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Causes of The Great Depression. Throughout the years of 1929 to 1939, there was a world wide depression and Canada was one of the worst affected countries.

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Presentation on theme: "Causes of The Great Depression. Throughout the years of 1929 to 1939, there was a world wide depression and Canada was one of the worst affected countries."— Presentation transcript:

1 Causes of The Great Depression

2 Throughout the years of 1929 to 1939, there was a world wide depression and Canada was one of the worst affected countries. Financially and economically, the country began to collapse regardless of what was done by political power. Throughout the years of 1929 to 1939, there was a world wide depression and Canada was one of the worst affected countries. Financially and economically, the country began to collapse regardless of what was done by political power. As the depression carried on, 1 in 5 Canadians became dependent on government relief. 30% of the labour force was unemployed, where as the unemployment rate had previously never passed 12%. As the depression carried on, 1 in 5 Canadians became dependent on government relief. 30% of the labour force was unemployed, where as the unemployment rate had previously never passed 12%.

3 Over-production of goods. Over-production of goods. Canadas dependence on a few primary products. Canadas dependence on a few primary products. Canadas dependence on the U.S. Canadas dependence on the U.S. High tariffs. High tariffs. Too much buying on credit. Too much buying on credit. Underlying causes

4 Over-production of goods Stock piles of almost all goods were everywhere. Stock piles of almost all goods were everywhere. Factories had to slow down their production; many employees were laid off. Factories had to slow down their production; many employees were laid off. E.g. Automobile centres such as Oshawa and Windsor produced 400,000 cars in To do this made little sense because Canadians already owned over 1,000,000 cars and in the best year ever had purchased only 260,000. E.g. Automobile centres such as Oshawa and Windsor produced 400,000 cars in To do this made little sense because Canadians already owned over 1,000,000 cars and in the best year ever had purchased only 260,000.

5 Canadas dependence on a few primary products Canadas economy depended heavily on exports of natural resources to other countries (e.g. Europe, U.S.) Canadas economy depended heavily on exports of natural resources to other countries (e.g. Europe, U.S.) E.g. In the late 1920s Canadas wheat industry faced growing competition from Argentina and Australia which were also wheat-exporting countries. The price of wheat on the world market dropped. With little income, farmers could not purchase machinery and manufactured goods from Eastern Canada. E.g. In the late 1920s Canadas wheat industry faced growing competition from Argentina and Australia which were also wheat-exporting countries. The price of wheat on the world market dropped. With little income, farmers could not purchase machinery and manufactured goods from Eastern Canada. In 1928, Canadian farmers bought 17,143 tractors. Five years later, they bought only 777. In 1928, Canadian farmers bought 17,143 tractors. Five years later, they bought only 777.

6 Canadas dependence on the U.S.A. In the 1920s, the U.S. had replaced Britain as the largest buyer of Canadian products and the largest investor into our economy. In the 1920s, the U.S. had replaced Britain as the largest buyer of Canadian products and the largest investor into our economy. When the depression hit the U.S., banks closed, industries collapsed, and people were out of work as factories shut down. No longer did Americans need our lumber, paper, wheat, and minerals. It was inevitable that Canada's economy would suffer too. When the depression hit the U.S., banks closed, industries collapsed, and people were out of work as factories shut down. No longer did Americans need our lumber, paper, wheat, and minerals. It was inevitable that Canada's economy would suffer too. It was not surprising that when the American economy got sick, Canada also suffered. One comedian said, "When the United States sneezed, the rest of the world got pneumonia." It was not surprising that when the American economy got sick, Canada also suffered. One comedian said, "When the United States sneezed, the rest of the world got pneumonia."

7 High tariffs In the 1920s, war-torn countries needed many of the surplus manufactured goods Canada produced. Unfortunately, they were heavily in debt from the war and often could not afford to buy them. In the 1920s, war-torn countries needed many of the surplus manufactured goods Canada produced. Unfortunately, they were heavily in debt from the war and often could not afford to buy them. At the same time, many countries adopted a policy known as protective tariffs (a tax on imported goods). In order to protect their home industries from foreign competition, they placed high tariffs on foreign imports. Country X found that its goods were being kept out of country Y by high tariffs. Soon, country X placed high tariffs on imports from country Y. At the same time, many countries adopted a policy known as protective tariffs (a tax on imported goods). In order to protect their home industries from foreign competition, they placed high tariffs on foreign imports. Country X found that its goods were being kept out of country Y by high tariffs. Soon, country X placed high tariffs on imports from country Y. World trade began to slow down. Surplus goods in one country were kept out of another country that needed them. World trade began to slow down. Surplus goods in one country were kept out of another country that needed them.

8 Too much buying on credit Many families got themselves hopelessly into debt with credit buying. The piano that cost $445 cash was purchased with $15 down and $12 a month for the next four or five years. Goods ended up costing far more than they were worth. Many families got themselves hopelessly into debt with credit buying. The piano that cost $445 cash was purchased with $15 down and $12 a month for the next four or five years. Goods ended up costing far more than they were worth. If the wage earner became sick or was laid off work it was often impossible to keep up the payments. As the depression worsened, many people lost everything. If the wage earner became sick or was laid off work it was often impossible to keep up the payments. As the depression worsened, many people lost everything.

9 Immediate Causes Drought Drought Stock Market Crash Stock Market Crash

10 Drought In 1929, a terrible drought (a long period with no rain) began that lasted nearly 10 years. In 1929, a terrible drought (a long period with no rain) began that lasted nearly 10 years. Crops dried up and the soil turned to dust; the wind then blew away the dry soil. Crops dried up and the soil turned to dust; the wind then blew away the dry soil. Storms of dust occurred often leading parts of Alberta and Saskatchewan to be referred to as the Dust Bowl. Storms of dust occurred often leading parts of Alberta and Saskatchewan to be referred to as the Dust Bowl. Nearly 14,000 farms were abandoned during the depression. Nearly 14,000 farms were abandoned during the depression.

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13 Stock Market Crash Too many people were buying stocks on margin which means that they borrow money from the bank in order to buy more stocks. Too many people were buying stocks on margin which means that they borrow money from the bank in order to buy more stocks. Often investors had to put up collateral to back up their loans; homes, businesses, cars and other assets were used Often investors had to put up collateral to back up their loans; homes, businesses, cars and other assets were used The crash occurred on Black Tuesday, October 29, The crash occurred on Black Tuesday, October 29, Families lost all their money and businesses went bankrupt. Families lost all their money and businesses went bankrupt.

14 Black Tuesday


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