Canada in the 1920s and the Great Depression

1. Canada in the 1920s and the Great Depression

2. IB Objectives Mackenzie King RB Bennett

3. IB Paper 3 Sample Questions In what ways, and for what reasons, did the relationship between Canada and Britain change between 1900 and 1931? “The political and economic impact of the First World War on Canada was more positive than negative.” How far do you agree with this judgment?

4. IB Paper 3 Sample Questions Analyse the main developments in Canada’s economic relations with the United States in the first half of the twentieth century. Analyse the short-term and long-term effects of the First World War on the economic and political development of Canada.

5. IB Paper 3 Sample Questions Analyse the impact on Canada of participation in the First World War. To what extent did the First World War contribute to the emergence of the movement towards greater sovereignty for Canada?

6. Lecture Outline • Canada in the 1920 A. Effects of World War I B. Economic Relations with the U.S. C. Labor D. Canadian Independence II. Canada during the Great Depression

7. Key Terms • OBU • Statute of Westminster • Richard Bedford Bennett • Mackenzie King

8. Canada Enters the War When the war broke out in 1914, Canada entered automatically as part of the British Empire. In October 1914 more than 30,000 Canadian soldiers were shipped to Europe. The war caused conflict between French and English Canadians.

9. Impact on Canada The Economy 60,000 Canadians were killed in action and around 200,000 were wounded out of about 625,000 Canadian soldiers.

10. Effects of World War I • The transition from a war time to peace time economy led to a brief burst of inflation where prices doubled from their pre-war average, and then to a severe recession that lasted until 1923. • Grain prices fell by 1/3, however they were still high enough to encourage farmers to expand production, and Canada became the world’s largest exporter of wheat.

11. Population • During the 1920s about 1 million people immigrated to Canada with most of them becoming part of the urban industrial workforce. • By the end of the decade, British people made up half of the population and French people were a little over 28%

12. Economic relations with the U.S. • U.S. owned 1/3 of Canada’s pulp production • U.S. capital was vital for the expansion of the Canadian mining industry • Ford, Chrysler, and GM established auto production plants in Canada and produced about 75% of all cars in the country.

13. Economic Relations • Oil and natural gas was discovered in Alberta in 1914 and Canada became one of the world’s larges producers of petroleum. • By the early 1920s, the U.S. had replaced Britain as Canada’s number one trading partner.

14. Labor • During the war labor unions had doubled their membership and economic troubles during 1918-1922 caused many workers to go on strike. • In March 1919 western labor leaders met at Calgary and organized into the One Big Union (OBU)

15. OBU • The OBU was a socialist organization that was inspired by the Communist success in Russia in 1917. • The Calgary delegates called for a general strike across Western Canada and in May 1919 30,000 unionized workers in Winnipeg went out on strike and shut down the city.

16. “Bloody Saturday” • On June 21 in Winnipeg—”Bloody Saturday”—two workers were killed and 30 injured by the Mounties. • The strike was broken and the military took control of the city. • This caused Canadian unions to decline in power and lose membership during the 1920s.

17. Canadian Autonomy • In 1917 Britain invited prime ministers from its empire to join the British Cabinet to form an Imperial War Cabinet to coordinate the war effort. • Britain also recognized Canada as an autonomous nation of an Imperial Commonwealth. • After WWI, Canada had control of its armed forces and has influence on Imperial matters that concerned its well-being.

18. Statute of Westminster • Officially recognized Canada’s independence in 1931 • Also gave independence to Australia, New Zealand, South Africa, Irish Free State, and Newfoundland.

19. Causes of the Great Depression in Canada • Decline in investment and demand in industry • Shrinkage of agricultural markets • A drought and subsequent prairie dustbowl • A grasshopper invasion in 1937

20. Effects of the Great Depression • About 27% of non-agricultural workers were unemployed and the total unemployment probably exceeded 50% at the height of the depression. • Agricultural income shrank by 75%.

21. Impact of tariffs • The Hawley-Smoot Tariff in the U.S. in 1930 was just one of several measures that led to a drastic decline in exports, which, prior to the crash, accounted for more than a third of Canada’s nation income. • Between 1928 and 1933, annual per-capita income in Canada declined by 48% from $471 to $247.

22. Richard Bedford Bennet • In the election of 1930 Bedford’s Conservative party won control of the Canadian government. • He believed that self-help was better than public assistance.

23. Bennett • He raised the tariff by almost 50% causing the US to retaliate and Canada’s foreign trade decline by two-thirds from 1929-1933 • By 1935 it was clear that the Depression was not going away so he created his own “New Deal” based off of FDR’s.

24. Bennett • Parliament enacted unemployment insurance, minimum wages and a maximum 48 hour work-week • Federal government created the Bank of Canada • His reforms were too late and his party lost the 1935 election and the Liberal party of Mackenzie King regained power.

25. Mackenzie King • Most of Bennett’s reforms had been found unconstitutional and King did not implement any new social policy initiatives. • By 1938 the King government began to stimulate the economy with deficit spending.