Unit 3.1

Time Period: 1929 - 1939
Significance: The Great Depression was the worst economic disaster to affect the modern world, with millions suffering due to job loss and deteriorating living conditions.

Definition: The economy functions in cycles, known as the Business Cycle, which encompasses: - Prosperity: Growth of wealth - Recession: Temporary decline in the economy - Recovery: Changes implemented to restore prosperity - Depression: Prolonged recession characterized by long-term downturn.

Prosperity: - High production - Low unemployment - Many jobs and money to spend - Business expansion and high profits
Recession: - Declining production - Increasing unemployment - Fewer sales/jobs, business cuts, low profits - Bankruptcies and job cuts
Depression: - Very low sales - High unemployment - Many businesses close - Very low wages and low demand for goods
Recovery: - Increasing production - Declining unemployment - Job increases and spending reinitiated.

Many Canadians invested heavily in the stock market during the 1920s, often borrowing money to buy shares.
Stocks experienced dramatic price hikes during this period, leading to a Bull Market: - Definition: A sustained period of optimism and rising stock prices, where investment prices inflate faster than usual.
Individuals who made wise investments profited significantly from this boom.

In September 1929, stock values began to fall, spurring panic among investors who rushed to sell their stocks to recover their investments.

Occurrence: On October 29, 1929, referred to as Black Tuesday, the stock market crashed.
Key Events: - All exchanges (Toronto, Montreal, New York) faced collapse. - Total shares traded on that day: 16,419,030; lost approximately $9 billion in value. - Many investors lost all savings, and shares plummeted to half their value.

Many were unaware of the severity of the economic crisis, mistakenly believing that the economy would naturally rejuvenate itself. Eventually, widespread unemployment, starvation, malnutrition, and scarcity of basic necessities became commonplace during the "Dirty Thirties."

Duration: Lasted for 10 years, severely impacting agricultural economies.
Effects: - Grasshopper pests devastated crops. - Insufficient rainfall turned large regions into dust bowls. - Ontario and Quebec also suffered economically as farmers could not purchase factory goods. - While Canadian farmers struggled, nations like Australia, Russia, and Argentina had record wheat harvests, resulting in a price drop from $1.29/bushel in 1928 to 34 cents in 1932. - By 1939, although conditions normalized, 250,000 farmers had abandoned their farms and migrated to Canadian cities in search of employment.

Definition: Areas of land where vegetation has been eradicated, and soil reduced to dust, mainly due to prolonged drought or poor farming methods.

The stock market crash was a significant trigger leading to a prolonged period of economic hardship; however, it was not the sole cause of the Great Depression.

Overproduction and Overexpansion: - Many businesses produced excess goods, stockpiling items like cars, newsprint, radios, and clothing. - Factories expanded excessively without sufficient demand for their products, leading to an oversupply.
Dependence on Primary Products: - The Canadian economy was heavily reliant on sectors such as pulp and paper, mining, wheat, and fish. - A decrease in global demand for these commodities resulted in economic downturns in Canada.
Dependence on the U.S.A.: - Exports accounted for a significant portion of the Canadian economy, especially towards the U.S., with 65% of imports and 40% of exports tied to the U.S. - The simultaneous economic downturn in the U.S. heavily impacted Canada.
High Tariffs: - To protect domestic industries, the Canadian government imposed increased tariffs on imports; other countries matched these tariffs, leading to decreased trade and sales of Canadian goods.
Buying on Credit: - The 1920s saw a rise in purchasing on credit, leading individuals and businesses to accrue debts with the expectation of future earnings. - Many borrowed funds or bought stocks on credit, which became unsustainable as the economy faltered.

Demographic Impact: Young men aged 17-30 were particularly affected, often being the last hired due to hiring preferences for males with families to support.
By age 17, young men were no longer designated as dependants and had to fend for themselves, typically facing high competition for scarce jobs.

Initiatives: Prime Minister R.B. Bennett established relief camps for unemployed young single men to provide jobs and necessities.
Camp conditions: - Activities included building infrastructure like roads, airports, military bases, and parks. - Compensation: Food, lodging, and $7.50/month (approximately $159.60 today).
As the Depression progressed, pay decreased, and conditions deteriorated for workers (about 20,000 men employed at any time).

Background: Discontent led workers to form the Relief Camp Workers' Union (RCWU), culminating in protests against working conditions.
Timeline: On April 4, 1935, approximately 1,500 workers struck in Vancouver, escalating to a union rally.
Outcome: Strikers traveled to Ottawa; when they reached Regina, leaders were arrested, leading to the Regina Riot on July 1, 1935.

Overall Factors Contributing to the Depression: - The crash of the stock market revealed the extent of overspending and overproduction. - This led to increasing unemployment and diminishing financial capacity in the economy, with individuals unable to fulfill credit obligations, resulting in the loss of homes, vehicles, and appliances. - Consequently, dissatisfaction and economic decline ensued with a diminishing flow of money in circulation, exacerbating the economic downturn.