THE GREAT DEPRESSION 1929 1940
THE GREAT DEPRESSION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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People rushed to withdraw their money and caused banks to close
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People went and rushed to deposit money in the banks
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People went and started to buy stocks in the banks
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People went to rob the banks ____ because you know ____ crime and such
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Detailed explanation-1: -The Depression Many of the small banks had lent large portions of their assets for stock market speculation and were virtually put out of business overnight when the market crashed. In all, 9, 000 banks failed–taking with them $7 billion in depositors’ assets.
Detailed explanation-2: -Although only a small percentage of Americans had invested in the stock market, the crash affected everyone. Banks lost millions and, in response, foreclosed on business and personal loans, which in turn pressured customers to pay back their loans, whether or not they had the cash.
Detailed explanation-3: -The run on America’s banks began immediately following the stock market crash of 1929. Overnight, hundreds of thousands of customers began to withdraw their deposits. With no money to lend and loans going sour as businesses and farmers went belly up, the American banking crisis deepened.
Detailed explanation-4: -A bank run occurs when large groups of depositors withdraw their money from banks simultaneously based on fears that the institution will become insolvent. With more people withdrawing money, banks will use up their cash reserves and ultimately end up defaulting.