Crash → Banks fail — 5,000 banks collapsed 1929-32. People lost savings.
No savings → No spending — People stopped buying goods
No demand → Factories close — No point making goods no one buys
Factories close → Unemployment — 25% unemployed by 1933
Unemployment → Even less spending — Cycle gets worse and worse
NO GOVERNMENT HELP — Hoover believed in "rugged individualism"
This deep dive covers The Vicious Cycle of Depression within Causes of the Depression for GCSE History. Revise Causes of the Depression in America 1920-1973 for GCSE History with 12 exam-style questions and 15 flashcards. This is a high-frequency topic, so it is worth revising until the explanation feels precise and repeatable. It is section 4 of 14 in this topic. Use this deep dive to connect the idea to the wider topic before moving on to questions and flashcards.
Practice questions for Causes of the Depression
On which date did 'Black Tuesday' occur, marking the worst day of the Wall Street Crash?
By 1933, approximately what percentage of the American workforce was unemployed?
Quick recall flashcards
How many banks failed?
5,000 (1929-1932)
Peak unemployment?
25% (1933) — 1 in 4 workers