In early 1938, the federal and provincial governments cut financial support for the relief camps that had been established nationwide in 1932 to house and provide work for single, unemployed, homeless men. In the depths of the Great Depression these camps were the only refuge for these men. The camps were often squalid, and had the dual purpose of keeping young men away from urban centres, where they might protest, and of providing cheap labour for private industry. They caused a great deal of resentment among the men, who were isolated from society and often lonely; they particularly resented being paid only 20 cents for a day's work. In April 1935, the most dramatic enactment of this resentment occurred when 1500 men from BC camps went on strike and ultimately, after two months' protest in Vancouver, launched the On To Ottawa Trek.
As a result of the closing of the BC camps on 1 May, many hundreds of homeless men converged on Vancouver.
Steve Brodie, a Communist with experience from the 1935 labour unrest in Vancouver, organized the men into brigades. On the afternoon of 20 May 1938, approximately 1200 men left from the East End of Vancouver for a protest rally downtown. Over 700 men flooded into the recently renovated post office (now Sinclair Centre). A second column entered Hotel Georgia, while a third group entered the Vancouver Art Gallery.
The manager of the Hotel Georgia refused to call the police and risk property damage and city council was able to negotiate for the men to leave for $500. The other two groups of protesters, however, held their positions for weeks, as the police waited for orders.
Authorities finally decided to act and sent in the police at five o'clock on the morning of Sunday 19 June 1938. Harold Winch of the Co-operative Commonwealth Federation, who had acted as a liaison between the unemployed and the police during the 1935 Labour unrest, successfully negotiated the withdrawal of the unemployed from the art gallery. Because the post office was a federal building, the RCMP led the assault, using tear gas. The protesters responded by smashing the windows for ventilation and arming themselves with whatever they could throw. The RCMP, armed with batons, forcibly ejected the men. Reports of the fracas vary, but estimates indicate that 42 were hospitalized, five of them police officers. Steve Brodie was singled out for particularly brutal treatment by the police and was left with a permanent eye injury.
Following the melee, the protesters and supporters marched back to the East End, smashing windows en route. Later that day, as news spread, some 10,000 supporters turned up at the Powell Street Grounds to protest police brutality.
In the end, Bloody Sunday yielded no resolution and no one was arrested for participating.