Party's Over: Crash of 1929

jeff.gravette

Tier 1

Lesson Plan

Party's Over: Crash of 1929

Students will be able to explain the primary economic factors that led to the Stock Market Crash of 1929, including economic bubbles, stock market speculation, and consumerism.

Understanding the causes of the 1929 Stock Market Crash is essential for grasping the origins of the Great Depression and recognizing how economic behaviors can impact national and global stability.

Audience

10th Grade Students

Time

45 minutes

Approach

Through direct instruction, primary source analysis, and reflective activities.

Materials

When the Party's Over: The Crash of 1929 Slide Deck, Primary Source Analysis Worksheet, and Exit Ticket

Prep

Review and Prepare

15 minutes

Review the Lesson Plan and all linked materials: Slide Deck, Primary Source Analysis Worksheet, and Exit Ticket.
* Ensure projector and computer are working for the Slide Deck presentation.
* Print enough copies of the Primary Source Analysis Worksheet and Exit Ticket for all students.

Step 1

Engage & Connect: Setting the Stage

5 minutes

Begin by asking students what they know about the Roaring Twenties. Use Slide 1 to introduce the idea of a boom.
* Transition to the idea of a 'party' ending, hinting at the crash. Use Slide 2.

Step 2

Teach & Model: Unpacking the Causes

20 minutes

Present the core economic factors using the Slide Deck (Slides 3-7).
* Explain terms like 'economic bubble,' 'stock market speculation,' and 'buying on margin.'
* Discuss how consumerism and easy credit contributed to the instability.
* Facilitate a brief Q&A to check for understanding.

Step 3

Practice & Apply: Primary Source Analysis

15 minutes

Distribute the Primary Source Analysis Worksheet.
* Explain the instructions clearly, guiding students to read the excerpt and answer the questions.
* Circulate around the room to provide support and answer questions.
* Bring the class back together to briefly discuss some student responses, focusing on how the primary source illustrates the discussed economic factors.

Step 4

Assess & Reflect: Exit Ticket

5 minutes

Distribute the Exit Ticket.
* Instruct students to independently answer the question, summarizing one economic factor that led to the crash.
* Collect the Exit Ticket as students leave to gauge their understanding of the lesson's objective.

0 educators
use Lenny to create lessons.

No credit card needed

Slide Deck

The Roaring Twenties: A Boom Time!

What comes to mind when you think of the 1920s?

Economic Prosperity
New Technologies (cars, radios)
Cultural Shifts (Jazz Age, Flappers)
A sense of unlimited growth and optimism!

Ask students what they imagine when they hear 'Roaring Twenties'. Encourage words like 'prosperity,' 'new inventions,' 'jazz,' 'flappers.' Connect it to a time of excitement and economic growth.

But... What Happens When the Party's Over?

Every party has to end eventually, right?

Excesses can lead to problems.
Good times can mask underlying issues.
The 'boom' of the 1920s had some hidden cracks...

Transition from the excitement to a subtle hint of trouble. Ask: 'What happens after a big party?' Lead into the idea that even good times can't last forever without consequences.

Economic Bubbles: Growing Too Fast?

What is an Economic Bubble?

Rapid increase in asset prices (like stocks) driven by speculation.
Prices become much higher than the actual value of the assets.
Often fueled by public enthusiasm and easy money.
Eventually, bubbles burst!

Introduce the concept of an economic bubble using a simple analogy, like a balloon that keeps getting bigger and bigger with air, but eventually has to pop. Explain that value isn't always real.

Stock Market Speculation: A Risky Game

Gambling on the Market

Speculation: Buying stocks with the expectation that their price will rise, allowing for a quick profit.
Not based on the company's performance, but on belief of continued price increases.
Many people, even ordinary citizens, got involved.

Explain speculation and connect it to gambling. Emphasize that people were buying stocks not for long-term investment in companies, but to quickly sell them for a higher price.

Buying on Margin: Dangerous Debt

Borrowing to Buy Stocks

Buying on Margin: Paying only a small percentage of a stock's price and borrowing the rest from a broker.
This dramatically increased potential profits... AND losses!
If stock prices fell, people couldn't repay their loans.

Explain 'buying on margin' as essentially taking out a loan to buy stocks. Highlight the risk: if the stock price drops, you still owe the money.

Unchecked Consumerism & Credit

Everybody Wants Everything!

New products (cars, appliances) fueled a desire for more.
Easy Credit: Stores and banks made it simple to borrow money.
People bought more than they could afford, accumulating debt.
This created a booming market, but one built on shaky ground.

Discuss how the excitement of consumer goods led to people buying more than they could afford, often with credit. Explain that this created a false sense of prosperity and debt.

A Recipe for Disaster

All these factors combined to create an unstable economy:

Unrealistic stock prices (bubble)
Risky investments (speculation)
High debt from borrowing to buy stocks (margin)
Widespread personal debt (consumer credit)

The stage was set for a major economic collapse.

Summarize how these factors combined to create an unstable economic situation, a 'house of cards' waiting to fall. Lead into the eventual crash.

Worksheet

Primary Source Analysis: Voices from 1929

Directions: Read the following excerpt from a contemporary account or newspaper article about the economic situation leading up to the Stock Market Crash of 1929. Then, answer the questions below.

Excerpt from a newspaper editorial, 1928

"The stock market has become the favorite playground of the nation. Everyone, it seems, is getting rich overnight. Typists and chauffeurs are discussing their stock portfolios, and the papers are full of stories of humble folk who have made fortunes in a matter of weeks. It’s a new era, they say, where the old rules of economics no longer apply. Why work hard for a meager salary when you can simply buy a few shares of Radio Corporation and watch your wealth multiply? Even with borrowed money, the returns are so grand that one would be foolish not to participate. This soaring prosperity, we are told, is here to stay, and the wise investor will ride this wave to untold riches."

What is the general feeling or attitude towards the stock market described in this excerpt?
According to the editorial, who is participating in the stock market? What does this suggest about the widespread nature of investment at the time?
The excerpt mentions "borrowed money." Which key economic factor discussed in class does this relate to? Explain the risk associated with this practice.
Based on this primary source, how might the widespread belief that "the old rules of economics no longer apply" contribute to an economic bubble?

Cool Down

Exit Ticket: When the Party's Over

Name: ____________________________

Date: ____________________________

Directions: In 1-2 sentences, explain ONE economic factor that you learned today which contributed to the Stock Market Crash of 1929. Make sure to use specific vocabulary from the lesson.