Government Response To The Great Depression

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Government Responses
During the Great Depression, Canada’s federal governments were slow to respond effectively to the crises that were provoked. Mackenzine King’s government (1925-30) felt it was best to leave the problems alone; he believed in laissez- faire, in other words the economy would get fixed on its own. King was impassionate in balancing the budget and a limited government role. He also believed that the downturn was caused by the business community and an adverse climate cycle, which led to the drought and the Dustbowl. King thought the depression would make a comeback on its own by international trade. Therefore, he was against any polices that would raise tariffs, he also refused to give money for relief to Tony or Conservative
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Bennett went to the extent to propose a Canadian version the New Deal as a different solution since he realized that the economy would not solve its own problems itself. His other proposals were Farm credits, Federal by election and Horse drawn Fords. He was influenced by his brother in law, William Kerridge that was an ambassador to the USA, he was inspired of Roosevelt’s New Deal because he believed the only way capitalism could be saved was by direct government intervention. The New Deal consisted of Employment and Social Insurance Act that provided unemployment insurance and allied benefits. Therefore, Bennett hoped that his proposal to the New Deal happened quickly, so that the Liberals would not rejected it and would have elections quicker. In Mackenzie King’s 2nd term (1935-1948) he returned as a prime minister. He belittled Bennett’s proposal of the new deal and still went with traditional economic policies. However, he did realize without federal support the economy would not right itself. He gave up on the idea of balancing budget. In the late 1920’s King was attentive to the economic policies and felt that the economy should be left alone. By 1934 King came up with an idea to create a Central Bank with more authority than the Bank of Canada to have control over the money supply. Even though his plan didn’t go on for so long, he wanted to restore the international trade. Most Canadians were looking for federal government rather than for relief for the reason of realizing only the federal government had the resources. Therefore, the Depression displayed that the Canadian system was not able to manage and needed to be

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