¶¶ Causes of Great Depression :

(i) Post-world war economy of the world was fragile. Agricultural overproduction was a problem. As prices slumped, farm produce rotted.

(ii) Many countries financed loans from the U.S.

(iii) U.S. overseas lenders panicked at the sign of financial crisis

(iv) Thus, banks were bankrupt and were forced to close down in Europe and in the US because they were unable to recover investments, collect loans and repay depositors.

(v) American capitalists stopped all loans.

The Great Depression was a severe economic downturn that lasted from 1929 to 1939. It was the longest and most significant economic depression in the history of the industrialized world. The primary cause of the Great Depression was the stock market crash of 1929, which triggered a chain reaction of events that led to the collapse of the global economy. In this response, we will discuss the various factors that contributed to the Great Depression.

1. Stock Market Crash of 1929:
The stock market crash of 1929 was the primary cause of the Great Depression. The stock market had been rising steadily throughout the 1920s, and many investors had become wealthy by speculating on stocks. However, in 1929, the stock market bubble burst, and stock prices plummeted. Investors lost their savings, and many businesses went bankrupt, leading to widespread unemployment.

2. Overproduction and Underconsumption:
Another significant cause of the Great Depression was overproduction and underconsumption. During the 1920s, industries were producing goods at a faster rate than people were buying them. This led to a surplus of goods, which caused prices to drop. As a result, many businesses were forced to lay off workers, leading to high levels of unemployment.

3. Banking Crisis:
The banking crisis was another contributing factor to the Great Depression. Many people had invested their money in banks, hoping to earn high interest rates. However, many banks had invested in the stock market and lost their customers' money. As a result, people began to lose faith in the banking system, and there was a run on the banks. This led to the collapse of many banks, further exacerbating the economic crisis.

4. Protectionism:
In the years leading up to the Great Depression, many countries had become protectionist, meaning that they had increased tariffs on imported goods to protect their domestic industries. This led to a decrease in international trade, which hurt many countries' economies, particularly those that relied on exports.

5. Dust Bowl:
The Dust Bowl was a severe environmental disaster that occurred during the Great Depression. A drought in the Great Plains region of the United States led to a massive dust storm, which destroyed crops and made it impossible for farmers to make a living. This led to widespread poverty and unemployment in the region.

In conclusion, the Great Depression was caused by a combination of factors, including the stock market crash of 1929, overproduction and underconsumption, the banking crisis, protectionism, and the Dust Bowl. The Great Depression had a significant impact on the global economy, leading to widespread poverty, unemployment, and social unrest.