America 1920-1973Topic Summary
Topic Summary: The Causes of the Great Depression
Part of Causes of the Depression — GCSE History
This topic summary covers Topic Summary: The Causes of the Great Depression within Causes of the Depression for GCSE History. Revise Causes of the Depression in America 1920-1973 for GCSE History with 10 exam-style questions and 5 flashcards. This is a high-frequency topic, so it is worth revising until the explanation feels precise and repeatable. It is section 14 of 14 in this topic. Use this topic summary to connect the idea to the wider topic before moving on to questions and flashcards.
Topic position
Section 14 of 14
Practice
10 questions
Recall
5 flashcards
Topic Summary: The Causes of the Great Depression
Key Terms
- Overproduction: Factories making more than consumers can buy
- Speculation: Borrowing to buy shares hoping to sell at profit
- Wall Street Crash: Collapse of New York Stock Exchange, Oct 1929
- Hooverville: Shantytown of unemployed Americans, named to mock Hoover
- Rugged individualism: Hoover's belief Americans should help themselves, not rely on government
- Dust Bowl: 1930s drought destroying Great Plains farmland
Key Dates
- Early 1920s: Agricultural crisis begins — farmers struggle as European demand falls
- Late 1920s: Overproduction and speculation reach dangerous levels
- 24 Oct 1929: Black Thursday — panic selling begins on Wall Street
- 29 Oct 1929: Black Tuesday — total stock market collapse; $30bn lost
- 1929-32: 5,000 banks fail; 100,000+ businesses close
- 1933: 25% unemployment — peak of the Depression
Key People
- Herbert Hoover: Republican President 1929-33; refused direct relief; blamed for worsening the Depression
- Franklin D. Roosevelt: Democratic challenger who promised a "New Deal"; won 1932 election 472-59 electoral votes
Must-Know Facts (OSIAS)
- O — Overproduction: factories producing beyond demand
- S — Speculation: borrowed money buying shares
- I — Inequality: 60% of families below poverty line
- A — Agriculture already in crisis
- S — Spending on credit (60% cars, 80% radios)
- Crash = TRIGGER; OSIAS = underlying causes
- 25% unemployment; 5,000 bank failures; $30bn lost
Cross-Topic Links
- → Topic 4 (Economic Boom): Every cause in WCRAM contains the seed of the Depression — credit created debt, mass production created overproduction, speculation inflated shares beyond real value; this topic is the essential follow-on to the boom's hidden weaknesses.
- → Topic 6 (Wealth Inequality): The underlying causes of the Depression (OSIAS) were present throughout the 1920s — the 60% below poverty line, farmers already bankrupt, and over-reliance on credit were all features of the boom years that made collapse inevitable.
- → Topic 11 (FDR Election): Hoover's response to the Depression (rugged individualism, no direct relief, attacking the Bonus Army) directly caused his landslide defeat; understanding the scale of suffering here explains why Americans voted overwhelmingly for FDR's "New Deal."
- → Topic 12 (New Deal): Each New Deal agency was designed to address a specific Depression problem — the CCC tackled unemployment, the AAA tackled farm prices, the FDIC tackled bank failures; knowing the causes from this topic explains why those solutions were chosen.
- → Topic 15 (WW2 and Post-War): WW2 ended the Depression by creating 17 million new jobs and dropping unemployment from 14% to 1.2% — the war achieved what the New Deal could not, demonstrating that the Depression's scale required government spending on a wartime level.