Agricultural overproduction: Agricultural overproduction led to the falling agricultural prices. As prices fell, agricultural income declined, farmers tried to expand their production and sell more in the market to earn. This worsened the situation as prices further fell, leading to farm produce rotting in the market with lack of buyers.
Withdrawl of US loans: Many countries financed their investments through loans from US But US overseas lenders panicked at the first sign of trouble. US overseas loans had gone upto $ 1 billion but it reduced to one quarter of that amount and countries depending on US loans now faced an acute crisis.