Question

How did many banks fail consumers in the stock market crash of 1929? Banks had invested customer savings in the stock market, losing depositors’ money in the crash. Banks refused to pass on profits made in the stock market to depositors, keeping the money. Banks refused to issue loans to help investors pay for their financial losses in the crash. Banks only paid a small portion of insurance owed to depositors for their financial losses.

Answer 1

A: Banks had invested customer savings in the stock market, losing depositors’ money in the crash.

Step-by-step explanation:

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Answer 2

Correct Answer:

Banks had invested customer savings in the stock market, losing depositors’ money in the crash.

Step-by-step explanation:

The stock market crash was one of the lowest point in the history of American economy. It was so bad that, most American families lost their deposit in the banks leading to loss of confidence in banks and low spending.

For example, the New York's Bank of the United States collapsed. The bank had more than $200 million in deposits at the time, making it the largest single bank failure in American history.