The Thirties: A Decade of Despair

The Thirties: A Decade of Despair Falling Off the Economic Edge Socials 11

Recap: The End of the Boom • Unemployment in 1929: 4.2% • 1922-26 • Canadian companies issued new shares to a value of $700 million • Profits went up, share values went up • Buying “on margin” – buying shares with only 10% down payment • Loans readily available • Price of stocks inflated beyond real value

Crash! • Some cautious investors started selling their stocks in order to cash in on high profits • Others rushed to follow their lead • Sellers panicked as the value of stocks fell dramatically

Crash! • October 29, 1929 – New York Stock Market crashed, followed by Toronto and Montreal • Investors went bankrupt since they borrowed heavily • Contributed to but DID NOT CAUSE the Depression!

Causes of the Depression • Wheat • Overproduction • Protectionism • Treaty of Versailles

Wheat • 1927 – price of wheat on the world market began to fall • Supply and demand – more wheat was being produced than was being sold • Canadian and U.S. wheat farmers depended on foreign markets (exports), but other countries were producing their own wheat • Sales decreased -> income of farmers dropped -> farmers unable to meet mortgage and loan payments

Overproduction • Overproduction – more goods being produced than were being sold • At first, manufacturers continued to stockpile, then they began to cut back production • This led to layoffs -> less income -> less spending on consumer goods • Vicious cycle

Protectionism • U.S. imposed high tariffs on foreign goods coming into the country • Meant to protect domestic market by making foreign items more expensive • Other countries then did the same in response -> slowdown in world trade as opportunities for export shrank

Treaty of Versailles • Germany unable to make reparations – economy in ruins • France and Britain were relying on repayments in order to pay off their debts to the U.S.

Depression • A period of severe economic and social hardship, massive unemployment, and terrible suffering.

Canada and the Depression • Canada’s economic weakness: dependency on the export of primary resources • Wheat – supplied 40% of world demand • Newsprint – supplied 65% of world demand

Cycle • Demand for product falls • People lose jobs • People can’t buy goods • People who make goods lose jobs • Millions of Canadians out of work

Desperate Years • Factories and businesses closed • People evicted from their homes • Loss of respect • “pogey” – government relief payments given to those who had no alternative source of income • long lines • Public declaration of financial failure • Swear that they had no home and nothing of value • This would get them food vouchers

Private Charities • Used clothing and meals • Soup kitchens

Deepening Depression • By 1933, ¼ of the workforce was unemployed • Jobless men “hopped” freight trains - “riding the rods” – rode on the roof or clung to the underside of the train • Shanty towns or “jungles”

Drought on the Prairies • 1928 – drought begins, lasts almost 8 years • 1930-31 – wind and dust storms • Palliser’s Triangle especially badly hit • Plague of grasshoppers • 1935 – Prairie Farm Rehabilitation Administration Act for irrigation systems and reservoirs • too late

The Disadvantaged • Poor got poorer • Employment of women blamed for the depression. • Aboriginal families on relief got only $5/month – expected to “live off the land” • Chinese families were starving • Provincial government started food kitchens, but they were not well-funded • Expected Chinese men to cost ½ of what it cost to feed white men

The Disadvantaged • Immigrants targeted • Anti-Semitism: hatred and prejudice towards Jews • Jobs closed to Jews – signs posted forbidding applications • 10 000 immigrants deported in the first half of the Depression • 1931 – government put a complete stop to immigration

Questions? • Chapter 4 Test: November 2

The Thirties: A Decade of Despair