Bennett and Mackenzie King who offered their solutions in solving this situation. Many others had their own ideas. In the West side of Canada, two parties emerged as major political force. It was the Social Credit Party in Alberta and the socialist Co-operative Commonwealth Federation in Saskatchewan. William Aberhart, leader of the Social Credit Party, believed the cause of the Great Depression was because people did not have enough money to buy goods and services.
To try to help out unemployed people, mostly men, the government introduced relief camps. During the 1930's in Prairie Canada, the Great Depression created harsh conditions and it was a struggle until it ended. The event which triggered the Great Depression was the Stock Market crash of October 24, 1929 in New York. Another important cause was that: Later in the 1930's, the wide adoption of the gold exchange in many countries was widely criticized as a great mistake which greatly contributed to the severity and length of the Great Depression. 1 In Canada, wheat, the most important export, was being over-produced around the world, despite the fact that the 1928 supply of wheat was still available in 1929.
“The housing market will get worse before it gets better” –James Wilson. The collapse of the United States housing market in in 2008 was one of the most devastating moments for the world economy. The United Sates being arguably the most important and powerful nation in the world really brought everyone down with this event. Canada was very lucky, thanks to good planning and proper preventatives to avoid what happened to the United States. There were many precursor events that occurred that showed a distinct path that led to the collapse of the housing market.
One being the lack of diversification in the American economy. The prosperity of America had been basically dependent on a few industries like construction and the automobile and in the late 20's these industr... ... middle of paper ... ...l deficit and Bennett cut back on government spending. A great burden on the country was Canadian National Railway, the government had to take over many railways and from that took in a debt of over two billion dollars. After seeing president Roosevelt's New Deal policy having good results in the U.S. Bennett introduced policies based on the New Deal. Bennett started up minimum wage and unemployment insurance.
These type of banking panics continued on well through 1933 which spurned President Roosevelt to declare a national “banking holiday”. Banks nationwide were closed down until they were inspected and could prove to the government that they were capable of being solvent. Due to all of the panic caused by the stock market crash and the distrust in the banking system, one fifth of the banks in existence had failed and closed by 1933. “The Federal Reserve did little to try to stem the banking panics. Economists Milton Friedman and Anna J. Schwartz, in the classic study A Monetary History of the United States, 1867–1960 (1963), argued that the death in 1928 of Benjamin Strong, who had been the governor of the Federal Reserve Bank of New York since 1914, was a significant cause of this inaction.
Resultly, many companies were bankrupt (Hallowell 225). Secondly, the Canadian government introduced victory bonds. After a year, in 1915, the money spent on military was equalled to the total national expenditure in 1913. In order to help fund the war, Robert Borden issued victory bonds to the citizens of Canada where a specific amount of interest will be paid back after a certain number of years. Though proven to be very successful by bringing in over $100 million on the first issued bond (W), the amount required to be paid back was an astronomical amount.
As a result of the lack of sufficient domestic demand in Canada, only a small number of larger firms are developed in each industry. Furthermore, Canadian firms seldom treat research and development as a priority. Unlike in the US, innovation is not a corporate culture in Canada. This can be partly due to the lack of intense domestic competition, causing firms to spend resources on other areas instead of R&D because there is no real urge to innovate and maintain competitiveness. The government also plays a major role in determining the level of domestic competition.
However, as the Great Depression took Canada by storm, talks about its then financial state were brewing. Some even questioned the country’s ability to meet larger demands. The central bank was formed from the Act in 1934, and starting running in 1935, but as a privately owned institution. Then, when William Mackenzie King was re-elected as Prime Minister after a full term by Richard Bennet, the new government made an amendment to the Bank of Canada Act, making the bank publicly owned by 1938, as it is today (Bank of Canada: History). Its primary objective was to be able to support financial and economic wellbeing of our country (Go Currency: Bank of Canada).
He also came up with the new deal which saved America and put people back to work. The government relied on impersonal market forces before the Great Depression. Franklin Roosevelt made a speech to America in which he said, “I pledge you, I pledge myself, to a new deal for America.” Franklin Roosevelt 's first act as president was to handle America’s bank crisis’s. He wanted to fix all the bank loans and get banks back in business as soon as possible. On March 3, 1933 all the banks were closed.
Replacing prime ministers (twice) and making only minor changes ultimately did Canada no good. The government's poor efforts in their attempts to resolve Works Cited Canadian Encyclopedia Plus; Bennett; Canada; McLelland and Stewart; 1995 Cranny, Michael. Counterpoints Exploring Canadian Issues Second Edition. Toronto: Pearson Canada Inc., 2010.