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The GreatThe Great
DepressionDepression4/7 Warm Up: What was the Great4/7 Warm Up: What was the Great
Depression?Depression?
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The Great DepressionThe Great DepressionOctober 29, 1929October 29, 1929
Definition:
The severe economic slump that followed the
collapse of the global stock market in 1929
and the after effects of World War I.
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Terms you should knowTerms you should know
Depression:Depression:A period of low economic activity andA period of low economic activity andrising unemploymentrising unemployment
Stock:Stock: Share or portion ofShare or portion of a particularcompany ora particularcompany orcorporation that an individual can owncorporation that an individual can own
DividendDividend:: Money you make or lose from owningMoney you make or lose from owningstock.stock.
Panic:Panic:A sudden widespread fright concerningA sudden widespread fright concerningfinancial affairs causing hurried selling and a sharpfinancial affairs causing hurried selling and a sharpfall infall in pricesprices
InflationInflation: Increase in prices: Increase in prices over timeover time
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The Great DepressionThe Great Depression
The 1920s were mainly a good decade; theThe 1920s were mainly a good decade; the
world was recovering from war and life wasworld was recovering from war and life was
good. Spending was high.good. Spending was high.
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Pretend you live in the 1920s, andPretend you live in the 1920s, andreceive some money to buy stock inreceive some money to buy stock insome of the big businesses of thesome of the big businesses of the
time. These are the companies youtime. These are the companies youcan choose from:can choose from:
General Electric (electronics)General Electric (electronics)
Ford Motor Company (ModelFord Motor Company (Model--T)T)
CocaCoca--ColaCola
General Motors CorporationGeneral Motors Corporation
United Fruit Company (produce)United Fruit Company (produce)
Westinghouse (electriccompany)Westinghouse (ele
ctriccompany)U.S. SteelU.S. Steel
A&P GroceriesA&P Groceries
J. WalterThompson Agency (beauty supplies)J. WalterThompson Agency (beauty supplies)
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Now select a company and write down the nameNow select a company and write down the nameand how much stock you start off with.and how much stock you start off with.For example: If I buy CocaFor example: If I buy Coca--ColaCola-- I have just spentI have just spent
$25 for one stock.$25 for one stock.
February 10, 1921
Company Price Per 1 Stock
+/-
Ford Motor Company 50
Coca-Cola 25
General Motors Corp. 25
United Fruit Company 10Westinghouse 10
U.S. Steel 50
A&P Groceries 10
J. WalterThompson Agency 25
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Tracking your stockTracking your stock-- how much havehow much haveyou made? Write the year and add oryou made? Write the year and add orsubtract your dividend to your stocksubtract your dividend to your stock
price from 1921.price from 1921.
March 24, 1924
Company Price Per 1
Stock
+/-
Ford Motor Company 100 +50
Coca-Cola 75 +50
General Motors Corp. 10 -15
United Fruit Company 5 -5
Westinghouse 25 +15
U.S. Steel 100 +50
A&P
Groceries 50 +40
+
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Tracking your stockTracking your stock-- now how much have younow how much have youmade? Write the year and add/subtract yourmade? Write the year and add/subtract yourdividend to you stock price.dividend to you stock price.
November 16, 1926
Company Price Per 1 Stock
+/-
Ford Motor Company 150 +50Coca-Cola 125 +50
General Motors Corp. 250 +240
United Fruit Company 150 +145
Westinghouse 100 +75U.S. Steel 200 +100
A&P Groceries 220 +170
J. WalterThompson Agency 100 +50
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May 21st, 1928
Company Price Per 1 Stock ($)
+/-
Ford Motor Company 250 +100Coca-Cola 175 +50
General Motors Corp. 400 +150
United Fruit Company 200 +50
Westinghouse 150 +50U.S. Steel 450 +250
A&P Groceries 270 +50
J. WalterThompson Agency 200 +100
Tracking your stockTracking your stock-- now how much have younow how much have youmade? Write the year and add/subtract yourmade? Write the year and add/subtract yourdividend to you stock price.dividend to you stock price.
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How much did you end upHow much did you end uplosing?losing?
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Anyone who bought stocks in midAnyone who bought stocks in mid--19291929
and held onto them saw most of his orand held onto them saw most of his or
her adult life pass by before getting backher adult life pass by before getting back
to even.to even.
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The Great DepressionThe Great Depression
In 1929, a plateau of high prices andIn 1929, a plateau of high prices and
spending cause the stock marketsspending cause the stock markets
around the world crasharound the world crash
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The Great DepressionThe Great Depression
People panicked and it looked likePeople panicked and it looked like
governments were losing controlgovernments were losing control
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The Great DepressionThe Great Depression In Germany of all places, the Depression wasIn Germany of all places, the Depression was
even worse; even before this the Germaneven worse; even before this the German
economy was in serious troubleeconomy was in serious trouble
Treaty of Versailles put heavy restrictions ofTreaty of Versailles put heavy restrictions ofthe German economythe German economy
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Germany in theGermany in the
Global DepressionGlobal Depression In order to pay off their debts, theIn order to pay off their debts, theGerman government printed more moneyGerman government printed more money
In 1923In 1923--1924 inflation reac
hes1924 inflation reac
hes3,250,000,000%3,250,000,000%
Wait what does that mean?Wait what does that mean?
Day 1: $1000 Day 3: $2000 Day 5: $4000 Day 31:
$32768000
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Germany in theGermany in the
Global DepressionGlobal DepressionAccording to one story, aAccording to one story, a
man took
a wheelbarrowman took
a wheelbarrowfull ofcash to the bakeryfull ofcash to the bakery
to buy a loaf of bread.to buy a loaf of bread.
He stepped inside to getHe stepped inside to get
the baker, and when hethe baker, and when hereturned, someone hadreturned, someone had
stolen the wheelbarrowstolen the wheelbarrow
and left the cash!and left the cash!
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Germany in theGermany in the
Global DepressionGlobal DepressionSome Germans resorted toSome Germans resorted to
burningburningDeutschmarksDeutschmarks
(German money) for(German money) for
heat!heat!
It was cheaper thanIt was cheaper than
firewood!firewood!
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Exit TicketExit Ticket
Explain:Explain: What type of government will you bring in toWhat type of government will you bring in to
end the crisis? Define that type ofend the crisis? Define that type of
government.
government.
What are 3 things you will do once you getWhat are 3 things you will do once you get
power to establish that government?power to establish that government?
Why didnt you choose the other two types?Why didnt you choose the other two types?
Why are they bad options?Why are they bad options?