<P> Outstanding debts became heavier, because prices and incomes fell by 20--50% but the debts remained at the same dollar amount . After the panic of 1929, and during the first 10 months of 1930, 744 US banks failed . (In all, 9,000 banks failed during the 1930s). By April 1933, around $7 billion in deposits had been frozen in failed banks or those left unlicensed after the March Bank Holiday . </P> <P> Bank failures snowballed as desperate bankers called in loans, which the borrowers did not have time or money to repay . With future profits looking poor, capital investment and construction slowed or completely ceased . In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending . Banks built up their capital reserves and made fewer loans, which intensified deflationary pressures . A vicious cycle developed and the downward spiral accelerated . </P> <P> The liquidation of debt could not keep up with the fall of prices it caused . The mass effect of the stampede to liquidate increased the value of each dollar owed, relative to the value of declining asset holdings . The very effort of individuals to lessen their burden of debt effectively increased it . Paradoxically, the more the debtors paid, the more they owed . This self - aggravating process turned a 1930 recession into a 1933 great depression . </P> <P> Fisher's debt - deflation theory initially lacked mainstream influence because of the counter-argument that debt - deflation represented no more than a redistribution from one group (debtors) to another (creditors). Pure re-distributions should have no significant macroeconomic effects . </P>

List and discuss four major causes of the great depression