The Great Depression

Canada’s Economic State, 1920s

• Image of prosperous ’20s – “Roaring”?

• Reality: boom and bust roller coaster

• Late 1920s – resource boom

• Growing American influence – now largest investor; by 1926 Canada’s most important trading partner

• Women’s increasing role in the economy

Economy (continued)• New consumer products – automobiles

• Communications – airplanes; telephones

• Middle- and upper-class consumption

Bombardier – first snowmobile, 1923

Regional Variations

• Maritimes and Prairies left out of the “boom”?

• Coal and steel in decline

• Low wheat prices for much of decade– vagaries of international markets; expansion and borrowing of First World War & when prices good in parts of 1920s

The Collapse“Black Tuesday” 29 October 1929

Causes of the Great Depression

Not caused by a “crisis of capitalism,” but became one!

★ overproduction; stock speculation

★ Protectionism ( using tariffs) – Canada retaliated

★ Decline in international trade severely hurts Canada (2nd worst off in world, after US)

★ SO NOT AN OVERNIGHT PROBLEM CAUSED BY STOCK MARKET CRASH!

Effects of the Great Depression

Stocks, production, wages, GNP, imports, exports, all decline

but unemployment increases to 20-25% nationally (1933)

Hardest Hit … The PrairiesCompounding factors: natural disasters (drought, grasshoppers, etc.)

The Political Response - King

Do nothing!

Balance the budget and slash spending

“Not a five cent piece” to any Conservative

provincial government

But had to face election…

1930 ElectionFought on leadership issue

R.B. Bennett (Conservative) makes tariffs and unemployment the key issues

“Five cent piece” comment thrown in King’s face

Bennett victorious – largely on rural vote!

The Political Response R.B. Bennett

Leadership of Conservatives – “one man show”

Also personal altruism

Bennett’s Policies

• Simply not enough

• Unemployment Relief Act (1930) - $20M for relief (mostly administered by provinces and municipalities)

• To 1938: $350M federal on relief; $650 M provincial and municipal! crushing burden!

• Response: balance budgets by cutting services

Relief – “going on the pogey”

Line up for a soup kitchen, Toronto

Humiliation

“Failure”

Food vouchers

Private charity

Relief work

Work Camps

On to Ottawa Trek (1935)

Regina Riot, 1 July 1935

THIRD PARTIES

Leader:J.S. Woodsworth

1933 – Regina ManifestoSocialist (but not communist,

nor doctrinaire)

9% of popular vote in 1935

The Co-operative Commonwealth Federation (1932)

Social Credit

William “Bible Bill”Aberhart

1935 – sweeps to power in Alberta

Each citizen to have a ‘credit’ to achieve prosperity

Reconstruction Party (1935)

H.H. Stevens

8% of popular vote in 1935(taken from Conservatives)

Communism and Fascism

Communist march, Vancouver, c.1933

Canadian fascist paraphernalia

Also Intolerance

KKK to Canada

The Atlantic CoastNEWFOUNDLAND

The threat of bankruptcy – Britain will not allowFrom dominion to colonial status[Prerequisite to Confederation?]

MARITIMESVote Liberal

But social and economic reforms cannot be achieved for lack of $

QuebecScandals and corruption

Maurice Duplessis

The Union Nationale

“The Padlock Law” (1937)

The Padlock Law

• The Act prohibited the "use [of a house] or allow any person to make use of it to propagate communism or bolshevism by any means whatsoever" as well as the printing, publishing or distributing of "any newspaper, periodical, pamphlet, circular, document or writing, propagating communism or bolshevism." A violation of the Act subjected such property to being ordered closed by the Attorney General - "padlocked" - against any use whatsoever for a period of up to one year, and any person found guilty of involvement in prohibited media activities could be incarcerated for three to thirteen months.

Ontario

“Mitch” Hepburn’s Liberals

Schisms with federal Liberals

Provincial Rights and the “Unholy Alliance” with

Duplessis

British ColumbiaT.D. “Duff” Pattullo (Liberal)

The “little New Deal”:•“work and wages”• state health-insurance plan• reduced taxes for lower incomes• unemployment insurance• public works

But lacks the $ to put it into effect!

Bennett’s “New Deal”Borrows from FDR’s New Deal in US• sweeping social reform platform announced on radio

“The capitalist system has failed” • promised laws to control big business•to increase income and business taxes•to reduce farm debts•to introduce minimum wages, the 8 hour day•unemployment insurance, health insurance•better old age pensions

Key: Govt now promising to do things within provincialjurisdiction under BNA Act! but most declared ultra vires (beyond the power)

What people remembered…

Bennett buggies, Bennett boroughs, …

THE ELECTION OF 1935: “KING OR CHAOS”

Public does not go for Bennett’s “deathbed

repentance” (New Deal promises)

Liberal Policies

• Relief for farmers – Prairie Farm Rehab. Act

• Lower tariffs

• Canadian Broadcasting Corporation (1936)

• Trans-Canada Airlines (1937) – Crown Corp.

• National Economic Commission – advocates Keynesian approach (deficit financing)

• Royal Commission on Dominion Provincial Relations (est. 1935) Rowell-Sirois report

The Rowell-Sirois Commission

• A Canadian Royal Commission looking into the Canadian economy and federal-provincial relations. It was called in 1937 and reported in 1940.

• It was called as a result of the Great Depression. The attempts to manage the Depression by the government illustrated grave flaws with the Canadian constitution. While the federal government had most of the revenue gathering powers, the provinces, unexpectedly, had to make the greater expenditures ~health care, education, and welfare. By 1937 they were all massive expenditures, however.

• The Commission recommended that the federal government take over control of unemployment insurance and pensions. It also recommended the creation of equalization payments and large transfers of money from the federal government to the province each year.

“A Low, Dishonest Decade”?

Bennett cannot “blast into foreign markets”

The Manchurian Crisis (1931) - no coherent stand against Japan

The Riddell Incident (1935) - how to deal with Mussolini’s Italy? Sanctions?

- WLMK repudiates Riddell – no sanctions

WLMK sees League as place for conciliation, not arbitration

Isolationism and Appeasement

WLMK to Germany, 1937

North American Nation

Neville Chamberlain & appeasement

WLMK on Hitler- Saw what he wanted

to see

Assessing King’s approach

• “low and dishonest” – a weak and sleazy performance of delay and moral corruption?

• Or was indecision the price that had to be paid for internal Canadian unity?

Royal Visit, Spring 1939

The Road to War

Hitler’s lebensraum living space", i.e. land and raw materials

Jewish refugees – “None is too many”

September 1939 – PolandAnother world war…

CATASTROPHE OF THE WAR ENDED THE

CATASTROPHE OF THE DEPRESSION