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The Great Depression 4 THE GREAT DEPRESSION Few countries were so severely affected as Canada was by the depression of the 1930 's. During that time at least a third of the labor force became unemployed and many Canadians depended on welfare for survival. Canada, which was rich with raw materials, had become a great trading nation. That trade depended heavily on a strong world economy to buy the exports. The collapse in world trade hit Canada and particularly the West hard. To add to the effects of a bad economy, Saskatchewan was plagued by crop failures and devastatingly low crop prices.
Leading up to the great depression, times were quite favorable. In fact world economy was booming. Western farm crops were productive. Mining, fishing and lumbering flourished.
Manufacturing was at capacity and employment was steady. Stock prices were at all-time highs and prosperity was evident everywhere. The living was easy and the future appeared hopeful. New homes and new cars became common to ordinary folk. In October, 1929, all black clouds met in one place, the New York Stock Exchange, and the thunderbolt struck. Stock prices fell disastrously, a sign that the American economic system was failing.
In the United States and Canada things were never to be the same again. Very shortly the stock market's Domino Effect caused Canada's stock markets to collapse. The confidence that people had in a government of Bennett and King was soon shaken. Bennett and King had always believed that a balanced budget and a sound dollar would allow the marketplace to flourish and full employment to follow.
This was not to be. At least 33 percent of the workforce in Saskatchewan was agricultural in 1931. The economy was not diversified. When the prairie wheat economy collapsed farmers could barely get 38 cents per bushel for the same grain that was worth $ 1. 60 just a year or two earlier. Canada, like the rest of the world was deep into the worst depression in history. Saskatchewan's provincial income plummeted by 90 %, forcing 66 % of rural population onto government relief.
Farmers, young people, small businessmen and the unemployed bore the brunt of the not so "great" depression. Relief camps and soup kitchens were necessary to look after the victims. Bush work camps paid men 20 cents a day for hard labour. The depression seemed to carry on forever. At times, the effects eased, but they never halted, until the recovery. The recovery began around 1937 or 1938, but it was a long, tough struggle.
The rains came to the prairies and that helped to produce bountiful harvests. More and more men went back to work. In Europe, Hitler's troops were marching into Austria and then into Czechoslovakia. Wise men knew it would only be a matter of time before Germany would invade Poland. On September 10, 1939 war broke out and Canada did not hesitate to jump in. A vast military effort got under way.
The war machine required the services of every available man and woman for the next six years. Any willing worker could find work in the armed forces, in defence plants, in factories and on farms across the nation. By 1942 everyone was at work. Though Canada was one of the most affected nations, we learned a lot from the experience and adversity. The government learned that it had to assume responsibility for monetary, fiscal and social policy.
The key to lasting economic growth lay in a diversified economy and a skilled workforce. Arguments continue until today. Some say massive state expenditures required for war put an end to the depression. Others believe that a new economic theory, called Keynesian Economics did the job along with a different government attitude. Whatever the answer, institutions were created like the Bank of Canada, Unemployment Insurance, and educational funding for schooling and training.
The nations of the world hope that a catastrophe of this magnitude will be diverted by these new economic efforts.
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Research essay sample on Great Depression Stock Prices
