Why did so many banks fail?


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Several factors led to the failure of many small banks. Banks do not keep a lot of money on hand. The money you deposit in your checking or savings account or to repay your loans is quickly lent out again by the bank. When many people attempt to get their money out of the bank at the same time the bank does not have it. Thus the bank is unable to meet its financial obligations and closes its doors. Thousands of Americans lost everything they had put into savings due to bank failures. The Great Depression - Banks