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To: Eric in the Ozarks

Milton Friedman said that the most important piece of legislation to come out of the Great Depression was the creation of FDIC, the Federal Deposit Insurance Corporation.

Prior to FDIC, when a bank failed every depositor’s money simply disappeared. And in the three years from 1930-33 one third of all American banks collapsed, wiping out the savings of millions of Americans.

No other country in the world had similar damage. A peculiarity of American banking law prohibited branch banking, something which could have provided small rural banks with large money center partners in a crisis.


6 posted on 10/23/2019 5:04:37 PM PDT by Pelham (Secure Voter ID. Mexico has it, because unlike us they take voting seriously)
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To: Pelham
Prior to FDIC, when a bank failed every depositor’s money simply disappeared. And in the three years from 1930-33 one third of all American banks collapsed, wiping out the savings of millions of Americans.

The bank run scene in "It's A Wonderful Life" is what prompted me to read about how banking works.

15 posted on 10/23/2019 6:19:01 PM PDT by SamAdams76
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