On October the 24th, 1929 the New York Stock Exchange (NYSE) collapsed when millions of shares at inflated prices were offered on sale. Over $50 billions were lost on what was called “Black Thursday” when the stock prices returned to their actual value. Soon after the crash, the entire world economy began a period of deflation; prices and wages dropped as the demand for goods was significantly reduced. Because of this lack of need for goods production halted and several factories closed; people lost their jobs and businesses were bankrupt. By 1933, nearly half the nation’s workmen were unemployed, and the youths coming out of high school and university had little hope of beginning a career. A lack of unemployment insurance forced many people to rely on relief from the government.
The Depression hit most sectors of the economy very hard. One of the hardest hit was the wheat farming industry. Farmers in the Prairie region of Canada saw the price of a bushel of wheat plummet from $1.60 in 1929 to 38 cents in 1932 because of an oversupplied world market. Many farmers were unable to pay off their loans and lost their farms, others were forced to abandon their farms for lack of money to support themselves.
Incomes fell 60% in Alberta and 72% in Saskatchewan. Quebec was also hit hard as the demand for manufactured goods and clothes decreased due to the inability of people, farms, and companies to spend money freely. The many ports of Quebec were very inactive simply because there was much less wheat being shipped than before and many workers lost their jobs as factories closed. Also in Quebec, a back-to-the land movement began as priest such as Félix-Antione Savard led unemployed city dwellers to sparsely populate regions such as Abitibi-Témiscamingue. The people were encouraged to return to their roots and farm. However, this movement had very little success.
... to fill the planter hoppers with seed---corn, soybeans, wheat, barley, and sunflowers. I was there in the poring ... My heart raced and I could feel my blood pumping hard through the many routes within my body. Shifting into ... know it by that crunch on my feet, those wheat stubs trying desperately to poke through the soles in my ... Most people only know what farms are like by what they see on television or ...
Canada was especially hit hard by the Great Depression that followed the crash of the U.S. stock market in October 1929. Unemployment soared, industrial production collapsed, and prices, especially for farm commodities, fell rapidly as demand for all consumer goods virtually disappeared. From 1929-1933 Canada’s Gross National Product declined 42%.
Governments and private relief agencies were at a loss in attempting to cope with the legions of jobless. William L Mackenzie King, seemingly unaware of the magnitude of the disaster, refused to release federal funds to the provinces to combat unemployment and send relief. In the 1930 election King’s Liberal government was swept from office, and the Conservatives, under Richard Bedford Bennett, took power with an absolute majority in the House of Commons.
Bennett faced severe economic and social tests as the depression deepened. His government undertook some modest measures to combat the slump: work camps were set up for unemployed men; federal relief money was channelled to the provinces; the Prairie Farm Rehabilitation Act was passed to alleviate the burden of the severe drought conditions; the Canadian Wheat Board was established to stabilize wheat prices; and various measures were taken to provide foreclosure relief to farmers. In early 1935 Bennett announced a series of sweeping social reform measures in what was referred to as Bennett’s “New Deal”, though much of the legislation that was eventually enacted as part of that program was later declared unconstitutional by the courts.