Causes Of The Great Depression Essay

2455 Words 10 Pages
Causes of the Depression

Public confidence was generally high in Canada during the last years of the 1920s, and many Canadians were optimistic. However, the uncertain prosperity of the Roaring Twenties was coming to an end. A dramatic signal of the approaching end took place in October 1929. On October 24, thousands of speculators lost money in a sudden stock market tumble on the Winnipeg Grain Exchange. Five days later, the New York stock market crashed. Too many people had bought stocks using borrowed money. As long as stock prices were rising, speculators could sell their stocks, pay off their debts, and still make a profit. But when stock prices began to fall, they could not cover their debts by selling off stocks. A drop in stock market
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The Depression was a worldwide economic disaster that affected countries as far as Germany, Norway, Chile, Japan, and the United Stats. It is not surprising that an event as devastating and complicated as the Great Depression had many causes and they were related to factors that revealed the extreme vulnerability of the Canadian economy to world market conditions. Most recent economic studies of the Great Depression suggest that the stock-market crash frightened American consumers and business people, creating what one economist described as uncertainty about future income. American consumers, worried about having less money to spend in the future, stopped buying expensive items. Because of the drop in consumer demand, American manufactures began decreasing the production of consumer goods. As American industrial production declined, workers were made redundant and unemployment grew, causing American consumer spending and business investment to drop even further. Therefore, the Great Depression in the US deepened in the early 1930s. At the same time, other countries also experienced economic problems which worsened as the effects of staggering economies in large countries like the United States and Great Britain spread around the world. Canada was hit especially hard because 33 percent of its gross national income was derived from …show more content…
Mines, sawmills, and paper mills shut. Construction decreased, so did Canadian manufacturing. People across the country were redundant. At the same, there was no social welfare system, but only a small old-age-pension scheme. There was no unemployment insurance, no health care for the sick, and no welfare for the poverty stricken. Between 1929 and 1933, Canada’s gross national expenditure dropped by 42%. By 1933, one-third of the labour force was out of job and eight hundred thousand Canadians were forced to ask the private governments and charities for survival (Struthers and Foot par

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