PRESENTATION OUTLINE
THE START
The first four waves of banking panics started in the fall of 1930 when large numbers of investors lost confidence in the banks security and demand to receive large amounts of cash, forcing banks to liquidate loans because of their insufficient amount of money on hand.
HOW DID BANKS FAILINGS EFFECT OTHER BUSINESSES?
because the banks had no money due to people withdrawing all their money from their bank account they could not loan to businesses and therefore new businesses could not start and already made businesses could not grow and probably had to lay people off.
HOW DID BANKS FAILING EFFECT PEOPLE?
loans got liquidated which made things harder for people to start new businesses and businesses had to lay off workers and the bank had to fire people and possibly go out of business.
Bank runs started again in the spring and fall of 1931. The Hoover administration tried supporting the failing banks with government loans. The idea with that was that the bank would in turn loan the money to businesses, and the bank would be able to hire back their employees.
SHORT TERM IMPACT
because of bank failures families didn't have enough money to keep themselves in a safe and comfortable environment and many families grew up in a depressing environment.
LONG TERM IMPACT
the long term impact is that now the United States knows how to handle their banking and now they have experience to know how to get themselves out of situations like that. They also now know how to keep the circular flow of money going in an effective matter.
