Causes of the Great Depression

Causes of the Depression, the Business Cycle and some new

vocabulary

Causing the Crash• Canada’s Dependence on US

markets– If US Economy drops so does

Canada’s• Decrease in farmers earnings

– Decrease in prices leads to…– Decrease in overall demand

• Overproduction– Leads to layoffs– Decrease in Demand

• Protectionism– Tariffs lead to other tariffs

• Speculation on Stocks– Buying on the Margin

• Debt from WW1– Less money for govt = Laissez-faire

Buying on the Margin

• Stock Speculation– Investors would put

down the least amount necessary to purchase a stock

– Investors often borrowed from the banks to do this

– Hoped stocks would increase in price

• When stock market collapsed people in this situation lost everything

Economic Cycle• Prosperity

– When times are good– Mid 20’s– High employment

• Recession– When times are bad– Economic Slow Down– Unemployment rising

• Depression– A Long Recession!– High unemployment– Deflation can occur

• Recovery– When times improve– Start of WW2

• Economy picks up to create equipment

Protectionism• Tariffs

– When governments put taxes on imported goods

– Usually causes other governments to respond with retaliatory tariffs

• Subsidies– When government give

supports to companies to make them competitive

– Can result in retaliatory tariffs etc.

Inflation and Deflation• Inflation

– When costs increase– Especially hard on

people with fixed incomes

• Deflation– When costs decrease– Usually due to drop in

demand because of a depression or recession

– Good to those employed

Deficit vs Debt• Debt

– Amount of money owed• Deficit

– Amount of money spent more than earned in a given period

– If you have money in the bank (a surplus) than if you spend more than you earn you may still not be in debt.

Unemployment Rate

• Simply the number of people unemployed– Can be a difficult

number to calculate– When is a person old

enough to be considered unemployed

– How about the under-employed?

Supply and Demand

• Supply and Demand Theory– If there is a lot of a

product and not many people want it – it is cheap!

– If there is very little of a product and there is a high demand - expensive

Impact of the Depression

The Prairies

• Saskatchewan had it the worst– Drought– Locusts– Dust Storms– Bennett Barnyards

Riding the Rails

• Unemployed went town to town looking for work– Often charged with

vagrancy– Lived in jungles outside

of towns– Bummed food or went

to soup kitchens

Pogey kept low

• Pogey was kept low• Welfare today• In order to get Pogey

people had to publically declare bankruptcy

• Not available for women• Very low for 1st Nations

– Expected to live off of the land

Blaming Government

• Bennett Buggies– See the photo!

• Bennett Barnyards– An abandoned farm

• Eggs Bennett – No eggs or meat!

Relief Camp Worker Strike• On to Ottawa Trek

– Relief Camp Workers from BC form a union

– Try to go to Ottawa by rail to meet Bennett

– Wanted unemployment insurance and fair wages

– Stopped in Regina• Regina Riot

– One police officer killed– Trek Broken Up

Protest Parties• CCF

– Socialist Party led by James Woodsworth

– Their party platform was called the Regina Manifesto

– Would become the NDP• Social Credit

– Led by William Aberhardt– Wanted $25 per month

• Union Nationale– Farm Credit Policies