Explain any five causes of the great depression in the US between 1929 and 1932.
GREAT depression in the US started in 1929 and ended in the late 1932. There were several factors responsible for the depression in the continent.
- Agricultural over production.
- Falling prices led to decline the agricultural income.
- Falling agricultural prices over a prolonged period worsened the situation.
- Farmers tried to expand production and bring a large volume of produce to the market to maintain their overall income, which increased the glut (too much supply) in the market, bringing prices further down. Farm production rotted due to lack of buyers.
- In’mid -1920s, many countries financed their investment through loans from the US. In the first half of 1928, US overseas loan amounted to over $1 billion. US overseas lenders panicked and started withdrawing. A year later the loan amount dropped to quarter of the previous amount. US banks also slashed domestic lending and called back loans.