In the midst of the economic prosperity of the 1920s, banks began to open throughout the nation. Nearly five banks were opening each day, offering prospective investors loans at very low rates. However, government regulation of banks was nearly nonexistent. Banks were free to open, with no minimum startup capital, or regulation on their loans. Banks became unreliable, and the structure of banking became weak. Banks opened and received deposits. Those deposits were then sent out as loans. If these loans were not repaid, or the money was lost, banks had no means by which to make up for the lost money. Furthermore, depositors had absolutely no recourse against that bank which invested depositors' money carelessly. With no way to secure their monetary holdings, hundreds of banks folded, and the American people gradually lost trust in the structure and security of banking.
Unequal Distribution of Wealth Unequal Distribution of Corporate Power Foreign Balance of Payments American Economic Beliefs
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