1920s Boom & Bust


The Twenties: Boom & Bust
ž  Trade & Foreign Investment
ž  By 1920s the USA was Canada’s main trading partner
ž  In 1921, Canada exchanged 2.5x more with USA than Britain
ž  Lots of US foreign investment into Canada
ž  American Branch Plants
ž  U.S. market was bigger than Canadian market – U.S. could make & sell for less
ž  Canadian government put taxes called tariffs on American imports.
ž  Ex. In 1920 35% tariff on cars imported to Canada
ž  This protected Canadian jobs
ž  U.S. manufacturers built factories in Canada to avoid the tariff
ž  Branch Plants
ž  A branch plant is a factory or business operating in Canada that is owned by a foreign company.
ž  Did everyone benefit from the boom?
ž  Maritimers & Newfoundlanders were not doing so well economically.
ž  Area too far from center to attract investment
ž  Britain no longer big trading partner so not close anymore
WORKERS
ž  Business owners became rich, employees stayed poor
ž  Violent strikes in many coal districts
ž  Today we have unemployment insurance
ž  If we are sick, we get free medical care
ž  These social welfare programs did not exist in the 1920s
ž  VISIBLE MINORITIES
ž  Asians – Chinese, Japanese and Sikhs faced discrimination.  Many employers refused to hire Asians or paid them very low money.  Most lived in British Columbia
BLACKS
ž  Most blacks came from the USA
ž  Some were from loyalists, some escaped slaves
ž  They got right to vote at confederation
ž  Not treated as equals
ž  Separate schools, bad education, less jobs
ž  ABORIGINAL PEOPLES
ž  Traditional ceremonies & dances forbidden
ž  Government controlled their money
ž  Couldn’t vote
ž  Canada wanted to make all “Indians” into Canadians
ž  RESIDENTIAL SCHOOLS
ž  Starting in 1920 First Nations children age 7-15 had to live in government funded schools
ž  Goal: remove children from their home and culture
ž  Aim: Assimilation
ž  Traditional clothes, language, religions, all BANNED
ž  Forced to wear uniforms and become Christians
ž  Physical & sexual abuse 



ž  Playing the Stock Market
ž  If you wanted to start a business, you would need to spend money.
ž  $ from ?
  • Your own, a business loan from a bank, or find partners, give them a share in your profits in exchange for their investing their $ in your businessown

ž  Companies that need a lot of money can sell shares in their business on the stock market
ž  Why do people buy shares (stocks)?
  1. If share value rises, can sell stocks for profit
  2. Shareholder may get a portion of company’s profits (dividend)
ž  People bought “on margin” – borrowed $ to buy stocks
ž  Black Tuesday
ž  Tuesday October 29th 1929 the stock market crashed
ž  Desperate traders sold their shares for whatever they could get
ž  Black Tuesday affected North America & Europe
ž  Within one month a share of $10 became $5, by 1932 it became $1.50 or less
ž  One on four Canadians did not have a job
ž  With less $ to spend, shops closed down
ž  Next 10 years known as the GREAT DEPRESSION
ž  Causes of the crash
ž  Too much margin buying, production of goods, & American economic influence
ž  Not enough wages for workers or protection for people’s savings
ž  Caused an imbalance that made the entire world economy fall. 


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