The Great Depression Revised

8/8/2019 The Great Depression Revised

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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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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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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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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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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?

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The Great Depression Revised