At the end of 1919 the Canadian government acquired the Grand Trunk Pacific Railway and the Canadian Northern Grand Trunk and merged them to create the publicly owned Canadian National Railways. Upon Borden's retirement in 1920, Arthur Meighen succeeded as prime minister. The election of 1921 brought the Liberals back into office under a new leader, William Lyon Mackenzie King (see King, Mackenzie). Because the government had a bare majority, it depended upon the support of the Progressive (Farmer) party members.

After four years of timid Liberal leadership, a new election strengthened the Conservative representation but not quite to the point of giving the party control of Parliament. This was accomplished in 1926, when a scandal in the Department of Customs and Excise cost the Liberals their majority in the House. By political shrewdness, however, King forced Meighen's second government to go to the people for an election within a matter of days; and the Liberals were once more returned to power.

The 1920s were marked everywhere by a spiraling expansion of business. Technical and industrial advances paced the rising standard of living. In the summer of 1929 industrial production began to slow significantly. In October of that year the stock market crash heralded unemployment and financial ruin across Canada, as it did elsewhere in the world. Defeated in the 1930 elections, King made way for the Conservatives under Richard Bedford Bennett (later Viscount Bennett). Bennett thus had the unenviable responsibility of dealing with the Great Depression. His inability to deal with the crisis, coupled with the severe drought in the prairies, led Canadians to desert the Conservatives. The election of 1935 brought the Liberals back into office, a position they were to continue to hold without interruption for 22 years.

Native Peoples Issues