The Great Depression

The Regina Riots of 1935

How “roaring” were the 1920’s?

After WWI, the U.S. did not face the type of destruction found in Europe.

The U.S. came home-isolated themselves and got to to work.

The 20’s were a time of great prosperity for the U.S.The nation’s overall income rose from $74 billion in 1923 to $89 billion in 1929.

Prosperity for All?Behind this façade of success, masked an incredible inequality in the distribution of wealth.Henry Ford was the classic example of this: He reported $14 million, while the average income was $750.00!Said another way, 1% of the population enjoyed 75% of the nation’s disposable income.Manufacturing increased 32%, but worker’s wages only increased 8%. These profits went directly to the corporations, which rose 62%

An Unstable Economy

Unequal distribution of wealth causes instability within the economy because total supply and demand do not equal each other.

There was an over supply of manufactured goods-the middle class wanted to buy more, but didn’t have the money. The wealthy did buy goods, but only spent a small portion of their income.

How the Economy Kept Going

The economy of the 1920’s relied on two things: credit and the luxury spending and investing of the rich.Installment buying or buying on credit reached all time levels in 1929. 60% of all cars and 80% of all radios were purchased on credit.An artificial demand was created for products for which people could not ordinarily afford.This worked as long as people remained confident in the economy.

The Stock Market

Massive speculation began in the late 1920’s.Many people bought stocks on margin. You could put $10 up of your own money and borrow $75 from a banker. Sold at a profit a year later, people at times were making a 4300% profit.There was also unequal distribution of wealth among companies. The radio and automotive companies controlled the manufacturing sector. Agriculture at this time was virtually ignored.

The Problem with EuropeUnequal distribution of wealth around the world-the U.S. was prospering, but Europe was not.By 1929, $1.25 billion had been loaned to Europe, most of which was used to buy U.S. goods.The U.S. kept tariffs high to protect American goods and the U.S. tried to be as self-sufficient as possible.The U.S. would not buy products from Europe and after a time, Europeans could not pay back the interest on their loans-let along buy more products. U.S. exports fell by 30%

When Confidence Fades

Low stock prices beginning in Oct. of 1929 began to shake people’s confidence in the economy.

Stock prices could not stay high forever.

The rich stopped investing in stocks and luxury items. The middle class and poor stopped buying on credit for fear of losing their jobs.The stock market crash on Tues. Oct. 29, 1929 was the spark that set off an already unstable economy.

A Vicious Circle Begins…

The middle class and poor could not afford to pay the interest on their loans.Manufacturing was decreased by 9%, people began to lose their jobs.More loans were defaulted on, radios and cars were returned and manufactured goods began piling up in warehouses.Industries associated with radios and autos began falling apart-people no longer needed tires, gasoline or increased electricity.

Banks become part of the “Circle”During the 1920’s banks and bankers had been heavily investing the stock market. Banks were the primary source of money for speculators or those people who bought stocks on credit.Banks were also independently investing in the stock market as well.As people put money in banks, this was the money that was used for loans and stocks.As people’s confidence weakened, a rush on the banks began. Banks soon ran out of money (as most of it was loaned or lost in the stock market) and what people had put in the bank was lost!! In the 30’s, over 9,000 banks closed.

The Effects of the Crash Internationally

After the stock market crash, the rich stopped loaning money to Europe.

The U.S. raised tariffs even higher to protect the weakened manufacturing industry. (Hawley-Smoot Tariff of 1930)

Countries all around the world stopped buying American products--which lead to….

And the Circle Broadens

….the loss of more jobs, the closing of more stores, the closing of more banks and factories.

Unemployment grew to 5 million in 1930 and 14 million by 1932.

One Final “Issue” to Deal With

The Dust Bowl-while not a direct cause of the depression, greatly affected agriculture, which had been an ignored industry in the 1920’s.

Poor agricultural practices of plowing and planting were exacerbated by the drought.

The drought lasted from 1931-1939, with the worst coming in May of 1935. May 14th is actually called “Black Sunday”.

The Dustbowl

By 1940, 2.5 million people migrated from the Great Plains in search of work, food, land-survival!Most of these people were called “Oakies”, even though Oklahoma was only one of the states affected.Many other people lost their farms or were unable to pay their farm mortgages without government assistance.

So What Actually Caused the Depression?

Even historians and economists do not agree!More than likely it was a multitude of different causes all happening at the same time (WWI anyone?)The depression was certainly more complicated than just the crash of the stock market.You must come to your own conclusions, but do not underestimate the power of confidence in an economy!

The Depression Globally

By no means did the Depression just affect the United States.Each country suffered and handled the issues differently. You will have the opportunity to explore that idea later this week.For the next few days we will be taking a look at the depression in Canada and in particular the Regina Riots of 1935.

The Depression in Canada

Canada was affected as much, if not more than the United States.

GNP dropped 40% and unemployment reached 27%.

1 in 9 people were on government relief

The Western prairies were also affected by dust storms and draught

Bread lines at Yonge St. in Toronto

The Beginnings of the Riot

Also known as the On-to-Ottawa Trek began in 1935.Relief did not come for free-Prime Minister Bennett required those on relief to join work camps in the west.The conditions in the relief camps were dismal and workers were given $.20 per day.Workers began to demand access to first aid, workers’ compensation and the right to vote in federal elections.

The Decision to go to the Government

In April 1935 1,600 workers called for a strike and headed to Vancouver, BC to protest.

After two months (June 3), hundreds of workers traveled to Ottawa to formally to take their grievances to the federal government.

Workers traveling to Ottawa

An Unscheduled Stop

Once the protestors reached Regina Saskatchewan, Prime Minister Bennett invited 8 leaders to meet with him.

The other protesters were watched by the Royal Canadian Mounted Police.

The meeting did not go well-it essentially turned into a shouting match.

Bennett accused the “Trekkers” of being radicals.

The Regina Riots Begin

On July 1, 1935 all the protesters reunite and call a public meeting in the town square.1,500-2,000 people attended of which only 300 were Trekkers.3 large vans around the square hid Royal Canadian Mounted Police riot squads.At 8pm, a whistle was blown and the RCMP and Regina police charged.

The Riots Continue

People fought back with anything they had available-sticks and stones, etc.Police attacked with clubs, fired revolvers into the crowd and used tear gas.Store windows were broken, but none of the stores were looted.After it was over, 120 Trekkers had been arrested and the police claimed 39 injuries.1 plainclothes police officer was killed as well as one rioter.

After the Riots

The participants are gathered into exhibition grounds and guarded by police and machine guns.A barbed wire stockade was built and Trekkers were denied food and water.Trekkers called Premier Gardiner, who accused the police of inciting a riot. He also called for food and transportation for the Trekkers back home or to the camps.

The ResultsDuring the on-going trials, a Justice Minister made the statement that shots were fired by the protesters and returned by the police.This was never proved during the lengthy trials.The riot made national news all across Canada. Bennett and his conservative party lost much support.The communist party gained strength in Canada.The relief camps were disbanded or taken over by the provinces.

The Regina Riots in Action