Since I was born in the early 70's, neither my parents or I were around to experience the great depression. One question I have concerns the status of banks during the depression. Did they stay open for business, allowing withdrawls for people with money in the bank? Or was the situation more dire with people having money in the bank they could not access? I realize major bank accounts are FDIC insured, but what happens in a situation like the depression?
The Great Depression
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JHZR2
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Banking and monetary policy require banks to hold onto a certain amount of cash to provide sufficient consumer protection in the case of a run on the bank. Of course not much is liquid, or really liquid...
I think a lot of the banking policy was put into place because of runs on banks during the great depression.
But then again, realize that lots of folks, lot of them, stayed gainfully employed, making and spending and saving money during the great depression. So, while it may be a concern, it may be less or more of one depending upon your area of work, etc.
JMH
I think a lot of the banking policy was put into place because of runs on banks during the great depression.
But then again, realize that lots of folks, lot of them, stayed gainfully employed, making and spending and saving money during the great depression. So, while it may be a concern, it may be less or more of one depending upon your area of work, etc.
JMH
Jimmy Stewart explained all this in "Its a Wonderful Life." Your money isn't sitting in the bank; it has been loaned out to homeowners etc; so everyone can't get all their money at once.
Maybe someone knows the ratio of reserve funds to loans that a bank is required to hold. I'm sure it is surprisingly low.
Maybe someone knows the ratio of reserve funds to loans that a bank is required to hold. I'm sure it is surprisingly low.
Now there is FDIC, then there wasn't - many banks did fold, and some people did lose some money, but this wasn't really the cause of the great depression. I believe we tend to lump the whole thing, the whole era, together. It may be a bit easier to digest if you study the era year by year. This will take time!
From my point of view it was "perfect storm" of events in a world that finally truly began globalism.....our bankers choked, literally wouldn't loan (for many reasons, most stupid) - interest rates (for the time) remained high (some still argue this is a good thing) - then we passed some very terrible protectionist trade laws (the intent was good) - but this only further tightened things in 1930 - just when we could have pulled out of it......then the drought came a few years later......but we started to pull out of it only to have a recession in 1937 or so.....people lost confidence in banks, the market, trade.....
But people made it, and the folks who did well kept their heads and bought!
And then there was a glitch in the weather that pushed a lot of farmland back into desert.
This is off-topic from the original question, but I can give you a couple of examples that put a human face on it.
Both my parents and my in-laws went through the Depression. Afterwards my father in-law never ate another bean, as that was almost all he had for years.
As I was growing up there were always lots of coats in the house, and they were perpetual Christmas gifts. They had been few and far between for my father.
Also, my father served in two branches of the service. Did one hitch in the Army. Got out and there were no jobs, so he went into the Navy. Went on shore leave once and came back to find a bomb had been dropped through where his bunk used to be.
Both my parents and my in-laws went through the Depression. Afterwards my father in-law never ate another bean, as that was almost all he had for years.
As I was growing up there were always lots of coats in the house, and they were perpetual Christmas gifts. They had been few and far between for my father.
Also, my father served in two branches of the service. Did one hitch in the Army. Got out and there were no jobs, so he went into the Navy. Went on shore leave once and came back to find a bomb had been dropped through where his bunk used to be.
Unemplyoment was 25%, over 1200 banks had failed, there were no such things as food stamps or unemployment benefits....
That "glitch" in the weather seems to have been cause by cooler than normal Pacific water temps and warmer than normal Atlantice temps. At least that's what a NASA study claims. Poor land use and farming practices didn't help.
That "glitch" in the weather seems to have been cause by cooler than normal Pacific water temps and warmer than normal Atlantice temps. At least that's what a NASA study claims. Poor land use and farming practices didn't help.
and a much biger % were farmers, so the weather had a big impact. they had to leave their farms, or starve
Besides "It's a Wonderful Life", "Sullivan's Travels" and "O Brother Where Art Thou?" are good movie references.
During the depression, my Grandfather would arrive at work and they'd flip a coin to see who would get the work. I don't know how long this went on for but times were tough.
"O Brother Where Art Thou?"
While not historical is hysterical! "Care for some gopher?"
While not historical is hysterical! "Care for some gopher?"
My grandpa was around during the depression, and he remembered people wearing clothes made out of old feed bags.
I also have a very interesting book with first hand accounts about what it was like.
One person said her 5 year old brother didnt know what was happening when it started to rain, because he had never seen rain up until that point!
Another person said it was so dry, the only thing that would grow was weeds, so thats what they would eat. Pick em and make a salad.
I also have a very interesting book with first hand accounts about what it was like.
One person said her 5 year old brother didnt know what was happening when it started to rain, because he had never seen rain up until that point!
Another person said it was so dry, the only thing that would grow was weeds, so thats what they would eat. Pick em and make a salad.
"Grapes of Wrath' is perhaps the best depression movie. Will Rogers use to say that when the Okies went to CA they raised the IQ in both places :^)
'Hoover flags' were trouser pcokets turned out, 'Hoovervilles' were shanty towns, 'Hoover hogs' were rabbits that were caught, etc., which is why pictures of FDR use to be in people's houses.
'Hoover flags' were trouser pcokets turned out, 'Hoovervilles' were shanty towns, 'Hoover hogs' were rabbits that were caught, etc., which is why pictures of FDR use to be in people's houses.
FDR (New Deal) was probably the worst output of the Great Depression.
Highly doubtful.
Also highly political.
Also highly political.
Turning a country from neighbor helping neighbor, self supporting, states rights country into a nanny state was the real start of the downhill slope. Once a people think the Government can solve all their problems, then the country is no longer the same as the intentions of the founding fathers. Yes, highly political.
Since you admit it's highly political, why bring it up?
Topical. I doubt any depression in any country could be brought up without politics......
As a side bar, the depression in the USA as nasty as it was - peanuts compared to other famine type events in China, Africa, Bangladesh.....
As a side bar, the depression in the USA as nasty as it was - peanuts compared to other famine type events in China, Africa, Bangladesh.....
To balance it, it was big business who wanted the restrictive trade laws. Hawley-Smoot Tariff was an R thing. A very stupid thing.
I really think prohibition put the country in the frenzy that gave us the Great Depression.....the 21st amendment was too late.....but it helped.....
I really think prohibition put the country in the frenzy that gave us the Great Depression.....the 21st amendment was too late.....but it helped.....
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