The Recession and World War II (1918-1945)
At the end of the First World War, Medicine Hat was stagnating. Real estate development was marginal during the first half of the 1920s. The decade opened with a few public projects, including a courthouse, library, and child welfare clinic. A few highways, rail lines, and irrigation projects also went ahead. There was much activity in the coal, oil, and natural gas industries, as companies continued drilling within the city. Canadian Pacific Railway continued to be an important employer within the city, and the company did not make significant cutbacks during the period. But there were few new industries starting up, except for a soap company and the Riverside Nurseries in 1921.
Medicine Hat's economy was in a slump. The real estate market was virtually inactive. Unemployment was high with 1 in 5 men not working. Many homes were abandoned as people began leaving the area in search of work elsewhere. Southern Alberta witnessed a number of seasons characterized by dry, hot and windy conditions that turned the area into a large dustbowl. Thus, the farmlands around Medicine Hat produced very little disrupting the agricultural-related industries. The drought led to the highest rates of farm abandonment in Southern Alberta's history. The population of the Medicine Hat district declined 18% during the 1920s, leaving hundreds of farms vacant.
The Village of Suffield, almost 50 kilometres northwest of Medicine Hat, was a casualty of the drought because its main employer was Canadian Wheatlands Limited. Before the drought, the thriving farming village had five grain elevators and three hotels, including the popular Alamo Hotel, a tourist spot for Medicine Hatters. However the drought essentially transformed Suffield into a ghost town.
The global stock market crash of 1929 kept Medicine Hat's economic conditions from improving in 1930s. City council raised taxes so as to avoid possible bankruptcy. Unemployment was widespread. Unemployed men from rural areas across the province were riding on freight trains and stopping in cities like Medicine Hat to desperately find work. In response, Medicine Hat created public improvement projects such as road and sewage improvements, opening up temporary labour positions. More than 3600 Medicine Hat families, representing nearly an eighth of the population, were on relief. Workers often faced terrible and unsafe conditions, while the unemployed were desperate for work. On June 11 of 1935, a freight train carrying 1,200 men arrived from the west, on their way to Ottawa to protest the economic conditions; many were arrested in Regina, for rioting.
Despite the economic woes of the 1930s, farmers in the Medicine Hat region were fairing better. While prices for farm goods were low, crop yields were better. Medicine Hat's agricultural industry was strengthened by the rise of the milk industry. In the 1930s, 84 milk producers/distributors operated in the city.
In 1939, war took the city by storm. After two decades of stagnation, Medicine Hat received a massive population boost from soldiers training at the Dominion-Provincial War Emergency Training Centre and the Royal Air Force No. 34 Flying Training School. Medicine Hat was also home to the South Alberta Regiment (SAR) infantry militia unit. Other temporary visitors to the city included prisoners on their way to the 2nd largest POW camp in Canada near the Medicine Hat city limits.
In 1941, the Village of Suffield was revived by the establishment of a British military facility specializing in the study of chemical warfare. These visitors to Medicine Hat and area allowed the city's businesses to thrive, particularly retail and recreational ones. 3000 men trained at the BCATP while it was in operation from 1941 until the end of the war, often visiting local grocery stores, cafes, theatres, and the Bowladrome.
The landmark Assiniboia Hotel was destroyed by a fire in 1944. Medicine Hat's industries were growing and providing much employment because its rich supply of natural gas and clay deposits helped the city secure wartime contracts. Its pottery industry giant, Medalta Potteries, produced a lot of crockery, kitchenware and tableware for the Canadian military. In addition, the Alberta Foundry and Machine Shop was converted to war production, manufacturing anti-aircraft parts and shrapnel shells.
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