Causes of the Great Causes of the Great

Depression: Depression:
CHC 2D CHC 2D CHC 2D CHC 2D CHC 2D CHC 2D CHC 2D CHC 2D
The end of an era:
Listen to the song Anything Goes by Cole Porter. Even though it
was written in 1934, this song is considered by some to be an
anthem for what the Roaring 20s were all about
Listen to the
Lyrics of the
song Brother
Can You Spare
a Dime and
answer the
questions that
http://www.youtube.com/watch?v=r7NJ
9ylAhos
http://www.youtube.com/watch?v=
eih67rlGNhU
questions that
follow the
lyrics on your
handout.
9:00 Appt.: Analyse the lyrics for each of the two songs that you
just heard. How do these two songs compare with each other in terms
of the mood and language? What do you think this suggests about the
effect that the Great Depression had on culture?
Though not everyone
shared in the
prosperity of the
1920s, there was a
general mood of
optimism in the
country
ut this changed
drastically in the drastically in the
early 19!0s" Canada
was plunged into the
#reat Depression $ the
worst economic
downturn the
country has ever
faced"
%rosperity, &ecession '
Depression
%rosperity, &ecession '
Depression
alloon Demonstration( alloon Demonstration( alloon Demonstration( alloon Demonstration(
)magine that the alloon we will use
in this activity represents The
*conomy
'
The +ir in the alloon represents
,-.*/, 01).*11 ' 2-1
&ecord the 3ollowing Chart
in /our .otes(
&ecord the 3ollowing Chart
in /our .otes(
Type of Type of Type of Type of
*conomic *conomic *conomic *conomic
+ctivity +ctivity +ctivity +ctivity
)llustration )llustration )llustration )llustration
4draw a picture of 4draw a picture of 4draw a picture of 4draw a picture of
the 5alloon that the 5alloon that the 5alloon that the 5alloon that
you see6 you see6 you see6 you see6
Definition Definition Definition Definition
4+ccording to 4+ccording to 4+ccording to 4+ccording to
this visual aid, this visual aid, this visual aid, this visual aid,
how would this how would this how would this how would this
term 5e defined term 5e defined term 5e defined term 5e defined
in terms of in terms of in terms of in terms of
,oney, 5usiness ,oney, 5usiness ,oney, 5usiness ,oney, 5usiness
12:00 Appt.:
1. Complete the bottom of this handout and work
through the answers to these questions.
,oney, 5usiness ,oney, 5usiness ,oney, 5usiness ,oney, 5usiness
' 2o5s76 ' 2o5s76 ' 2o5s76 ' 2o5s76
%rosperity %rosperity %rosperity %rosperity
&ecession &ecession &ecession &ecession
Depression Depression Depression Depression
through the answers to these questions.
2. Your reflection for this appointment should be
focussed on what this information about inflation
and deflation might tell us about the Great
Depression and its effect on average Canadians
lives?
The 8alue of a Dollar The 8alue of a Dollar The 8alue of a Dollar The 8alue of a Dollar The 8alue of a Dollar The 8alue of a Dollar The 8alue of a Dollar The 8alue of a Dollar
9hat happens to :the *conomy; when the
alloon is :)nflated;7
9hat does this mean for the value of a
dollar7 9ill it 5uy you more or less
Class Discussion and Review:
dollar7 9ill it 5uy you more or less
during a period of :)nflation;7
9hat Happens to :The *conomy; when the
alloon :Deflates;7
9hat does this mean for the value of a
dollar7 9ill it 5uy you more or less
during a period of :Deflation;7
How could prosperity
turn to %overty for so
many so <uic=ly7 many so <uic=ly7
9hat Caused the #reat
Depression7
Why do we
NEED to learn
about the
Great
Depression? Depression?
Its just
DEPRESSING!
Causes of the Great Causes of the Great
Depression: Depression:
I. UNDERLYING
CAUSES
I. UNDERLYING
CAUSES
>1" -ver$%roduction
and -ver$*?pansion
During the 1920s,
agriculture and industry
reached high levels of
production" ,any
industries were e?panding industries were e?panding
)ndustries influenced 5y
the :5oom;( food,
newsprint, minerals, and
manufactured goods
Huge supplies of
everything were produced
and were stoc=piled
Surplus ears
of corn
*ven in the general
prosperity of the 1920s,
Canadians could afford
to 5uy only so many goods
$ as a result, large stoc=s
of newsprint, radios,
shirts, shoes and cars
piled up unsold in
warehouses"
*ven in the general
prosperity of the 1920s,
Canadians could afford
to 5uy only so many goods
$ as a result, large stoc=s
of newsprint, radios,
shirts, shoes and cars
piled up unsold in
warehouses" warehouses"
1oon factory owners
5egan to panic and slowed
down their production"
They laid$off wor=ers"
@aid$off wor=ers ' their
families had even less AA
to spend on goods" 1ales
slowed down even moreBBBB
warehouses"
1oon factory owners
5egan to panic and slowed
down their production"
They laid$off wor=ers"
@aid$off wor=ers ' their
families had even less AA
to spend on goods" 1ales
slowed down even moreBBBB
Farms and factories overproduced beyond the demand.
Businesses cut
production
Workers suffered
from wage cuts
and lay offs.
People had
little or no
money to spend.
Demand for
goods fell.
>2" CanadaCs Dependence >2" CanadaCs Dependence >2" CanadaCs Dependence >2" CanadaCs Dependence
on a 3ew %rimary %roducts on a 3ew %rimary %roducts on a 3ew %rimary %roducts on a 3ew %rimary %roducts
These primary products are These primary products are These primary products are These primary products are
also =nown as :staples; 4e?" also =nown as :staples; 4e?" also =nown as :staples; 4e?" also =nown as :staples; 4e?"
9heat, fish, minerals ' %ulp 9heat, fish, minerals ' %ulp 9heat, fish, minerals ' %ulp 9heat, fish, minerals ' %ulp
and %aper6 and %aper6 and %aper6 and %aper6
These goods were CanadaCs These goods were CanadaCs These goods were CanadaCs These goods were CanadaCs These goods were CanadaCs These goods were CanadaCs These goods were CanadaCs These goods were CanadaCs
most important e?ports most important e?ports most important e?ports most important e?ports $ $$ $
However, there was a However, there was a However, there was a However, there was a
surplus of these goods on surplus of these goods on surplus of these goods on surplus of these goods on
the 9orld mar=et the 9orld mar=et the 9orld mar=et the 9orld mar=et
)f foreign )f foreign )f foreign )f foreign contries contries contries contries stopped stopped stopped stopped
5uying from Canada, our 5uying from Canada, our 5uying from Canada, our 5uying from Canada, our
economy would 5e in serious economy would 5e in serious economy would 5e in serious economy would 5e in serious
trou5le trou5le trou5le trou5le
What do you think the environmental legacy
of this era will be?
>!" CanadaCs Dependence >!" CanadaCs Dependence >!" CanadaCs Dependence >!" CanadaCs Dependence
on the 0nited 1tates on the 0nited 1tates on the 0nited 1tates on the 0nited 1tates
During the 1920s, Canada 5ought
DEF of our imports from the
americans ' G0F of our e?ports americans ' G0F of our e?ports
were 5eing sent to the 0nited 1tates
The 0nited 1tates had 5ecome
CanadaCs greatest trading partner
4ritain had 5een replacedB6
)t was not surprising that when the
+merican economy got sic=, Canada
also suffered
>G" High Tariffs cho=ed >G" High Tariffs cho=ed >G" High Tariffs cho=ed >G" High Tariffs cho=ed
-ff )nternational Trade -ff )nternational Trade -ff )nternational Trade -ff )nternational Trade
>G" High Tariffs cho=ed >G" High Tariffs cho=ed >G" High Tariffs cho=ed >G" High Tariffs cho=ed
-ff )nternational Trade -ff )nternational Trade -ff )nternational Trade -ff )nternational Trade
)n the 1920s, *urope needed goods
from the 01 and Canada to re$5uild
after the war 5ut unfortunately after the war 5ut unfortunately
they could not always afford to pay
for themB
,any countries developed a policy
of :%rotective Tariffs;, and this
policy was often reciprocatedBBB
9hile High Tariffs were used to
protect home industries, they
cho=ed off international
tradeBBB
>E" Too ,uch uying on >E" Too ,uch uying on >E" Too ,uch uying on >E" Too ,uch uying on
Credit Credit Credit Credit
>E" Too ,uch uying on >E" Too ,uch uying on >E" Too ,uch uying on >E" Too ,uch uying on
Credit Credit Credit Credit
:5uy now, %ay @aterB;
y 1929, credit$5uying was
already a well esta5lished
custom
,any 3amilies got themselves
hopelessly into de5t with
:5uy now, %ay @aterB;
y 1929, credit$5uying was
already a well esta5lished
custom
,any 3amilies got themselves
hopelessly into de5t with hopelessly into de5t with
credit$5uying
)nterest &ates were high and
people ended up paying much
more than the original price
of their goods
)f you fell 5ehind on the
payments, the person who
sold you the goods had the
right to repossess themB
hopelessly into de5t with
credit$5uying
)nterest &ates were high and
people ended up paying much
more than the original price
of their goods
)f you fell 5ehind on the
payments, the person who
sold you the goods had the
right to repossess themB
>D" uying 1toc=s :on >D" uying 1toc=s :on >D" uying 1toc=s :on >D" uying 1toc=s :on
,argin; ,argin; ,argin; ,argin;
>D" uying 1toc=s :on >D" uying 1toc=s :on >D" uying 1toc=s :on >D" uying 1toc=s :on
,argin; ,argin; ,argin; ,argin;
To many people in the
1920s, the stoc=
mar=et seemed an easy
way to get rich <uic=ly
4li=e gam5ling6 4li=e gam5ling6
&ich 5usiness tycoons
invested in shares, 5ut
so did their chauffeurs
and the typists in their
offices
)t was not even
necessary to have a
lot of money to
play the stoc=
mar=et
/ou could 5uy
stoc=s on Credit
Hust as you could
5uy a phonograph
or a washing
,achine
https://www.youtube.com/watch?v=ejjNMnIo3Fg
Toaster
Factory
Stock Market
Banks
Now organize yourself into
groups of THREE and play
The Stock Market Game.
Follow the instructions
given on the handout to
Stock Market
Stock Broker/ Brokerage Firm
Investor
given on the handout to
complete the game and
determine who the winner
is in your group
/ou only needed a small cash
down payment 4usually around
10F6$ the 5ro=er loaned you the
rest of the money at a high
interest rate"
The idea was that as soon as The idea was that as soon as
your stoc=s went up in value
you could sell them $ then you
would pay 5ac= your loan and
poc=et the profits $ this process
was referred to as :uying on
,argin;
)n order for the stoc= 5ro=ers to
lend this money to investors, they
as=ed for :collateral; to secure
the loan this was often a
purchaserCs house or carB
But relatively few Canadians were investing in the stock market
so how do so many go broke during the Depression?
Causes of the Great Causes of the Great
Depression: Depression:
II. IMMEDIATE
CAUSES
II. IMMEDIATE
CAUSES
>1" The 1toc= ,ar=ets >1" The 1toc= ,ar=ets >1" The 1toc= ,ar=ets >1" The 1toc= ,ar=ets
CrashB CrashB CrashB CrashB
>1" The 1toc= ,ar=ets >1" The 1toc= ,ar=ets >1" The 1toc= ,ar=ets >1" The 1toc= ,ar=ets
CrashB CrashB CrashB CrashB
Black Thursday:
The international price of
wheat reached a record
Then, on Thursday
October 24, 1929,
wheat prices on the
Winnipeg Grain
exchange plummeted.
wheat reached a record
high in July 1929. Soon
afterward Canada and
other countries around the
world began reporting
bumper crops. Suddenly
there was too much wheat
for sale. As a result wheat
prices began to fall.
exchange plummeted.
Everyone wanted to
sell their wheat but
few wanted to buy.
Millions of dollars in
profits were lost as
people tried to cut
their losses by selling
wheat.
Black Tuesday:
On Black Thursday at the Winnipeg Grain Exchange,
few people realized that even worse was to come. Five
days later, a similar crash occurred on the worlds leading
stock exchange in New York.
Share prices on the New York Stock Exchange had been
sliding gradually downward for some time. Then, on sliding gradually downward for some time. Then, on
Tuesday, October 29
th
, 1929, worried investors started
trying to sell their shares. This started a panic, and
prices plummeted. Suddenly the downward slide turned
into a crash!
This disaster sparked similar crashes on the other stock
markets in Canada (Toronto and Montreal) and around the
world. Millions of investors lost huge amounts of money.
http://www.youtube.com/watch?v=RJpLMvgUXe8
1toc= 1929 High
%rice
19!2 @ow
%rice
Decline in
%rice 1929$
19!2
ell ell ell ell
Telephone Telephone Telephone Telephone
A1I!"00 AJI"00 A10E"00
Canadian Canadian Canadian Canadian
%acific %acific %acific %acific
&ailway &ailway &ailway &ailway
ADJ"E0 AI"E0 AE9"00
&ailway &ailway &ailway &ailway
3ord of 3ord of 3ord of 3ord of
Canada Canada Canada Canada
AJ0"00 AE"JE ADG"2E
)mperial )mperial )mperial )mperial
-il -il -il -il
AG1"2E AJ"G0 A!!"IE
1teel 1teel 1teel 1teel
Company Company Company Company
of Canada of Canada of Canada of Canada
AD9"2E A11"00 AEI"2E
Three 1erious Challenges for Canadian 3armers in Three 1erious Challenges for Canadian 3armers in Three 1erious Challenges for Canadian 3armers in Three 1erious Challenges for Canadian 3armers in
the 19!0s( the 19!0s( the 19!0s( the 19!0s(
1" + 1udden Drop in 9heat %rices
2" )n 1929 a Terri5le Drought 5egan in the %rairies
4.o &ain for 10 years in some %laces6
>2" Drought in the %rairies >2" Drought in the %rairies >2" Drought in the %rairies >2" Drought in the %rairies
4.o &ain for 10 years in some %laces6
!" 1warms of #rass$hoppers ate their way across
the %rairies ' destroyed many of the crops that
had survived the drought
How do you think
Canadian farm
families would
survive in these
conditions?
.ot +ll Canadians )nvested in .ot +ll Canadians )nvested in .ot +ll Canadians )nvested in .ot +ll Canadians )nvested in
1toc=s 1toc=s 1toc=s 1toc=s
However, ,ost Canadians However, ,ost Canadians However, ,ost Canadians However, ,ost Canadians
>!" The Downward 1piral ' >!" The Downward 1piral ' >!" The Downward 1piral ' >!" The Downward 1piral '
Deflation of the *conomy Deflation of the *conomy Deflation of the *conomy Deflation of the *conomy
>!" The Downward 1piral ' >!" The Downward 1piral ' >!" The Downward 1piral ' >!" The Downward 1piral '
Deflation of the *conomy Deflation of the *conomy Deflation of the *conomy Deflation of the *conomy
3:00 Appt.
Using the information found on the Flow-Chart for the
Downward Spiral handout that has been distributed,
However, ,ost Canadians However, ,ost Canadians However, ,ost Canadians However, ,ost Canadians
would 5e effected 5y this :ust; would 5e effected 5y this :ust; would 5e effected 5y this :ust; would 5e effected 5y this :ust;
in the 5usiness world in the 5usiness world in the 5usiness world in the 5usiness world
How do you thin= ordinary How do you thin= ordinary How do you thin= ordinary How do you thin= ordinary
Canadians who had never even Canadians who had never even Canadians who had never even Canadians who had never even
invested in stoc= would 5e invested in stoc= would 5e invested in stoc= would 5e invested in stoc= would 5e
effected 5y the crash7 effected 5y the crash7 effected 5y the crash7 effected 5y the crash7
Downward Spiral handout that has been distributed,
summarize the three spriralling and causative
events that are outlined on this sheet.
According to what you see here, how was almost
every Canadian and Canadian business going to feel
the impact of the Depression?
1toc= ,ar=et 1toc= ,ar=et 1toc= ,ar=et 1toc= ,ar=et
Crashes Crashes Crashes Crashes
1toc= ,ar=et 1toc= ,ar=et 1toc= ,ar=et 1toc= ,ar=et
Crashes Crashes Crashes Crashes
%eople have less %eople have less %eople have less %eople have less
money to spend money to spend money to spend money to spend
%eople have less %eople have less %eople have less %eople have less
money to spend money to spend money to spend money to spend
%eople have %eople have %eople have %eople have
even @ess ,oney even @ess ,oney even @ess ,oney even @ess ,oney
to spend to spend to spend to spend
%eople have %eople have %eople have %eople have
even @ess ,oney even @ess ,oney even @ess ,oney even @ess ,oney
to spend to spend to spend to spend
uying goes uying goes uying goes uying goes
down down down down $ $$ $K K K K
3actories @ay 3actories @ay 3actories @ay 3actories @ay
%eople -ff %eople -ff %eople -ff %eople -ff
uying goes uying goes uying goes uying goes
down down down down $ $$ $K K K K
3actories @ay 3actories @ay 3actories @ay 3actories @ay
%eople -ff %eople -ff %eople -ff %eople -ff
0nemployment 0nemployment 0nemployment 0nemployment
&ises, &ises, &ises, &ises,
0nemployment 0nemployment 0nemployment 0nemployment
&ises, &ises, &ises, &ises,
%eople have %eople have %eople have %eople have
even less money even less money even less money even less money
to spend to spend to spend to spendB
%eople have %eople have %eople have %eople have
even less money even less money even less money even less money
to spend to spend to spend to spendB
3actories @ay 3actories @ay 3actories @ay 3actories @ay
%eople off %eople off %eople off %eople off $ $$ $K K K K
0nemployment 0nemployment 0nemployment 0nemployment
&ises +gain &ises +gain &ises +gain &ises +gain
3actories @ay 3actories @ay 3actories @ay 3actories @ay
%eople off %eople off %eople off %eople off $ $$ $K K K K
0nemployment 0nemployment 0nemployment 0nemployment
&ises +gain &ises +gain &ises +gain &ises +gain