Monthly Archives: April 2016

The case for big banks

During the banking crisis of the early 1930’s ten thousand banks in the US went bankrupt. Almost all of these had capitalization of under $100,000. This was a period of time when most small towns had their own small bank. Small banks started running into trouble in the 1920’s when the farmers who were their biggest customers started running into problems. After WWI farmers in the US had a huge market in the recovering European scene. When Europe started to recover the farmers lost customers and this only got worse in the early 1930’s. During this same period of time only one Canadian bank went under since they were mostly national banks who could weather the storm.

(Book – The Defining Moment: FDR’s Hundred Days and the Triumph of Hope – Jonathan Alter)