How Did The Bank Contribute To The Great Depression

There are many contributing factors to the Great Depression.Three of the contributing factors, to the Great Depression that I found that were most important was bank failures, the reduction of items being purchased, and the Hawley-Smoot Tariff. One contributing factor to the Great Depression was America's weak banking system. Even though the Federal Reserve System was created in 1913 most of America's banks were small. So, these individual institutions had to rely on their own resources. When there was a panic, depositors would rush to take money out of the bank.Then, the bank would go under when the bank did not have enough money on reserve. So in 1930, bank failures were on the rise throughout the United States. Depositors tried to take their money before the
Deflation caused prices to drop and businesses to cut costs by laying off workers. As people lost their jobs, they were unable to keep on paying for items that had bough through credit. Which caused them to have possessions taken away. So, these workers could not buy anything, as the unemployment rate kept on sky rocketing. Businesses suffered as their inventories continued to get bigger and prices dropped even more.A third contributing factor to the Great Depression was the Smoot-Hawley Tariff, it was supposed to 1raise import duties to protect American businesses and farmers. This simple tariff caused a horrific impact on the 1 international economic climate of the Great Depression. The idea behind this tariff was to protect American industry. But, since Europe responded with their own high tariffs it caused there to be fewer buyers of American goods, less trade, fewer jobs, and etc. This caused the world trade to fall by 2 two-thirds between 1929 and 1934. Herbert Hoover was the President during the Great Depression. It is easy to criticize him on what he did to alleviate the Great