Today we will be doing a couple different activities to understand what actually caused the Great Depression.
Great Depression Budgeting
We will do an activity where you will learn how to budget with the resources many people had during the Great Depression. This lesson comes from: The Federal Reserve Bank of St. Louis
Human Reactions to the Great Depression
Next, we will read some primary documents that show how people reacted to the Great Depression. This lesson came from: The Historical Society of Pennsylvania
As you read the primary sources, please ask yourself the following questions:
What is each document?
When was each document written?
What are its main points?
Who wrote it? Why?
Who read the document, and how would it have made them feel?
What impact do you think reading the document had on the lives of the reader(s)? In the case of the newspaper articles, what impact do you think the event being described had on the people involved in the event?
Vocab Words
Bankruptcy: A case filed under chapter 11 of the United States Bankruptcy code. The situation is caused when a person or corporation’s financial obligations exceed their ability to pay.
Deposit: A transaction involving a transfer of funds to another party for safekeeping, e.g., a customer places funds in a checking or savings account; the customer is a “depositor.” The bank uses these deposits to make loans to other people and receives interest from those taking out the loan. In this way, the bank can give back the depositors their money and make a profit on the interest.
Directors: People elected by shareholders to manage a company.
FDIC: Federal Deposit Insurance Corporation - Federal guarantee or insuring of bank deposits up to $2,500 in 1934 (ceiling is $250,000 per bank in 2011).
Liquidation: The selling of assets and the paying of liabilities in anticipation of going out of business.
Reorganization: Formal bankruptcy may result in reorganization and continued operation of the firm or it may require liquidation and distribution of the proceeds.
Run: A run on a bank is when many people withdraw money at one time, usually because they think the bank is not going to have enough money to repay them their deposits at a later time.
Solvency: The ability to meet all obligations and debts.
Stockholders: People who own a company by paying for a piece of the company (stock). They are able to elect the directors and they receive profits (dividends) when a company makes money.