1. “Roaring Twenties” become “Dirty Thirties”: Canada and the Causes of the Great Depression also see:

2. The Trigger: The Stock Market Crash

3. The Trigger: The Stock Market Crash
September 1929 – Prices begin to fall
Investors begin to lose confidence in the stock market and the companies they’d invested in
Tuesday, October 29, 1929  the stock market crashed as investors quickly sold their shares before they lost all their value

4. The Globe, October 30, 1929

5. How did Canada go from the optimism and prosperity of the 1920s to the “Dirty Thirties”?

6. What were the 5 main long term causes of the Great Depression in Canada?

7. 1. Overproduction -- Businesses were producing more goods than they could actually sell.
The industrial capacity of both the U.S.A. and Canada had expanded beyond the ability of the consumer to consume

8. During the 1920s, many industries were expanding, and profits were spent on adding to factories or building new ones
Huge supplies of manufactured goods were stockpiled because they could not be sold
Question for the class: why would this be harmful to the economy (having too many goods and no one to sell them to?) Guiding questions – if there is a lot of something, would you pay a lot for it? If it’s unique, would you pay a lot for it? Demand drives pricing
AND if no one is buying the product, they are spending more money producing it than they are taking in – have to pay for workers, raw materials, etc.

9. 2. Canada was dependent on exports of natural resources/staples.
1920s: about 25% of the Canadian Gross National Product was derived from exports of staple products
What happens if other countries stop buying?

10. Wheat, fish, paper, minerals, coal, wood – shipped to Europe as it recovered from the war, and to the US
Overproduction!
As the economies of other countries started to decline, there was less demand for Canada’s raw materials

11. 3. Canada’s economy was very dependent on that of the United States.
1920s: 40% of Canadian exports were sold to the USA
A lot of US investment in Canada
So…what happened when the US economy failed?
Decreased demand for Canadian exports
Closing of US branch plants in Canada
Canada was the second hardest hit country by the Depression, after the US

13. 4. Protectionism Increasing trend in the 1920s
Tariffs: money (“duties”) collected on goods coming in to a country
Meant to discourage imports and protect industries from foreign competition
US protectionism threatened Canada’s export market

16. 5. Canadians were going into debt.
Buying stocks “on the margin”
Buying consumer goods on credit
Farmers and businesses borrowing from banks to pay for equipment and labour

17. So when the economy began to fail…
Banks wanted repayment
Companies went bankrupt and laid off workers
Canadians couldn’t pay back their debts

18. What were the long term effects?

20. Widespread Unemployment

21. More recent unemployment stats

22. Canada and causes of great depression
crash course on the roaring 20s