Compare and Contrast the Response to the Great Depression of Two Countries in the Region

Topics: Great Depression, New Deal, Unemployment Pages: 3 (1070 words) Published: February 27, 2013
Compare and contrast the response to the Great Depression of two countries in the region. The outbreak of the Great Depression in 1929 caused economic hardship for society in the Americas. World trade was quelled and the consequences devastated the United States of America and Canada. Both countries suffered a breakdown in world trade and resulted in a decrease of domestic revenue. The governments were tasked with restoring an economy that faced a 40% and 37% drop in their GDP in Canada and the U.S respectively. Additionally the increased rates of unemployment heightened the difficult situation. In 1933-34 during the hardest parts of the depression, Canada faced 28% unemployment and the US 25% forcing the government to act on various policies and inevitably spending on recovery. The long term laissez faire approach from the government had to be reconsidered and simply instilling austerity measures were not going to be effective in balancing the federal budget. The attitudes of ‘business of America is business’ was also evident in the initial Canadian response. Similar to Herbert Hoover of the U.S, Prime Minister Mackenzie King believed that the crisis was a passing phase and refused to provide federal aid. This was partly attributed to the fact that Canada was already in debt due to expansion of infrastructure and education during the 1920s and only introduced moderate relief efforts. Hoover’s highly economically republican outlook was not popular and by 1932 Franklin D. Roosevelt was elected President. Correspondingly in Canada a new Prime Minister; Richard B. Bennett was tasked with alleviating the situation. Roosevelt initiated a New Deal, which would provide America with relief, recovery and reform from the economic depression. In response to the Great Depression Congress accelerated its tariff policies, culminating in the Reciprocal Trade Agreements Act of 1934 which enabled the President to negotiate tariff reductions on a bilateral basis. In an...
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