The Crash and Initial Impact

1. The Crash and Initial Impact • The collapse of the New York Stock Market on Black Thursday or October 29, 1929, had immediate and profound effects on the Canadian economy. • The gigantic American market was closed off by punishing tariffs; American investment abroad ceased; and American bankers began recalling their loans. • Because Canada’s market was so deeply linked to the US, it was the most desperately affected. • The Canadian economy was geared toward the export of minerals, lumber, newsprint, fish, and especially wheat. • Overproduction during the 1920s had created a glut of materials which suddenly had no available consumers. As a result prices fell dramatically.

2. Canada received one third of its national income from abroad, but now it was forced to fend for itself. • As the economy ground to a halt hundreds of thousands of Canadians found themselves on the street without jobs, money or security. • Recall that at this time there was no relief, no social welfare, and no unemployment insurance. • The rich and elite in Canada viewed this mass employment as an indication of character weakness rather than as a failure of the capitalist economic system. • For example, the wealthy John Eaton argued that the Depression was a worthwhile experience since it taught men the value of a job.

3. Impact on Western Canada • The western provinces were the hardest hit by the Depression • Saskatchewan suffered the most. • The price of wheat per bushel fell from $1.65 in 1929 to $0.30 in 1931 • This devastated the provincial economy that was so dependent on the crop. • Natural disasters such as grasshoppers, rust, drought and drifting soil further compounded the troubles in agriculture. • Alberta was also hit hard. • As a younger province Alberta couldn’t afford high interest rates, yet theirs were the country’s highest. Their problem was one of debt, not destitution.

5. Impact on Western Canada • In Manitoba, the economy of Winnipeg collapsed when the East-West railway trade slowed down. Thousands of unemployed residents were joined by indigent (lacking food and clothing) farmers and laborers drifting into the city looking for non-existing jobs. • In B.C, a province dependent on the export of minerals and lumber, unemployed workers poured into Vancouver. • One disgusted citizen remarked that Vancouver had become “just a blamed summer resort for all the hoboes of Canada”

6. Impact on the Rest of Canada • The impact on the Maritimes was felt to a lesser degree because the region had been in a continuous depression since Confederation. • In Southern Ontario and Montreal unemployment reached new highs as the huge manufacturing complex of Canada’s industrial heartland ground to a halt.

7. Initial Response of Mackenzie King • The Prime Minister at the start of the Great Depression was Liberal William Lyon Mackenzie King. • King was a born conciliator and traveled a middle road which allowed him to govern for longer than any other PM in Canadian history. • King believed that the Depression was only a “temporary seasonal slackness”

8. Initial Response of Mackenzie King • His remedies of balancing the budget and slashing government expenditures were ineffective. • When King received desperate requests from provincial and municipal government for financial assistance, he passed them off as a Tory (Conservative) plot to undermine his Liberal government. • As King told the House of Commons in April, 1930: • “as far as giving moneys out of the federal treasury to any Tory government in this country for these alleged unemployment purposes I would not give them a five cent piece.” • Although he later regretted the comment, the damage was done and King was seen as wildly indifferent to the conditions of the unemployed.

9. The 1930 Election and Bennett in Command • R.B. Bennett, leader of the Conservative Party, was ready and waiting in the wings after King’s 5 Cent gaff. • Bennett was tall, imposing and immaculately groomed. • A millionaire, he was rarely seen without his top hat, tail coat, patent leather shoes and cane. • Nicknamed “bonfire” Bennett, he was a fiery speaker who was once clocked at 220 words per minute.

10. The 1930 Election and Bennett in Command • During the 1930 election campaign, King tied to avoid the issue of the Depression while Bennett emphasized his solution of a tariff that would “blast a way” for Canadian goods into world markets. • 14% of the Canadian workforce was unemployed but King didn’t really recognize it as a priority campaign issue. • This was the first federal campaign in which radio was extensively used and Bennett proved to be superior to King as a communicator. • The Tories won the election by a landslide and the Depression became Bennett’s problem to solve. • There was no way that someone with Bennett’s background and philosophy could solve the problems of the greatest economic crisis in Canadian history • Bennett was a conservative who believed in sound, hard currency and disliked spending money on massive public works or relief payments. He believe that a balanced budget would help right the Canadian economy. • He also shared the elitist attitudes of upper-class citizens. He once remarked, “one of the greatest assets a man can have on entering life’s struggle is poverty.”

11. The 1930 Election and Bennett in Command • Bennett did have some early accomplishments. • First, he followed through on his election promise and raised the tariff • Second, he did spend ten times more on relief for the out of work than had been spent in the previous decade. • Still, Bennett argued that provinces and municipal governments would have to pay for most of the costs of dealing with the Depression. • Bennett’s higher tariff did not have the desired effect and even his creation of the Bank of Canada to give greater stability in national finances was left to the private sector. • Bennett’s attempts closer economic relations with Britain were also rebuffed. • By 1933, almost one-third of Canadians were out of work during the worst year of the Depression. • Bennett’s lack of solutions had made him a highly unpopular Prime Minister. A newspaper came to be called a Bennett blanket and a permanently out of gas car pulled by horses was referred to a Bennett buggy.

12. Relief Camps and the On-to-Ottawa Trek • One of Bennett’s few attempts to address the issue of unemployment backfired. • The thousands of unemployed men traveling the country by rail came to be seen as a threat and were being arrested for vagrancy. • Bennett created relief work camps run by the Department of National Defense that provided work, food and shelter for these “single homeless persons”

13. Relief Camps and the On-to-Ottawa Trek • 175,000 inmates passed through the work camps. • Though some camps were well run, comfortable and treated workers with respect, many were more like prisons. • The pay was 20 cents per day, food was terrible, and bedbugs plentiful. • The work of clearing land for highways and airports in swampy, mosquito-infested areas was hard. • Also, camps were isolated in the bush, did not allow women inside and forbade entertainment or alcohol. • Relief camp workers began to organize a Relief Camp Workers Union and took their case to the city of Vancouver. They demanded better conditions and better pay. • From there, they decided to go directly to Parliament Hill to complain. • Hopping on east-bound freight trains the On-to-Ottawa Trek had begun.

14. Regina Riot • This picture shows trekkers in Regina before the riot. • The trekkers gathered more unemployed workers as they stopped in every city. • After talks collapsed between Bennett and march leaders, the order for trekkers to clear out of Regina was given. • The resulting Regina Riot on July 1, 1935 saw trekkers battle Mounties and city police until the city was cleared. • A city detective had died in the fighting and 130 strikers were arrested.

15. Regina Riot • Bennett saw the On-to-Ottawa trek as the work of dangerous subversives in the Communist party and, indeed, there were numerous communists involved in organizing the campaign. • Bennett used Section 98 of the Criminal Code to arrest prominent Communists like party leader Tim Buck and, when possible, to deport radicals. • The R.C.M.P. was order to infiltrate trade unions, organization of the unemployed and other “subversive” groups. • Civil liberties were trampled in the “anti-red” hysteria of the time. • Bennett’s handling of the On-to-Ottawa Trek and the Regina Riot was seen by many as heavy-handed and King was able to exploit this during the 1935 federal election.

16. Impact on Canadian Women • Due to the sexism of the times, women were largely ignored during the Depression • The domestic sphere was still held to be women’s “proper place”, thus women every job held by a woman was viewed as a job taken away from a male “breadwinner”. • Most school boards, professional organization, governments, manufacturers, and retailers stopped hiring women. • Many women turned to domestic work in order to survive. • This reversed the trend of the previous two decades which had seen women moving into sales, clerical and even professional jobs.

17. Impact on Canadian Women • Wages for domestic workers were abysmally low, in some cases less than $4/week • Between 1921 and 1936 the number of domestic workers doubled but their wages decreased by half. • Also, minimum wage laws which were passed to protect women backfired when employers fired women to employ the cheaper and unprotected labour of male workers. • There were no specific measures for unemployed women as there were for men – no work camps, no public works programs. • The hardest hit among women turned to prostitution if they could not find a male to support them.

18. New Ideas • For the first time a significant number of Canadians began to examine the existing economic, social, and political systems and found them unsatisfactory. • Both the Liberal party under Mackenzie King and the Conservative party under Bennett had provided very few concrete solutions to the problems facing Canadians during the Depression. • It was in Western Canada that many alternative parties began. • In 1932 the Co-operative Commonwealth Federation was founded out of an alliance of farmer groups, socialists and labour parties.

19. New Ideas • The CCF’s Regina Manifesto called for an end to the capitalist system based on “domination and exploitation”. • The CCF promoted public ownership of a financial institutions, public utilities, and transportation companies. It favoured production for use rather than production for profit. • J.S. Woodsworth, a Methodist minister, was the CCF’s founder and used the Social Gospel of Christianity, rather than Marxism, to argue for socialism. • The CCF had some early successes. A handful of members sat as M.Ps in parliament, while the party became the official opposition in B.C. and Saskatchewan. • Despite its moderate tone and non-violent approach, to some the CCF still seemed too similar to communism. • The right-wing party that emerged during the thirties was Social Credit. • William “Bible Bill” Aberhart was a fundamentalist lay preacher whose fiery sermons attracted very large radio audiences in Alberta.

20. Social Credit • Social Credit argued that since there was never enough money available to buy the always available goods and services, governments should issue “social dividends”, or cash payments, to everyone. • While most economists dismissed this theory, Aberhart forged on inspired by his new economic fundamentalism. • During the 1935 election, Aberhart capitalized on the demoralized and scandal-ridden nature of the John Brownlee administration. Aberhart won a landslide victory to become Alberta’s Premier.

21. Social Credit • When Aberhart attempted to implement his Social Credit policies, they were disallowed by the federal authorities or by the courts. • Social Credit ended up providing Alberta with a solid, free-enterprise, conservative government for the next generation, but its theories were only used for campaign rhetoric. • Thus, one of the important effects of the Great Depression in Canada was the emergence of viable “Third parties” and an end to the two-party system.

22. Bennett’s New Deal • By the end of 1934, the economy was worsening, western sectionalism was rising, and every Conservative provincial government was gone. • Bennett, a champion of the status quo and a classic conservative, began doubting his own policies and made a surprising swing to the left. • Bennett drew inspiration from US President Franklin D. Roosevelt and his New Deal. • In January 1935 Bennett made a national radio broadcast in which he declared that the old order was gone and that it was time for a new society. • This would include unemployment insurance, subsidized housing, and minimum wage legislation. • Capitalism was in need of reform and Bennett argued that he was ready to do it.

23. Bennett’s New Deal • Bennett quickly brought in one of the most far-reaching reform packages in Canadian governmental history. • Government money flowed into New Deal programs such as: • The Prairie Farm Rehabilitation Act (to restore and preserve drought-affected lands) • The Canadian Wheat Board (to administer the sale of grain and promote higher prices for wheat) • The Natural Products Marketing Board (to allow marketing boards to help farmers get higher prices for their products than the free market could provide.) • Bennett proposed legislation to pave the way for unemployment insurance and national health insurance, but these programs were thwarted by the courts. • The Bank of Canada Act created a central bank to regulate credit and currency in the best interest of the country. This government agency could set more reasonable interest rates and increase the monetary supply in order to stimulate the economy. • Many Canadians viewed Bennett’s adoption of the New Deal as a ploy designed to save his highly unpopular government from defeat in the upcoming election. • Woodsworth derided Bennett’s New Deal as a “deathbed conversion”

24. King Back in Office • During the 1935 election campaign Bennett hoped his New Deal would sway Canadians. Bennett attempted to copy Roosevelt’s and Aberhart’s successes in using the radio, but to no avail. • King made few promises but did pledge to close down the relief camps. • King also ran on a campaign of “King or Chaos”, criticizing Bennett for his heavy-handed repression of the On-to-Ottawa Trek. • The October results saw King’s Liberals grab 125 seats in the House of Commons while Bennett’s Tories were reduced to only 40 seats. • Unfortunately, 5 years in opposition seemed not to have changed King in the slightest.

25. King Back in Office • King would say, “what is needed more than a change in economic structure is a change of heart.” • King promised to balance the budget and slash government spending. • He also kept his promise to close the relief camps, but mostly because he viewed them as being too expensive. • King lowered the tariff and signed a trade deal with the United States in an attempt to kick-start the Canadian economy. • King did adopt a few of Bennett’s New Deal policies, but on a whole he moved slowly and cautiously. • Canadians would have to wait another 5 years before the effects of the Depression began to subside.

26. Depression-Era Culture in Canada • Longshoremen by Miller Brittain is a portrayal of unemployed longshoremen in his home town of Saint John, NB. • There was unparalleled cultural activity during the 1930’s. • In the world of painting, the Group of Seven had come together and Emily Carr was finding an audience for her work. • While the 1920s had seen painters experimenting in abstract works, the 1930s saw a return to realism as artists portrayed images of the unemployed, foreclosed farms and the helpless.

27. Depression-Era Culture in Canada • Canadian novels in the 1930s were escapist – an adventure, a historical romance, or a comedy. The grief of the decade was too overwhelming to write about. • Canadians flocked to Hollywood movies and tuned into their radios for American comedy and variety shows such as Amos ‘n Andy. • In the depths of the Depression, people wanted to be entertained and a growing cultural influence came from the USA. • Foster Hewitt and “Hockey Night in Canada” continued to be a favorite of Canadians • The CBC, created in 1936, brought popular programs such as “The Happy Gang” into people’s homes.