Roaring Twenties and Dirty Thirties Chapter 3 Dirty Thirties

The Dirty Thirties

The Great Depression

     The 1920’s were seen as a time of prosperity throughout Canada, even though not everyone shared in the good times. This good mood would not last long however, as Canada, like many other countries, plunged into the Great Depression in the early 1930’s. This depression would turn everyone’s lives around in an instant, and leave people wondering how everything changed so fast. Initially, people attributed this to the stock market crash, but that was really just a symptom of the failing economy of 1920’s North America.

The Business Cycle

     The economy is in a constant state of change, from good times of economic upswings to the bad times when businesses decline. Economists who have charted these changes have named it the Business Cycle, and it included four parts: prosperity, recession, trough/depression, and recovery. In the 1920’s, North America was in the prosperity stage, where wages and prices are high, there is little unemployment, and business profits are high. This is followed by a recession, where sales slow and companies lay off workers and slows production. This raises unemployment, and lowers spending because people have lost jobs, and the still employed spend less money. This is followed by a depression or a trough. A depression is the worst possibly outcome, as more people lose jobs, and businesses go bankrupt. Stock markets crash and unemployment soars. The other outcome, a trough, is simply a low point, and the economy can recover quicker. Finally, an economy reaches the recovery stage where businesses no longer produce enough to meet the demands of consumers. As a result, more are hired and more money is available to spend, eventually drawing the economy back into prosperity.

The Great Crash

     Black Tuesday was the nickname given to the day the stock markets crashed in October of 1929. Many people had played the markets in the 1920’s, buying stocks when prices were low and selling when they rose, hoping to make cash quickly. They invested much of their money into the markets, which resulted with many people losing everything when the markets fell.

Causes of the Great Depression

Below are the 6 main causes of the Great Depression.

1.       Over-Production and Over-Expansion

Agriculture and other industries reached record highs during the prosperous 1920’s and produced huge supplies of food and other goods. The problem was that more was being produced than used, so extra was stockpiled in warehouses. In 1930, 400,000 cars were made in Canada, even though the record in annual car sales was only 250,000. As more good stockpiles, factory owners panicked and slowed production, laying off workers.  This meant less money could be spent, pushing further towards recession.

2.       Canada’s Dependence on a Few Primary Products

The economy of Canada was based on a few key staples, or basic products. These products were wheat, fish, minerals, and pulp and paper. If demand was strong, then the economy would be, but if the global demand for these staples fell, the economy would also follow suit. This was especially true for areas like the prairies or Maritimes, which focused on only one staple. As the depression hit other countries, they could no longer afford to buy products from Canada, which hit the prairies especially hard. Other countries were competing with Canada’s wheat, and farmers suffered a drought in the summers of 1929, 1931, and 1933-1937, further adding to their troubles. Other industries, such as flour mills suffered when the farmers had troubles. Thus, the problems of the farmers had a chain-reaction.

3.       Canada’s Dependence on the United States

The 1920’s Canadian economy was closely linked to that of the USA, as 65% of Canada’s imports came from there during this decade. In turn, 40% of Canada’s exports went to the USA, making them the biggest trading partner. Thus, when the American economy began to have trouble, the Canadian economy was not far behind it. Once America was hit by the depression, their business interest and purchases from Canada dissipated, dragging the Canadian economy down alongside it.

4.       High Tariffs Choked Off International Trade

As euripi recovered from the war, they needed to buy supplies from North America, but were restricted because they could not afford to buy the goods. This was happening at the same times as countries were adopting tariffs (taxes on imported goods) to protect their own economies. As one country would place high tariffs on another country’s goods, the other country would follow suit, eventually slowing the international flow of goods.

5.       Too Much Credit Buying

In the 1920’s, people were buying their items on credit, following a buy now and pay later idea. Will Rogers, a comedian, said that to clear traffic problems, all cars not paid for should be removed from the highways. Though it seemed humorous, it was to prove how many people were buying with credit, and not paying right away. This uncontrolled buying put many families into debt, as buying something with credit meant it would cost more than the start price after all payments and interest were added. Once items were paid for, they were often obsolete or useless, so people would buy more. If people fell behind on payments, the item could be repossessed by the original owner. Once the depression hit, many lost everything, from cars to stoves and even houses.

6.       Too Much Credit Buying of Stocks

People of the 1920’s saw the stock market as a way to get rich quick, which led everyone to buy on credit. Now, it was not just the rich people, but everyday citizens who bought stocks. They needed the stocks to rise to pay the credit and interest, so as they fell, they dumped the stock to cut losses. In October 1929, this trend hit its worst as the market dipped and everyone dumped their stocks, further lowering the values. In a number of hours on October 29, 1929 the stocks in Montreal and Toronto dropped 50%, and investors were simply wiped out. People feared a depression coming, but they failed to realize they were living in it.

The Worst Years

     The depression hit Canadians hard, as none were prepared for the conditions they would be facing. By 1931, unemployment covered almost one third of all Canadians, leaving drifters searching for work wherever they travelled. The government of the early 1930’s offered no support to the poor starving families, since none of the social welfare programs had been created by this time. The rich Canadians lived well with the rock-bottom prices, and the government tried to assist the poor with what little relief money it could give to each province.

Government and Relief

     In the depression times, the welfare of the poor was taken care of by city governments and charities, so the federal government had no preparation to assist the masses when the depression hit. King, the prime minister at the time thought it best to wait out the depression, and thought social welfare was the task of the provincial governments. He supported this by saying he would not give a “five-cent piece” to any province without a Liberal government. In response, King was not re-elected in 1930, and the Conservative Richard Belford Bennett became PM. Bennett promised to find work for the unemployed, and gave $20 million to the provinces for relief, as well as to improve Canada’s global trade. Though he tried to implement these promises, they did not do as he hoped, and were only temporary aids to the whole problem.

     The provincial governments also had an issue with the relief money, as they were unsure of how to distribute it. As such, it was passed along to municipal governments to solve on their own, which led to many issues. In some cities, workers were laid off, money was borrowed, and taxes were raised, but this could not deal with the volume of needy in the cities. Farmers had the benefit of growing their own food, so were considered to be better off than city folk. Some in cites had to prove they had no utilities, or prove they had lived in the city they wanted relief from. Other had to give up licenses, and many were completely excluded, like widows, unmarried mothers and women with jailed husbands. It took protests for the governments to change this policy. The federal government had also set up relief camps where men could work to build roads and clear brush for 20 cents a day and food, clothes, and a place to sleep. In June of 1935, the On-To-Ottawa Trek begun and ended as BC relief camp workers on trains headed to Ottawa were stopped by Mounties in Regina. Bennett claimed the men were plotting to overthrow the government, a comment that resulted in riots which injured dozens and killed a police officer.

Coping With Hardships

     People across the country found ways to cope with the hardships and help each other. Many avoided relief unless absolutely needed, as it was a sign they did not have what it took to survive. Relief was often vouchers for food and other goods, and was often barely enough to live on. A family of five only got $4.58 a week in Montréal in 1932, $5.75 in Vancouver, and $0.42 in Newfoundland. As times got worse, many blamed Bennett, and named their makeshift solution to problems after him. “Bennett Buggies” were cars pulled by farm animals, “Bennett Boroughs” were shacks where unemployed people lived, newspaper blankets on park benches were “Bennett Blankets: and a “Bennett Barnyard” was an abandoned farm.

Effects on Canada’s Regions

     In all regions of Canada, the depression hit hard, but some areas got it worse. In the prairies, wages dropped for 50% or greater, and wheat farmers suffered from drought, grasshopper plagues, and surplus wheat in the global market. These factors lowered the quantity and value of wheat in Canada, and sent agriculture machinery production down wards rapidly, shifting from 17,000 tractors sold in 1928 to only 892 sold in 1932. Small businesses in central Canada collapsed, or survived by firing most of their employees and lowering pay, whereas large companies had profits in all but one of the depression years because they had more to fall back on, and a greater market to deal with. Maritime economies fell as markets for their good dropped, though the farmers who could grow varied crops faired rather well. Newfoundland was still separate from Canada, and required the British government to take over to prevent complete economic collapse.

The Great Escape

     Amidst the daily struggles across the country, the 1930’s became the ‘Golden Age’ of Hollywood. A ticket, costing only a quarter, was a path for Canadians to forget about their worries and their hardship and enter the wondrous world of movies.  Gone With the Wind and Mickey Mouse were popular films of the time, and numerous film stars were Canadian. Radio shows coming in from the USA also became very popular in Canada during these years, and were another escape from the depressing daily lives of most Canadians.

Protecting Canadian Culture

     Bennett thought something should be done about the American radio shows filling Canadian airwaves. He set up a Royal Commission, led by a banker Sir John Aird in 1928. The 1929 Aird report showed majority of radio shows were coming across the border, and advertising was having an impact. Since most Canadian radio stations were in cities, the rural areas were not getting Canadian broadcasting. This led to the conclusion that the federal government shall control all Canadian radio stations, and the formation of the Canadian Radio Broadcasting Association (CRBC) in 1933. This was made to counter the largely American control of Canada’s airwaves, and was changed to the Canadian Broadcasting Corporation (CBC) in 1936. The CBC covered the 1939 royal tour to Canada by King George VI and Queen Elizabeth, and was carries all across the country, proving it could help unite Canada.

     The National Film Board (NFB) was established in 1939 “to promote the production and distribution of films in the nation and in particular...  to interpret Canada and Canadians to other countries.” This was created as Canada wanted a film production company to counter the spreading Hollywood influence. The first commissioner, John Grierson, was a documentary filmmaker and helped Canada a world leader in documentaries. Norman McLaren was an animator, and he contributed to the NFB’s reputation for animated films as well. Thus, the NFB has brought recognition to Canada for its many film works since 1939. In 1937, the Governor General’s Awards were created to promote literature, and were invented by Governor General John Buchan (also an author) under pressure from the Canadian Author’s Association. Though initially in English, French works were included in 1959, and it remained the most prestigious literary award in Canada until the 1980’s. People have argued the organization have helped Canadians, while other say it restricts outside creative influences.

The Search for Solutions

     By 1935, Bennett knew Canadians were very unhappy about the economic situation. The depression dragged onwards, and it appeared the government was not helping. Just before the 1935 elections, Bennett proposed radical changes, including unemployment and social insurance, minimum wages, limits work hours, guarantee fair treatment of workers, and control prices to stop business from making unfair profits.  This so-called “New-Deal” was similar to that introduced by American president Roosevelt and it surprised Canadians. Bennett’s political opponents convinced Canadians that this was just a ploy to get their votes, and in the 1935 election, King and the Liberals were back in power. People also found themselves dissatisfied with provincial governments during the depression, since they rarely had effective ways of dealing with the present problems. They usually just asked for more money from the federal government, though some, like Ontario, set minimum wages. These changes had little effect at the time however.

 

New Political Parties

     In the 1930’s, Canadians were searching for someone to really lead them out of the depression, and exhibit real leadership. Federal and provincial governments were out of ideas, and parties were appearing all over Canada. Canadians needed dramatic action to deal with the depression, regardless of who it came from.

Social Credit

     The Social Credit party appeared in 1935 as it became the provincial government of Alberta. It was led by William Aberhart, who attacked the “Fifty Big Shots”, leading bankers and industrialists in Canada. He followed the writings of Major C.H. Douglas, who said the economic issue was caused by too little money being put into the economy. To solve this, Aberhart gave a $25 social credit to every adult in Alberta, every month. This credit was called ‘funny money’ because it was deemed illegal, and not a penny was paid out. Despite this, his party stayed in power in Alberta for 35 years, and came to power in British Columbia in 1953, eventually becoming a federal party and winning a few seats in Alberta and Québec, (where it was known as the Ralliement des Creditistes) where it was popular from 1961 through the1970’s.

Co-operative Commonwealth Federation (CCF)

     This party was formed in 1932 by farmers, labour groups, university teachers and a few members of parliament. The main goal was for social and economic changes to solve the issues causing people to suffer. The name summarized what the party stood for; Co-operative was for the belief in joint action, Commonwealth was for the hope of a social order where wealth would be shred more equally, and Federation stood for the fact that the party was composed of people from various social and economic standings.  James S. Woodsworth was the first leader, a man who had been arrested for involvement in the Winnipeg General Strike. He was elected as an MP for Manitoba later in his career. The policies were laid out in the Regina Manifesto, a document calling for public ownership of banks, transport, electric power, and other major services. It also called for government to support agriculture, conservation, and improving health and welfare services. They also believed the government should be in control of the economy, but that pole should vote to make these things occur. Members were often called communists, but differed because they did not support violent revolutions, and wanted change through the government. Though they made little progress, King and the Liberals adopted some of their ideas, but they eventually got a few seats in BC and Saskatchewan in 1933-34. They also got some support in Ontario, and managed t come into power in 1941 in Saskatchewan, and their ideas have been borrowed by both the Liberals and Conservatives throughout the years. In 1961, they were renamed the New Democratic Party (NDP), and are still around today. The ideal of welfare, unemployment insurance and pension too root in the depression, but did not come around until later on.

Union Nationale

     By 1921, more people in Quebec were in towns than farms, as many had moved off into industrial fields like mining and hydroelectricity. As it became industrialized, control was still in the hands of those who spoke English. The depression caused a crisis for the industrializing province, as unemployment reached 30% in Montreal. The party appeared, headed by Maurice Duplessis, and blamed the English-speaking people and federal government for the problems. They vowed to defend French culture and language, and were determined to gain more political power for Quebec as a province. They came into power in 1936, and Duplessis had control from then until his death in 1959, with the exception of the war times. Once in power, laws were passed to stop labour unions, and then the Padlock Law was passed in 1937. This allowed for the premises of any group deemed being against the government, or just not fully cooperating to be locked up. Initially aimed at communists, it also targeted Jews, labour unions, and Jehovah’s Witnesses. The party remained popular for their nationalism to Quebec.

Immigration

     Canada has had a “tap-on, tap-off” approach to immigration. Immigrants are let in during good times, and kept out during bad times. In the 1920’s, xenophobia feeling arose, and the government began deporting anyone seen as a troublemaker, as they still feared a revolution. They would have no trial, and no lawyer or jury, they were just put on ships. When immigrants would enter some cities for relief, they would be shown a voluntary deportation form, a sign they were not wanted there. The government passed a law to refuse entry to people who would not be able to find job, or be a burden to society. This only favored Americans or British. The 1921-1931 decade had 1,666,000 immigrants which dropped to 140,000 in the 1931-1941 decade. The peak year had 400,000 immigrants, but the height of the depression, 1935, only saw 11,000 new people. Even the Jews trying to escape Nazi Europe were refused entry to Canada, and sent back. This would later haunt Canadians, as many of these people died in the holocaust.

I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.-Albert Einstein

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