Causes of the Great Depression CANADA FUNDAMENTAL CAUSES

Causes of the Great Depression (CANADA)

FUNDAMENTAL CAUSES

OVERPRODUCTION • Background ▫ The development of the assembly line meant that factories could produce more products quickly • Immediate consequences ▫ Cheaper products ▫ More profits for businesses ▫ Industrial expansion • Long term consequences ▫ Overproduction & stockpiling of goods ▫ layoffs

CANADIAN RELIANCE ON EXPORTING STAPLE PRODUCTS • Background ▫ The Canadian economy depended on the export of staple products (i. e. wheat, timber, minerals) • Immediate consequences ▫ Lots of people in Canada invested in commodities (raw materials) on the stock market • Long term consequences ▫ Many other countries started growing wheat which resulted in extra wheat and cheaper prices ▫ People related to the wheat industry lost jobs and couldn’t buy consumer goods ▫ Investors lost money

CANADIAN DEPENDENCE ON THE UNITED STATES • Background ▫ 40% of Canadian exports were sold to the Americans • Immediate consequences ▫ Success of the American economy = success of the Canadian economy (1920 s) • Long term consequences ▫ Failure of American economy = failure of Canadian economy (1929 -1930 s)

ECONOMIC PROTECTIONISM • Background ▫ During the 1920 s the US government wanted to protect their home industries (protectionism) and have people buy American made goods • Immediate consequences ▫ US put tariffs on imported goods • Long term consequences ▫ Canada (and other countries) lost their export markets ▫ Canada (and other countries) had to protect their economies with tariffs ▫ International trade slowed

INTERNATIONAL DEBT FROM WWI • Background ▫ After WWI the USA lent money to other countries (esp. in Europe) to help rebuild ▫ Borrower nations agreed to sell their products to the USA to raise money to repay the loans ▫ But, when the USA imposed tariffs the European countries could not repay their loans • Immediate & long term consequences ▫ Debt ▫ Poverty

IMMEDIATE CAUSE

STOCK MARKET CRASH • Background ▫ Stock markets around the world crashed on October 29, 1929 (“Black Tuesday”) • Why did it crash? ▫ Rise of 2 new investing techniques �Speculation �Buying on margin ▫ Canadian bank presidents and business leaders suggested people invest in wheat and other internationally traded items (even when prices were falling) ▫ Investors began to worry too late and started to panic. They sold their stocks VERY quickly which made the prices of the stocks drop A LOT!

• Immediate consequences ▫ ▫ ▫ Massive stock sell off Banks called in loans People withdrew all their money from banks Bank failures (mostly in the USA) People lost life savings • Long term consequences ▫ Unemployment ▫ Poverty

POLITICAL CARTOONS Which ‘cause’ does the cartoon address? What is the message of the cartoon ?

POLITICAL CARTOONS Which ‘cause’ does the cartoon address? What is the message of the cartoon ?

POLITICAL CARTOONS Which ‘cause’ does the cartoon address? What is the message of the cartoon ?

POLITICAL CARTOONS Which ‘cause’ does the cartoon address? What is the message of the cartoon ?

POLITICAL CARTOONS Which ‘cause’ does the cartoon address? What is the message of the cartoon ?

POLITICAL CARTOONS Which ‘cause’ does the cartoon address? What is the message of the cartoon ?

POLITICAL CARTOONS Which ‘cause’ does the cartoon address? What is the message of the cartoon ?