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Lecture

the great depression


Department
History
Course Code
HIS263Y1
Professor
Mc Kim/ Penfold

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The Great Depression
I. The Crash
Black Tuesday (October 29, 1929): the Canadian stock market crashed. Fell 300
million dollars in a single day. It echoed and paralleled the crash on Wall Street
(centre of American financial capital). Hints that it is more than a Canadian event,
but is rather global
The Crash was more a symbolic start then a real one. It did not cause the
depression, but it is symbolic in the sense that it creates a ‘bookend’. Finishes at
the arrival of WWII where government begins to spend, drawing out economic
crisis
Depression: a whole series of overlapping problems in global economy:
international instability, over production of key commodities, over extended
credit of popular commodities (cars, wash machines, etc) – things that
characterize western word; thus, it is a worldwide event. All countries experience
downturn, but they play out in different contexts based on global and national
variations
Canada hit hard, because economy was based on exports of natural resources
(80% exportation), but there is a major decline in world trade; thus, declining in
exports and revenue source. Another problem is due to international problems
intersecting with specific local conditions. Ex. world wheat markets glutted (too
much). Likely a price would go down. No big deal if you sell more wheat at a
lower price, but at the same time, the output of prairie wheat farms are declining
due to a draught that comes in the late 1920’s, which kills wheat production. The
effect of this is a total collapse of the Western economy. Price of wheat bushels
are going down, but also the output because of draught:double whammy”. The
result, farms abandoned. The effect is the Canadian economy almost completely
collapses during this period. Unemployment rate rises to from 5% to 1/3 of wage
earners in the 1930’s. This is made all the worse by the government approach by
the government: less eligibility
II. Less Eligibility
Government response was not innovative or dramatic.
William Lyon Mackenzie King is in power at the time. His first response, like that
of most western leaders, was to minimize the crisis. Has an election in 1930.
Canadians react in a negative way, as they don’t see this minimization as a means
of dealing with the problem
R.B. Bennet (Conservative, 1930-35): addresses Canadians with drastic rhetoric
to combat effects of emerging depression. Hacks at king for his unwillingness to
see that it needs to be dealt with right away. Promises to use tariff to drive
economy. This gets him elected in 1930.
Unemployment Relief Act: legislation passed by Bennet. Initially give approx 20
million of federal money to provinces for the relief of the unemployed. The figure
is extended over the course of the depression. In total, the government spends
approx spend 1billion (all levels of government). Ambiguous because on the one
hand this is a massive sum for this time, but its nature is very traditional.
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