Play the Market From High St. to Bay St.

Name of Company Year# of StocksPrice per stock Opening Total Closing Total

The Setup  You will each have 1000$ to invest in a Canadian company, you will have six to choose from  You must invest all your money in one company.  After each round you will calculate your new total based on the current stock price  Whoever has the most money at the end will win a prize

Initial Buys  You will have to go to one of the brokers in the room and tell them what company you want to invest in  They will give you a stock certificate for that company  You must calculate how many shares you have using the first round opening stock price  The market will then open  After each round you will have to calculate your new totals  If you would like you can sell all your stocks to the broker and invest in a new company but you must invest all your money

The Companies  The Canadian Pacific Railway  Belmore Bay Mining Company  Canadian Wheat Board  Stelco  Imperial Oil  The Powell River Company

Current Stock Prices  CPR – 20$ per share  Belmore Bay Mining– 10$  Wheat Board – 20$  Stelco – 20$  Imperial Oil – 20$  Powell River – 5$

1920  CPR – Extends track into Saskatchewan – (+5$)  Belmore Bay– New Coal Reserve Found – (+5$)  Wheat Board – Bad Crop Year – (-5$)  Stelco – Major contract acquired – (+10$)  Imperial Oil – New Oil Well Discovered – (+5$)  Powell River Co. – New International Orders – (+10$)

New Prices  CPR - 25$  Mining – 15$  Wheat – 15$  Stelco – 30$  Imperial Oil – 25$  Powell River – 15$

1926  CPR – Company acquires new locomotive – (+5)  Mining – Company establishes new drill site – (+5)  Wheat – Big crop – (+10)  Stelco – Death of President Harding curbs sales to American businesses – (-5)  Imperial Oil – CPR’s New Locomotive Much Faster, Orders Filled Sooner – (+5)  Powell River – Chemical Pulping Mastered– (+15)

New Prices  CPR – 30$  Mining – 20$  Wheat – 25$  Stelco – 25$  Imperial Oil – 30$  Powell River – 30$

1928  CPR – Mechanical Problems with Several New Locomotives– (-5$)  Mining – Workers strike, work ceases – (-5$)  Wheat – Horrible wheat crop of 1928 – (-15$)  Stelco – Price of oil increased (for ships) – (-5$)  Imperial Oil – Increase of oil price– (+10$)  Powell River – Price of Oil Curbs Sales – (-5$)

New Prices  CPR – 25$  Mining – 15$  Wheat – 10$  Stelco – 20$  Imperial Oil – 40$  Powell River – 25$

1929  CPR – Stocks Plummet as Canadian Federal Reserve Pulls Funding – (-15$)  Mining – Railway to transport goods comes to a halt – (-10$)  Wheat – After last years poor crop the price of wheat drops – (-5$)  Stelco – Canadian sales plummet, but huge European order – (+10$)  Imperial Oil – CPR, and Powell River no longer purchasing Oil – (- 20$)  Powell River – Small company cannot survive lost investments, goes bankrupt – (-25$)

New Prices  CPR – 10$  Mining – 5$  Wheat – 5$  Stelco – 30$  Imperial Oil – 20$  Powell River – 0$ - 0

The Winner Is?

Cash Out  Cash in your stocks to see how much money you have made or lost?  What did you notice about the stocks?  What kind of things influenced the stock prices?

The Bull and the Bear Black Tuesday

Learning Goals  By the end of this lesson I will know what forces contributed to the Great Depression.  By the end of this lesson I will know how market forces work and what impact they have on stock holders, stock brokers, banks and the market.  By the end of this lesson I will recognize how political and social events can have a serious influence on the economy.

Prosperity Cycle

Depression Cycle Less Jobs Lower wages Decreased Demand Decreased demand for materials Decreased Investments

The Façade  The “boom”  “Roaring” 20’s  Dancing, drinking and dating!  Easy to borrow money and even easier to spend it

The Reality  Stock prices had reached an never before seen high  Many at the time thought that it had no ceiling – after all it was the “Roaring Twenties”  Many of the stocks were being purchased “on margin”  People were borrowing money to invest in companies  No regulations on panic selling or margin buying

Canada  Wheat Crop Crash of 1928  All your eggs in one basket  Heavy reliance on only a few primary industries  Timber, steel, wheat, etc.  Overproduction  Too much of the exportable goods  Got the message too late…  Two birds…one stone  When the U.S. economy started to fail they stopped buying Canadian exports…bad news for us!  This was made worse by America’s protectionist market

The Climb  Throughout 1929 the market ebbed and flowed  Reached a record high in September  With 50$ you borrow another 300 and invest in a company with an average return of 1600$ only seven months later.  By October there was increased anxiety about the market, with chaotic patterns of buying and selling.  The bigger they are, the harder they fall

The Fall  October 4 th – the TSE (Toronto Stock Exchange) reported 200 million in losses.  October 21 st – NYSE reports substantial losses from stock sales

Black Thursday  Eventually the bank stopped answering and the brokers began dumping their holdings  When people saw the brokers selling they panicked and began selling as well.  Angry mobs gathered outside the TSE, NYSE, Winnepeg, Chicago, etc.  Ticker tapes were unable to keep up with the action

Black Tuesday  Tuesday, October 29, 1929  Monday morning the TSE was losing one million dollars a minute.  Whatever stocks were left were immediately sold for shockingly low prices  Even the Prime Minister was wiped out.  The day is characterized by suicides, angry mobs, and lost fortunes.

The Aftermath  Crash was bad…aftermath was worse.  As stores, factories and banks went out of business many people lost their jobs.  Unemployment skyrocketed to 30%  The 1930’s poised to be an unstable, reserved and tumultuous decade.  The depression will put unprecedented economic pressures on Canada.  In other parts of the world the depression hits even harder.