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As the economic depression deepened in the early 30s, and as farmers had less and less money to spend in town, banks began to fail at alarming rates. During the 20s, there was an average of 70 banks failing each year nationally. After the crash during the first 10 months of 1930, 744 banks failed - 10 times as many. In all, 9,000 banks failed during the decade of the 30s. It's estimated that 4,000 banks failed during the one year of 1933 alone. By 1933, depositors saw $140 billion disappear through bank failures.

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โˆ™ 2010-03-05 01:29:03
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Q: Why did banks close during the Great Depression and How?
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Related questions

What day did the banks close during the Great Depression?

what did so many banks close during the great depression


Why did the banks close during the Great Depression?

The banks closed during the Great Depression simply because they ran out or nearly ran out of money. Later deposits made in banks were guaranteed by the federal government.


What caused banks to close during the Great Depression?

Banks were forced to close during the Great Depression as there was a frantic run of customers withdrawing their money. Such was the run that the banks didn't have the actual money in their vaults. Much of the customers' money was on paper, loaned out to other banks, companies, etc. Banks also invested some of their customers' money in stocks and shares.


What were Franklin D Roosevelt's biggest contributions to American Society?

was that he helped the banks during the Great Depression by making a national holiday where all the banks had close down for four days.


Did school close down during the Great Depression?

no


What were some of Franklin D Roosevelt Contributions?

He made Americans comfortable through the Great depression. He helped the banks during the great depression by making a national holiday where all the banks had to close down for four days and could ony re-open if they passed inspection.


What happened to banks and businesses in the economic collapse during the great depression?

Many businesses and banks were forced to close during the economic collapse. The number of business failures were very high and the total number of banks fell by about one third during five years, either through merger, failure, or voluntary liquidation.


What was family life life during the depression?

The family life during the Great Depression wasn't all that close and when we say that we mean that they werent always together and when a family member died during the Great Depression they had to keep on walking and leave their dead bodies behind.


Why did businesses close during the Great Depression?

Businesses closed during the Great Depression because they weren't realizing the revenue the needed to remain operational. During this time people weren't working so they couldn't spend money they didn't have.


Why were bank holidays orders by many governors during the depression?

FDR called national "bank holidays" where all banks close and reopen if they were financially sound


What were the effects on Singapore of the Great Depression?

geylang had to close down


What happened to banks and businesses in the economic collapse?

Many businesses and banks were forced to close during the economic collapse.


Why did FDR close America's banks?

America was in a terrible depression when FDR took office and banks were failing. People were rushing banks, trying to get their money out, which of course, they did not have, since they had loaned it out. Panic set it and closing the banks gave people time to think and banks time to make corrections. All the banks were audited and the sound ones were allowed to re-open in about two weeks.To stop the massive run on the banks that was going on at the time. People were taking all their money out of the banks during the Great Depression. Banks don't keep all the money people deposit - they loan it out - so if everyone who has money in the bank removes it from the bank, the bank will fail. FDR closed all the banks four days. During that period, he guaranteed to provide unlimited cash to any bank and to insure the depositors against the bank's failure. When the banks reopened, people put their money back in the bank.


When did the Great Depression 2 start?

There was no 2nd Great Depression. Many thought the Great Recession would be a great depression but that was not the case. In reality, the economy was not even close to another great depression. The great depression included such things as wage fixing and pricing fixing by the government, excess public debt from WW1, Smoot-Hawley act, etc. The Great Recession was just a financial breakdown, which is bad, but not a GD.


What happened in us History in the 1930's?

The major event in the US during the 1930's was the crushing Great Depression. Most of this decade saw an unemployment rate of 25% or more. Banks had to close and many companies simply went out of business. It was, and is the worst economic disaster in US history.


Why is the great depression important?

History caused businesses houses to close down of not allow employment, factories shut down an banks failed,farms income fell down to 50 percent and by 1932 approximately were unemployed.


Why did many businesses close in the 1930s?

many busnissess closed in the 1930s because of the great depression


Are you close to another depression?

In 2011, CNN conducted a poll that showed that 50% of Americans believe the U.S. is headed for another Great Depression. The lack of usual resilience for economic stresses has made many people believe that America is headed for another Great Depression.


How did the great depression affect the world's economy?

the factory where close but the men that work on the job fail to complete the economy


What is bank holiday and public holiday?

bank holidays were thought of in the great depression to close banks temporarily to give them a chance to catch back up on the money that everybody was trying to withdraw all at the same time, which banks couldn't support. and public holidays are holidays that the public get off work, Christmas, Easter, Independence Day, etc.


Do banks close on Veterans Day?

Because it is a Federal holiday, most banks do close on Veteran's Day.


Why did banks close after the stock market crash?

Banks did not close after the stock market crash. The stock market crash was induced by the closure/failure of Banks.


How did the Great Depression happen?

The Great Depression happened because many of the businesses of the 1920's and 30's stocks were growing at an alarmingly fast rate. And soon the stocks were worth more then the companies themselves. And so many people lost tons of money that they didn't have. And they didn't have the money because they bought the stocks on what we call " credit" today..... And then businesses closed which caused banks to close and so on.


Are banks close during the president day?

Most banks are closed on Presidents Anyway, you may find some community banks and local banks open on Presidents Day.


Why did so many banks collapse at the beginning of the great depression?

Banks were taking major financial risks, including investing in stocks and bonds. At that time, there were few limits, and fewer regulations, to require banks to be cautious or to protect their customers' money. When the stock market crashed in 1929, many of the banks that had not set aside enough capital to cover their losses in case of an emergency found themselves out of money and had to close; their customers, who in most cases had no idea the banks were making risky investments, also lost everything.