The Great Depression

Whether or not bank failures caused the Great Depression or were caused by the Great Depression is widely debated. In looking at the facts, we can see that the populace made quick work of withdrawing whatever cash they had in the banks, thus, depleting cash at hand. It is also a fact that the banks lost huge amounts of money on bad loans to farmers and buisinesses that went bankrupt. With no available cash, and no cash coming in from outstanding loans, banks were forced to close. As a result, people hoping to start anew with fresh ideas had nowhere to fund those ideas.... it was simply a viscious circle that took years to overcome.