It's A Wonderful Life Bank Run

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It's A Wonderful Life Bank Run


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George Bailey gives out loans to the community members in order to hold them over until the bank officially opens. 

“What is a 'bank run'?" So, if you and a hundred other people each deposit $100 in the bank, the bank turns around and loans out as much as they can.

It's a Wonderful Life begins in the party economy of the 1920s, during the rise of capitalism in America. The growth of the economy and rapid technological advances during this post-war period lead to improvements in production and telecommunication, increasing the importance of financial markets and allowing companies to make money by the sale of shares. As a result, financial markets open ownership of companies to the public. In the 1920s, when business was booming and many people were making money in the market, the public became very excited about the get-rich-quick opportunities they saw in a market they didn't necessarily understand. When the ignorant public began throwing their money into the stock market on the unstable basis of margin buying, money in the market became inflated until the market eventually imploded. Numerous people, businesses, and banks were financially ruined in the stock market crashes of 1929. Speculating heavily with their deposits, many banks were totally wiped out during the crash of 1929, which created a run on the banking system. The crashes, along with other social, political, and economic disasters, provoked the Great Depression.

The Great Depression is the backdrop for It's a Wonderful Life, and although the film does not delve deeply into the economics of the depression, it influences and affects every aspect of the movie. The first major impact the depression has on Bedford Falls is the run on the bank. Everyone in town is in a panic because of the market crash, and fearful that they may lose all of their money in the Savings and Loan, the public rushes to the bank in an attempt to retrieve it. Fortunately, the Savings and Loans were not financially ruined in the crash, but the bank system does not allow for all of the money of its customers to be kept in the bank itself. Therefore, George has difficulty explaining to the residents of Bedford Falls that he does not have all of their money in the bank at any specific time. So during the crash, when Mr. Potter offers fifty cents on the dollar, many people are willing to take that cut in their savings in order to have the security of money in their wallets. George is able to foil Potter's plan to shut down the Savings and Loan by dispensing his honeymoon money to the desperate people, retaining their patronage. This is neither the first nor the last time that Potter tries to shut down the Savings and Loan.

Content Standard(s):
Social Studies
SS2010 (2010)
Grade: 9
World History: 1500 to the Present
13 ) Explain challenges of the post-World War I period.

Examples: 1920s cultural disillusionment, colonial rebellion and turmoil in Ireland and India, attempts to achieve political stability in Europe

•  Identifying causes of the Great Depression
•  Characterizing the global impact of the Great Depression

Alabama Alternate Achievement Standards
AAS Standard:
SS.AAS.9.13- Identify challenges in the United States after World War I.
SS.AAS.9.13a- Identify the causes and effects of the Great Depression including the stock market crash, collapse of farm economy, Dust Bowl, collapse of savings and loans banks, inflation, poverty, homelessness, soup kitchens, and unemployment.

Social Studies
SS2010 (2010)
Grade: 11
United States History II: The Industrial Revolution to the Present
6 ) Describe social and economic conditions from the 1920s through the Great Depression regarding factors leading to a deepening crisis, including the collapse of the farming economy and the stock market crash of 1929. [A.1.a., A.1.b., A.1.d., A.1.f., A.1.i., A.1.j., A.1.k.]

•  Assessing effects of overproduction, stock market speculation, and restrictive monetary policies on the pending economic crisis
•  Describing the impact of the Smoot-Hawley Tariff Act on the global economy and the resulting worldwide depression
•  Identifying notable authors of the 1920s, including John Steinbeck, William Faulkner, and Zora Neale Hurston (Alabama)
•  Analyzing the Great Depression for its impact on the American family
Examples: Bonus Army, Hoovervilles, Dust Bowl, Dorothea Lange

Alabama Alternate Achievement Standards
AAS Standard:
SS.AAS.11.6- Define economic depression; recognize the general causes of the Great Depression including overproduction of crops, stock market crash; recognize the effects of the Great Depression including collapse of the farm economy, unemployment, bank failure, homelessness and soup kitchens.

Tags: bank run, Great Depression, stock market crash of 1929
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Author: Ginger Boyd