The Great Depression happened due to a combination of several factors including widespread use of credit and loans, overproduction especially in farming, the stock market crash of 1929, bank failures, and policy mistakes. Many people and banks borrowed heavily in the 1920s, buying things and stocks on credit, which created an unsustainable financial bubble. When stock prices started falling, investors who had bought on margin were forced to sell, leading to the stock market crash. The collapse triggered bank runs and failures, which wiped out savings and contracted the money supply. Overproduction, particularly in agriculture after WWI, led to falling prices and debt burdens for farmers, worsening economic conditions. Additional issues included international trade disruptions, drought (the Dust Bowl), and attempts to return to the gold standard, which caused deflation and unemployment. All these factors combined to create a severe and prolonged worldwide economic depression from 1929 through the 1930s.
