MP Board · Class 10 · Social Science · History: The Making of a Global WorldWhat were the main causes of the Great Depression of 1929?

The Great Depression began around 1929 and lasted till the mid-1930s, causing catastrophic declines in production, employment, incomes, and trade. The crisis was triggered by a combination of factors. First, post-war agricultural overproduction led to falling agricultural prices. As prices slumped and agricultural incomes declined, farmers tried to expand production to maintain their overall income, which flooded the market and pushed prices even lower. Second, in the mid-1920s, many countries financed their investments through loans from the US. When US overseas lenders panicked and withdrew their loans, it led to the collapse of major banks and currencies in Europe and elsewhere. In the US, thousands of banks went bankrupt, factories closed down, and millions lost their jobs, leading to a worldwide economic collapse.