCF – later – NDP), the Social Credit Party in Alberta, and the Social Credit Party in Alberta, and the Union Nationale in QuebecUnion Nationale in Quebec

Nazism = Fascism

10) a. Cooperative 10) a. Cooperative Commonwealth Federation Commonwealth Federation

(CCF)(CCF) first leader was J.S. first leader was J.S.

WoodsworthWoodsworth, a sensitive , a sensitive man and devout Christian man and devout Christian who held strong opinions on who held strong opinions on helping the less fortunatehelping the less fortunate

founded in Calgary in founded in Calgary in 19321932 by a coalition of by a coalition of farmers, academics and farmers, academics and Ottawa MPs associated with Ottawa MPs associated with farmer & trade-union farmer & trade-union organizationsorganizations

CCF cont’CCF cont’ produced the “Regina produced the “Regina

Manifesto” in 1933Manifesto” in 1933, calling , calling for the creation of a political for the creation of a political vehicle that would rescue vehicle that would rescue Canada from the Depression Canada from the Depression

promised unemployment & promised unemployment & health insurance, public health insurance, public housing, agricultural price housing, agricultural price supports, laws to protect supports, laws to protect farmers from creditors & farmers from creditors & public ownership of major public ownership of major industries and financial industries and financial institutions (SOCIALIST institutions (SOCIALIST policies)policies)

CCF cont’CCF cont’ Later, on June 15, 1944 the provincial Later, on June 15, 1944 the provincial CCFCCF, , led by led by

Tommy DouglasTommy Douglas, won Saskatchewan to form North , won Saskatchewan to form North America’s first socialist governmentAmerica’s first socialist government

King and his party responded to the CCF’s success King and his party responded to the CCF’s success by adopting some of the party’s most popular by adopting some of the party’s most popular policies, cutting off “the threat on the left” and policies, cutting off “the threat on the left” and initiating the federal government’s involvement in initiating the federal government’s involvement in social and economic affairssocial and economic affairs

The Liberals hoped to prevent a post-war Depression The Liberals hoped to prevent a post-war Depression and in the process laid the foundation for Canada’s and in the process laid the foundation for Canada’s welfare statewelfare state– Old Age Pension plan, Old Age Pension plan, – unemployment-insurance scheme (1940) unemployment-insurance scheme (1940) – system of family allowances (1944) system of family allowances (1944) – promoted policies to support home building, find work promoted policies to support home building, find work

for demobilized war vets and increase federal assistance for demobilized war vets and increase federal assistance to health careto health care

10 b. Social Credit Party10 b. Social Credit Party

“Give each citizen a monthly

$25 prosperity certificate,

guaranteed by the government, to spend on food,

clothing, and shelter.”

- William Aberhart

Social Credit cont’Social Credit cont’ advocated the distribution advocated the distribution

of money, or "social credit," of money, or "social credit," so that people might so that people might purchase the goods and purchase the goods and services readily produced services readily produced by capitalist enterprise by capitalist enterprise

in 1932 Alberta evangelist in 1932 Alberta evangelist William William ABERHART used used his radio program to his radio program to encourage other Albertans encourage other Albertans to adopt social credit as the to adopt social credit as the means of rescuing the means of rescuing the province and Canada from province and Canada from the drastic effects of the the drastic effects of the GREAT DEPRESSION

10 c. Union Nationale Party10 c. Union Nationale Party

Led by Led by Maurice Maurice DuplessisDuplessis

Won the 1936 Quebec Won the 1936 Quebec provincial electionprovincial election

preached social, economic preached social, economic and political reform and political reform

Union Nationale was Union Nationale was completely dominated by completely dominated by Duplessis until his death in Duplessis until his death in September 1959September 1959

Union Nationale cont’Union Nationale cont’ Duplessis is infamous for Duplessis is infamous for

The Padlock ActThe Padlock Act (1937) (1937)– Quebec statute empowering the attorney general (AG) to Quebec statute empowering the attorney general (AG) to

close, for one year, any building used for propagating close, for one year, any building used for propagating "communism or bolshevism" (undefined)"communism or bolshevism" (undefined)

– A judge could order the lock removed if the owner could A judge could order the lock removed if the owner could prove that the building had not been so used during the prove that the building had not been so used during the preceding yearpreceding year

– empowered the AG to confiscate and destroy any printed empowered the AG to confiscate and destroy any printed matter propagating communism. Anyone printing, matter propagating communism. Anyone printing, publishing or distributing such material could be publishing or distributing such material could be imprisoned for up to a year, without appealimprisoned for up to a year, without appeal

– In 1957 the Supreme Court of Canada declared the Act In 1957 the Supreme Court of Canada declared the Act unconstitutional, an invasion of the federal field of unconstitutional, an invasion of the federal field of criminal law.criminal law.

11. Changing Role of 11. Changing Role of GovernmentGovernment

Before the Great Before the Great Depression, governments Depression, governments generally responded to generally responded to economic downturns by economic downturns by “tightening their belts” “tightening their belts” and cutting back on and cutting back on government spending government spending until it matched revenuesuntil it matched revenues

Changing Role of Gov. cont’Changing Role of Gov. cont’ Soon realized that Soon realized that

government would government would have to take a more have to take a more active role in caring active role in caring for the poorfor the poor

Unemployment Unemployment benefits, sick benefits, benefits, sick benefits, child benefits, welfare, child benefits, welfare, etc. all directly or etc. all directly or indirectly originated indirectly originated during the depressionduring the depression

= basis of modern social = basis of modern social safety netsafety net

Gov Role cont’Gov Role cont’ Ever since the Great Depression, national Ever since the Great Depression, national

economies have been strictly controlled by economies have been strictly controlled by elected governmentselected governments

Citizens expect governments to manage Citizens expect governments to manage the economy through:the economy through:– tax policy (increasing & decreasing taxes),tax policy (increasing & decreasing taxes),– monetary policy (raising & lowering interest monetary policy (raising & lowering interest

rates), and rates), and – fiscal policy (increasing and decreasing fiscal policy (increasing and decreasing

government expenditures)government expenditures)

Responses to the Responses to the Great DepressionGreat Depression

Fortunate vs UnfortunateFortunate vs Unfortunate

The Fortunate The Unfortunate

Professional People doctors, lawyers, and bankers

had steady jobs did not have their wages

reduced Government Workers did not have their wages

reduced People with Savings prices for food, clothing and

shelter were low

Single Men could not find jobs could not receive relief

payments or food vouchers Farmers on the Prairies other countries stopped buying

their wheat drought turned fertile soil into

dust

Why Attempts often FailedWhy Attempts often Failed At the beginning of the Depression, no At the beginning of the Depression, no

one foresaw that it would be as bad as it one foresaw that it would be as bad as it was for as long as it waswas for as long as it was

No one realized the extent to which No one realized the extent to which national economies had become national economies had become international and connected in natureinternational and connected in nature

Any solution to such a large problem Any solution to such a large problem needed to be radical – and democratic needed to be radical – and democratic governments hesitated in doing anything governments hesitated in doing anything drasticdrastic

A.A. USA’s AttemptsUSA’s Attempts

President Hoover did not President Hoover did not implement any relief implement any relief measures at the beginning measures at the beginning of the Depressionof the Depression

President Roosevelt President Roosevelt was was elected in 1933 and elected in 1933 and introduced the introduced the “New “New Deal”Deal”, which was a set of , which was a set of relief programs designed to relief programs designed to put Americans back to workput Americans back to work

A. 1) USA – A. 1) USA – Keynesian Keynesian EconomicsEconomics

Keynes – British Keynes – British economist who economist who proposed radical proposed radical solutionssolutions

Proposed that Proposed that governments should governments should spend their way out spend their way out of the Depressionof the Depression

1) Keynesian Economics 1) Keynesian Economics cont’cont’

Proposed: Proposed: deficit financingdeficit financing– governments should governments should borrow borrow

moneymoney, to be repaid in the , to be repaid in the future when the economy future when the economy recovered, and spend it on recovered, and spend it on huge employment projectshuge employment projects

– Employment projectsEmployment projects – to – to improve / modernize the improve / modernize the infrastructure such as building infrastructure such as building roads, bridges, dams, etc.roads, bridges, dams, etc.

Bonneville Dam on Columbia River

B.B. Canada’s AttemptsCanada’s Attempts

1) Initial Government 1) Initial Government Response Response

to Depressionto Depression Federal & provincial Federal & provincial

governments largely downloaded governments largely downloaded the responsibility of providing the responsibility of providing relief to the municipalities – but relief to the municipalities – but they did not have the resources they did not have the resources to deal with itto deal with it

PM Mackenzie King – unwilling to PM Mackenzie King – unwilling to deal with the Depression – said deal with the Depression – said he would not give Conservative he would not give Conservative provincial governments “a five provincial governments “a five cent piece” to help them deal cent piece” to help them deal with unemploymentwith unemployment

2)2) Citizens’ Response – Citizens’ Response – Riding the RailsRiding the Rails

Unemployed men Unemployed men took to “Riding the took to “Riding the rails” – hitching a rails” – hitching a ride on freight trains ride on freight trains by trying to ride on by trying to ride on top of cars / inside top of cars / inside cars (if they could cars (if they could get in) to travel get in) to travel across country to across country to find workfind work

Police tried to arrest Police tried to arrest transients for transients for “vagrancy”, but this “vagrancy”, but this did little to stop did little to stop themthem

2) Government Response = 2) Government Response = Pogey/ Dole Pogey/ Dole

““Pogey” or “the dole” Pogey” or “the dole” – similar to modern- – similar to modern-day welfare systemday welfare system

Assistance in the Assistance in the form of money form of money received from the received from the state state

Deliberately kept Deliberately kept lower than lowest lower than lowest paying jobs to paying jobs to discourage people discourage people from wanting to be from wanting to be on iton it

3) Government Response = 3) Government Response = VouchersVouchers

A piece of paper that A piece of paper that entitles the holder to a entitles the holder to a discount, or that can be discount, or that can be exchanged for goods and exchanged for goods and servicesservices

Government program that Government program that provided vouchers to people provided vouchers to people who qualified to get:who qualified to get:– FoodFood– Other essential itemsOther essential items– Sometimes rent and fuelSometimes rent and fuel

2 & 3) Pogey / Vouchers - 2 & 3) Pogey / Vouchers - ResultsResults

Brought in too late to Brought in too late to be of much helpbe of much help

Too many restrictions Too many restrictions placed upon itplaced upon it

Because so little, Because so little, people ended up people ended up starving and starving and suffering from suffering from diseasedisease

Dole did help out Dole did help out those who received itthose who received it

2 & 3) Pogey /Vouchers - 2 & 3) Pogey /Vouchers - ResultsResults

rationed sparingly – not enough people rationed sparingly – not enough people received themreceived them

hardly able to survive on what was givenhardly able to survive on what was given humiliating to live on $10 per month while humiliating to live on $10 per month while

some were living the high lifesome were living the high life

Soup kitchen

Many people, especially Many people, especially

single men, had tosingle men, had to

resort to eating at resort to eating at

Soup kitchensSoup kitchens

4) Government Response = 4) Government Response = Unemployment Relief Camps – Unemployment Relief Camps –

1930 – R.B. Bennett 1930 – R.B. Bennett (Conservative) became PM(Conservative) became PM

Set up Set up Unemployment Relief Unemployment Relief CampsCamps for single, unemployed men for single, unemployed men

Sent to camps in wilderness under Sent to camps in wilderness under military authoritymilitary authority

Men laboured Men laboured on public on public works projects works projects such as such as building roads, building roads, for 20 cents a for 20 cents a day, plus room day, plus room and board and board

4) Relief Camps - Results4) Relief Camps - Results Way of dealing with “riding Way of dealing with “riding

the rails”, and did succeed the rails”, and did succeed in getting men off the in getting men off the streetstreet

Humiliating – men felt de-Humiliating – men felt de-humanized, hidden away humanized, hidden away and forgottenand forgotten

Restrictive – no freedom of Restrictive – no freedom of mobility in and out of mobility in and out of campscamps

not productive - able-not productive - able-bodied men could have bodied men could have been used for more been used for more productive purposes; Work productive purposes; Work projects were useless, projects were useless, futile in many cases.futile in many cases.

4) Relief Camps Results 4) Relief Camps Results cont’cont’ Hotbed of discontent – men plotted ways of making Hotbed of discontent – men plotted ways of making

the government accountable for the Depression, the government accountable for the Depression, which led to:which led to:– the On-to-Ottawa Trek and the On-to-Ottawa Trek and – the Regina Riot (see # 6)the Regina Riot (see # 6)

The fact that some people would accept the The fact that some people would accept the conditions of the camps just to have a place to live conditions of the camps just to have a place to live shows us how desperate they were.shows us how desperate they were.

isolation of camps – kept men away from their isolation of camps – kept men away from their families & loved onesfamilies & loved ones

5) High Tariffs5) High Tariffs

PM Bennett – set up high PM Bennett – set up high tariffs to protect Canadian tariffs to protect Canadian industries (*see “Causes” )industries (*see “Causes” )

Thought other countries Thought other countries would lower their tariffs would lower their tariffs because they would need because they would need Canada’s staple products Canada’s staple products (*see “Causes”), but by (*see “Causes”), but by 1935, only Britain had 1935, only Britain had lowered its tariffs, so the lowered its tariffs, so the plan back-firedplan back-fired

tariffs

trade

5) Tariffs - Results5) Tariffs - Results

Had opposite effectHad opposite effect showed lack of showed lack of

understanding of understanding of global economic forces global economic forces – economy of Canada – economy of Canada too closely tied to too closely tied to foreign markets for foreign markets for Tariffs to be helpfulTariffs to be helpful

income tax was income tax was increased as a resultincreased as a result

6) Bennett’s New Deal - 6) Bennett’s New Deal - 19351935

Inspired by Roosevelt’s Inspired by Roosevelt’s “New Deal” - PM Bennett “New Deal” - PM Bennett introduced his own version:introduced his own version:

1.Progressive taxation (the 1.Progressive taxation (the more you make, the more more you make, the more you pay )you pay )

2. Maximum number of hours 2. Maximum number of hours in a work weekin a work week

3. Introduction of minimum 3. Introduction of minimum wage wage – Federal government could Federal government could

not enforce 2 & 3 since not enforce 2 & 3 since Provinces were responsible Provinces were responsible for enforcing employment for enforcing employment practicespractices

6) Bennett’s New Deal con’t6) Bennett’s New Deal con’t

4. Stronger regulation 4. Stronger regulation of working conditionsof working conditions

5. Unemployment 5. Unemployment InsuranceInsurance

6. Health and accident 6. Health and accident insuranceinsurance

7. Revised old age 7. Revised old age pension planpension plan

8. Agricultural support; 8. Agricultural support; andand

9. A marketing board 9. A marketing board to regulate wheat to regulate wheat pricesprices

New Deal OutcomeNew Deal Outcome

6 of the 8 statutes were invalidated by 6 of the 8 statutes were invalidated by the the Judicial Committee of the Privy Council (1937) because they deemed the laws (1937) because they deemed the laws outside of the federal government’s outside of the federal government’s powerpower

Only the Farmers Creditor's Arrangement Only the Farmers Creditor's Arrangement Act (which resulted in the Wheat Board) Act (which resulted in the Wheat Board) and section 498A of the Criminal Code and section 498A of the Criminal Code (dealing with unfair trade practices) were (dealing with unfair trade practices) were allowed to standallowed to stand

6) New Deal - Results6) New Deal - Results

Most of these ideas now make up our Most of these ideas now make up our modern-day “social safety net”modern-day “social safety net”

Benefits aimed at helping individuals Benefits aimed at helping individuals and businesses in times of economic and businesses in times of economic crisiscrisis

Unfortunately: TOO LITTLE, TOO LATEUnfortunately: TOO LITTLE, TOO LATE Did little to help with unemploymentDid little to help with unemployment 1935 the 1935 the CANADIAN WHEAT BOARD was was

created to market and establish a created to market and establish a minimum floor price for wheat minimum floor price for wheat Socia

l safety

7) On-to Ottawa Trek 7) On-to Ottawa Trek & Regina Riot& Regina Riot

On-to Ottawa TrekOn-to Ottawa Trek June, 1935 – thousands June, 1935 – thousands

of relief camp workers, of relief camp workers, embittered by their embittered by their experience & experience & frustration, boarded frustration, boarded trains in Vancouver trains in Vancouver bound for Ottawabound for Ottawa

7) On-to- Ottawa Trek7) On-to- Ottawa Trek

Protest gathered strength as it Protest gathered strength as it crossed the countrycrossed the country

Workers wanted:Workers wanted:– Work with wagesWork with wages– Real jobsReal jobs

7) Regina Riot7) Regina Riot

““trekkers” trekkers” stopped in stopped in Regina by Regina by RCMP – riot RCMP – riot broke outbroke out

Dozens Dozens injured and injured and one officer one officer beaten to beaten to deathdeath

7) Regina Riot – cont’7) Regina Riot – cont’•Only one striker met with Bennett – Only one striker met with Bennett – but nothing came of itbut nothing came of it

•People turned against Bennett, and People turned against Bennett, and in 1935, re-elected Mackenzie-King in 1935, re-elected Mackenzie-King as Prime Ministeras Prime Minister

8) Diversion8) Diversion People sought to escape their economic People sought to escape their economic

woes – One case:woes – One case: In 1934 – in North bay, Ontario - Dionne In 1934 – in North bay, Ontario - Dionne

Quintuplets (5 babies) were the 1Quintuplets (5 babies) were the 1stst to live to live for more than just a few daysfor more than just a few days

Soon after birth – government took over Soon after birth – government took over the welfare of the Quintsthe welfare of the Quints

8) Quints cont’8) Quints cont’ Sent to a nursery / hospital where Sent to a nursery / hospital where

they were cared for by a special they were cared for by a special team of doctors and nursesteam of doctors and nurses

8) Quints con’t8) Quints con’t Quints rarely saw their Quints rarely saw their

parents or other siblingsparents or other siblings Constantly tested and Constantly tested and

observedobserved Ontario gov. eventually Ontario gov. eventually

built a road to the nursery built a road to the nursery so tourists could watch the so tourists could watch the Quints playQuints play

Estimated that generated Estimated that generated over $500 million in tourist over $500 million in tourist dollarsdollars

After 9 year battle, Quints After 9 year battle, Quints finally returned to familyfinally returned to family

In 1998, the Ontarian In 1998, the Ontarian government gave the government gave the Dionnes a settlement of $4 Dionnes a settlement of $4 million CDN. million CDN.

Dionne Family Home

Tourist attraction

Overall Government Responses Overall Government Responses = Unsuccessful = Unsuccessful

Government experimented; did try options to Government experimented; did try options to alleviate poor economic conditions.alleviate poor economic conditions.

Prior experience was not available to draw Prior experience was not available to draw upon.upon.

Other countries were doing similar things, so Other countries were doing similar things, so they did the best they could.they did the best they could.

Federal government did bail the provinces out Federal government did bail the provinces out with relief money ($20 million to provinces).with relief money ($20 million to provinces).

put people to workput people to work In 1931, when they finally gave emergency In 1931, when they finally gave emergency

relief, the Depression had already been in full relief, the Depression had already been in full swing for three years.swing for three years.

Responses & Results - Responses & Results - OverallOverall

Growth of “Protest Parties” (third parties) Growth of “Protest Parties” (third parties) such as the CCF showed the naïveté of the such as the CCF showed the naïveté of the federal government which seemed to have federal government which seemed to have had no idea how desperate rural Canadians had no idea how desperate rural Canadians were.were.

adopted a plan in 1939 for “arsenal of adopted a plan in 1939 for “arsenal of democracy” to help put people back to workdemocracy” to help put people back to work

Ultimately, the production of goods and Ultimately, the production of goods and weapons for WWII ended the Depression for weapons for WWII ended the Depression for Canadians.Canadians.