The Great Depression

A Shift in Ideas ► The communist movement met very little support in Canada for many reasons  Belief in democratic principles  Prosperity  Ability of the powerful industrialists to influence the government

Prelude to Depression ► The Canadian economy of the twenties was booming and the future looked bright ► Record crops and a Laissez-faire attitude towards business seemed to herald an age of unchecked prosperity

Prelude to Depression ► The Economy had three distinguishing features  Relied heavily on exports  It was closely tied to the American Economy  Canada had over expanded (using borrowed money for production) ► This left the economy in a precarious position

Prelude to Depression ► Competition from Europe increased as it recovered ► The record crop of 1928 could not be sold ► In order to protect domestic producer the United States introduced the Hawley-Smoot Tariff Act ► This act raised tariffs on imported goods ► The Mackenzie King Liberals also raised tariffs to protect Canadian producers

The Crash ► On October 29, 1929 investors made fearful of falling prices began selling stock at an alarming rate ► This led to a world wide economic collapse

The Depression Starts ► The stock market crash of 1929 was the beginning of an era stretching from known as the Great Depression

The Depression Deepens ► The depression affected all aspect of the Canadian economy  Farming  Railways  Auto ► Without the foreign markets people did not have a way to sell goods ► Without a place to sell goods no one had money to buy goods

The Depression Deepens ► As money became scarce business owners were forced to cut costs and fire employees ► Unemployment skyrocketed

The Farmers ► Drought also struck the prairies further limiting the ability to generate revenue in the Canadian west

The Farmer Cont… ► Thousands of farmers were forced into bankruptcy. Nearly Westerners migrated from the prairies.

Depression Politics ► Prime Minister Mackenzie King promised to “contribute to relief” but said “not a five- cent to a province with a Tory administration”

Unprecedented Crisis and Traditional Answers ► The Canadian government's response to the Depression was to maintain long-standing assumptions and practices concerning the role of government ► Prime Minister Mackenzie King refused to provide the provinces with additional funds to alleviate the growing distress. ► His inaction contributed to his government's defeat in the 1930 federal election.

The Bennett Years ► Bennett becomes Prime Minister ► Bennett started a program similar to that of Franklin Roosevelt’s “new deal”

Bennett’s Response ► He was even more reluctant to initiate extensive government intervention in economic and social arenas. ► He disliked spending money on massive public works or relief payments. ► In his opinion, unemployment was a provincial and municipal responsibility, and neither level of government could expect significant funds from Ottawa.

What is a Man to Do? ► While government "inaction" fuelled frustration among the unemployed. ► The government feared that the thousands of unemployed would embrace communist beliefs and pose a threat to the political and economic status quo.

Idle Hands are the Devils Playground ► Work camps were set up and men were paid $0.20 a day ► The purpose of these camps was to keep the men out of the cities and keep them from becoming communists

On-To- Ottawa Trek ► The camps were isolated, the work was hard, and the pay was poor. ► By the summer of 1935, thousands had left the camps and congregated in Vancouver. ► They decided to trek by rail to Ottawa and demand government action.

Of They Go ► Hundreds of unemployed joined the On-to- Ottawa Trek as it traveled across the prairies.

Reading ► The “On – To – Ottawa Trek” ► In groups of Four – Five do the reading and then discuss the significance of these events ► What impact does this have on the common person? ► What impact does this event have on Canada? ► Be prepared to share your discussion with the rest of the class.

The Bennett Years ► Bennett also tried to reach out to world markets ► Bennett tried once again to revive the idea of colonial preference ► He succeeded in negotiating a deal where countries of the British Commonwealth would lower tariffs if it did not affect their own industry ► This proved ineffectual

The Bennett Years ► In 1935 with an election around the corner Bennett introduced his “new deal” of government spending on social programs ► The Liberals attacked Bennett claiming that the programs were outside the rights of the Federal Government ► Bennett was defeated and King returned to power

King…Again ► King then sent Bennett’s “new deal” to the courts where it was determined that it was not constitutional ► The powers for these reformed rested with the Provincial governments ► Upon winning the election, King's Liberals quickly negotiated the Reciprocal Trade Agreement with the United States.

Overview ► Classic Liberalism was not able to repair the damage of the depression ► The market would not right itself ► The idea of government involvement in the economy had become more accepted ► The country had not fallen to communism

3 – 2 – Things you learned 2- Things you already knew 1- Question