Banking on Change: The Fed and the Great Crash
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Banking on Change: The Fed and the Great Crash

Grade 11HistorySocial Studies4 days
In this 11th-grade history project, students act as 'economic detectives' to investigate the structural cracks hidden beneath the surface of the Roaring Twenties. By analyzing the Panic of 1907 and the subsequent creation of the Federal Reserve, learners explore how the U.S. attempted to build a national financial safety net. Through simulations of bank runs and consumer debt, students identify critical economic 'red flags'—such as overproduction and agricultural decline—that signaled the coming 1929 crash. The experience culminates in a multi-modal 'Economic Autopsy' where students synthesize historical evidence to deliver a final verdict on the causes of the Great Depression.
Federal ReserveEconomic IndicatorsGreat DepressionFinancial LiteracyPanic Of 1907Primary SourcesEconomic Stability
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Inquiry Framework

Question Framework

Driving Question

The overarching question that guides the entire project.How can we, as economic detectives, use the 'red flags' of the early 1900s to decide if an economy is truly strong or just 'roaring' toward a crash?

Essential Questions

Supporting questions that break down major concepts.
  • How did the 'Panic of 1907' and other early bank failures change the way Americans thought about their money?
  • Why did the government decide we needed a 'bank for banks' (The Federal Reserve), and how is it supposed to protect us?
  • Even though the 1920s were called 'Roaring,' what were the hidden problems or 'cracks' in the economy?
  • How did problems for farmers and factory workers in the 1920s lead to bigger problems for the whole country?
  • What are the 'red flags' that tell us an economy might be headed for trouble?

Standards & Learning Goals

Learning Goals

By the end of this project, students will be able to:
  • Students will identify and explain the significance of the Panic of 1907 and how it led to the creation of the Federal Reserve System.
  • Students will analyze the role of the Federal Reserve as a central bank designed to provide economic stability and prevent bank failures.
  • Students will evaluate the economic indicators (red flags) of the late 1920s, including overproduction in agriculture and industry, and the rise of consumer debt.
  • Students will synthesize historical data to distinguish between the 'roaring' public perception of the 1920s economy and its underlying structural weaknesses.
  • Students will demonstrate 'economic detective' skills by citing evidence from historical documents to justify whether an economy is healthy or unstable.

Common Core State Standards (History/Social Studies)

CCSS.ELA-LITERACY.RH.11-12.1
Primary
Cite specific textual evidence to support analysis of primary and secondary sources, connecting insights gained from specific details to an understanding of the text as a whole.Reason: As 'economic detectives,' students must cite evidence from historical sources to identify 'red flags' and support their conclusions about the health of the 1920s economy.
CCSS.ELA-LITERACY.RH.11-12.7
Primary
Integrate and evaluate multiple sources of information presented in diverse formats and media (e.g., visually, quantitatively, as well as in words) in order to address a question or solve a problem.Reason: Students will need to look at charts, photos of the 1920s, and economic data to solve the 'detective' challenge of identifying the coming crash.

C3 Framework for Social Studies State Standards

C3 D2.Eco.12.9-12
Primary
Explain how current globalization trends and policies affect economic growth, labor markets, rights of citizens, the environment, and resource and income distribution in different nations.Reason: This standard aligns with the project's focus on how the creation of the Federal Reserve and 1920s economic policies influenced the nation's financial stability and distribution of wealth.
C3 D2.His.14.9-12
Secondary
Analyze multiple and complex causes and effects of events in the past.Reason: The project requires students to examine the complex causes of the 1929 crash, including farming issues, industrial shifts, and monetary policy changes.
C3 D2.Eco.15.9-12
Supporting
Evaluate the effectiveness of government policies in altering the distribution of income and wealth.Reason: The project explores the creation of the Federal Reserve and its intended role in managing the economy, providing a basis for evaluating government intervention.

Entry Events

Events that will be used to introduce the project to students

The Great Classroom Bank Run

Students enter to find the 'Classroom Bank' shuttered with a 'Closed Indefinitely' sign. They are given 'Bank Books' showing their accumulated participation points/rewards, but told they cannot withdraw them because the bank ran out of physical cash during a 'panic.' This simulation forces students to grapple with the lack of a central lender (the Fed) to back up local banks.
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Portfolio Activities

Portfolio Activities

These activities progressively build towards your learning goals, with each submission contributing to the student's final portfolio.
Activity 1

The Case of the Missing Cash: The 1907 Investigation

In this introductory activity, students act as lead detectives investigating the 'Crime of the Century'—the Panic of 1907. They will examine why the classroom bank 'failed' in the entry event and compare it to the historical panic that nearly collapsed the U.S. economy before the Federal Reserve existed. The goal is to understand that without a central system, individual banks are vulnerable to 'runs.'

Steps

Here is some basic scaffolding to help students complete the activity.
1. Analyze primary source news headlines and photos from the Panic of 1907 to identify the physical signs of a bank run (long lines, closed doors).
2. Use a 'Cause and Effect' graphic organizer to link the lack of a central bank to the 'contagion' of fear among depositors.
3. Complete a 'Suspect Profile' for JP Morgan, explaining how a private citizen had to step in because the government lacked a central bank.

Final Product

What students will submit as the final product of the activityA 'Crime Scene Case File' that includes a list of 'Suspects' (causes of the panic), 'Witness Testimony' (summaries of primary source accounts), and a 'Detective’s Theory' on why the bank run occurred.

Alignment

How this activity aligns with the learning objectives & standardsAligns with CCSS.ELA-LITERACY.RH.11-12.1 (citing evidence from primary sources) and C3 D2.His.14.9-12 (analyzing complex causes of historical events).
Activity 2

The Federal Reserve Shield: Designing the Safety Net

Students will design a 'Safety Blueprint' for the newly created Federal Reserve (established in 1913). They will learn about the Fed's three main tools: the discount rate, reserve requirements, and open market operations, but simplified as 'The Three Safety Valves.' They will explain how these valves are meant to prevent the 'explosions' (panics) they investigated in Activity 1.

Steps

Here is some basic scaffolding to help students complete the activity.
1. Watch a simplified video or read a graphic-novel style text about the birth of the Federal Reserve Act of 1913.
2. Label a diagram of a 'Bank for Banks,' showing how local banks can borrow money from the Fed when they run low on cash (the 'Lender of Last Resort' concept).
3. Write a 'Guarantee Statement' from the perspective of the Fed, explaining to the public why their money is safer now than it was in 1907.

Final Product

What students will submit as the final product of the activityAn annotated 'Economic Safety Shield' poster or digital infographic that illustrates the three main ways the Federal Reserve protects the banking system.

Alignment

How this activity aligns with the learning objectives & standardsAligns with C3 D2.Eco.15.9-12 (evaluating government policies) and C3 D2.Eco.12.9-12 (explaining how policies affect economic stability).
Activity 3

Roaring or Rigged? The Red Flag Hunt

Students will shift their focus to the 1920s. While the era is often called 'Roaring,' students will use their detective skills to find 'cracks' in the economy. They will analyze data on farm foreclosures, the rise of 'buying on margin' (debt), and overproduction in factories. This activity helps students see that a 'booming' economy can hide systemic weaknesses.

Steps

Here is some basic scaffolding to help students complete the activity.
1. Compare two sets of data: a chart showing rising stock prices and a chart showing falling crop prices for farmers in the 1920s.
2. Participate in a 'Buy Now, Pay Later' simulation using play money to understand how consumer debt and 'installment plans' became a hidden risk.
3. Identify three 'Red Flags' (overproduction, low wages for workers, high debt) using a checklist provided by the teacher.

Final Product

What students will submit as the final product of the activityA 'Red Flag Map' of the 1920s United States, where students place warning icons over specific sectors (Farms, Factories, Banks) with brief explanations of the hidden trouble in each area.

Alignment

How this activity aligns with the learning objectives & standardsAligns with CCSS.ELA-LITERACY.RH.11-12.7 (integrating visual and quantitative data) and C3 D2.Eco.12.9-12 (analyzing income distribution and labor markets).
Activity 4

The Final Verdict: Why the 'Roar' Turned into a Crash

In this final summative activity, students compile all their evidence to answer the driving question. They will perform an 'Economic Autopsy' on the year 1929. They will look at how the 'Red Flags' they found in Activity 3 combined with the limitations of the early Federal Reserve to cause the Great Crash. This activity synthesizes all previous learning into a final verdict.

Steps

Here is some basic scaffolding to help students complete the activity.
1. Review the 'Case Files' from Activities 1-3 to select the most critical pieces of evidence (The 'Smoking Guns').
2. Draft a 'Verdict' using sentence frames provided for the special education context (e.g., 'The economy looked strong because ____, but the hidden red flag was ____.').
3. Present the findings to the 'Congressional Committee' (the class), explaining how the Federal Reserve could have used its 'Safety Valves' more effectively.

Final Product

What students will submit as the final product of the activityThe 'Economic Detective’s Final Report': A multi-modal presentation (slides, recorded video, or a written dossier) that identifies the three primary causes of the 1929 crash and provides a 'Recommendation for the Future' to prevent it from happening again.

Alignment

How this activity aligns with the learning objectives & standardsAligns with CCSS.ELA-LITERACY.RH.11-12.1 (citing evidence) and C3 D2.His.14.9-12 (analyzing complex causes/effects).
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Rubric & Reflection

Portfolio Rubric

Grading criteria for assessing the overall project portfolio

Economic Detective: The Federal Reserve & Great Crash Portfolio Rubric

Category 1

Monetary Origins & The Federal Reserve

Focuses on the historical necessity and functional design of the Federal Reserve in response to early 20th-century financial crises.
Criterion 1

Investigating Economic Instability (Panic of 1907)

Students analyze the causes of the Panic of 1907 and the resulting need for a centralized banking system, using primary source evidence.

Exemplary
4 Points

Independently identifies multiple causes of the 1907 panic; provides a sophisticated 'Detective’s Theory' that clearly explains why private intervention (JP Morgan) was a temporary fix and why a government-led central bank was necessary. Use of primary sources is precise and insightful.

Proficient
3 Points

Identifies the primary causes of the 1907 panic; explains the role of JP Morgan and the basic need for a central bank. 'Detective’s Theory' is logical and supported by primary source evidence found in headlines and photos.

Developing
2 Points

Identifies some causes of the 1907 panic with teacher support; 'Detective’s Theory' is partially developed but may lack clear connection between the bank run and the need for a central system. Uses some evidence from primary sources.

Beginning
1 Points

Identifies limited aspects of the 1907 panic; 'Detective's Theory' is incomplete or missing. Struggles to connect the 'Classroom Bank Run' to the historical event even with significant prompting.

Criterion 2

Understanding the Federal Reserve System

Students demonstrate understanding of how the Federal Reserve acts as a 'lender of last resort' and uses policy tools to stabilize the economy.

Exemplary
4 Points

Provides a comprehensive 'Safety Blueprint' that accurately explains all three 'Safety Valves' (tools) and their impact on the economy; the 'Guarantee Statement' is written with high clarity and demonstrates deep empathy for the public's financial fears.

Proficient
3 Points

Accurately labels the 'Bank for Banks' diagram and explains at least two 'Safety Valves' (tools). The 'Guarantee Statement' clearly communicates why the Fed makes the banking system safer than it was in 1907.

Developing
2 Points

Labels parts of the 'Bank for Banks' diagram with help; explains one 'Safety Valve' tool. The 'Guarantee Statement' is basic or relies heavily on provided sentence frames without adding original thought.

Beginning
1 Points

Labels are incomplete or inaccurate; struggles to explain the purpose of the Federal Reserve even with simplified graphic-novel style texts. 'Guarantee Statement' is missing or unclear.

Category 2

Analyzing 1920s Economic 'Cracks'

Assesses the ability to look beyond surface-level prosperity to identify underlying economic structural failures.
Criterion 1

Economic Detective Skills (Detecting Red Flags)

Students interpret diverse data sets (charts, maps, simulations) to identify systemic weaknesses in the 1920s economy.

Exemplary
4 Points

Identifies all major 'Red Flags' (agriculture, factory overproduction, consumer debt) and makes insightful connections between them; explains how 'buying on margin' created a 'roaring' illusion. Map icons are placed with detailed, accurate justifications.

Proficient
3 Points

Correctly identifies at least three 'Red Flags' using the provided checklist; explains the difference between rising stocks and falling crop prices. 'Red Flag Map' is complete with accurate explanations for each sector.

Developing
2 Points

Identifies 1-2 'Red Flags' with assistance; 'Red Flag Map' is partially complete. Shows basic understanding that farmers and factory workers were struggling while others were 'roaring.'

Beginning
1 Points

Struggles to identify 'Red Flags' even with a checklist; does not successfully complete the 'Buy Now, Pay Later' simulation or connect it to economic risk. Map icons are misplaced or lack explanation.

Category 3

Synthesis & Evidence-Based Reporting

Evaluates the ability to integrate information from diverse formats to solve the 'Economic Detective' challenge.
Criterion 1

The Final Verdict (Synthesis & Argumentation)

Students synthesize evidence from all activities to create a final report on the causes of the 1929 crash and propose future-oriented solutions.

Exemplary
4 Points

Synthesizes complex causes into a compelling 'Economic Autopsy'; the 'Verdict' uses 'Smoking Gun' evidence to link the Fed's early limitations to the Great Crash. 'Recommendations for the Future' are creative and show high-level critical thinking.

Proficient
3 Points

Compiles a 'Final Report' that identifies three primary causes of the crash; uses sentence frames effectively to deliver a clear 'Verdict.' Recommendation for the future is logical and grounded in the evidence collected.

Developing
2 Points

Identifies 1-2 causes of the crash in the 'Final Report'; 'Verdict' is present but may be simplistic or missing one of the 'Smoking Guns.' Recommendations are general or lack specific connection to the 1929 context.

Beginning
1 Points

Final Report is incomplete; struggles to state a 'Verdict' or link the 'Red Flags' to the actual crash. Presentation lacks clear evidence from the previous 'Case Files.'

Criterion 2

Use of Evidence & Multi-Modal Communication

Assesses the student's ability to cite specific textual, visual, and quantitative evidence to support their economic conclusions. (Aligned with SPED accommodations).

Exemplary
4 Points

Independently cites multiple forms of evidence (data charts, primary source quotes, simulation outcomes) to support every claim; evidence is seamlessly integrated into the multi-modal presentation.

Proficient
3 Points

Cites specific evidence from at least two different sources (e.g., a photo and a data chart) to support the final 'Verdict.' Effectively uses provided scaffolds to organize evidence.

Developing
2 Points

Includes evidence in the report but it may be vague or not clearly linked to the specific claim. Relies heavily on teacher prompts to identify which evidence to include.

Beginning
1 Points

Provides minimal or no evidence to support claims; report consists mostly of unsupported opinions or incomplete thoughts. Struggles to use the provided 'Case Files.'

Reflection Prompts

End-of-project reflection questions to get students to think about their learning
Question 1

After designing your 'Economic Safety Shield,' how confident do you feel in explaining how the Federal Reserve acts as a 'bank for banks' to prevent panics like the one in 1907?

Scale
Required
Question 2

As an economic detective, which 'Red Flag' do you think was the most dangerous 'hidden crack' in the 1920s economy?

Multiple choice
Required
Options
Overproduction (Factories making more than people could buy)
The 'Farm Crisis' (Farmers losing money while the city looked rich)
Buying on Margin (People using debt to buy stocks)
Bank Runs (People rushing to take all their cash out at once)
Question 3

Think back to the 'Classroom Bank Run' simulation. How did your investigation into the 1920s change the way you look at a 'strong' economy? What is one specific piece of evidence that proved the 1920s were more 'rigged' than 'roaring'?

Text
Required
Question 4

How much has this project improved your ability to look at charts, photos, and news headlines to find 'the real story' behind an event?

Scale
Optional