Lesson 8.01: Causes of the Great Depression

• Introduction
• Causes and Consequences
• Stock Market Crash
• Bank Runs
• Practice
• Task

Bank Runs

	American Union Bank
American Union Bank U.S. Social Security Administration This image is in the public domain.

Crowd at New York's American Union Bank during a bank run early in the Great Depression. The Bank opened in 1917 and went out of business on June 30, 1931.

Most bank runs lasted just a day or two, and sometimes only hours. So bankers tried to combat them by slowing down the rate of withdrawals while reassuring customers that the bank would not fail. One Arkansas bank resisted a run by paying only in silver coins and making customers provide their own bags. Forced to carry away heavy bags of savings, some customers changed their minds and left their money in the bank. In 1932, banks in Urbana, Illinois, prevented a run in nearby Champaign from spreading to Urbana by closing for five days. Meanwhile, teams of volunteers pressured depositors into signing no-withdrawal pledges. When the strategy worked, the concept of a "bank holiday" spread. The following year, a national bank holiday was the first action ordered by new President Franklin D. Roosevelt.