M965.199.3206 | War Babies
September 15, 1941, 20th century
Ink, crayon, graphite and opaque white on card
38.4 x 28 cm
Gift of Mr. John Collins - The Gazette
© McCord Museum
Keywords: Cartoon (19139) , Drawing (18637) , drawing (18379) , economy (442)
Keys to History
War orders to factories jumped from $60 million in 1939 to $2.5 billion in 1942. This spectacular growth meant that there were jobs for everyone willing to work. Many people now had lots of money to spend. There was little to spend it on, however, as the factories that had formerly produced consumer goods were now turning out war-related goods. The increased demand for the few goods available resulted in a sharp increase in prices, and this in turn resulted in demands for higher wages. A Wartime Prices and Trade Board was set up in 1939 to monitor prices and shortages. When inflation began to spiral out of control in 1941, the Board was given sweeping powers to implement price and wage controls. The government also vigorously promoted the sale of Victory Bonds, encouraging people to save their money until after the war when consumer goods would once again become available.
John Collins' cartoon illustrates the average Canadian's dismay as wages and prices continued to grow. Inflation was a real problem. The cost of living rose 17.8% from September 1939 to October 1941. From October 1941 to April 1945 it rose 2.8%.
The control of the Canadian economy was now strongly centred in Ottawa. A small cost-of-living bonus helped keep wages in line with prices.
A powerful price and wage control policy came into effect on December 1, 1941.
Donald Gordon, a well-known economist, was assigned by the government to the Foreign Exchange Control Board in 1939. In 1941 he was made chairman of the very powerful Wartime Prices and Trade Board.