the economic boom! of the 1920s but before life got better, it wasn’t great. a look at canada’s...
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The Economic BOOM!of the 1920s
But before life got better, it wasn’t great.
A look at Canada’s economy before the boom.
Post-War Problems
#1: Prohibition Ban on Alcohol. Seen as the root of many other problems#2: Labour Unrest When WW1 ends, many munitions factories
closed down Women were under pressure to return to
household duties Thousands of returning soldiers were looking
for work
Labour Unrest Even people who did have jobs were not
much better off: why? Rapid Inflation: prices of basic items (food,
clothing) had increased greatly, but wages had not increased at all! The cost of living had more than doubled from
1914 to 1919! Soldiers, and other workers, wanted to create
unions who would fight with/for them for better job conditions
The Country Strikes
In 1919, workers across the country staged strikes
Miners, steelworkers Cape Breton Machinists Toronto Loggers West Coast Streetcar drivers Windsor None of these strikes were so big as the
Winnipeg General Strike of 1919
The Winnipeg General Strike
May 1919-June 1919 Building and metal trade
workers voted to strike To show their support, 30 000
other workers in Winnipeg walked off the job!
“general strike”: almost all industries and key services were shut down Streetcar operators, garbage
collectors, postal workers, telephone operators, firefighters, and hydro workers all refused to work
The Winnipeg General Strike
Ottawa sends Mounties to Winnipeg to put down the strike
Bloody Saturday: June 21 Violence erupts! Mounties charge a parade
(demonstration) Shots are fired One striker is killed Strike leaders are arrested
and sentenced to jail terms
The Winnipeg General Strike
Together, government, factory owners, and the Mounties had defeated the strikers.
Strikers are forced to go back to work Some are forced to promise not to become a
union member or be involved in union activities
Others were not welcomed back to their job
The Results of the Strike
Draws attention to the social and economic conditions faced by many working people
A royal commission is appointed to investigate the causes of the strike
The commission comes up with 3 reasons: High cost of living Poor working conditions Low wages
Labour leaders turn to politics they want their voices heard!
The BOOM!
Gradually, life started to get better for most Canadians, especially by the mid-1920s
Business picked up because foreign investors gained confidence in Canada
In regions across Canada, industries were growing!
Industry #1: Wheat on the Prairies From 1925 to 1928, the
prairies enjoyed huge wheat crops
War-torn Europe – which had previously made its own – was struggling and wanted Canadian wheat
The world price for wheat also moved up steadily
Farmers traded their horses for tractors, adding more and more machinery
Co-Operatives
Co-operatives are businesses owned by farmers.
Why is this beneficial? Their goal was to loan money to other
farmers at lower interest rates than eastern Canada bankers charged
Wanted to sell seed, grains, cattle, and dairy products so that they could skip the middle man and make more profit
Industry #2: Pulp and Paper 1920s: production of newsprint
became Canada’s largest industry after agriculture
Forests of softwood were used to make newsprint
Most of the American sources had been used up = giant market for Canadian pulpwood
Results: lots of money, but Canada’s forests are being destroyed
PROBLEM!
Canada’s economy is become more and more dependent on the export of raw materials.
Why is this a problem?
Industry #3: Hydroelectric Power Quebec and Ontario are big
producers Niagara Falls had been
used for power since 1895 Rivers were now developed
as resources for water power
Industries were turning to hydroelectric power instead of coal
People wanted electricity for their homes
Canada’s output for hydroelectricity became second in the world
Industry #4: Oil and Gas
Nicknamed the “Oil Age” More Canadians are driving automobiles, so
the demand for gasoline and oil soars Oil and gas are always being used for
heating and cooking October 1924: oil speculators in Alberta
struck it rich Produced a million barrels of oil and large
quantities of natural gas
Problem!
What was used for energy before oil and before hydroelectricity?
Coal! Where was that being
produced in Canada? The Maritimes! To whom were they
now selling their coal? They weren’t…
Industry #5: Mining Large deposits of copper were
found in the Canadian Shield along the Ontario-Quebec border and in northern Manitoba
Sudbury, ON: producing almost 80% of the world’s nickel
BC was a top producer for lead and zinc
Many of these rich mining deposits were developed with American financing
Foreign Investment in Canada At the beginning of the 20th century, Canada’s
biggest foreign investor was…? Britain! Bankers from Britain had invested in
Canadian government bonds and railroads. They did not invest in industries much because they didn’t think they’d make any money.
WW1: British investment slows down
Someone else steps in, though…
The U.S.! Americans wanted to
invest in the rapidly expanding areas of the Canadian economy – the industries
Difference in Investors
British investors usually left Canadian business people to run the businesses in their own way
American investors took greater control over the industries
They introduced the Branch Plant System Branch industries are copies of the American parent
company Produce the same product as the parent, but they get to
have a special stamp: “Made in Canada” Parent company then does not have to pay such high taxes
Branch Plant System
Good thing: Essential to develop
industries Provides jobs Help Canada develop into
a powerful nation
Bad thing: “Americanization” Important decisions made
in the US instead of Canada
Top management jobs = Americans
Profits sent back to the US Complete economic
takeover?
Branch Plant System – a Diagram U.S. Parent Company
Canadian Branch
CompanyP
rofi
ts
Important Decisions
Management Jobs
Foreign Investment Money
Research & Development
Jobs Taxes CDN Products
Questions
1. Why did Americans invest in Canada in the 1920s?
2. Correctly use the following terms in a sentence:
1. Branch plant2. Taxes3. Parent company
3. Complete a pros and cons chart for American Investment in Canada based on your opinion.