|
1929 Crash |
Economic Slowdown |
Bennett in Power |
The Ottawa Conference |
Prairie Drought |
Relief |
The Regina Riots | Alberta &
Bible Bill | Statute of
Westminster | Woodworth & the CCF
| The Union Nationale |
Relief Camps |
Bennett's Conversion |
King's Return |
European Unrest |
Royal Visit
After the stock market collapse of
October 29, 1929, many expected the economy to continue
on as strong as before and that the markets would bounce
back to their highs of previous summer. Terms such
as "the economy remains fundamentally sound",
"undiminished confidence in Canada's continued growth",
"constructive optimism", were used by the financial
community, politicians and other establishment figures
to reassure the people that the markets demise was a
temporary event. These events and predictions did not
transpire and a whole series of related events began to
take place which magnified the decent into economic
depression.
With the evaporation of many peoples disposable income
and in in many cases their entire savings, many began to
cut back on expenditures. This compounded the slow down
in consumer and business buying which necessitated a
slowing down of production and the laying off of
workers. As workers were laid off and restricted their
purchases, a deflationary spiral was started. Government
revenues began to fall as tax revenues decreased from
lower sales and less economic activity.
At this point
government stimulus spending might have spurred a stop
in the slow down and maybe started an increase in the
activity of the economy, but the Liberals in Canada as
the Republicans in the U.S. refused to go into any
further debt and focused in on balancing the budget by
reducing government spending. The result of these
actions pulled more money out of the economy and further
retarded the economy cycle.
Many banks and financial institutions had
helped feed the stock market frenzy which created the
bubble which had just burst. They had lost millions on
loan defaults, housing repossession, bankrupt debtors
and their own investment in the markets. They began to
restrict their lending and consolidate their lending
requirements which began to pull more money from the
economy and further slowed down business.
The bright optimistic
attitude of the 1920's was replaced by a pessimistic,
sceptical view of capitalism, the western systems and
the future in general. This crisis of confidence in the
system resulted in less spending by the consumer,
putting off a purchase when an older worn procession
would do and another restriction on the flow of cash.
Governments worldwide began to increase
their protective tariffs which slowed down international
trade and increase some prices to consumers which
discouraged them from buying unless absolutely
necessary.
The cogs and machinery
of business and commerce were grinding to a halt and
little action by federal governments was enacted to get
things going again.
On January, 1930, many of the mayors of
major Canadian cities assembled in Winnipeg to call on
the Federal Government to provide funds to the municipal
governments for relief and launch a massive public works
program to get people back to work. The feds did
not respond and by 1932 the country had sunk into
complete despair and many had simply given up. In the
U.S. the entire banking system was in danger of
dissolving as bank runs became commonplace and many
closed their doors forever.
Canada entered the depression and sunk to
it's lowest depths in 1932, which by was deeper then
anyone could have imagined. The long struggle of the
depression had set in. |
