<P> Throughout the early 1900s banking regulations were extremely lax if not non-existent . The Currency Act of 1900 lowered the required capital of investors from 50,000 to 25,000 to create a national bank . As a result of this change nearly two thirds of the banks formed over the next ten years were quite small, averaging just above the 25,000 in required capital . The number of banks will nearly double (number of banks divided by Real GDP) from 1890 to 1920 due to the lack of oversight and qualification when banking charters were being issued in the first two decades of the 1900s . </P> <P> The unregulated growth of small rural banking institutions can be partially attributed to the rising cost of agriculture especially in the Corn Belt and Cotton Belt . Throughout the corn and cotton belts real estate increases drove the demand for more local funding to continue to supply rising agricultural economics . The rural banking structures would supply the needed capital to meet the farm commodity market, however, this came with a price of reliability and low risk lending . Economic growth was promising during the period of 1887 - 1920 with an on average of 6 percent growth in (GDP). In particular the participation in World War I (1917 - 1918) drove a booming agricultural market that drove optimism at the consumer and lending level, which in turn, resulted in a laxer approach in the lending process . Overbanked conditions existed which pressured struggling banking locations to increase their services (specifically to the agricultural customers) without any additional regulatory oversight or qualifications . This dilemma introduced several high risk and marginal business returns to the banking market . Banking growth would continue through the first two decades well outside of previous trends disregarding the current economic and population standards . Banking profitability and loan standards begin to deteriorate as early as 1900 as a result; adding to the agriculture shock and Great Depression to follow . </P> <P> Crop failures beginning in 1921 began to impact this poorly regulated system, the expansion areas of corn and cotton suffered the largest due to the dust bowl era resulting in real estate value reductions . In addition, the year 1921 was the peak for banking expansion with roughly 31,000 banks in activity, however, with the failures at the agricultural level 505 banks would close between 1921 - 1930 marking the largest banking system failure on record . Regulatory questions began to hit the debating table around banking qualifications as a result; discussions would continue into the (Great Depression) as not only were banks failing but some would disappear altogether with no rhyme or reason . The panic of financial crisis would increase in the Great Depression due to the lack of confidence in the regulatory and recovery displayed during the 1920s, this ultimately drove a nation of doubts, uneasiness, and lack of consumer confidence in the banking system . </P> <P> With a lack of consumer confidence in the economic direction given by the federal government panic started to spread across the country shortly after the Wall Street Crash of 1929 . President Hoover retained the Gold Standard as the country's currency gauge throughout the following years . As a result, the American shareholders with the majority of the gold reserves began to grow wary of the value of gold in the near future . Europe's decision to move away from the Gold Standard caused individuals to start to withdraw gold shares and move the investments out of the country or began to horde gold for future investment . The market continued to suffer due to these reactions, and in result caused several of the everyday individuals to speculate on the economy in the coming months . Rumors of market stability and banking conditions began to spread, consumer confidence continued to drop and panic begin to set in . Contagion spread like wild fire pushing Americans all over the country to withdraw their deposits in mass . This idea would continue from 1929 - 1933 causing the greatest financial crisis ever seen at the banking level pushing the economic recovery efforts further from resolution . An increase in the currency - deposit ratio and a money stock determinant forced money stock to fall and income to decline . This panic - induced banking failure took a mild recession to a major recession . </P>

Which of the following trends in the 1920s helped lead to the great depression
find me the text answering this question