Explain any five factors that led to the Great Depression of 1929.
Answers
The Great Depression began in 1929. India was an exporter of wheat to European countries. When the international prices of wheat crashed because of the Great Depression, prices of wheat in India fell almost by 50%. Peasants and farmers were the worst sufferers. While the prices of the crops declined, the government refused to reduce the revenues. This forced the peasants to borrow money from the moneylenders. At this time in India, the peasants’ indebtedness increased.
1. Agricultural over production was a problem. As prices slumped, rotting of farm produce also held.
2. US then given loans to many counties.
3. Financial crisis led to panic if US overseas lenders.
4. Banks were bankrupt and were forced to close down in US and Europe as they were unable to recover their investment.
5. All loans were stopped by American capitalists.