The reasons for the Great Depression of 1929 are : (i) The post-war world economy was very fragile. First, agricultural overproduction remained a problem. It was made worse by falling prices. There was a glut in the market pushing down prices even further and farm produce rotted due to lack of buyers. (ii) In the mid-1920s many countries had financed their investments through loans from the US. US overseas lenders panicked at the first sign of trouble. In the first half of 1928, US overseas loans had amounted to over $ 1 billion. A year later it was one quarter of that demand. Countries dependent on US loans now faced an acute crisis. (iii) Withdrawal of US loans led to failure of major banks in Europe and collapse of currencies like the British pound sterling. In Latin America and elsewhere it intensified the slump in agricultures and raw material prices. (iv) The US attempt to protect its economy in the depression by doubling import duties also dealt a severe blow to world trade.