Canada in the 1920s and the Great Depression

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Canada in the 1920s and the Great Depression
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IB Objectives

• Mackenzie King
• RB Bennett

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IB Paper 3 Sample Questions

• In what ways, and for what reasons, did the
  relationship between Canada and Britain change
  between 1900 and 1931?
• The political and economic impact of the First
  World War on Canada was more positive than
  negative. How far do you agree with this
  judgment?

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IB Paper 3 Sample Questions

• Analyse the main developments in Canadas
  economic relations with the United States in the
  first half of the twentieth century.
• Analyse the short-term and long-term effects of
  the First World War on the economic and political
  development of Canada.

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IB Paper 3 Sample Questions

• Analyse the impact on Canada of participation in
  the First World War.
• To what extent did the First World War contribute
  to the emergence of the movement towards greater
  sovereignty for Canada?

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Lecture Outline

• Canada in the 1920
• A. Effects of World War I
• B. Economic Relations with the U.S.
• C. Labor
• D. Canadian Independence
• II. Canada during the Great Depression

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Key Terms

• OBU
• Statute of Westminster
• Richard Bedford Bennett
• Mackenzie King

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Canada Enters the War

• When the war broke out in 1914, Canada entered
  automatically as part of the British Empire.
• In October 1914 more than 30,000 Canadian
  soldiers were shipped to Europe.
• The war caused conflict between French and
  English Canadians.

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Impact on Canada

• The Economy
• 60,000 Canadians were killed in action and around
  200,000 were wounded out of about 625,000
  Canadian soldiers.

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Effects of World War I

• The transition from a war time to peace time
  economy led to a brief burst of inflation where
  prices doubled from their pre-war average, and
  then to a severe recession that lasted until
  1923.
• Grain prices fell by 1/3, however they were still
  high enough to encourage farmers to expand
  production, and Canada became the worlds largest
  exporter of wheat.

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Population

• During the 1920s about 1 million people
  immigrated to Canada with most of them becoming
  part of the urban industrial workforce.
• By the end of the decade, British people made up
  half of the population and French people were a
  little over 28

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Economic relations with the U.S.

• U.S. owned 1/3 of Canadas pulp production
• U.S. capital was vital for the expansion of the
  Canadian mining industry
• Ford, Chrysler, and GM established auto
  production plants in Canada and produced about
  75 of all cars in the country.

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Economic Relations

• Oil and natural gas was discovered in Alberta in
  1914 and Canada became one of the worlds larges
  producers of petroleum.
• By the early 1920s, the U.S. had replaced Britain
  as Canadas number one trading partner.

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Labor

• During the war labor unions had doubled their
  membership and economic troubles during 1918-1922
  caused many workers to go on strike.
• In March 1919 western labor leaders met at
  Calgary and organized into the One Big Union (OBU)

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OBU

• The OBU was a socialist organization that was
  inspired by the Communist success in Russia in
  1917.
• The Calgary delegates called for a general strike
  across Western Canada and in May 1919 30,000
  unionized workers in Winnipeg went out on strike
  and shut down the city.

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Bloody Saturday

• On June 21 in WinnipegBloody Saturdaytwo
  workers were killed and 30 injured by the
  Mounties.
• The strike was broken and the military took
  control of the city.
• This caused Canadian unions to decline in power
  and lose membership during the 1920s.

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Canadian Autonomy

• In 1917 Britain invited prime ministers from its
  empire to join the British Cabinet to form an
  Imperial War Cabinet to coordinate the war
  effort.
• Britain also recognized Canada as an autonomous
  nation of an Imperial Commonwealth.
• After WWI, Canada had control of its armed forces
  and has influence on Imperial matters that
  concerned its well-being.

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Statute of Westminster

• Officially recognized Canadas independence in
  1931
• Also gave independence to Australia, New Zealand,
  South Africa, Irish Free State, and Newfoundland.

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Causes of the Great Depression in Canada

• Decline in investment and demand in industry
• Shrinkage of agricultural markets
• A drought and subsequent prairie dustbowl
• A grasshopper invasion in 1937

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Effects of the Great Depression

• About 27 of non-agricultural workers were
  unemployed and the total unemployment probably
  exceeded 50 at the height of the depression.
• Agricultural income shrank by 75.

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Impact of tariffs

• The Hawley-Smoot Tariff in the U.S. in 1930 was
  just one of several measures that led to a
  drastic decline in exports, which, prior to the
  crash, accounted for more than a third of
  Canadas nation income.
• Between 1928 and 1933, annual per-capita income
  in Canada declined by 48 from 471 to 247.

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Richard Bedford Bennet

• In the election of 1930 Bedfords Conservative
  party won control of the Canadian government.
• He believed that self-help was better than public
  assistance.

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Bennett

• He raised the tariff by almost 50 causing the US
  to retaliate and Canadas foreign trade decline
  by two-thirds from 1929-1933
• By 1935 it was clear that the Depression was not
  going away so he created his own New Deal based
  off of FDRs.

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Bennett

• Parliament enacted unemployment insurance,
  minimum wages and a maximum 48 hour work-week
• Federal government created the Bank of Canada
• His reforms were too late and his party lost the
  1935 election and the Liberal party of Mackenzie
  King regained power.

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Mackenzie King

• Most of Bennetts reforms had been found
  unconstitutional and King did not implement any
  new social policy initiatives.
• By 1938 the King government began to stimulate
  the economy with deficit spending.