The Economic BOOM! of the 1920s

1
The Economic BOOM!of the 1920s

• But before life got better, it wasnt great.
• A look at Canadas economy before the boom.

2
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

3
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

4
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

5
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

6
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

7
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

8
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!

9
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!

10
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

11
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

12
Industry 2 Pulp and Paper

• 1920s production of newsprint became Canadas
  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 Canadas forests are
  being destroyed

13
PROBLEM!

• Canadas economy is become more and more
  dependent on the export of raw materials.
• Why is this a problem?

14
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
• Canadas output for hydroelectricity became
  second in the world

15
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

16
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 werent

17
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 worlds
  nickel
• BC was a top producer for lead and zinc
• Many of these rich mining deposits were developed
  with American financing

18
Foreign Investment in Canada

• At the beginning of the 20th century, Canadas
  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 didnt
  think theyd make any money.

19

• 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

20
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

21
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?

22
Branch Plant System a Diagram
U.S. Parent Company
Important Decisions
Management Jobs
Foreign Investment Money
Research Development
Profits
Canadian Branch Company
Jobs
Taxes
CDN Products
23
Questions

1. Why did Americans invest in Canada in the 1920s?
2. Correctly use the following terms in a sentence
3. Branch plant
4. Taxes
5. Parent company
6. Complete a pros and cons chart for American
   Investment in Canada based on your opinion.