Banks

There were many bank failures during the depression. Some of the bank failures were responsible for some small business people’s failures. The bank failures started with a short recession which was then followed by an extreme amount of failures. The farming regions were largely accounted for, for a big reason for the bank failures. The bank failures were a lot more popular in rural areas rather than urban areas. About 80% of the bank failures took place within the rural areas. One of the leading causes of the bank failures though was the income. During World War One, where agricultural acreage grew the most, was where the most banks failed. It happened because in those areas is where the agricultural distress was worse. With the economic downturn in 1920 the banks began to fail even worse. For the towns and cities that had less than 2500 people it was worse. The banks fell by 27%. Within the year of 1921 505 banks had gone bankrupt. Between 1923 and 1929 there was an average of about 680 banks that failed annually. It peaked at over 950 banks in the year 1926. (Alston, Grove, Wheelock)

There are other reasons that they failed, the main reason was definitely the issues with agriculture. Another thing that definitely extended the bank failures were the various state and federal policies that were enforced during that time period. (Alston, Grove, Wheelock)

Citation

Alston, Lee, Wayne Grove, and David Wheelock. United Sates. //Why Do Banks Fail? Evident of the 1920's//. Academic Press, Inc., 1994. Web. .