Inflation soars after First World War

The weekly food bill for Canadian families averaged $16.48 in July 1920, Canadian Press reported, October 1, 1920. Food costs had more than doubled from $7.75 per week in December 1913, thanks to rapid inflation induced by the First World War.

The average family budget in July totalled $40.76 per week, according to data from the federal Department of Labour. In addition to food, other items in the weekly budget included fuel, $8.64; rent, $8.38; clothing, $7.38; sundries, $6.50.

The hot pace of inflation, however, appeared to be cooling. In August, the weekly family budget declined by 33 cents.

Overall, the cost of living in both Canada and the United States increased by a reported 105 percent in less than seven years. Other countries were hit harder. In Britain, the cost of living had increased by 152 percent; in France, by more than 250 percent; and in Milan, Italy, by 348 percent. In Germany, the worst was yet to come, with perhaps the severest hyperinflation the industrial world has seen. From mid 1922-to mid 1923, the cost of living increased more than 100 times, and then exploded much higher. Before the end of the year, one Canadian dollar would buy about 380 million German marks; a loaf of bread cost three billion marks. A wheelbarrow would not hold enough single marks to buy a week’s groceries.

Although nothing like the Germans, most Canadians were also hurt by inflation, as prices increased more than incomes. A decade later, there would be far greater pain and suffering from the opposite cause, disinflation. In the Great Depression of the 1930s, prices fell sharply but most incomes fell even more. At the peak of the Depression, nearly one in four Canadian workers were without jobs and many others saw their earnings fall. Farmers, workers and business could not sell all they produced. Farmers used butter for axle grease.

Unfamiliar Canadian History Stories 115

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