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In United States, 1930, fear spread faster than facts. A rumor about bank weakness triggered mass withdrawals. Crowds lined up, demanding cash simultaneously. Banks didn’t fail because they were empty; they failed because everyone came at once. The system relied on staggered access, not total withdrawal. When confidence disappeared, liquidity vanished. Many banks closed temporarily, others permanently. This period reshaped financial safeguards worldwide. Deposit protections were introduced later to calm panic, not to enrich savers. The lesson remains relevant: banks are built on trust timing. When timing collapses, systems crack. The episode proved that psychology alone can bring down structures that look solid on paper.

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