Buy, sell or go bust?

7th December 2007 at 00:00
To help pupils understand stock market shares and speculation when learning about the Wall Street Crash, I took six real companies, invented stock prices for them in 1920, gave each pupil a tally sheet and an imaginary $500 to buy shares. They could use as much (or as little) of their savings to buy shares as they liked and choose the companies they thought would make the most profit that year (based on their previous knowledge of America in the 1920s).

I put several "newsflashes" on the board, such as "Henry Ford announces he has made the assembly line even more efficient". Pupils were asked how these news items would affect shares in the six companies (such as steel, Ford cars, radio and Woolworths). They could see how each newsflash would raise or lower shares in that industry.

I then put up share prices for the following year and asked them to work out how much profit or loss they had made (calculators needed). They then re-invested this in shares in the same six companies.

We repeated this a few times between 1920 and October 1929, with share prices rocketing and bearing no relation to the actual company profits. The newsflashes then related to the crash of share prices in October.

Pupils enjoyed playing tycoons and were able to understand the concepts of over-speculation and shares. We then wrote an essay on the causes of the crash, and each was able to discuss these ideas well

Steve Handley teaches history at St Joseph's Roman Catholic Comprehensive, Tyne and Wear.

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