The GD lasted for ten years. It was the worst economic disaster- it brought terrible suffering to many people. Stock Market Collapsed ! Businesses went.

The GD lasted for ten years.

It was the worst economic disaster- it brought terrible suffering to many people.

Stock Market Collapsed !

Businesses went bankrupt !

Workers lost their jobs!

Prairie farmers in Western Canada experienced a terrible drought.

Dependence on the sale of exports of natural resources.Too much optimism about the future.Growing dependence on credit.High Tariffs Low Incomes = low standard of living!

Canada’s income drew upon natural resources:Wheat Fish PaperMineralsCoal Wood

The good times were dependent upon the continued sale of these products!!!!

Society believed that the good times would last forever.Farmers borrowed money from financial institutions to purchase more land.They bought more factories and machines and hired extra workers.It was based on the belief that the demands for goods would increase!

Banks lent money out because they felt confident about the future.Buying on credit became popular. People were buying every product ranging from:

HomesCarsAppliances Entertainment

Some people even bought shares of a company stock on credit, called buying “on margin”.A share is one unit of ownership in a company that can be purchased or sold in a placed called a stock market.Investors were buying on margin offering up their homes, business, cars and other assets.This was risky, but there was a belief that shares would steadily increase in value and that they would be cashed in later at a higher price.

Many businesses found that they had over produced, and began to stockpile their goods in a warehouse.Suddenly, there was less demand for Canadian natural resources.Factories in other countries had large stockpiles of goods, they to started to produce less.Therefore, they didn’t need to depend on Canadian exports.The Canadian government decided to raise the tariffs on foreign imported goods.In turn, other countries raised their tariffs on imports which resulted into less trades.

Consequently, the demand for Canadian goods, fell dramatically.Canadian workers were laid off.Economic clouds were gathering in the later 1920s, but few people noticed …

A terrible drought hit the prairies in 1929—it lasted ten years.For example, lack of rain, over farming, high temperature, and plagues of locusts turned sections of the Canadian West.The drought lasted for ten years.Between 1931-1941 250,000 farmers abandoned their farms in the West and joined the ranks of the unemployed.

The start of the GD was triggered by the stock market crash on October 29th, 1929.This day was called “Black Tuesday” because prices for shares collapsed in the US and in Canada.Investors suddenly realized that their stocks were over priced, and tried to sell them all at once.On this day in NY over 16 million shares traded, lost half their value (9 billion).16 Companies lost 300 million. Many investors lost their savings and went bankrupt.Some even committed suicide.

The crash resulted into a mass unemployment.This meant that there was less money in the economy and less purchasing power.With the collapse of the stock market in 1919, companies that had over spent and over produced misjudged their markets and went bankrupt.PM King thought that the stock market crash would be a temporary setback for the Canadian economy.

For one cause or another, it has become necessary to impose restrictions upon the use of many commodities, including not a few of the necessities of life.    Mackenzie King

The next election was being held in 1930—King had a new opponent Richard Bennet.However, King believed that he could win the election for these reasons:

He lowered taxes Created a balanced budget Increased trade with Britain

Despite King’s efforts, Bennett won and passed laws to subsidize or provide funds. For example, he helped farmers transport their grains. He also lowered taxes.Consequently, many voters blamed King for doing nothing to correct the bad times. One quarter of Canadians were unemployed and looking for work.The Depression was world wide and people were desperate. This created opportunities for dictators. (Next week’s lesson – the rise of totalitarian governments in Europe).

Please complete the following questions for homework:1.How did the economic conditions of the 1920s, compare with those of the 1930s?2.What role did the government play in the lives of Canadians in the 1930s?3.Explain what was wrong with the Canadian economy based on the following headings:oNatural ResourcesoBuying on credit oOver production of goodsoRaising tariffsoA low standard of living4. How did the drought in the West make the Great Depression worse?5. Why did the stock market collapse on October 29th, 1929.6.In the library or at home – Research the following: What was the Co-operative Commonwealth Federation?7.Explain the difference between Communism and Socialism.8. Who was Agnes Macphail?