This activity is divided into two components. In the first component, students learn some basic terminology regarding the stock market and investment and play a stock market game as an introduction to the stock market crash of 1929. In the second component, students examine the domestic and international factors that brought about the Great Depression of the 1930s.
Strand(s) and Expectations
Ontario Catholic School Graduate Expectations: CGE2a, 2b.
Strands: Communities: Local, National, and Global; Social, Economic, and Political Structures; Methods of Historical Inquiry
Overall Expectations: CGV.02, SPV.01.
CG2.03 - describe the influence of Great Britain and Europe on Canadian policies from 1900 to the present;
SP1.02 - compare economic conditions at different times in Canada’s history and their impact on the daily lives of Canadian families;
MI1.01 - use terms related to historical organization and inquiry correctly.
The teacher prepares terms that the students need to know before playing the stock market game (stocks, investment, shares) and explain them to students as the game is being set up. The teacher should put a chart up on the board to keep a running track of the prices of each of the stocks as the game progresses. The teacher also needs to make and cut out the stocks/bonds, and currency ( in denominations of $10, $50, $100, $500 – see Appendices 2.1.3 and 2.1.4 on web site) and photocopy bankers’ calculation forms (Appendix 2.1.2 on web site) prior to the game. Three ordinary dice must be prepared in advance: one has equal numbers of “UPS” and “DOWNS” on its six sides; a second die has the six stocks/bonds on it (gold, silver, wheat, industry, pulp and paper, and bonds); a third has the numbers 10, 10, 20, 30, 40, 50 on its respective six sides, indicating the amount (in cents) that the stock goes up or down. Lastly, the teacher and students must set up four stations where the bankers/brokers sit to buy and sell stocks.
Prior Knowledge Required
Students should be aware of the buying/investment/business expansion frenzy of the 1920s.
1. The game is an extremely simple way to demonstrate to students that when one invests in the stock market there are no guarantees of profits. To understand and appreciate this unpredictability, students take part in a game where random luck determines losses and profits. Three or four students are chosen from the class to be bankers and each receives a bankers’/brokers’ calculation form (see web site for Appendix 2.1.2). As well, the stock certificates are divided up among the bankers/brokers for sale to the other students. The teacher distributes to each of the remaining students a sum of money ($1000). The students may then go to the bankers and spend their money on the purchase of stocks. Each stock is priced at $2.00/per share to begin with. The first buying session should take five to seven minutes and then sales are stopped. The teacher then rolls the dice and records the outcome of each of these rolls on the board, adding to or subtracting from the value of the stock. If the stock gets to $4.00, it splits, giving the owner twice the number of shares at a value of $2.00 per share. Should a stock get below 10 per share, it is taken off the board and cannot be revived. After five minutes, students have the opportunity to go back to the bankers to buy and/or sell. The process is repeated several times (allowing less time to buy/sell helps to increase the urgency and therefore the tension and involvement). The game need not be played for long before students begin to see the risk one takes by gambling one’s money on a stock that could drop off the market entirely.
2. Students take a moment to read in their texts about the crash of the Stock Market in 1929 and the immediate reactions to the crash.
3. The teacher then directs a discussion about what happened to the economy after the crash.
4. Using the diagram in Appendix 2.1.1, the teacher can ask students what happened and draw the diagram on the board as students speculate about how the problem worsened because of fear, layoffs, lack of money in the economy, fewer sales, production dropping, etc. drawing some conclusions about cause-and-effect. Students copy the diagram from the board or the teacher hands out copies.
5. The teacher directs the students to consider whether the crash of the stock market was the cause of the Depression. Students should also consider the moral questions arising from an economic system which encouraged such practices to the detriment of the poor.
6. Students read in their texts about some other issues they should consider when examining causes of the Great Depression: high tariffs in Canada, US, England, and Europe; Canada’s reliance on the US and other international markets which were also experiencing market failure; businesses over-expanding, over-producing, and over-borrowing; the problem of relying on primary industries, credit buying, and the purchasing of stocks on margin. Students complete the gathering and categorizing of this information for homework by reading and making notes on the causes of the Depression. As enrichment, the teacher may have students choose stocks from the newspaper and follow their rise and fall
Formal teacher observation/assessment of note-making skills