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What were the 2 ways that the stock market crash weakened US banks?
The market crash weakened the nation’s banks in two ways. First, by 1929, banks had lent billions to stock speculators. Second, many banks had invested depositors’ money in the stock market, hoping for high returns.
What was the purpose of the National Credit Corporation quizlet?
Created in 1931, the National Credit Corporation under the persuasion of Herbert Hoover got the largest banks in the country, at that time, to provide lending agencies that would be able to give banks, on the brink of foreclosure, money that could be used for loans.
How did the stock market rush weaken the nation’s banks?
The stock market crash weakened the nation’s banks because? banks had invested their deposits in the stock market. using money from New York bankers.
What happened when President Hoover asked the Federal Reserve Board to put more money into circulation?
Hoover asked the Federal Reserve Board to put more currency into circulation, but the board refused (this would have caused inflation). Banks were forced to foreclose on the farmers. They needed the money now and were asking for it early. They marched on Washington DC to ask for their money early.
What were American attitudes toward the stock market before the crash?
What was the economy like before the stock market crash? People’s attitudes? Before the stock market crash, the economy was really good. People were buying a bunch of stocks because they thought that all of the stocks would go up because of the good economy.
How were businesses affected by the stock market crash?
The stock market crash crippled the American economy because not only had individual investors put their money into stocks, so did businesses. When the stock market crashed, businesses lost their money. Business houses closed their doors, factories shut down and banks failed. Farm income fell some 50 percent.
What was the purpose of National Credit Corporation?
The National Credit Corporation was an organization created in 1931 in the United States by President Herbert Hoover’s administration to try to stop bank failure stemming from the Great Depression, and was a forerunner of the Reconstruction Finance Corporation.
Did the National Credit Corporation work?
^^ The National Credit Corporation had failed. President Hoover, however, was not responsible for the failure. President Hoover called for the establishment of a Reconstruction Finance Corporation.
Why was the National Credit Corporation set up?
The “$500,000,000 bankers’ pool was set up to help “save hundreds of small banks throughout the county.” The Corporation attempted to convince large surviving banks to loan money to failing banks as a solution to bank runs.
When does the Reconstruction Finance Corporation take over?
At the same time as the third call, it was noted that after “the Reconstruction Finance Corporation begins functioning, it is understood it will take over the activities of the National Credit Corporation.
When did Bank of America and National City Safe Deposit Company merge?
In November 1931, the New York State Banking Department approved a merger between the Bank of America Safe Deposit Company into the National City Safe Deposit Company under the latter’s name with an authorization certificate from the Corporation for $2,000,000 capital.
What did people do with their money in a panic?
Fear of failure sometimes caused people to panic. In a panic, bank customers attempt to immediately withdraw their funds. While banks hold enough cash for normal operations, they use most of their deposited funds to make loans and purchase interest-earning assets. In a panic, banks are forced to attempt to rapidly convert these assets to cash.