Richard Bedford Bennett and the Great Depression

The pervasive feeling during the Great Depression was helplessness. The lack of any vestige of hope exacerbated the climate of fear: fear induced by watching the old and familiar crumbling; fear that next month, especially next winter, there would not be enough to eat or the wherewithal to keep warm. Even for those on fixed incomes it was a distressing time, having to cope with tramps at the kitchen door and watching the freight trains going by with men riding to unknown destinations and for unknown purposes. Roots were drying up like the prairies.

The Canadian banking system had stood up well – there had not been a Canadian bank failure since 1923 – but there was urgent need of a central bank to regulate credit. Prime Minister Richard Bedford Bennett had seen first-hand what the Bank of England could do to help Britain’s depression. On 21 March 1933 Finance Minister E. N. Rhodes announced there would be a royal commission on banking and currency in Canada. The commission reported in September, recommending three to two in favour of a central bank. The legislation passed almost unanimously in 1934 and the Bank of Canada was established the following year.

The Bennett New Deal of 1935 promised federal government intervention to achieve social and economic reform. It was also genuine Bennett, policies he had espoused for many years, with roots in his own political instincts. He had long believed in old-age pensions, unemployment insurance, and labour unions. What was new was the strong rhetoric delivered by Bennett in incisive radio speeches. “The old order is gone,” Bennett announced. “If you believe things should be left as they are you and I hold irreconcilable views. I am for reform. And, in my mind, reform means Government intervention.… It means the end of laissez-faire.” The centrepiece of Bennett’s program was the Employment and Social Insurance Act. It was followed by bills introducing a minimum wage, an eight-hour day, and a 48-hour work week. There were doubts about the constitutionality of these measures, but with elections due in a few months, that was worth risking.