“The Dirty Thirties!  Just put in your book that you met Henry Jacobsen and he’s 78 years old.  Might say I never took a backward step in my life until that Depression whipped me, took away my wife, my home, a section of good land back in Saskatchewan. Left me with nothing.  Write that down.”  This man, who will remain anonymous, was reciting what it was really like to live through the Great Depression in Canada during an interview with the author of Ten Lost Years: 1929-1939, Barry Broadfoot.  He worked at Mohawk Handle Company in New Westminster, Canada and was a member of the Mohawk Lumber company. This company made many wooden things including broom handles and it was this man’s job to paint those handles.  He did so by dipping the handles into a pipe full of paint and then uses multiple pipes to twirl the handle as he took it out which resulted in a pretty spiral of colors.  The minimum wage at this time was thirty-five cents and hour and this man was making fifteen.  There was about 300 men working for Mohawk at this time and they wanted to go on strike, their goal being to receive the pay that was required by law.  The directors heard about this and called a meeting where the superintendent said, “ Let ‘em all quit!  I can replace ‘em all by tomorrow morning if they do”. “ We all grumbled a lot, but what could we do?  We stayed on the job and kept getting paid fifteen cents and hour.  That was the Depression for you”(interviewee).

This project examines what effects the stock market crash, that took place in the United States in 1929, had on Canada’s economy.  The Great Depression not only deteriorated the United States economy, but also Canada’s finically stability due to the drastic changes in the trading practices and the raise of tariffs.  In order to answer this question unemployment rates in both the United States and Canada will be looked at during the years of the Great Depression.  An article discussing the effects of the United States delayed recovery had on Canada’s ability to bounce back will also be provided and a chart that shows the rate of tariffs at this time.  All of these resources will work together to provide an explanation for the effects the Great Depression had on Canada.

Great Depression

This picture depicts some of the results of the Great Depression.  Unfortunately, soup lines were not only going on in the United States.  When the Great Depression hit the United States it did not stop their, it spread all around the World.  Canada, the United States neighbor to the North suffered immensely from the Great Depression.

Direct relationship between United States and Canada's economy
Direct relationship between United States and Canada’s economy

The article, Slow U.S. recovery expected to hamper growth in Canada, by Derek Abma was directed towards the public.  It discussed the relationship of the Canadian and United States economy.  In the article it stated that the slow recovery in the United States economy was expected to hinder the growth of Canada’s economy.  Canada’s economy relies on the export of goods and when the United States economy is suffering they are less likely to buy those goods.  Trading is the main reason these countries economies are so connected.  

In the book, The Canadian Economy in the Great Depression by A. E. Safarian  he talks about the reasoning for the collapse of the economy in Canada in the 1930’s.  The book expands on the connections between Canada and the United States economy.  The main reason for ties between the economies is trade.  The reason that the the Great Depression hit Canada so hard was because, “Canada’s closest economic ties are with the United States…”(Safarni 2).

When the United States economy crashed in 1929 they were no longer able to keep up with the established trade practices with Canada.  The United States could no longer afford to buy Canada’s exports and were not longer able to supply the exports Canada relied on.  Before the crash, “In 1928 the United States took 38 percent of Canada’s merchandise exports…(Safarni 3).  Another element of great value in the economic structure of Canada is the large amount of foreign capital.  “In 1930 long -term capital in Canada amounted to 7,613 million, of which 4,660 million was held in the United States…(Safarni 4).

TariffHistoryChart

A Small Open Economy in Depression: Lessons from Canada in the 1930s by Caroline M. Betts, Michael D. Bordo, Angela Redish is an article about the reasons for the Great Depression.  The Great Depression hit the United States in 1929 in result of the rapid spending without having the money to pay for it.  The phrase of the time was, “buy now and pay later”.   When the United States got taken down by the Great Depression it did not take long for Canada to go down as well.

Canada’s and the United States economies were interconnected because of how much trading went on in between them.  When the United States could no longer afford to buy Canada’s exports Canada’s economy took a huge hit.  Also, when the United States raised their tariffs to salvage their own economy it hurt Canada’s economy even more.   When World War Two hit it turned the United States economy around because it forced the United States to start spending in order to help the war effort.  When the United States economy started turning around they lowered the tariffs and started trading with Canada again.  Canada’s economy started to recover as well.  The Great Depression was caused by reckless spending and was ended by the demands World War Two made on the economy.

The article, “Industrial Output Down 17% In Canada ” was written on January 14, 1932 in New York. This article was written for the general public to inform them about the economic downfalls caused by the Great Depression in Canada. At this time Canada was suffering greatly at the hands of the Great Depression. The Great Depression started in the United States after the stock market crash in 1929. Canada’s economy ties with the United States is what caused the Great Depression to have an effect on their economy as well.
When the United States economy crashed they were forced to raise tariffs which had a major impact on the trade between Canada and the United States. In this article it mentions how the industrial output went down 17% in Canada and that is because the United States was no longer able to purchase Canada’s goods. Canada’s economy depended on that business from the United States so when the United States could no longer keep up those trading habits Canada’s economy crashed. This source suggests that Canada should no longer be so economically dependent on the United States. If Canada’s economy was more independent they would not have suffered as much or for nearly as long from the Great Depression.”Decline Compares With One of 20% in 1930, Bank of Commerce Official Says. DROP IN WHOLESALE PRICES Index Off to 70.3 In December From 70.6 in November — 84 Quotations Higher, 75 Lower” was written on January 14, 1932 in New York.  This article was written for the general public to inform them about the economic downfalls caused by the Great Depression in Canada.  At this time Canada was suffering greatly at the hands of the Great Depression.  The Great Depression started in the United States after the sock market crash in 1929. Canada’s economy ties with the United States is what caused the Great Depression  to have an effect on their economy as well.

When the United States economy crashed they were forced to raise tariffs which had a major impact on the trade between Canada and the United States.  In this article it mentions how the industrial output went down 17% in Canada and that is because the United States was no longer able to purchase  Canada’s goods.  Canada’s economy depended on that business from the United States so when the United States could no longer keep up those trading habits Canada’s economy crashed.  This source suggests that Canada should no longer be so economically dependent on the United States.  If Canada’s  economy was more independent they would not have suffered as much or for nearly as long from the Great Depression.

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The Great Depression of the 1930’s in Canada by Michiel Horn which expands on the economic turmoil Canada went through during the Great Depression.  It references the changes in trading for both Canada and the United States.  Also, it further explains the supply and demand side trading and why it had such an impact of Canada’s and the United Stated trading relationship.

The Great Depression 1929-1939 by Pierre Berton takes a different approach by focusing on the ineptitude of Canada’s men during this tragic time.  Berton goes on to say that Canada’s government was simply waiting around for someone to save them instead of trying to better the situation themselves.  This book mentions the pitiful tactics such as ‘passing the buck’ that Canada used in attempt to remedy the situation.

Work Cited:

Abma, Derek. “Slow U.S. Recovery Expected to Hamper Growth in Canada.” LexisNexis Academic & Library Solutions. January 19, 2011. Accessed September 7, 2014.

Betts, Caroline, Michael Bordo, and Angela Redish. “The Canadian Journal of Economics / Revue Canadienne D’Economique.” JSTOR. Accessed October 6, 2014.

Berton, Pierre. The Great Depression, 1929-1939. Toronto, Ont.: McClelland & Stewart, 1990.

Broadfoot, Barry. Ten Lost Years: 1929-1939; Memories of Canadians Who Survived the Depression. Toronto: Doubleday Canada;, 1973.

Horn, Michiel. The Great Depression of the 1930s in Canada. Ottawa: Canadian Historical Association, 1984

“INDUSTRIAL OUTPUT DOWN 17% IN CANADA: Decline Compares With One of 20% in 1930, Bank of Commerce Official Says. DROP IN WHOLESALE PRICES Index Off to 70.3 In December From 70.6 in November — 84 Quotations Higher, 75 Lower.” January 14, 1932. Accessed October 22, 2014.

Safarian, A. E. The Canadian Economy in the Great Depression. 3rd ed. Montréal: McGill-Queen’s University Press, 2009.

“Social Democracy for the 21st Century: A Post Keynesian Perspective.” : Murphy on US and Canadian Unemployment during the 1930s: A Critique. December 8, 2013. Accessed September 7, 2014.

“The Coming Depression.” : April 2012. April 26, 2012. Accessed September 7, 2014.

“Tuesday, July 03, 2012.” 3quarksdaily:. Accessed December 2, 2014. http://www.3quarksdaily.com/3quarksdaily/2012/07/page/14/.

“WGNWTOtradetalksinSeattle.” WGNWTOtradetalksinSeattle. Accessed October 6, 2014.