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    Wall ST Crash Game

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    nyimae09
    1) In the 1920s, there was an economic boom in the US as businesses borrowed money from banks to expand and sell stocks to investors, promising large profits. Share prices doubled between 1922-1928. 2) In 1929, share prices peaked as banks lent heavily to speculators. However, steel production and car sales were declining. The government raised interest rates to curb speculation. 3) "Black Tuesday" in October 1929 saw 16 million shares sold, wiping out $14 billion as speculators had to sell to repay bank loans, starting the crash. Banks and businesses failed as loans were called in.

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    Wall ST Crash Game

    Uploaded by

    nyimae09
    20 views2 pages
    1) In the 1920s, there was an economic boom in the US as businesses borrowed money from banks to expand and sell stocks to investors, promising large profits. Share prices doubled between 1922-1928. 2) In 1929, share prices peaked as banks lent heavily to speculators. However, steel production and car sales were declining. The government raised interest rates to curb speculation. 3) "Black Tuesday" in October 1929 saw 16 million shares sold, wiping out $14 billion as speculators had to sell to repay bank loans, starting the crash. Banks and businesses failed as loans were called in.

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    1) In the 1920s, there was an economic boom in the US as businesses borrowed money from banks to expand and sell stocks to investors, promising large profits. Share prices doubled between 1922-1928. 2) In 1929, share prices peaked as banks lent heavily to speculators. However, steel production and car sales were declining. The government raised interest rates to curb speculation. 3) "Black Tuesday" in October 1929 saw 16 million shares sold, wiping out $14 billion as speculators had to sell to repay bank loans, starting the crash. Banks and businesses failed as loans were called in.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    20 views2 pages

    Wall ST Crash Game

    Uploaded by

    nyimae09
    1) In the 1920s, there was an economic boom in the US as businesses borrowed money from banks to expand and sell stocks to investors, promising large profits. Share prices doubled between 1922-1928. 2) In 1929, share prices peaked as banks lent heavily to speculators. However, steel production and car sales were declining. The government raised interest rates to curb speculation. 3) "Black Tuesday" in October 1929 saw 16 million shares sold, wiping out $14 billion as speculators had to sell to repay bank loans, starting the crash. Banks and businesses failed as loans were called in.

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    You are on page 1of 2

    Worksheet to accompany the computer simulation at www.activehistory.co.

    uk / 1
    Wall St. Crash Computer Simulation

    Task 1: Describing what happened


    Complete this table as you progress through the game. The computer will tell you
    when it is time to fill in each row of the table.

    Situation Effect (fill these cells in when prompted by the computer)


    1 It is 1922. There is an economic 'Boom' as the USA provides Europe
    with goods for reconstruction after the Great War. Many companies
    raise more money to grow by inviting investors to buy shares in their
    businesses. They promise large profits and so large dividends!
    2 It is 1924. Germany has been given a large American loan under the
    Dawes Plan. So, it can pay reparations to France and Britain, who in
    turn can afford to purchase American goods.

    3 It is 1928. The average value of shares has more than doubled in just
    five years! American businesses are keeping demand for goods high
    by spending lots of money on advertising: especially on the radio and in
    the cinema.
    4 It is 5th March 1929: Herbert Hoover becomes President and says
    'Shares are cheap at current prices' and that soon 'poverty will be
    banished from this nation.' Banks will lend $9 billion to speculators this
    year. Your local barber tells you he has doubled his money this year.
    5 It is Spring 1929. Steel production is declining, car sales are down, and
    consumers are building up high debts because of easy credit. The
    government announces plans to deal with 'the evil of harmful
    speculation'
    6 It is 9th August: The government raises interest rates. Hoover says he
    plans to 'strangle the speculative movement' which is 'optimism gone
    wild'

    7 It is September 3rd 1929. After another surge, the Dow Jones reaches
    a high of 381 points. A newspaper headline trumpets, 'Public Demand
    for Stock Appears Insatiable.' Share prices have increased 5X in the
    past 5 years!
    8 It is 4th September 1929. The 'Babson Break' - Roger Babson, an
    economic expert, predicts that despite heavy advertising, there are now
    too many goods & not enough customers for them: 'Sooner or later, a
    crash is coming, and it may be terrific.'
    9 It is September 19th 1929. The 'Fisher Forecast': Professor Irving
    Fisher of Yale University says that Babson's prediction of a crash is
    foolish and that shares are still great value.

    10 It is October 24th 1929: 'Black Thursday' – millions of shares are put up


    for sale, bringing down prices. Many speculators, with loans to repay to
    the banks, cut their losses and sell theirs too. By the end of the day, 13
    million shares have been traded!
    11 It is October 25th 1929. Five banks have spent $20 million buying up
    shares in big businesses to keep their price high and restore
    confidence. President Hoover reassures Americans that U.S. business
    is sound.
    12 It is October 29th 1929: 'Black Tuesday' – 16 million shares are sold
    and $14 billion is wiped off the stock market.

    13 It is November 1st 1929. The banks are planning to cancel all overdraft
    facilities. They also announce that anyone with an overdraft should
    prepare to pay it back straight away by selling any shares that they
    may have.
    14 It is November 5th 1929. With many speculators unable to pay back
    their bank loans, the banks are left short of money and so call in loans
    they have made to businesses, including those that you have bought
    shares in.
    15 It is Nov 13th 1929. The stock market reaches its bottom; 659 banks
    have failed with debts of $140 billion. 400,000 lost savings when the
    Bank of New York crashed in 1930. Hoover declares that 'Prosperity is
    just around the corner'
    Worksheet to accompany the computer simulation at www.activehistory.co.uk / 2

    Task 2: Explaining who was responsible

    Describe what they did which helped Explain why their actions helped the
    the Crash to happen Crash to happen
    Banks

    Businesses

    Government

    Speculators

    Task 3: Assessing who was most responsible


    Produce a flowchart showing how the actions of each of the four groups listed
    above link to one another. Compare your findings with a partner, then with the
    class, and finally take a vote on who you think was most responsible.

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