Canadian Response to Depression

• King believed in laissez-faire, balancing the budget and a limited government government role
• King believed his cautious economic policy had caused prosperity and the downturn was caused by overspeculation and an adverse climatic cycle
• King thought the depression would right itself with international trade and government intervention would make it worse
• King opposed policy to raise tariffs and wouldn't give relief funds for Conservative-run provinces
• King lost the 1930 election
• The Conservatives had a 31-seat majority
• Bennett was a successful businessman, charismatic but was overwhelming and indifferent of others' views
• Bennett's policies were traditional, based on tariffs and relief
• The National Loan Service was set up to borrow $150 million and it was oversubscribed by $72 million
• $20 million for emergency relief was allocated to the provinces by the federal government. So, no direct relief and less than $20 for each unemployed person
• Bennett later committed $28 million for relief and public works to create jobs each year
• The 1934 Public Works Construction Act made a federal building programme of $40 million to create jobs. This included work in national parks and the federal government used local labour
• The 1934 Farmers' Credit Arrangement Act protected farmers from eviction by letting them make compromises about repayment of debts under the supervision of a government board
• The Farmers' Credit Arrangement Act benefitted farmers more than creditors. By 1938, 36 000 cases were handled with $550 million of debts being removed
• Relief camps run by the Canadian Department of National Defence to put 70 000 unemployed hoboes to work. They were paid $0.20 a day
• The camps did work to facilitate the development of communication across Canada, but people complained of poor conditions and ulterior motives for the camps. Most people who refused to go to the camps were arrested for vagrancy
• Tariffs were increased to protect Canadian markets. This may have saved some firms, but didn't help international demand for exports
• In Manitoba, the estimated overall cost of tariffs was $100 per farm
• Bennett supported Imperial Preference, offering Britain and the Commonwealth reciprocal preferential trading rates
• Bennett hoped for a major international agreement to combat the depression, but the 1932 Ottawa Conference had no decisions on monetary policy, but tariffs were reformed and there was a gradual reduction of them
• Canadian exports to Britain rose by 60%
• In July 1932, Hoover agreed to build the St Lawrence waterway to go through the USA and Canada, but the US Senate vetoed it
• Roosevelt invited Bennett to Washington to discuss trade developments, but little was achieved
• Bennett set up the National Radio Broadcasting Service to stop Canadians being as influenced by American radio
• In June 1931, the Canadian Supreme Court declared the control of the radio was the task of the federal government
• On 9th May 1932, a Special Commission suggested the creation of a Canadian Radio Broadcasting Commission to regulate programmes, which Bennett did
• There had not been a Canadian bank collapse since 1923
• Bennett wanted a centralised banking system and a 1933 Royal Commission agreed, so the Bank of Canada was set up in 1934. Banks couldn't issue their own banknotes or keep their own gold reserves