The Great Depression From the Roaring Twenties to

The Great Depression From the Roaring Twenties to the Dirty Thirties…

After WWI: The Economy in the 20 s u. The world’s financial centre was New York u. In the late 1920’s the economy was going very well: prosperity, lots of consumer goods, jobs, etc. u. Most people from the middle and upper classes were purchasing stocks at an alarming rate and making money on their investment.

Causes of the Great Depression Overproduction Huge supplies are produced but are not sold. u. Farmers who produced goods were noticing that people in their own countries were buying less. THE FARMERS WERE OVER PRODUCING PRODUCTS. u. Factories were also over producing. When companies realized this, they slowed down production and fired workers to save money.

Factories/farms slow down production Workers fired Less money to spend on buying goods

Causes of the Great Depression Reliance on Exporting Staple Products u. Staples: crops (wheat), pump & paper, fish, minerals u. Meant that other countries had to keep buying those staples from us for our economy to remain strong u. Other countries started producing MORE… so they needed less from us = unsold staples in Canada

Drought – “Dustbowl”

DROUGHT ON THE PRAIRIES ▪ No rainfall = dying crops = no wheat shipped = railways and flour mills lost business. ▪ Mass migration of farmers looking for work ▪ Saskatchewan the hardest hit province

Causes of the Great Depression Canada’s Dependence on USA “When the United States sneezed, the rest of the world got pneumonia. ” 40% of our exports were sold to the USA 65% of our imports were from the USA was our most important trading partner, and our economy was linked closely with theirs

Causes of the Great Depression Tariffs & Protectionism Tariffs: money collected on goods coming into a country Protectionist: protecting your home country’s products/industries and discouraging imports through tariffs.

Causes of the Great Depression Tariffs & Protectionism Countries throughout the world were raising tariffs, which made it harder to trade…

Causes of the Great Depression International Debt after WWI • USA lent money to foreign nations • Foreign nations depended on US exports to raise money. • Protectionist movement (tariffs) reduced this trade and Foreign nations could not afford to pay back loans.

Causes of the Great Depression THE STOCK MARKET CRASH (Oct 1929) u. In Oct 1929 the New York Stock Exchange collapsed u. Prices of stocks fell very quickly and thus the stock owners wanted to sell all they had = downward spiral u. More than 23 million shares changed hands in one day

ECONOMIC TRAGEDY u Because stocks had been so profitable people had been getting loans from the bank, and paying for STOCKS ON MARGIN u STOCKS ON MARGIN were stocks that were bought with only a 10% down payment. It was assumed that the rest of the cost would be covered with the profit from the stocks. u BANKS WERE EVEN INVESTING money from peoples accounts in stocks without the owners knowledge. u BECAUSE STOCKS LOST THEIR VALUE OVERNIGHT the people who had heavily invested WENT BANKRUPT OVERNIGHT.

The IMPACT u. Some wealthy/middle class people did not see huge lifestyle change u. Most people, especially factory workers, lost their jobs. u. People were evicted from their homes (couldn’t pay rent) u. Factories and businesses closed. u. Many families depended on government relief payments and soup kitchens/free food organizations u. By 1933 ¼ of Canada’s workforce was unemployed u. MANY MEN TRAVELED TO TRY TO FIND WORK: They would take trains to towns all over Canada. This was called RIDING THE RODS.