American History

Unit
High School (11th grade) - What were the main causes for Stock market crash

Aim
What were the main causes for Stock market crash

Goalsobjectives
(These include social and academic skills as well as conceptual goals)
Read a primary source document with understanding
Recognize the continuing importance of ideas and documents
Place the stock market crash within philosophical and political contexts
Recognize connections between ideas in different historical eras
Draw conclusions based on historical decisions and evidence
Understand the benefits and problems of economics and government economic controls, and how they fail
Examine the meaning of concepts of change, human rights, economic controls, and equality

Main ideasunderstandings
(These are from the main ideasunderstandings for the entire unit. They will be developed and reinforced in other lessons as well)
1. Post World War I prosperity stemmed from the creation of new industries, new technologies and government support of big businesses
2. The economy was geared to credit and big investment and was over geared towards credit and investment
3. Higher wages prompted higher investment in the economy by normal people
4. When the economy started to have problems public confidence in the stock market was low, as people did not know how they could regain their profits, and were worried about losing all their investments
5. The stock market crash prompted people to try and sell everything they had invested, however due to supply and demand there were more people selling than buying, therefore the price dropped, and people lost their money
6. A combination of all the above led to consumer over confidence and high levels of credit and investment in the stock market
7. Many investors confidently purchased stocks on margin and engaged in speculative trading. Therefore when the trades went bad they had to try and get some money back
8. Banks that had loaned to speculators and invested depositors funds lost their cash reserves. They were then not able to loan more money to those who needed it as they had lost their savings and had no capital to help secure a loan.
9. An uneven distribution of income left most families with little expendable income. When Americans cut back on spending, manufacturing slowed production, which in turn led to lower wages and unemployment.

Materials
Video footage of the day of the crash and subsequent weeks of stock trading with appropriate equipment
Do now
Read the passages from Chapter 22 The Great Depression Begins, 19291932

Motivation
How did the government react to the crash in the stock market and how does this compare to todays economic regulation of the economy

Activitiesquestionstransitions
Use the internet and other resources to see if you can find out how much money was lost after the stock market crash

Summary
Based on the examination of the materials, outline the main reason for the stock market crash of October 1929

Application
What was the most important cause of the change in the economy after the stock market crash and how was it resolved

Homework assignment
Think about what you would have done if you had lost your savings in the crash.