Great Depression and four causes

The causes of the Great Depression were as follows:

1. Conditions created by war: The Great Depression was the result of the war. There was an immense industrial expansion due to the increased demand for goods supplied to the army, during the period of the First World War. After the war, the demand for these goods suddenly dropped. So, there was no demand in many industries. There was also a large fall in agricultural prices due to reduced demand.
2. Overproduction in agriculture: Agricultural overproduction was another major factor responsible for the depression. This was made worse by falling agricultural prices. As prices fell and agricultural incomes declined, the farmers tried to increase the production. They tried to bring a larger volume of produce to the market to maintain their overall income. This act pushed down the prices of farm produce further.
3. Shortage of loans In the mid-1920s, many countries financed their investments through loans from the USA. While it was often very easy to raise loans in the USA during the boom period, lenders in the USA panicked at the first sign of trouble. Countries that depend crucially on US loans now faced an acute crisis.
4. Large-scale unemployment: Farms could not sell their harvests, households were ruined, and businesses collapsed. Faced with falling incomes, many households in the US could not repay what they had borrowed and were forced to give up their homes, cars and other consumer durables.