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Country Banking in the Great Depression in the U.S .: Re-examining the work of Fred L. Garlock

Country Banking in the Great Depression in the U.S .: Re-examining the work of Fred L. Garlock. Hugh Rockoff Rutgers University. Friedman and Schwartz 1963. Challenges to F&S. Temin 1976 Bernanke 1983 Wicker 1980, 1996. White 1984. Calomiris and Mason 1997, 2003

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Country Banking in the Great Depression in the U.S .: Re-examining the work of Fred L. Garlock

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  1. Country Banking in the Great Depression in the U.S.: Re-examining the work of Fred L. Garlock

    Hugh Rockoff Rutgers University
  2. Friedman and Schwartz 1963
  3. Challenges to F&S Temin 1976 Bernanke 1983 Wicker 1980, 1996. White 1984. Calomiris and Mason 1997, 2003 Richardson and Troost2009. Carlson, Mitchener, Richardson 2011.
  4. Garlock’s Data country banks in Iowa, Arkansas, Wisconsin loan books of the banks Security holdings by class of security Bank Examiner’s reports Personal meetings with bank managers, borrowers
  5. Garlock’s papers ———. 1941. Country banking in Wisconsin during the depression. Technical bulletin / United States Department of Agriculture. Vol. 777. Washington: U.S. Dept. of Agriculture. ———. 1939. Review of Farm Credit in Canada by W. T. Easterbrook. ———. 1938. “Discussion of ‘Inflation and the Price of Land’ by Louis H. Bean,” ———. 1935a. (with Bueford Monroe Gile) Bank failures in Arkansas. agricultural experiment station. Bulletin no. 315. Fayetteville, Ark ———. 1935b. “The Money for Spring Planting.” Banking ———. 1934. (with Bueford Monroe Gile). “General Indicators of the Condition of Arkansas Banks.” Arkansas Agricultural Experiment Station Bulletin No. 298. _____. 1933a. Loan operations and liquidity requirements of an Iowa bank: A preliminary report. _____. 1933b. “Waiver Agreements with Depositors.” American Bankers Association Journal 25:8 (Feb.): 21,44,75 . _____. 1932a. Two Country Banks in Iowa and Virginia. _____. 1932b. Effect of the seasonality of agriculture on Iowa banking. . ———. 1930. Long term loans of Iowa banks ———. 1926. Bank failures in Iowa. ———. 1925. “Discussion of ‘Did Deflation Ruin the Farmer and Would Inflation Save Him?’
  6. What did country banks do? Locus of the banking crisis Small unit banks The strength of the system lies in democracy of control. The capital of the banks, with few exceptions is subscribed by the communities within which they do business; the interests of the officers are localized; and the funds of any community are used for development of its own industries. With such a system it is hoped to escape the monopolistic influences of the great branch systems, to make communities independent, and to protect the public from the foreign magnate (Garlock 1926, 56).
  7. Percentage of Country Bank Loan Portfolios devoted to Real Estate and Working Capital in 1929
  8. Garlock’s policy recommendations Maturity mismatch Adam Smith’s maligned real bills doctrine. Issue deposits with restricted withdrawals or debentures (waiver agreements saved some banks) Commercial banks + savings banks + loan and investment companies Never considered inflation as a threat
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