From Boom to Bust

1. From Boom to Bust

2. Canada Moves Toward Independence • After the Chanak Crisis King continued to move Canada toward independence. • King announced that Canada would now sign its own international agreements • The first was the Halibut treaty of 1923 signed between Canada and the United States

3. 1921-1925: Canadian Politics • 1920 Dominion Elections Act allows women to run for election to parliament for the first time • In 1921, Agnes Macphailbecame the first woman to be elected to the Canadian House of Commons. • A corruption scandal discovered late in his first term damaged Prime Minister William Lyon Mackenzie King's popularity • Early in his second term, another corruption scandal, this time in the Department of Customs, regarding the smuggling of alcohol was revealed, which led to more support for the Conservatives and Progressives, and the possibility that King would be forced to resign, • King called an election in 1925, in which the Conservatives won the most seats, but not a majority in the House of Commons. • King held onto power with the support of the Progressives, even though he had lost the election and his own seat in the HOC. • In 1926 King advised the Governor General, Lord Byng, to dissolve Parliament and call another election, but Byng refused, the only time in Canadian history that the Governor General has exercised such a power. • Byng called upon the Conservative Party leader, Arthur Meighen, to form a government. Meighen tried, but was unable to obtain a majority in the Commons. So after the shortest term in office of any Canadian PM, Arthur Meighen called an election in 1926.

4. Election 1925/26 • In the  Canadian federal election, of 1926, King appealed to the Canadian public to support the Liberal argument that the Governor General had interfered in politics. • The liberals and King argued that there had been a violation of the Constitution • Although no violation of the Constitution arose, King managed to convince the Progressives the Governor General was wrong to not support the PM. • This disagreement and the subsequent election is known as the King/Byng Crisis. • King and his party won the election of 1926 with a clear majority in the House of Commons.

5. Burning Questions! Think/ Pair/Share • Under what circumstances, if any, do you think the Governor General should be allowed to step in and interfere with the policies of the Prime Minister? • What do you think are some of the problems with minority governments? What are some of the advantages? What do we have now? Explain which is the superior form of government in your opinion.

7. Boom • The outcome of the 1926 election was due in large part to prosperity • Workers in factories North and South of the border were pouring out radios, refrigerators, cars and other consumer products • Grand hotels were being built across the country drawing American tourists

9. Americanization • Prosperity came from a new source • Canada had formerly traded East and West with Britain and Asia • Britain could no longer afford to invest in Canada following the war. • The United States had made a lot of money from the war and was looking to Canada as a consumer market, and vice versa

10. Americanization Cont’d… • Many American companies created branch plants in Canada to avoid tariffs. • Many highways were built linking Canada to the United States, and we began driving on the right side of the road • Air travel, radio, and telephone links began to network into the U.S. • Average work week was reduced from 50-60 hours per week to 44-50 hours increasing leisure time substantially

11. The Roaring 20’s Changing Times • More and more powers being turned over to provincial governments • Much of Canada relied on natural resources which fell under provincial jurisdiction. • Women voters demanded pensions for widows, low income mothers, and the disabled. • Political advocates like James S. Woodsworth argued for a national pension. When his government won a majority in 1926, Mackenzie King followed up on his promise to introduce legislation that became the Old Age Pensions Act in 1927. • •The maximum pension was $20 per month or $240 per year. • •It was available to British subjects aged 70 or over who had lived in Canada for 20 years. • •It was restricted to seniors whose income, including the pension benefits, was less than $365 per year (this was determined by the "means test"). • •Status Indians were excluded.

12. The Roaring 20’s • Provincially Quebec, BC, and Ontario were big winners during the 1920’s because of a new system to redistribute power over resources to the Provinces • In 1929 after five years of good times, the average household income was $1200 dollars. • Canadians read American books and watched American movies. Canadians began to have concerns regarding the “Americanization” of Canadian culture • Canada begins to see the emergence of service clubs such as Kiwanis and Knights of Columbus

13. American entertainment at it's finest: what we watched in the 1920's.

14. The Roaring 20’s • A nation of 10 million was buying 2 million movie tickets a week (for mostly American movies) • American pro baseball became the big pass time in North America • The NHL had 6 teams, (2 Canadian) • Canadian Artwork began to be recognized and work such as that by the Group of 7 and Emily Carr became well known. • This was seen as a much needed Canadian expression of Culture.

15. Red Maple by A.J. Jackson

16. Roots of Depression • Canada’s prosperity in the 1920’s had two great flaws: • Most Canadians could not afford the mass goods being produced • Canada was a resource export economy, dependent on the export of things like grain and newsprint. • This meant that we were heavily dependent on the health of the world economy.

17. Signs of Sickness • The wheat market had been dominated by Canada for much of the 1920’s however many other countries were now exporting wheat on the world market • Drought destroyed much of the 1929 crop in Canada, and world wheat prices were falling quickly from $2 to $1.09 per bushel • This devastated many farmers who had counted on the price of wheat remaining at $2

18. Black Tuesday • Europe had no money to buy Canadian goods • US raised tariffs to highest ever to protect their own goods • Canadian factories began to close • Shareholders in companies began to sell and prices fell quickly • October 29, 1929 the US stock market crashed

20. R.B. Bennett • RB Bennett was the new Conservative leader in Canada • King was convinced that Bennett was trying to blame the depression on him • Most people thought the depression would be over in months. • King announced that Ottawa had financial aid for western farmers, but not even a “five cent piece” for conservative supporters.

21. The Business Cycle • The business cycle is marked by three stages • 1. The first stage is a period of prosperity where the economy approaches full employment. This stage is often accompanied by inflation as full employment and high income levels drive up the price of labour and goods. • 2. In stage two the economy slows down bringing about a recession. Few new jobs are created and some jobs are lost, as companies reduce their production of goods and services. This is known as cyclical unemployment. • 3. The final stage is a period of economic recovery where production increases in response to increased consumer demand. New jobs are created and the cycle starts over. A depression occurs when the period of economic decline is prolonged and severe. During a depression prices of goods and services fall dramatically. This is known as deflation. Wages also fall. Generally wages fall faster than prices during a depression

22. Note how the unemployment always goes up and down, with varying severity.