Great Depression of Canada


This homepage will inform you of the effects that the Great Depression had on the country of Canada and its people. It covers many areas of the Depression and the whole duration of time that it lasted.


Throughout the years of 1929 to 1939, there was a world wide Depression and Canada was one of the worst affected countries. Financially and economically the country began to collapse regardless of what was done by political power.

The Causes Of The Depression

Effects

How Provinces Were Effected

How Industry and Individuals Were Affected

Letters to Bennett

How The Population Was Effected

Groups and Expansions

Bank Of Canada and Canadian Radio Broadcasting Corporation

Relief Camps

Trekkers

Political Role

Richard Bennett and Mackenzie King



THE CAUSE OF THE DEPRESSION

Many Canadians of the thirties felt that the depression wasn't brought about by the Wall Street Stock Market Crash, but by the enormous 1928 wheat crop crash. Due to this, many people were out of work and money and food began to run low. It was said by the Federal Department of Labor that a family needed between $1200 and $1500 a year to maintain the "minimum standard of decency." At that time, 60% of men and 82% of women made less than $1000 a year. The gross national product fell from $6.1 billion in 1929 to $3.5 billion in 1933 and the value of industrial production halved.1

Unfortunately for the well being of Canada's economy prices continued to plummet and they even fell faster then wages until 1933, at that time, there was another wage cut, this time of 15%. For all the unemployed there was a relief program for families and all unemployed single men were sent packing by relief officers by boxcar to British Columbia. There were also work camps established for single men by Bennett's Government.

The Great Depression, also known as The Dirty Thirties, wasn't like an ordinary depression where savings vanished and city families went to the farm until it blew over. This depression effected everyone in some way and there was basically no way to escape it. J.S. Woodsworth told Parliament "If they went out today, they would meet another army of unemployed coming back from the country to the city."2 As the depression carried on 1 in 5 Canadians became dependent on government relief. 30% of the Labour Force was unemployed, where as the unemployment rate had previously never dropped below 12%.




EFFECTS

How The Provinces Were Effected

It was estimated back in the thirties that 33% of Canada's Gross National Income came from exports; so the country was also greatly affected by the collapse of world trade. The four western prairie provinces were almost completely dependent on the export of wheat. The little money that they brought in for their wheat did not cover production costs, let alone farm taxes, depreciation and interest on the debts that farmers were building up. The net farm income fell from $417 million in 1929 to $109 million in 1933.

Between 1933 and 1937 to make matters even worse, Saskatchewan suffered a drought. The money brought in for the wheat was at a record low and the provincial income dropped by 90% in two years, forcing 66% of the province into relief. Where the previous yield per acre was 27 bushels, it had dropped to as little as three in 1937. The price of grain also dropped from $1.60 a bushel to $0.28 a bushel in 1932. Although Ontario and Quebec were experiencing serious unemployment, as mining and forest incomes from exports had dropped though they were less effected due to more diversified industrial economics, which, luckily for them, protected they domestic market.

For BC, the fish, lumber and fruit markets were considerably lower but they weren't as hard hit as the majority of the provinces. As for the Maritimes, they had entered provincial economic decline in the 1920's so therefore they had less of a margin to fall by. There was also a larger variety of jobs so the whole income wasn't wiped out due to the fall of one market. In 1934 Newfoundland had to surrender its government responsibilities and had to ask for financial aid from Britain.

How The Individual and Industry Was Effected

For an unemployed individual person during the depression there were no jobs and for those that had a job there was a high chance that it could be lost. Further there was little income from the majority of jobs. Tens of thousands of people were dependent on government relief, charity and food handouts for daily survival. Parents found it difficult to keep young children in school because they were needed on the farms to bring in as much goods as possible. University students were also dropping out all over the country because tuition was too much to pay. The home workers of the houses had to find part time jobs to "make ends meet."

The same ill-fortune was felt by industry business. The values of stocks were dropping rapidly and as the demand for goods and services dropped business firms ceased to exist. Even the CPR, considered on the world's most reliable income earners, didn't make enough money in 1932.




LETTERS TO BENNETT

Dear Sir:

I am writing you as a last resource to see if I cannot, through your aid, obtain a position and at last, after a period of more than two years, support myself. The fact is this day I am faced with starvation and I see no possibility for counteracting it or even averting it temporarily.

I have applied for every position that I heard about but there were always so many girls who applied that it was impossible to get work... First I ate three very light meals a day; then two and then one. During the past two weeks I have eaten only toast and a drunk a cup of tea every other day.

Day after day I pass a delicatessen and the food in the window look oh, so good! So tempting and I'm so hungry!...The stamp which carries this letter to you will represent the last three cents I have in the world, yet before I will stoop to dishonour my family, my character or my God, I will drown myself in.

Hamilton, Ontario




Dear Mr.Bennett:

I suppose I am silly to write this letter but I haven't anyone else to write to...we are just one of many on relief and trying to keep our place without being starved out...trying to get a start without and money and 5 children, all small... I am sure we can make a go of this place...if we could just manage until next fall. Just had 70 Acres in last year and the dry spell just caught it right along with the grasshoppers.

Please help me by standing me some money and will send you my engagement ring and wedding ring as security...My two rings cost over $100 over 15 years ago but what good are they when the flour is nearly all done and there isn't much to eat in the house...

Burton, Alberta




Dear Sir:

I wish to give my opinion of relief. First it is a shame for a strong man to ask for relief in this country... The best thing that can happen to a young man is to toss him overboard and compel him to sink or swim, in all my acquaintance I have never known one to drown who was worth saving...It takes hardship to make real men and women so cut out of relief...There are some people in this country who are in hard circumstances, but I can safely say there is no one having hardship that we pioneers had 28 or 30 years ago.

Blaine Lake, Saskatchewan


The previous letters are taken from Towards Tomorrow; Canada in a Changing World; History

How The Population Was Effected

The population growth in the 30's had reached the lowest since 1880 due to the plummeting numbers of immigrants and births. The number of Immigrants into Canada dropped from 169 000 in 1929 to fewer than 12 000 in 1935 and for the rest of the thirties it did not rise about 17 000. Almost 30 000 immigrants were forced to go back to their home country due to illness and unemployment. The number of deportations also rose from fewer then 2000 in 1929 to more than 7600 within three years. The death rate also rose due to poor living conditions, starvation, and disease. The birth rate dropped from 13.1 live births per 100 in 1930 to 9.7 in 1937.




GROUPS AND EXPANSIONS INTRODUCED TO CANADA

The depression of the thirties resulted in the expansion of government responsibilities for the economy and welfare of the country and its people. Born in 1932 the Canadian Radio Broadcasting Commission was created. In 1934, Bennett's government made the Bank of Canada to regulate the Monetary Policy. The Canadian Wheat Board was created in 1935 to market and establish the minimum price for wheat.

The depression also sparked a variety of reform movements including, Social Credit, "Work and Wages" Program, Co-operative Commonwealth Federation, Union National and W.D. Herridge. There was also the relief program that was set up for families in need and the monthly rate for a family of five varied from $60 in Calgary to $17 in Halifax.

The depression also lead to the outlaw and eventually the banning of the Communist Party of Canada. The Party was outlawed from 1931 to 1936 when a group of nine leaders were arrested for being members of an "unlawful association". They were again banned when war was declared in 1939 although groups of workers', the Unity League, the Relief Camp Workers Union, and the National Unemployed Workers Association made an organization and protested.

Bank Of Canada and Canadian Radio Broadcasting Commission

To enlarge the government the political groups created two important businesses that are still around today. They are the Bank of Canada in 1934 which was later nationalized in 1937, and the Canadian Radio Broadcasting Commission in 1932 later changed to Canadian Broadcasting Corporation also in 1937.

The CRBC was crated to establish a publicly owned radio network broadcasting in both French and English. People felt that the need for radio was important because it became the only escape from the hopelessness than many people felt. The depression demonstrated its inability to effectively regulate the nations money system and a new national bank was created to perform this function. The duties were to regulate currency and credit, serve as a private banker's bank and to advise on government financial matters.

Relief Camps

Because a family's relief was cut when a child turned 16, young men left home to reduce the burden on their families. Thousands of unemployed rode freight trains to the west looking for work which didn't exist. The Conservative government of Bennett set up work camps to prevent the growing unrest among this wandering mass of young unemployed workers. The camps were located in remote areas such as northern Ontario and B.C.'s interior. Inmates called these camps "slave camps". They lived on war surplus clothing, bunked in tar-paper shacks, ate army rations and were forced to work six and a half days a week for twenty cents a day.

Through 1932, the Relief Camp Workers Union (RCWU)was formed under the direction of Arthur Evans, a skilled carpenter, miner and communist labour organizer. The RCWU grew into a strong, disciplined democratic organization, focusing on the hopes and energy of the unemployed. In the spring of 1935, RCWU went on strike. They filled the streets of Vancouver shouting "Work & wages" and "When Do We Eat?". They demanded real work wages, better food, clothing and shelter, and an end to military discipline. Despite the overwhelming public support of "our boys", the federal government refused to negotiation with strikers. After this, the strikers voted to take their grievances to Parliament Hill in Ottawa.

Trekkers

On June 3rd, 1935, the first group of trekkers climbed into boxcars leaving Vancouver. They were joined by men in Kamloops, Field, Golden, Calgary and Moose Jaw. Women's groups, service clubs, labour councils, churches, unions and caring citizens met the trekkers at each stop with offers of food and shelter. Over 2000 unemployed men massed in Regina by mid-June. In Winnipeg, Thunder bay and Toronto, thousands were just waiting to join. Bennett decided that it was time to put an end to this. He ordered CPR to ban trekkers as "trespassers". Federal Cabinet directed RCMP to bolster troops in Regina to disperse the trekkers. Meanwhile, trekkers met with the government ministers in Regina. It was proposed that a small delegation continue to Ottawa. Eight were voted to go including Arthur Evans. On June 22nd, the delegation met with Bennett. Evans presented the strikers' demands. Bennett accused the purpose of the strikers to be a revolution to destroy law and order. The meeting disintegrated into heated exchanges with Bennett calling Evans a thief and Evans calling Bennett a liar. Negotiations ended.




HOW POLITICS PLAYED A ROLE

With so much economic pressure and upset the country turned to politics to hopefully clean up the situation that they were facing every day. The country removed their past political party run by Mackenzie King and brought in the conservative Lawyer, Richard Bennett, hoping that he could make a difference.

Richard Bennett and Mackenzie King in Power

Richard Bennett was brought into power when his opposition, Mackenzie King, reported that he would not give "a five-cent piece" to "any Tory Government". This remark was exactly what Bennett and his party needed to come into power and that is what happened in 1930. In the election, the conservatives got 137 seats in parliament and the Liberal representation was 88 seats. It was Bennett's confidence and energy that inspired Canadians to vote for Bennett.

Richard Bennett

Bennett was an "abrupt, headstrong, millionaire lawyer from Calgary"3 who dramatized King's slip as an example of tired cynicism and he accused the liberals of being unwilling and incapable of dealing with the pressures of the Depression. To get the people on his side, Bennett promised work, to promote the strengthening of Canada's industry behind tariff walls, and to "blast (Canada's) way into the markets of the world."

Bennett's first plan was to raise tariffs and in theory this would protect manufactures. He also believed this action would convince other nations to lower tariffs on Canadian goods. Unfortunately the side effects of his plan produced more damage then good. It did nothing to increase exports and in some cases increased export's costs, thereby reducing business. While the high tariffs might protect the domestic market the market was no sufficiently large enough to consume enough manufactured goods and therefore gave no longer significant life to the dyeing economy of Canada. In 1933 he was called the Nadir of Depression and became the but of endless jokes. Cars that were having to be towed by horses because gasoline could not be afforded were called "Bennett Buggies".

Bennett's other plan to hopefully get the economy on an up rise again was to start the New Policy in 1935 which was taken off the idea of the American New Deal. It was to insure unemployment insurance, a reduced workweek, and minimum wage, industrial codes and a permanent economic planning.

This policy didn't work and could not save the Conservatives or Bennett's place in politics. Many of the voters turned to three small parties: the Reconstruction party, which was a Conservative offshoot; the Cooperative Commonwealth Federation, which was a socialist group; and the Social Credit Party, which was a right-winged radical movement in Alberta. Almost by default King and the Liberals won the election of 1935 and were in power again. Bennett continued ineffectively as an opposition leader until 1938 when he abandoned Canada to England.

Mackenzie King

King dropped the new deal and declared it unconstitutional in 1937 and instead made the new Reciprocity Treaty with the United States. He converted the radio commission to The Canadian Broadcasting Corporation and fully nationalized the Bank of Canada. Finally he fended off provincial demands for more money to support relief programs for the unemployed.

FOOT NOTES

1. Morton Desmond;A Short History Of Canada; Page 166

2. Morton, Desmond; A Short History Of Canada; Page 198

3. Lower, Arthur, J; Canada An Outline Of History; Page 163




BIBLIOGRAPHY

1. Canadian Encyclopedia Plus; Bennett; Canada; McLelland and Stewart; 1995

2. Canadian Encyclopedia Plus; Great Depression; Canada; McLelland and Stewart; 1995

3. J.Arthur Lower; Canada An Outline of History; Canada; Ryerson Press, 1996

4. Microsoft Encarta; The Depression; Canada; 1994

5. Morton, Desmond; A Short History of Canada; Toronto, Ontario; McLelland and Stewart Inc.; 1996

6. Morton, Desmond; Canada In A Changing World-History; Canada; Harcourt Brace & Company Canada, Ltd.; 1988

7. website: http://www.workingtv.com/oto/otohome.html




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