The Great Depression in Canada

Summary

The video script explores the Great Depression's impact on Canada, focusing on four key causes: the 1929 stock market crash, easy credit leading to over-investment, interdependent global trade exacerbating economic downturns, and the Prairie droughts worsening agricultural losses. These factors combined to plunge Canada into a severe economic crisis, highlighting the interconnected nature of global economies and the devastating effects of over-reliance on exports.

Takeaways

• 📉 The Great Depression was a significant economic downturn that greatly affected Canada, with specific causes often attributed to major events.
• 📅 Black Tuesday (October 29, 1929) marked the beginning of the Great Depression, as it was the day of the stock market crash that signaled the recession.
• 💹 Easy access to loans and the rapid increase in share values during the Roaring Twenties led to an unsustainable economic bubble that burst during the crash.
• 🏦 The stock market crash had a domino effect, causing banks to demand repayment of loans that many could not afford, leading to further economic instability.
• 🌐 The interwoven global economy meant that the economic downturn in the United States had a ripple effect on trading partners, including Canada.
• 🚗 Post-World War One industrial growth and the availability of consumer goods like cars and radios led to widespread borrowing to finance these purchases, which contributed to economic instability.
• 🌾 Canada's heavy reliance on the U.S. as an export market and for imports made it particularly vulnerable to the economic downturn in the U.S.
• 🌾 Wheat overproduction in Canada, due to the Prairies' agricultural boom, led to an oversupply that was exacerbated by the global economic depression.
• 🛃 Increased tariffs by other countries to protect domestic industries further reduced demand for Canadian exports, worsening the economic situation.
• 🌧️ The drought and subsequent agricultural crises in the Prairies, starting in 1928, devastated the farming community and contributed to the overall economic hardship.
• 🦗 Drought, grasshopper plagues, and crop diseases like rust led to poor harvests and reduced income for farmers, worsening the economic impact of the Great Depression.

Q & A

What is the significance of October 29, 1929, in the context of the Great Depression?

October 29, 1929, is known as Black Tuesday because it was the day of the stock market crash that signaled the beginning of the Great Depression.

Why did people start selling their shares during the stock market crash of 1929?

People started selling their shares as the share values decreased, in an attempt to withdraw their money and avoid losses, which led to a panic sell-off.

How did the easy availability of loans during the Roaring Twenties contribute to the Great Depression?

The easy availability of loans allowed people to take on debt to buy shares and luxury goods. When the stock market crashed, many were unable to repay these loans, leading to bank failures and a worsening economy.

What role did the interwoven network of trade play in the spread of the Great Depression?

The interwoven network of trade meant that the economic downturn in one country, like the United States, affected its trading partners, including Canada, due to the interconnected nature of the global economy.

How did the post-World War One economic boom and new inventions impact the economy before the Great Depression?

The post-war economic boom and new inventions led to increased consumer spending and easy access to loans, which fueled a speculative bubble that burst during the Great Depression.

Why did the demand for grain decrease during the Great Depression, and how did this affect Canada?

The demand for grain decreased because of the economic downturn in countries like the USA, which reduced their imports. This affected Canada significantly as it relied heavily on grain exports, leading to a loss of export markets and economic hardship.

What was the impact of increased tariffs by other countries during the Great Depression on Canadian exports?

Increased tariffs by other countries encouraged citizens to buy domestically produced goods, which reduced the demand for Canadian imports and further exacerbated the economic crisis in Canada.

How did the oversupply of wheat in Canada contribute to the economic problems during the Great Depression?

The oversupply of wheat led to a decrease in grain prices, which left Canadian farmers with less income. This, combined with the global economic downturn, worsened the financial situation for farmers and the overall economy.

What role did the drought and subsequent agricultural problems play in exacerbating the Great Depression in Canada?

The drought and agricultural problems like grasshopper plagues and crop diseases reduced crop yields and increased the hardship for farmers. This, coupled with the economic depression, led to widespread poverty and unemployment among farmers.

What were the consequences of the high unemployment rate caused by the Great Depression for the Canadian workforce?

The high unemployment rate made it even more difficult for people to find work, increasing poverty and social unrest, and putting further strain on the economy and government resources.

How did the economic conditions in the Prairie provinces of Canada change during the Great Depression?

The Prairie provinces, once rich from grain exports, were severely impacted by the drought and the global economic downturn. The decrease in grain prices and the loss of export markets led to widespread destitution among farmers in these regions.

Outlines

00:00

📉 The Stock Market Crash and Its Impact

The first paragraph discusses the onset of the Great Depression in Canada, triggered by the stock market crash on Black Tuesday, October 29, 1929. It highlights how easy loans and the rapid increase in share values during the Roaring Twenties led to an unsustainable economic bubble. The subsequent rush to sell shares as their value decreased caused a sharp economic downturn. The interwoven global trade network meant that the economic shock in the United States affected its trading partners, including Canada.

💳 The Role of Easy Credit

This section delves into the role of easy credit in exacerbating the economic crisis. Post-World War One, industrial growth and the availability of consumer goods like cars and radios led to widespread borrowing. Banks granted loans without stringent checks on repayment capabilities. The reliance on increasing share prices and economic prosperity made the system vulnerable. When the crash occurred, banks faced defaults, and the easy credit system was revealed as a significant contributor to the economic collapse.

🌾 The Agricultural Crisis and International Trade

The third paragraph examines the agricultural sector's role in Canada's economic downturn. Canada's heavy reliance on wheat exports, particularly to the USA, made it susceptible to global market fluctuations. As the depression reduced demand for grain, Canadian exports suffered. Additionally, increased tariffs in other countries led to a preference for domestic products, further impacting Canadian farmers. The interconnectedness of economies meant that the USA's depression had a ripple effect on Canada and other nations.

🏞️ The Prairie Drought and Its Economic Ramifications

The final paragraph addresses the devastating effects of the drought in the Prairie provinces, which began in 1928. The lack of rainfall, strong winds, and subsequent topsoil erosion, along with plagues of grasshoppers and crop diseases like rust, severely damaged agricultural production. The already struggling economy due to the depression meant that the reduced harvests sold for less, leaving farmers impoverished and contributing to increased unemployment and the overall severity of the Great Depression in Canada.

Keywords

💡Great Depression

The Great Depression refers to a severe worldwide economic downturn that took place during the 1930s. It is the defining economic event of the 20th century and is directly related to the video's theme as it discusses the impact of this period on Canada. The script mentions the Great Depression as a result of the stock market crash and various economic factors, illustrating its central role in the video's narrative.

💡Black Tuesday

Black Tuesday, also known as the stock market crash of 1929, is the term used to describe the day when the stock market dramatically collapsed, signaling the beginning of the Great Depression. In the script, 'Black Tuesday' is highlighted as the pivotal event that led to the economic recession and the subsequent Great Depression, making it a key concept in understanding the onset of the economic crisis.

💡Stock Market Crash of 1929

The Stock Market Crash of 1929 is the event where stock prices on the New York Stock Exchange collapsed, leading to a widespread loss of wealth and a severe economic downturn. The script identifies this crash as a 'huge event' that significantly contributed to the Great Depression, emphasizing its importance in the economic history of the time.

💡Loans and Shares

In the context of the video, loans and shares represent the financial instruments that were easily accessible during the Roaring Twenties, leading to an inflated market and eventual crash. The script describes how people could easily take out loans and buy shares, which increased in value until they became too expensive, causing a rush to sell and contributing to the economic collapse.

💡Economic Recession

An economic recession is a period of temporary economic decline during which trade and industrial activity are reduced. The script uses the term to describe the state of the economy following the stock market crash, where people were reluctant to spend money, worsening the economic state and leading to the Great Depression.

💡Interwoven Network of Trade

The term 'interwoven network of trade' refers to the interconnected global trade system where countries rely on each other for imports and exports. The script explains how this network, while beneficial for trade, made the economic downturn in the U.S. felt globally, including in Canada, due to the interconnectedness of economies.

💡Industrial Growth

Industrial growth, as mentioned in the script, refers to the expansion of manufacturing and production capabilities following World War One. This growth led to the creation of new consumer goods like cars and radios, which became popular and contributed to the economic boom and eventual bust, as people took out loans to purchase these items.

💡Easy Credit

Easy credit describes the practice of banks and financial institutions granting loans with ease, often without stringent checks on the borrower's ability to repay. The script points out that the availability of easy credit led to an increase in share prices and a false sense of economic prosperity, which ultimately contributed to the severity of the Great Depression.

💡Oversupply

Oversupply occurs when the quantity of a product available for sale exceeds the quantity that consumers are willing to buy. In the script, oversupply is discussed in the context of Canadian wheat, where the decrease in demand during the Great Depression, combined with increased tariffs and a surplus of grain, led to economic hardship for Canadian farmers.

💡Drought

Drought is a period of unusually low precipitation, leading to a shortage of water. The script describes the drought in the Canadian prairies as a significant factor that exacerbated the economic conditions during the Great Depression, as it led to crop failures and increased the financial burden on farmers.

💡Unemployment

Unemployment refers to the state of being without a job while actively seeking work. The script highlights the increase in unemployment during the Great Depression, particularly among farmers who lost their livelihoods due to drought and economic conditions, contributing to the overall economic hardship.

Highlights

The Great Depression of the late 1920s and early 1930s greatly affected Canada.

Historians often attribute specific causes to major events, and the Great Depression is no exception.

This video will cover four major reasons for the Great Depression in Canada.

October 29, 1929, known as Black Tuesday, marked the beginning of the Great Depression with the stock market crash.

During the Roaring Twenties, easy loans and shares led to rapid increase in company values.

People stopped buying shares when they became too expensive and started selling them, causing a rush to withdraw shares and save money.

The stock market crash led to a reluctance to spend money, worsening the economic state.

Many American banks were hit hard by the recession and depression, affecting Canada's economy as well.

Interwoven global trade networks meant that economic issues in one country affected trading partners.

Post-World War I industrial growth and new inventions like cars and radios led to increased consumer spending and easy loans.

Banks granted loans without checking repayment capabilities, leading to a fragile financial system.

The availability of easy credit turned out to be detrimental to the world economy.

Canada relied heavily on the US as an export market and for imports, making it vulnerable to economic downturns.

Decreased demand for grain during the depression and increased tariffs affected Canadian exports.

Oversupply of wheat due to continued farming led to financial struggles for Canadian farmers.

The Prairie provinces, rich from grain exports, faced the devastating effects of drought and pests.

Drought, pests, and disease weakened crops and led to a sharp decline in grain prices, impacting farmers' livelihoods.

The correlation of the drought and the depression exacerbated the economic crisis in Canada.

Transcripts

the great depression of the late 1920s

and early 1930s greatly affected canada

historians have this habit of giving

major events specific reasons for

starting

and the great depression has not escaped

the fate of being labeled with specific

causes

this video will cover four of the major

reasons of the great depression in

canada

october 29 1929 became known as black

tuesday as it was the day of the stock

market crash of 1929

it signaled the recession that led to

the great depression

during the roaring 20s people had been

able to easily take

loans and shares in companies quickly

increased in value

once shares had reached a certain point

people stopped buying them because they

were too expensive

but started selling them to get their

money out as the shared values decreased

people suddenly rushed to withdraw their

shares so that they would not lose their

money and savings

afterwards they were reluctant to spend

their money and try to save it this

worsened the state of the economy

many american banks were hit hard by the

recession and following depression

in canada it was not quite as bad but

the united states canada and the rest of

the world had created an interwoven

network of trade

while this was good for getting and

selling a variety of products

it meant that what happened to one

country would affect all that country's

trading partners

the stock market crash of 1929 was a

huge event that led to the great

depression

after world war one the world grew

industrially and many new inventions

popped out on the market

items such as cars and radios were new

and popular

almost everyone went to own one people

now also began

having extra money to spend on these

luxuries and they took loans to help

cover the costs the banks granted these

loans with ease not really checking

whether people would be able to pay them

back on time or not

investors even took loans to buy more

shares the system worked as long as

share prices increased and the economy

was going well

but as soon as black tuesday hit banks

began demanding their money back only to

find

that people who owed the money were

unable to pay

those who held shares in the bank

withdrew them to protect their savings

leaving the banks broke if credit had

not been so readily available

the value of the shares would likely not

have increased so dramatically and the

banks would have had more reliable

investors

the availability of easy credit turned

out to be detrimental to the world

economy

the economies and countries around the

world became very intertwined after

world war one

shipping was faster than ever before and

countries relied on each other for

imports and exports

the usa had grown to become a powerful

nation with a booming economy

and canada relied heavily on this

country as an export market as well as

for imports

for example canada produced a lot of

wheat in the prairies

when the depression hit the usa the

world's demand for grain decreased

and canada lost a lot of export markets

additionally

other countries increased their tariffs

so that citizens would prefer to buy

products produced in their own country

as it was cheaper

canadian farmers continued to grow wheat

which led to oversupply of grain that no

one wanted

furthermore because countries depended

on each other so much

this meant that what happened to one

country would affect many other

countries as well

if during the 1920s canada had exported

and

imported few products they would have

been quite independent on the economic

scale and the depression in the usa

would not have hit canada as hard as it

did overdependence on exports to the usa

and other countries turned out to be a

calamitous mistake

and was one of the reasons why canadians

suffered during the great depression

during the 1920s the prairies had the

perfect conditions for growing wheat and

other grains

they were able to export lots of wheat

and the prairie provinces particularly

saskatchewan became rich

the first stages of the drought began in

1928 when there was much less rainfall

than in previous years

with every ensuing year the drought

worsened strong winds whisked away

topsoil and the lack of water made it

difficult to grow anything

soon plagues of grasshoppers swarmed the

land and ate those plants that managed

to survive the drought conditions

not only were the grasshoppers who

drought a problem a disease called rust

became prevalent

it weakened mature crops and caused them

to die what wheat and other grains could

be harvested by farmers sold for much

less than before due to the depression

this left farmers with very little money

and many tried to find work in cities

the jobless farmers increased the

unemployment rate making it even harder

for people to find work

the correlation of the drought and the

depression left hundreds of farmers

destitute and made the great depression

in canada worse

so there you have it four major reasons

of the great depression in canada