I used to struggle to make the Great Depression experience more real for my students; I was looking for a way to help my classes understand how the Crash of 1929 caused a cascading series of devastating problems for Americans of the time. All I really knew was that I wanted a lesson that would really hit home.
And then it hit me — I needed to put the students through a simulation that would show them, step by step, just how events unfolded and how they impacted ordinary Americans.
I didn’t have a lot of class time to devote to this, however. If I’m lucky, we have only two days to explore the Wall Street Crash, and I usually use one of them to show the excellent “Crash of 1929” episode from the PBS series American Experience. The other day has us reading and discussing the textbook’s presentation of the same information, comparing and contrasting what we learned from each source, and looking for bias.
This doesn’t leave a lot of time for simulations, but then I hit on a way to bring the point home in only about 10 minutes.
PREPPING FOR THE SIMULATION — Less than a minute
Make sure you have index cards, Post-it notes, or some other way for students to record data on separate slips. That’s it!
(Optional: If you want students to use monetary values suitable for the 1920s, you may need some data on hand to help them. The average net income in 1925, for example, was about $5,000. You can get a lot more information from IRS publications, such as Statistics of Income, 1925.)
SETTING UP WITH THE CLASS — Should only take 2-3 minutes
Pass out — index cards or Post-it notes to each student. Tell students that they are living in the 1920s and they are going to set up their lifestyles on their cards. Students will “invent” a life to explore this way.
- First card: Tell students to write down where they work. Insist that each student either writes down a profession/place of employment or indicates that their spouse supports them (a common scenario for married women in the 1920s)
- Second card: Tell students to record how much money they have saved up in the bank — their life savings. Students may ask if they should use values appropriate for today or ones that reflect salaries in the 1920s. This is your call, but I usually encourage them to use values appropriate for today. This is because I want the exercise to hit home — Later on in the simulation, I want the students to feel that they have really lost a lifetime’s worth of savings.
- Third card: Tell students that they saw stocks rising earlier in the decade and thought about investing. Tell them to write down how much they have invested in the stock market. If some students want to insist that they stayed away from stocks, that’s fine. Collect their cards back since they don’t have any stocks.
- Fourth card: Tell students to write down if they rent an apartment or live in a house they are buying. For the simulation, all house buyers will have outstanding mortgages.
STEP by STEP TEACHING PROCEDURE — Should only take 5-7 minutes, depending on how much explanation and discussion you work in.
- Once the card setup is done, choose one student to be the stockbroker and one to be the banker. Have students turn in all their stock cards to the stockbroker and give their lifetime savings cards to the custody of the banker.
- Announce that the stock market has crashed and everybody had to sell their stocks for less than they paid for them; any funds from the sale went to pay off the loans they took out to buy the stock, so their money is gone.
- At this point, have the stockbroker tear up the stock cards and toss them in the trash. For more impact, have him announce all the losses as he goes.
- Tell students that while they have lost their stock investments, at least they still have money in the bank. Then get dramatic: “Except…. I don’t quite know how to tell you this… but when you thought your money was safe, sitting in the vault, guess what your bank was actually doing with it?” Usually, a few students will realize the truth, which you can them confirm and announce: “Yes, that’s right… your life savings was put on the stock market by your bank. Without your permission. Probably without your knowledge. Anyway, all the money is gone.”
- Have the banker tear up the bank deposit cards and toss them, perhaps announcing all the losses as before. This is a good point to talk about “moral hazard.” Banks that bet investors’ money would keep any profit they made, but did NOT take on any real risk since they were not betting their own money.
- Talk about how with all these losses, people are really worried about money. They stop spending. Explore how this makes demand for items plunge. Start asking students what they have written on their employment cards. If a job is announced, say that nobody’s buying that item or service any longer and announce that the student is laid off. If a student is supported by a spouse, announce that the spouse has been laid off. Point out that each time a person is laid off, it only makes the “not enough demand” problem worse and causes more lay-offs.
- Each time you announce a lay-off, either collect the student’s employment card, or have the student rip it up. OR, wait until the end of the previous bullet point and have all the students throw away their cards at once.
- Review with students that they now have no investments, no savings, and no job. Time to deal with housing! Have the renters stand up. Ask them how they plan to pay their rent now that they are unemployed and no jobs are available. Announce that they are homeless. Send them to stand along a wall, pointing out that they have to leave their apartments (their desks, LOL). Have the former renters throw away their housing cards on the way.
- Say, “But the rest of you are luckier — you are buying houses, so you don’t have to pay rent.” Go on to talk about mortgages, monthly payments on the loan, and foreclosure. Tell the remaining students that things will take longer for them, but within a few months, they will also be homeless when they can’t pay their loans and the banks have them evicted. Send the remaining students to stand with the others. Have the former house buyers throw away their housing cards on the way.
- Briefly explore how now, everybody is homeless and unemployed, with no resources such as savings. Since nobody is spending, why would any companies start hiring people to provide goods or services? For the time being, it looks like the Great Depression is well underway with no possible end in sight!
Students usually enjoy the activity, and it does open their eyes about key issues — such as how the decisions banks make can have widespread effects on the economy.
ADDITIONAL TEACHING NOTES:
- Obviously, this simulation is vastly over-simplified. It puts 100% of the students into the category of unemployed and homeless, which exaggerates the true impact of the Depression. I’m okay with that, though, because the point is to show them how the economic sequence often unfolded for people, and to help them empathize with the helplessness of the individual in the face of these economic forces. I want every student to have that experience.
- The step-by-step teaching procedure can last longer than the 5-7 minutes suggested if you beef it up with “teachable moments” along the way.
- For example, when everybody loses their life savings, that’s a great time to talk about the FDIC, soon to be enacted in the New Deal, and how it’s still around today to protect our bank deposits.
- You could also work in a bank run by having the banker announce that he’s only got a certain amount of money to hand out to those who need it, and it’s first come, first served. Have students line up for their money and see how fast they are forced to go home empty-handed.
- Really, with this simulation the sky is the limit. I’m sure it could take a class period if you wanted to work in additional events and discussion of their impact.
- This would take more prep, but handing out actual cash in the form of Monopoly money could make the simulation feel even more real. Best place to get
a bunch of money from Monopoly or other commerce games? Thrift stores! You can often pick up entire game sets for just a buck because they’re missing pieces, but if all you need is the money, it’s a perfect match.
- Another way to go with the “cash basis” variant of the game is to print out sheets of faux money and cut the bills apart, though again, this is a little more prep for the teacher. Here is one possibility you can try if you’re looking fr a free download of play money sheets.
Having fun yet?
In my classroom, I’ve found this simulation to be really quick intro that gets the students’ attention and orients them to the big ideas they’ll be studying as we begin our unit on the Wall Street Crash and the Great Depression. You might also like these easy-to-correct Crash of 1929 worksheets that go with the video I use each year: American Experience: The Crash of 1929. The video is available for free online on streaming sites — just do a Google search to find where it might be loaded right now.