The Great Depression From Boom to Bust…

1. The Great DepressionFrom Boom to Bust…

2. The Roaring Twenties End • Canadian consumers kept the factories and their workers busy • “Branch plants” appeared • Stock markets rose although many stocks were overvalued • Credit was used to buy stocks • Canada’s economic potential seemed unlimited and public confidence was generally high • The ‘20s represented an “Age of Materialism” • The prosperity was shaky at best • Canada’s economy depended too much on export staples (like wheat) and on trade with the United States

3. The Origins of the Stock Market • During the Age of Exploration, companies form • Each requires capital to fund their ventures • People begin to invest in these companies • Buying an investment share in the business • The Dutch East India Company is the first to issue stocks (1602) • In Amsterdam the first exchange appears for trading stocks and bonds • Stock markets proliferate globally and market crises occur periodically

4. The Business Cycle • It was widely understood that economies go through natural cycles of recession and recovery • During particularly bad recessions a pronounced downward spiral can take place

5. From Boom to Bust: Black Tuesday • On 29 December 1929, the stock market crashed • The Great Crash (felt all over the world) • Stock prices began to fall…and fall…and fall. • Thousands of investors were wiped out as panic selling set in • Banks (and other creditors) were unable to collect loan repayments • Stock valuations went down by 50% in a few hours • Between October 29 and November 13 (when stock prices hit their lowest point), over $5 billion had disappeared from Canada’s economy • In the panic $50 billion in investments would disappear

6. The Market Crash • Fortunes were lost overnight • Among the bankrupt some even committed suicide • Many families lost all their life savings • Confidence in the U.S. economy was shattered • Stock market crash was a symptom of deep economic instability • U.S banks were forced to close • 10,000 • Clients withdrew savings causing more ruination • In retrospect, this crash would signal the start of the Great Depression • It was assumed by the government and business leaders that the crash would be temporary

7. W.L. McKenzie King “Business was never better, nor faith in Canada’s future more justified” • Prime Minister (Liberal Party) of Canada from 1921 to 1930 • Struggled in his first term • Prairie progressives wanted tariffs lowered • McKenzie King’s government presided over a period of unrest among farmers in the Prairies as farm prices declined • He also faced growing dissent from WWI veterans who expected their sacrifices to be compensated during difficult economic times • King truly thought the Depression would be short-lived • Other downturns (1913, 1922) had past • King proceeded with a laissez-faire leadership • The national government took minimal action to provide relief or encourage economic recovery • Social assistance= church and charities • Relief programs were the responsibility of ill-equipped provincial governments • King refused to give “a five-cent piece” to struggling provincial governments • Prosperity was around the corner

8. Buying on Margin: Overproduction: • Many people bought stocks by putting only 10% down • Used credit to buy stocks and goods • When stock prices went down, they had to pay back the borrowed money • This also included companies • Businesses closed, and Canada’s unemployment reached almost 27% • Demand for goods declined in the late 1920s but factories had continued to produce goods at a rapid pace • Export commodity prices dropped dramatically

9. Canada’s Banks • NoCanadian banks actually failed • Very few of its brokerages went bankrupt • Why? • The government saw nothing to be gained in foreclosing on the banks, so it simply let them be • Canadians had been caught up in the stock market mania • Reports surfaced after the Crash of widespread cheating on the Toronto Exchange at the time • For some, the Crash and its aftermath represent a “matter of life or death,” for others, like Sir Herbert Holt, life went on Herbert Holt “If I am rich and powerful, while you are suffering the stranglehold of poverty… it is [due to] foolishness on your part”

10. Canadian Economy and the Outcomes • Canada’s economy was very closely connected to the USA • Wheat (40% of world supply) • Newsprint (65% of world supply) • As the economy failed, people lost their jobs and the ability to pay rent • vagrancy meant jail time • To collect pogey or the “DOLE” (Relief vouchers) one had to publicly declare poverty • Private charity/soup kitchens • The Gross National Product fell • From $6.1 billion in 1929 to $3.5 billion in 1933 • The value of industrial production halved • Economy prices continued to decrease

11. High Tariffs • Canada was an exporting nation • Exports provided 1/3 of its income • As the economic crisis worsened, countries tried to safeguard their own industries by creating protectionist trade barriers • Tariffs • Both King’s Liberals and Bennett’s Conservatives supported tariff walls for Canada • Jobs created and industries protected behind them • Imports fell by 55% • Exports fell by 25% “Blast Canada’s way into the markets of the world”

12. Unemployment and Homelessness • In Saskatchewan, over 200,000 people are forced to leave their farms (evicted) • 70% of their population was dependent upon social assistance • Overall in Canada, the incomes of families fell by over 50% • Canada had a total population of 10 million • 2 million Canadians were living off relief handouts • e.g. soup kitchens • Canada’s unemployment rate quickly reached 13% in 1930 (rising above 25% in ‘33) • Canada’s unemployment rate went from 4% to 27% • 1 in 4 Canadians were out of work • As the Depression carried on, 1/5 Canadians depended on government relief • 30% of the labour force were unemployed • The unemployment rate had never dropped below 12%

13. The Suffering Continued • Young men and women: • Had to leave home at 16 – 18 yrs for work • They had to “ride the rails” looking for work • They had to make their own living areas near the rails • Shanty towns or hobo jungles • They were put in relief camps to work for 20 cents a day • There was no hope of getting a job • Some were sent to B.C. by relief officers • Young women could stay at home • Did not want relief because it was humiliating

14. Drifters • “Drifters” were not treated well on arrival in new cities • Moved from city to city looking for work • They were always under suspicion and police were constantly ushering them out • Relief was only provided to people who lived in a community for at least six months • The drifters could never qualify for such assistance • Single, unemployed women were not eligible for relief payment • Only married men could get relief

15. Squatters in Hotel Room • A “Bennettville” outside Toronto

16. Families in the 30s • Both parents could be unemployed or have low wages • They went on relief • $10 a month for the whole family • If you had grown children, you got less money • Had to line up for relief • Attempt to embarrass adults to find work • It was said by the Federal Department of Labour that a family needed between $1,200 and $1,500 a year to maintain the "minimum standard of decency" • At that time, 60% of men and 82% of women made less than $1,000 a year

17. Women and the “Lost Years” • Wives and daughters were often the only employed family members • They often were hired on part-time basis • As the Depression deepened, employed women were seen to be stealing work from men • Unemployed single women faced considerable hardships • The birth rate declined noticeably during the Depression • Ethnic, visible minority, and Aboriginal women faced discrimination and found it difficult to secure employment • Women typically earned only 55% of the pay given to their male counterparts in the work place.

19. “The Dust Bowl” • Farmers had bought new machinery and land with borrowed money • Poor farming practices damaged the top soil • Farmersdealt with: • Drought, 1930 • Sand storms • Blew seeds away • A plague of grasshoppers • They couldn’t grow anything! • A farmer’s income went down drastically • The land dried up • No wheat was grown • Left their farms and went to the city • Did not go on relief because they had too much pride

20. The price of wheat had been falling since 1927 • Over-production didn’t drop , prices did • Farmers’ mortgages suffered • No cash means no new tractors • Agriculture represented 32% of Prairie-province income • Farms were wiped out (250,000 abandoned)

21. Declining Immigration • The government passed a law in 1930 to stop almost all immigration • Only immigrants with considerable personal wealth could enter Canada • Farmers with the money to start a farm operation were accepted! • Immigration declined by 75% • With unemployment so high most Canadians agreed with these laws • Some, like Jews and Asians, were not welcome at all • Recent immigrants faced discrimination • Many were deported if they could not provide for themselves • 30,000 were deported during the first five years of the Depression • It declined from one million during the 1920s to just 250,000 in the ‘30s • Deport rather than support the destitute • Immigration Minister Blair had great power (feared riots in Quebec and negative reactions): • Kept out Jews and ordered deportations • Only 7 Chinese entered Canada during the Great Depression years and only a specified amount of Japs according to the “gentleman’s agreement” between the two nations • King opposed Jewish immigration “the line must be drawn somewhere” ~Frederick Charles Blair

22. British Columbia - Heavily dependent on resource exports, it struggled considerably Maritimes - Had prospered less, it therefore was impacted less Prairies - Had prospered mightily in the ’20s, would struggle the most in the 1930s Central Canada - Markets dried up, manufacturers suffered, and many jobs were lost

23. R.B. “Bonfire” Bennett • Bennett became Prime Minister (Conservative Party) of Canada from 1930 to 1935 • The worst of the Great Depression years • Bennett tried to increase trade within the British Empire • He imposed tariffs for imports from outside the Empire (50%) • Known as the Imperial Preference Policy • Pro-business policies provided little relief for the unemployed • Bennett promised action • He was a self-made millionaire • Put $20 million in emergency relief • Bennett did answer letters and give charity but he looked down on government “handouts” • As a businessman he dismissed Keynes’ economics as illogical

24. Bennett’s Answers: The New Deal • January 1935, Bennett announces in a radio address “I am for reform” and launches his own New Deal • The plan called for federal government intervention: • Minimum wage, maximum work week laws • Unemployment insurance • Retirement pensions • Health insurance • Mortgage assistance for farmers • Most of the New Deal was seen by the Supreme Court of Canada and the Judicial Committee of the Privy Council as an encroachment on the authority of provincial governments • Struck down as violation of Section 92 of the British North America Act (Canada's Constitution) • Bennett’s reform effort was seen as too little, too late

25. Bennett’s Answers: Canadian Relief Camps • October 1932, Bennett establishes a network of relief camps for unemployed and homeless men • Run by the military • In return for bunkhouse residence, 3 meals a day, work clothes, medical care and 20 cents a day, the "Royal Twenty Centers" worked 44-hrweeks clearing bush, building roads, planting trees and constructing public buildings • Critics argued that the federal government had established the camps in lieu of a program of work and wage increases • Conditions in the camps were awful • Low pay • Lack of recreational facilities • Isolation from family and friends • Poor quality food • The use of military discipline • Communist Party leaders saw a chance to organize strikes in the camps • Formed the Relief Camp Worker’s Union

27. Canadian Reactions: The On to Ottawa Trek • In April 1935, 1500 relief camp workers protested against the government for two-months • Local government refused to provide welfare • 1000 relief camp workers climbed aboard freight trains and headed for Ottawa to protest their working conditions

28. Canadian Reactions: The Regina Riot • When the train reached Regina, Saskatchewan, the number of protesters had doubled • Only about 300 strikers attended • Almost 2000 people gathered • Fearing a huge protest in Ottawa, R.B. Bennett stopped the train in Regina • Tried to negotiate with the protestors • On July 1st, 1935 a riot broke out as the RCMP tried to arrest the organizers of the protest • The RCMP hid in 3 vans and the Regina Police hid in a garage • At 8 p.m. a whistle blew and they charged • Beginning hours of hand-to-hand fighting • Regina police officer was killed and 120 protesters were arrested

29. The Regina Riots: Outcome • The strikers called the Premier for a meeting • They were arrested but released to meet • National newspapers reported the police initiated riot • Premier Gardner blamed Bennett for the trouble • He ordered the men be fed and negotiated a disbandment to the strike • The men boarded trains and returned west • The Trek was over! • Bennett said, the Trek was "not a mere uprising against law and order but a definite revolutionary effort on the part of a group of men to usurp authority and destroy government" • The Tories were defeated that year in the 1935 federal election • Bennett ended his final days in Great Britain • He remains the only Canadian Prime Minister to be buried outside of Canada

30. Dark Depression Humour abandoned prairie farm • Bennett barnyard • Bennett blanket • Bennett buggy • Bennett coffee • eggs Bennett newspaper engineless car roasted wheat broiled chestnuts + Bennett Buggy

31. WHAT IS IMPORTANT? • Black Tuesday, 29 December 1929 • The Great Crash of the Stock Market • Buying on Margin • Overproduction • PM King didn’t feel the Federal (1921-1930) government should interfere • Laissez-faire leadership • Thought it would be temporary • Canadian Banks • Very few failed • Bennett was the PM for the worst years of the Depression (1930-1935) • Tried to increase trade • Imperial Preference Policy • Increased tariffs- safeguard industry • The “Dole” (pogey or relief) • Men and women had to declare poverty and line up to get relief • Lived in shanty towns/hobo jungles! • “Ride the Rails” • “Drifters” • Farmers were hit hardest (since ’27) • “Dust Bowl” • Credit for new machines • Drought, Sandstorms, and plague • Had to move to cities- evicted • Declining immigration • Anger and deportation • Bennett’s New Deal (Jan ’35) • Gov’t intervention • Declared violation of BNAA • Too little, too late • Bennett set up relief camps • Internment camps for unemployed men • Run by military • Horrible conditions • Resentment in the camps turned to protests in BC (April ’35) • 1500 campers protested for 2 months- BC gov’t refused relief • “On to Ottawa” Trek (June ’35) • 1000 relief workers headed to Ottawa on the trains • The Regina Riot (1 July ’35) • 2000 gathered • Bennett stopped the protesters in Regina (fear for Ottawa) • Led to police violence • Bennett blamed for the trouble • Bennett ordered negotiations • Men returned west • Bennett became a joke • Bennett Buggy

32. They used to tell me I was building a dream, and so I followed the mob, When there was earth to plow, or guns to bear, I was always there right on the job. They used to tell me I was building a dream, with peace and glory ahead, Why should I be standing in line, just waiting for bread? Once I built a railroad, I made it run, made it race against time. Once I built a railroad; now it's done. Brother, can you spare a dime? Once I built a tower, up to the sun, brick, and rivet, and lime; Once I built a tower, now it's done. Brother, can you spare a dime?

33. The Return of King • In 1935, the Canadian people had enough of Bennett who they blamed for prolonging the Depression • Running under the slogan “King or Chaos” • King won the election • Became PM of the Liberal Party from 1935 to 1948 • Introduces relief programs: • National Housing Act • National Employment Commission • Nationalizes: • Canadian Broadcast Corporation, 1936 • Trans-Canada Airlines (Air-Canada), 1937 • Bank of Canada, 1938 • From 1939 • An increased demand in Europe for materials • Increased spending by the Canadian government on public works created a boost to the economy • By 1939, Canada was experiencing economic prosperity for the first time in a decade

34. Bloody Sunday • A group of 600 unemployed men protested against the governments lack of help • The protestors held a Vancouver Post Office for 6 weeks • Two other groups of protestors occupied the Vancouver Art Gallery and the Hotel Georgia lobby • Police issued an ultimatum for 5:17 am June 19, 1938 • At 5:40 am, while protestors were sitting peacefully, the police stormed the office and the other two buildings • 39 people were injured and 22 people arrested • 10,000 people attended a “sympathy meeting” to protest police brutality

35. The Rise of Alternate Political Parties CCF Social Credit Union Nationale • Led by “Bible Bill” Aberhart • Appealed to many voters in Alberta • Elected in 1935 • Citizens receiving a $25 monthly dividend to buy goods • Additional money would stimulate the economy • Led by Maurice Duplessis • Supported people in rural areas and Quebec nationalists • Believed the English minority controlled Quebec’s economy • Led by JS Woodsworth • Supported farmers, labourers, socialists, intellectuals, and the discontented Liberals • Public ownership of key industries • Social programs for the needy • Government spending on public works

36. The Co-operative Commonwealth Federation • Some Progressives • Socialist ideology • Democracy and equality • Ideas later adopted in Canadian politics • Regina Manifesto • July, 1933 • J.S. Woodsworth • Lost favour when he wouldn’t support Canada entering WWII • Pacifist • Tommy Douglas • Socialist • Universal health care • The CCF was later renamed the NDP in 1961.

37. Social Credit • William “Bible Bill” Aberhart • In 1932, he becomes interested in C.H. Douglass’ Social Credit Theory • Government income subsidies to stimulate economic growth • Tight regulatory control of banks to manage money supply • Aberhart forms the Social Credit Party of Alberta and wins the provincial election in 1935 • He is never successful in implement Social Credit because banking and monetary policy are controlled by the federal government in Canada

38. The Union Nationale • Maurice Duplessisblamed the Depression on the fact that many of Quebec’s industries were owned by Americans and English speaking Canadians • He formed the Union Nationale so that Quebeckers would have more control over their economy • The Union Nationale won the Quebec election in 1936 and remained a force in Quebec politics for the next 22 years

39. Rowell-Sirois Report • Attempts at providing relief during the Depression were exacerbated by legal issues over the division of power between the national and provincial governments under the BNAA • Royal Commission on Dominion-Provincial Relations 1937 • 1940 recommendations: • Found that provincial responsibility for health, education, and welfare had grown beyond the capacity of some provinces • Federal government should take over taxation authority and provide the provincial governments income through grants • Federal government should take responsibility for retirement pensions and unemployment insurance.

40. Who Survived the Crash? • Rich business men who sold their stocks before the crash • If you had any money during the Depression, you were extremely rich! • The Eaton’s did well • Bennett was also rich • This led to animosity over his economic situation • Satire

41. Depression-Era Culture in Canada • Longshoremen by Miller Brittainis a portrayal of unemployed longshoremen in his home town of Saint John, NB • In the world of painting, the Group of Seven had come together and Emily Carr was finding an audience for her work • The 1930s saw a return to realism as artists portrayed images of the unemployed, foreclosed farms and the helpless • Photography found an audience • From fashion to realism

42. Dorothea Lange, Migrant Mother

43. 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”. • Foster Hewitt and “Hockey Night in Canada” continued to be a favourite of Canadians • The CBC, created in 1936, brought popular programs such as “The Happy Gang” into people’s homes.

44. The USA • Hoovervilles • Hoover’s strategy was to lower interest rates - the problem was too big! • FDR’s 100 daysin 1933 • Close banks for three days • “New Deal” • Relief, Recovery, & Reform • Every letter to the President will be answered • End Prohibition • Create confidence and give LEADERSHIP • Economy?... • Liberals vs Conservatives

45. FDR listened to the economist Keynes: “SPEND YOUR WAY OUT OF DEPRESSION.” John Maynard Keynes (“Canes”)

46. The Rise of Fascism Germany, 1933: Hitler Spain, 1939: Franco Italy, 1922: Mussolini • Brown Shirts • Arian supremacy • Rebuild military = jobs • Challenge Versailles • Test tactics in Spanish Civil War • Anschluss • Lebensraum/self-determination • Falange vs elected Republic • International Brigades • Proxy war (blitzkrieg) for Condor Legion and Italian Air Force - Guernica • Did not fight in WW2 • Blame 1911 democracy for problems • Black Shirts March on Rome (threat of socialists) • 1929 Pact with Pope • Crush unions - Corporate State • Abyssinia, 1936 • Albania, 1938 secret police, one party state, dictatorship, militarism

48. Life in Hitler’s Nazi Germany Positive Aspects Negative Aspects • Mega-projects/rearmament • Employment • Direction • Hope in desperate times • Versailles abandoned • Return of national pride/saved • Reparation payments • Annexations • Wealth and power • Self-determination for Germans • Corrects some misplaced persons from Versailles • Versailles abandoned • Militarization/isolation • Nuremburg Decrees/racism • Loss of human/citizen rights • Loss of democracy • One party state • Brown Shirts/mob violence • Loss of security • Book burnings • Loss of freedom • Unions outlawed • Loss of freedom

49. Canada’s Failure of the St.Louis • Canada accepted fewer than 5000 Jewish refugees during the Second World War • Brazil accepted 27,000! Anti-Semitic advisors (from the South) to FDR persuaded him to block a USA landing - Mackenzie King who was visiting Washington with the Royal Family also gave in.

50. When will this ever end? • September 1, 1939 • WWII begins with the invasion of Poland • Unemployed men enlisted • Demand for goods