16h 47min, nov 7, 1930 y - The Bank of Tennessee failed
Description:
Affiliate banks failed the next day. The economy was improving but weaknesses in the banks pulled it back down. Only 1/3 of the 20,000 banks in US belonged to the Federal Reserve. Non-members didn't have enough access to reserves to fend off bank runs. As bank failures rose, American ran to banks to pull the money out. Banks only hold approx. 10% of its deposits, and they lend the rest. A bank run would wipe them out of business. Banks runs spread throughout the Southeastern US. By the end of the year, 1300 banks would fail.
