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Great Depression- Causes

            The Great Depression was the worst economic slump ever in U. history, and one which spread to virtually the entire industrialized world. The depression began in late 1929 and lasted for about a decade. Many factors played a role in bringing about the depression. Some of the factors were outmoded equipment from industrial base that made some industries less competitive, a crisis in the farm sector in which farmers produced more than they were able to sell, the availability of easy credit, and an unequal distribution of income. .
             The superficial wealth of the late 1920s hid troubling weaknesses that would ultimately lead to the Great Depression of the 1930s. A number of key basic industries, such as textiles, steel and railroads, barely made a profit. Railroads lost business to new forms of transportation, such as trucks, buses, and private automobiles, while textile mills faced competition from foreign producers in Japan, India, China, and Latin America. Mining and lumbering, which had expanded to supply wartime needs during World War I, faced diminished demand for their goods in peacetime. Coal mining was especially hard-hit, in part due to stiff competition from new forms of energy, including hydroelectric power, fuel oil, and natural gas. Even the boom industries of the 1920s, automobiles, construction, and consumer goods, began to weaken. The construction of new houses, for example, fell steadily. Housing starts were an important economic indicator, because house construction had spinoff effects on other industries. New houses required building materials, new furnishings, new equipment, and new appliances. Construction also created jobs. When housing started to decline, so did other businesses that depended on construction. Furniture companies that had expected an expanding market produced too many goods and cut their labor forces to reduce inventories. A similar story held for makers of household appliances.

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