In the 1920s, many rural banks failed because:
(Provide the explanation or continue the statement with the specific reason for the failure.)
Answer (2)
In the 1920s, many rural banks failed because of the failure of the farms to produce the bumper crops they were producing previously. The farmers had invested heavily in machinery and storage facilities. They drop in production meant that the investment did not recover and they failed to pay their loans back.
In the 1920s, many rural banks failed due to farmers' inability to repay loans, stemming from overproduction and falling crop prices. Rural banks relied on these loan repayments for stability, and as defaults increased, they faced financial collapse leading to widespread bank failures. This created a chain reaction that negatively affected the local economy and led to greater hardships in rural communities.
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