Question

Banks often suffered in the 1930s and lost money because they could not

Answer 1

The correct answer is they could not repay loans to investors.

The 1930's in the United States was extremely tough on the economy. Thanks to events like the Stock Market Crash of 1929, banks suffered tremendously during the 1930's. This was due to the fact that banks gave out loans to many citizens who could not pay these loans back due to the amount of money they lost in the stock market. This resulted in banks running out of currency and being forced to shut down. They also lost money if they were able to stay open, as they could not repay investors.

Answer 2

Banks often suffered in the 1930s and lost money because they could not repay loans to investors, which greatly reduced the confidence that people had in the financial industry in general.