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The good life came to an abrupt end in the late 1920s. Here are some of the reasons why:
- Overproduction of goods, especially in the US. The US raised its tariffs on imported goods, which made Canadian goods undesirable in their large market.
- Britain and other European countries also increased tariffs.
- Too much competition in the world for wheat especially from Argentina, Australia and the USSR – this has a ripple effect on other industries i.e. flour mills, railways, equipment manufacturing.
- Canadians were encouraged to buy goods “on credit” through the 1920s, large companies did the same, many people and companies had large debts.
- People believed that stock market prices would always increase
- Unemployment started near the end of the 1920s, sales of goods decreased but companies continued to grow.
- Stock values plunged. Throughout North America people lost their confidence in growth and prosperity. A panic set in and people began to sell their stocks which lead to Black Tuesday – the stock market crash of October 29, 1929.
- Soon their were no more buyers, only people frantically trying to sell worthless stocks.
- With the collapse of the stock market, the economy system toppled, the effects would trickle into every part of the Canadian society. The next 10 years Canadians would be immersed in the worst economic crisis in history known as the Great Depression.