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Black Tuesday.

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Introduction

Black Tuesday The dirty thirties, as some may call them, was a time of hopelessness and despair, unquestionably being the most tragic economic disaster to ever strike Canada. The Great Depression was the worst and longest economic slump ever in Canadian history that spread to virtually the entire industrialized world. The over speculation in the stock market added to the build up of the economic disaster. As the effects of the stock market crash lingered on, an untimely disaster that would prove to be beneficial was about to take place. A War that sprouted into existence gave new ground to the fallen economy. World War II had a great effect on the Canadian economy, not only ending the Great Depression but also creating jobs for the numerous unemployed and literally pulling the economy out of the gutter. The times were good during the "roaring twenties" and the Canadian economy was booming. Stock prices had been rising steadily since 1921, but in 1928 and 1929 they surged forward, with the average price of stocks rising over 40 percent (1). The stock market was totally unregulated. Margin buying in particular proceeded at a feverish pace as customers borrowed up to 75 percent of the purchase price of stocks (2). ...read more.

Middle

Consumption expenditures dropped by 18 percent, construction fell by 78 percent, private investment plummeted by 88 percent, and farm income, already low, was more than cut in half (7). During this period 9,000 banks went bankrupt or failed (8). The consumer price index declined by 25 percent and corporate profits fell from 10 billion to 1 billion dollars (9). The Depression hit hardest those nations that were most deeply indebted to the United States, i.e., Germany and Great Britain as well as Canada. In Germany, unemployment rose sharply beginning in late 1929's and by early 1932 it had reached 6 million workers, or 25 percent of the work force (10). Britain was less severely affected, but its industrial and export sectors remained seriously depressed until World War II. In Canada mass unemployment left many workers struggling to survive in a world without unemployment insurance, health care, and with very little social assistance. Many young men tracked all across the country, riding the rails in search of work. It is easy to imagine why it was a difficult time for labour. Craft unions continued to retreat into themselves, leaving all but a small group of workers without any union support. The gross national product in Canada, had been growing for a steady four years at an average annual rate of 3.5%, until it began to decline declined at a rate of over 10% annually, on average, from 1929 to 1932 (11). ...read more.

Conclusion

Roosevelt. In the end it was the war that restored full employment as well as the entire economy out of depression in Canada and other previously hurting countries. While the collapse of the stock market in 1929 may have triggered economic turmoil, it wasn't until the economies of the world were so deep into recession that it seemed like there was no way out. As the many unemployed were all in a frantic search for work to support themselves the economy seemed to get worse and worse and in the distance a war began to emerge. Ironically this added disaster proved to correct the economy of Canada as well as the rest of the world. It came to be that World War II boosted such things in the economy, as the GNP, and it also had a substantially positive effect on the unemployment rates, reducing them sufficiently. The Great Depression helps economists predict the economy today. It shows how an over speculation in the market with a rapid investment over a period of time could lead to an economic crash. We may never reach a point like the Great Depression because the banks are much more prepared for those kinds of situations. It is important to keep an open mind on what could happen to the market, and learn from past mistakes to live in a more prosperous economic society. ...read more.

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