People queueing during the Great Depression

ZIMSEC O Level History Notes: The United States of America (USA) 1920-1939: The Great Depression

  • It was a period of economic crisis or collapse of the USA and other countries’ economies

Causes of the Great Depression

  • The industries were producing more good than could be consumed by the local market and they ended up being stocked up in shops thereby reducing profits of both manufacturers and wholesale
  • The American society was divided into structures as there was unequal distribution of wealth
  • Those earning could not afford to but the goods being produced in factories
  • Prices began to sky rocket and wages were became little
  • The market was largely for those with more money and also the middle class
  • Tariff barriers imposed by the government also contributed to the fall of foreign trade
  • They led to those countries also imposing high tariffs on American goods and the Americans could not sell their good internationally yet the local economy could not consume all produced goods
  • The shift to industrialization led to the abandonment of the agricultural sector yet farmers had o produce food for the population
  • Credit policies introduced led to speculations and most goods were bought on credit but there was no money to pay back installments
  • The government also did not interfere with many industrialists’ manner of doing business and this made them abuse many laws of doing business
  • The immediate cause of the great depression as the collapse of the wall street which was the New York stock exchange
  • After the speculation that the boom would soon be over many people began to sell their shares on the stock exchange

To access more topics go to the History Notes page.