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The estimated number of banks and thrifts in the United States fell from around * in 1920 to * in 1929, when the onset of the Great Depression would then see it fall further, below * in 1933. This marks a cumulative decline of over * banks and thrifts, which is equal to a drop of more than ** percent in 13 years.

Tumultuous Twenties

Despite the economic prosperity associated with the Roarin' 1920s in the U.S., it was a tumultuous decade in financial terms, with more separate recessions than any other decade. However, the was also privy to frivolous lending policies among many banks, which saw the banking sector collapse in the wake of the Wall Street Crash in 1929. Many banks failed as the Great Depression and unemployment spread across the country, and customers or businesses could not afford to repay their loans. It was only after this financial crisis where the federal government began keeping more stringent and accurate records on its banking sector, therefore precise figures and the reasons behind these bank failures are not always clear.

Franklin D. Roosevelt

Just two days after assuming office in 1933, Franklin D. Roosevelt drastically declared a bank holiday, and all banks in the country were closed from ** until ***. This break allowed Congress to pass the Emergency Banking Act on **, which saw the Federal Reserve provide deposit insurance for all reopened banks thereafter. Through his first fireside chat, Roosevelt then encouraged Americans to re-deposit their money in the banks again, which successfully restored much of the public's faith in the banking system - it is estimated that over half of the cash withdrawn during the Great Depression was then returned to the banks by ***.