usrevenge t1_iw5jqx1 wrote on November 13, 2022 at 3:05 AM

Reply to comment by ovationman in TIL JP Morgan bailed out banks in 1907 but a severe recession occured anyway. Nelson Aldrich, a powerful senator with close ties to Morgan, led a mission to Europe in 1908 to study the workings of the central banks in England, France and Germany. The Federal Reserve was created a short time later by mankls3

Banks failed because they loaned out all their money and people then demanded the money back like a Ponzi scheme.

Banks still do this but they are required to have insurance to protect customers from their failure which is what FDIC is that you see on banking commercials. This means if bank of America shits the bed every customer can get all of their money back as long as they had less than $250,000 deposited.

ChevExpressMan t1_iw5ww5u wrote on November 13, 2022 at 5:01 AM

What were the major causes of the Great Depression? Among the suggested causes of the Great Depression are: the stock market crash of 1929; the collapse of world trade due to the Smoot-Hawley Tariff; government policies; bank failures and panics; and the collapse of the money supply.