What Caused Overproduction During the Great Depression?
A major cause of overproduction in the early 1900s was the boost new technology available to farms, businesses and homes, however this overproduction did not occur during the Great Depression. Actually, it was one of the major causes. Overproduction in agriculture and manufacturing was one of the many factors that lead to the Great Depression.
Farmers in the United States began producing more food during World War I to help supply allies in Europe with food. This overproduction continued through the 1920s. At this time, more and more farmers were trading their work animals for tractors and other machinery, which increased production even more. The overabundance of wheat, meat and other farm goods on the market drove the price down without increasing demand, which left farmers poor. Also during this time, more and more homes in urban and suburban areas had access to electricity and the demand for consumer goods rose. Manufacturers produced more goods to meet the demand. Advances in machinery and better processes increased production, but the workers’ wages remained the same. Supply greatly surpassed demand, and workers were laid off in great numbers. Since many people were unemployed and barely had money for food and other necessities, the demand for consumer goods plummeted.