Iowa History Daily: On December 21, 1932, all three banks in Iowa Falls failed as Iowa entered the extreme depths of the Great Depression. As corn fell to 8 cents per bushel, pork prices plummeted to 3 cents per pound, and beef reached five cents a pound, Iowans struggled to survive the greatest economic crisis in the country’s history.
Although the stock market crashed in 1929, hard times hindered Iowans starting in 1926 when average input costs for things like equipment, seed, taxes, and other expenses crept below the breakeven point. From 1926 to 1930, the average farmer paid 35% over income to try and scratch out a successful crop. By 1932 the average Iowa farmer paid 50% over income by the end of harvest.
The first bank in Iowa Falls to falter closed during June of 1932, and a town-wide 10-day business holiday started on July 4 to help stabilize the financial situation in the Hardin County town. Locals attempted to band together, signing agreements not to draw down accounts by more than 10% per month in order to help ensure survival of the banks. However, by December, all three banks in town closed. For the next five months the citizens of Iowa Falls didn’t have a local bank
Nationally, over 9,000 banks closed over the course of the Great Depression. In 1932 alone, weary Iowans pulled assets out of banks at a rate of 17% leading to the failure of many institutions. Only with federal intervention in the form of the Glass-Steagall Act (created FDIC) and the Agricultural Adjustment Act during 1933 did the economic situation start to gradually turn toward better days #IowaOTD #IowaHistoryDaily #IowaHistoryCalendar