“roaring twenties” become “dirty thirties”: canada and the causes of the great depression...

“Roaring Twenties” become “Dirty Thirties”:

Canada and the Causes of the Great

Depressionalso see: http://www.youtube.com/watch?v=bzGmkbAJcpc

The Trigger:The Stock Market Crash

The Trigger: The Stock Market Crash

• September 1929 – Prices begin to fall• Investors begin to lose confidence in the

stock market and the companies they’d invested in

• Tuesday, October 29, 1929 the stock market crashed as investors quickly sold their shares before they lost all their value

The Globe, October 30, 1929

How did Canada go from the optimism and prosperity of the 1920s to the “Dirty Thirties”?

What were the 5 main long term causes of the Great Depression in Canada?

1. Overproduction -- Businesses were producing more goods than they could actually sell.

The industrial capacity of both the U.S.A. and Canada had expanded beyond the ability of the consumer to consume

• During the 1920s, many industries were expanding, and profits were spent on adding to factories or building new ones

• Huge supplies of manufactured goods were stockpiled because they could not be sold

2. Canada was dependent on exports of natural resources/staples.1920s: about 25% of

the Canadian Gross National Product was derived from exports of staple products

• Wheat, fish, paper, minerals, coal, wood – shipped to Europe as it recovered from the war, and to the US

• Overproduction!

• As the economies of other countries started to decline, there was less demand for Canada’s raw materials

3. Canada’s economy was very dependent on that of the United

States.• 1920s: 40% of Canadian

exports were sold to the USA

• A lot of US investment in Canada

• So…what happened when the US economy failed?

4. Protectionism

• Increasing trend in the 1920s

• Tariffs: money (“duties”) collected on goods coming in to a country

• Meant to discourage imports and protect industries from foreign competition

• US protectionism threatened Canada’s export market

5. Canadians were going into debt.

• Buying stocks “on the margin”

• Buying consumer goods on credit

• Farmers and businesses borrowing from banks to pay for equipment and labour

So when the economy began to fail…

• Banks wanted repayment

• Companies went bankrupt and laid off workers

• Canadians couldn’t pay back their debts

What were the long term effects?

Widespread Unemployment

More recent unemployment stats

• Canada and causes of great depression

• crash course on the roaring 20s