It’s a Wonderful Life

Fractional Reserve Banking got a large mention in the 1947 film, “It’s a Wonderful Life.” In the film, worried depositors are seen turning up at the local private bank in a panic to withdraw their money. They also turn up to the small Savings and Loan institution run by James Stewart and try to withdraw their money.  He makes an impassioned speech explaining that their savings are loaned out to other members of his institution, reminding them that the private bank is not so generous or fair. Customers are unaware of behind the scenes machinations, where the large private bank is trying to put him out of business. He eventually backs up trust in the business with his own money and manages to survive.

There are clear messages in this film, also regarding Usury, large corporations, and community. The USA had suffered many bank runs in the 1930s, as worried depositors took out their dollars to pay for emergencies, or just to retain them as physical savings in their house. It’s estimated that by 1933, 9,000 banks had collapsed, so there’s no doubt this film would’ve meant a lot more to that generation watching it than us today. When it was released, the film was regarded suspiciously by the authorities, even as communist and subversive. It’s still as relevant, though, and well worth watching at least this clip.

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