Name: ______________________ Date: __________ Partner: ______________________
The rule in two lines. More buyers than sellers: the price goes up. More sellers than buyers: the price goes down. News changes how many people want to buy or sell.
Four kinds of news you have already heard. A bank fails and the borrowing stops. People still need light. One company controls almost all of a thing. A new invention arrives. The bank ignores the news.
Part A (Day 1): Match the news to the price change
There are eight news cards in the first table. Each one is a piece of a dispatch from 1873 or 1882, the two rounds you have already lived through. There are eight price changes in the second table, out of order, copied from the board. Write the letter of the price change next to the news card that caused it. Then write the cause and effect sentence for each one using this frame:
"___ happened, so more people wanted to ___ (buy / sell) ___, so the price went ___ (up / down)."
| # | News card (a piece of the dispatch) | Price change letter |
|---|---|---|
| 1 | 1873, RAIL. "On September 18, 1873, the bank of Jay Cooke and Company closes its doors. It had lent enormous sums to build a railroad across the northern plains, and it cannot pay what it owes. Other banks follow. Railroads that borrowed to lay track they did not need go broke." | ______ |
| 2 | 1873, OIL. "Oil and gas keep selling, because people still need light." | ______ |
| 3 | 1873, GAS. "Oil and gas keep selling, because people still need light." | ______ |
| 4 | 1882, OIL. "Standard Oil now refines about nine of every ten barrels of oil in the United States. This year its lawyers invented something new: the trust. A trust is a single board that secretly controls dozens of companies that look independent. Rivals are bought or driven out." | ______ |
| 5 | 1882, RAIL. "The railroads have climbed back." | ______ |
| 6 | 1882, ELEC. "On September 4, 1882, Thomas Edison's Pearl Street station switched on the first electric lights in New York's financial district, and Edison Electric Light joins the board today." | ______ |
| 7 | 1882, GAS. From the company card: "Lights the streets and homes of New York. Everyone pays the gas bill every month. Electricity is coming." | ______ |
| 8 | Every round, BANK. From the rules: "Pays 3 percent of the balance at the start of every round. Never falls." | ______ |
| Letter | Price change |
|---|---|
| A | OIL: 12 to 30 (up 18) |
| B | RAIL: 50 to 30 (down 20) |
| C | BANK: no share price; the balance grows 3 percent every round |
| D | GAS: 21 to 26 (up 5) |
| E | ELEC: joins the board at 25 (no earlier price) |
| F | OIL: 10 to 12 (up 2) |
| G | RAIL: 30 to 45 (up 15) |
| H | GAS: 20 to 21 (up 1) |
Cause and effect sentences:
- ______________________________________________________________________
- ______________________________________________________________________
- ______________________________________________________________________
- ______________________________________________________________________
- ______________________________________________________________________
- ______________________________________________________________________
- ______________________________________________________________________
- ______________________________________________________________________
Two questions:
- Cards 1 and 5 are both about the railroads. One pushed the price down, one pushed it up. What is the difference?
The difference: ______________________________________________________________________
- Card 4: one company controls nine of every ten barrels, and the price of its shares went up more than anything else on the board. If you bought kerosene for your lamp instead of shares of Standard Oil, would you be happy? Why or why not?
Answer: ______________________________________________________________________
Part B (Day 2): Fact or hype?
The three tests. Score each headline: one point for each test it passes.
- Who says it? A named company, a court, Congress, a dated report passes. "Insiders," "everyone," or no source fails.
- Is there a number? A date, a percent, an amount, or a count passes. No number fails.
- Does it tell you to hurry? No rush words passes. "Now," "last chance," "before it is too late," "everyone is selling" fails.
Two or three points: probably a fact. Zero or one: hype.
The year is 1893. Three of these headlines are pieces of the dispatch you heard yesterday. Three were written to make you hurry.
| # | Headline | Who says it? (1 or 0) | A number? (1 or 0) | No hurry? (1 or 0) | Total | Fact or hype? | If it is a fact, what would a careful investor do? (buy / sell / hold / wait for more) |
|---|---|---|---|---|---|---|---|
| 1 | "In February 1893 the Philadelphia and Reading Railroad, one of the biggest, goes bankrupt. By summer about five hundred banks and more than fifteen thousand businesses have failed." | ||||||
| 2 | "RAILROADS ARE FINISHED. Everyone is selling. Get out NOW before you lose it all." | ||||||
| 3 | "General Electric, formed only last year when Edison's company merged with a rival, watches its stock fall to a fraction of its price." | ||||||
| 4 | "Electric light is a fad. Nobody will ever pay for it. Sell every share today." | ||||||
| 5 | "In 1890 Congress passed the Sherman Antitrust Act to stop monopolies like Standard Oil, but so far nobody has used it." | ||||||
| 6 | "Insiders say oil will double by spring. Buy all you can before everyone else does." |
- Pick one headline you labeled hype. Rewrite it as a fact: give it a source and a number and take out the hurry.
My rewrite: ______________________________________________________________________
More room: ______________________________________________________________________
- Headline 2 tells you to sell your railroad shares. If you sold everything because of it, (a) who bought your shares, and (b) at what kind of price?
(a) ______________________________ (b) ______________________________________