Great Depression
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It was the economic crisis the world had never seen. When The Great Depression of October 29 1929 hit Canada and the world, it hit hard. The economy dropped like a stone. Unemployed single men were sent to relief camps and the numbers of unemployed reached the tens of thousands across Canada. Even though The Great Depression hit suddenly, when the stock market did crash the signs were there. Anybody who had been paying attention in the 20s could have predicted The Great Depression.
Although hindsight is 20/20 The Great Depression could have been predicted, if anyone was paying attention to the dangers of credit buying. During the 20s credit buying became extremely popular. The main concept was buy now, and only pay small amounts over time. Sadly it wasnt as simple as it appeared due to compound interest rates over time. An item was bought at the original price; eventually it was cheaper than credit buying. As credit buying swept the country the potential economic blow was getting harder to avoid. Not only credit buying of household goods but credit buying of stocks. It was considered the way to get rich and fast! Young farmers with big dreams, wives and children saw this opportunity as a blessing. After pouring all the familys savings into a stock like General Motors or Hudson Bay Company they would wait and let their stocks get them rich overnight. But when the stocks started to fall everybody tried to sell theirs fast and at the best rate possible. When and if it was sold they didnt reap rewards but would have instead lost money, which none could afford to have happen. Credit buying is what started the house of cards to fall.
Industries in the late 20s seemed to have forgotten the first and foremost role of the economics: Only make what you can sell. Businesses everywhere were producing far more products than needed. In 1930, car manufactures in Oshawa and Windsor made 400,000 cars even though Canadians already had over 1 million. And with sales dropping rapidly 1 in 3 men were laid off. Money was tight before, but now families had no income. With warehouses full of unsold stock, tensions were running high. When sales are non-existent the sellers had to stop the business all together. It all came back to the stock market. People blamed the stock market for the effect it had on everyone was apparent, it was hard to miss the block long soup lines.
The illusion