CANADA IN THE

GREAT
DEPRESSION
Remember…
 The Canadian economy was in recession after
WWI but by the mid1920s the economy began to
recover

 Consumer spending increased allowing businesses to

rehire workers and ramp up production. American
investment spurred Canadian growth.
Economic Cycle
 Prosperity – economy is booming, income levels are
high and unemployment rates low
 People are spending a lot of money which can cause
inflation, rise in prices on goods and services.
 (Banana goes brown you buy a new one and put the other
in the compost)

 Recession – production and employment are low and

people have less money to spend so the economy slows
down
 (Banana goes brown you eat it anyway)
Elements of the Economic Cycle
 Recovery – the demand for goods increases
leading to more jobs and higher incomes, the
economy begins to improve
 (Banana goes brown you use some eggs and flour
to make banana muffins)

 Depression – a severe economic downturn that lasts

several years
 (you have no banana)
The Stock Market
 1929!
 Stocks had increased in value in the 1920s and the
stock market was seen as an easy way to get rich
quickly

 The lure of getting fast wealth and easy money

caused many to purchase stocks on credit and the
value of stocks exceeded their true worth
Crash! Black Thursday, Black Monday
and Black Tuesday
 On Black Tuesday (29 October 1929) shares on the
Toronto Stock Exchange were losing value at the
rate of a million dollars per minute.
 (Adjusted for inflation in 2008, that is equivalent to losing
$12.3 million each minute)

The stock market crash signalled the beginning but

did not cause the Great Depression
Vulnerabilities
Keep in mind
 The Canadian economy was tied to consumerism

and relied on people to purchase manufactured

goods

 The productivity of the 1920s increased by c. 40%

while workers wages increased 8%
Overproduction
 Supply outstripped demand and when many
workers could not purchase the goods being
produced businesses stockpiled goods then slowed
production/manufacturing
The Aftermath of WWI
 Many countries had borrowed money from the US
during WWI and

 European economies were in shambles after war

and they had difficulty re-paying their loans to the
US
 Britain
and France were reliant upon German
reparations payments to repay the US and when
Germany could not pay, Britain and France could not
pay
Protectionism
 Many countries, including the US, implemented
tariffs on imported goods and Canadian products
became more expensive and therefore more
difficult to sell in other countries

 This caused the Canadian economy to slow down

even more
 Speculation - Buying on Margin
 People bought stocks with a small
down payment in the hope of
repaying the loan and making a
profit when the stock increased in
value.

 Not a sound strategy since the

success of this depended upon
being able to sell stock at a much
higher price than the investor
initially paid
Poor Canada

Dependence on the US
 The collapse of the American economy was a

disaster for the Canadian economy as Canada had

grown dependent upon American investment and
purchasing of Canadian goods
Why was Canada so Vulnerable?
Few primary products needed
 Canada’s economy was heavily reliant on the sale
of wheat, fish, minerals and pulp & paper in
international markets
 Canada faced competition from Argentine and
Australian wheat and farmers suffered when the
price of wheat fell
 When international demand decreased the
Canadian workers were unable to continue to buy
consumer products
From the Town to the Country
Dust Bowl
 In the late 1850s John Palliser was sent to the
Canadian plains to determine their agricultural
potential.
 ill-suited for settlement because of desert-like conditions.
 BUT
 Subsequent explorers had a different opinion and declared
that the area was lush and fertile.
A Saskatchewan Farm
Problems for the Prairies
 Rainfall
 average of 40 % less precipitation than normal and the
drought lasted for almost the entire decade
 Farming practices
 Ploughed excessively and topsoil was easily lost
 It coincided with the Great Depression
 Even if a farmer was able to yield a sufficient crop there
was a diminished market
 Farm incomes in the Prairies dropped from $363
million in 1928 to (- $10.7 million) in 1931
 “Migrant
Mother”
(1936) by
Dorthea
Lange
 Florence
Thompson
and her
children
 I saw and approached the hungry and desperate mother, as
if drawn by a magnet. I do not remember how I explained
my presence or my camera to her, but I do remember she
asked me no questions. I made five exposures, working
closer and closer from the same direction. I did not ask her
name or her history. She told me her age, that she was
thirty-two. She said that they had been living on frozen
vegetables from the surrounding fields, and birds that the
children killed. She had just sold the tires from her car to
buy food. There she sat in that lean- to tent with her children
huddled around her, and seemed to know that my pictures
might help her, and so she helped me. There was a sort of
equality about it. (From: Popular Photography, Feb. 1960)