What Caused the Great Depression in Canada Lead

What Caused the Great Depression in Canada? Lead Up to Hardship

OVERPRODUCTION § Good times had encouraged producers to increase production beyond what markets demanded § Stockpiling of goods § Workers laid off, have less money to spend, buy fewer goods

Primary products dependence § Economy depended on staple productswheat, fish, minerals, pulp and paper § Competition from other producers of same products reduced demand price on world market § Wheat Especially Vulnerable

Cutting Grain in Alberta c. 1920

Environmental issues § Poor farming practices and drier climate led to drought § Top soil dried up and blew away in great dust storms § Affected Palliser’s triangle in Canada § In the prairies known as the dust bowl

Dependence on USA § Primary market so downturn there affects us (reduced trade) § Our economic good times depended on continued sale of staple exports to USA

protectionism § Protective tariff: high taxes on goods coming in from other countries § Tariffs shut Canada out of world markets § Exports plummeted, slowed down trade internationally

Canadian international paper company mill at three rivers, Quebec, 1930

Worldwide Depression § US lent money during and after WWI § At the end of WWI European nations owe money to the U. S. § Nations depended on selling products to repay loans § Nations lose ability to repay loans with U. S. protectionism

Buying on credit § Buy now pay later motto § New consumer goods paid for in installments § With job losses people unable to pay for credit purchases

Buying on margin § Stock markets active - Toronto, NY, Montreal § When purchasing stocks some Canadians put 10% down with the idea of paying back the rest as soon as stocks go up in price and you sell them § Investors sought to cash in on high prices but flooded market and prices crashed

Crowds gather on wall street Black Tuesday Oct. 29, 1929

Economic collapse § Stock market cash didn’t cause depression but did make it worse § Investors who couldn’t repay stock debt went bankrupt § Canada plunged into depressiondirty thirties

Review questions