Banking Crisis Dbq

The depression had given rise to the worst crisis at the time in banking where almost 9,000 banks were shut down in a four year period. Ninety percent of small community banks failed because customers withdrew all the money from their accounts, resulting in massive decreases of the bank’s capital. With only ten percent of small community banks still in business it could be safely said that the banking industry had sunk almost as low as it could get. Clearly the banks were going to be blamed for the economic problems. Congressional hearings in early 1933 revealed huge irresponsibility on the part of these banks, which had used billions of dollars of depositors' funds to acquire stocks and bonds, and had made risky loans to inflate the prices