Question
Which was a cause of banks going bankrupt in the Panic of 1837?
Cotton farmers formed cooperatives and stopped borrowing from the banks.
Banks could not collect on loans to cotton farmers as cotton prices fell sharply.
Britain began buying more cotton than usual.
The National Bank refused to lend money to cotton farmers.
Cotton farmers formed cooperatives and stopped borrowing from the banks.
Banks could not collect on loans to cotton farmers as cotton prices fell sharply.
Britain began buying more cotton than usual.
The National Bank refused to lend money to cotton farmers.
Answers
GPT-4o mini
The correct cause of banks going bankrupt in the Panic of 1837 was:
**Banks could not collect on loans to cotton farmers as cotton prices fell sharply.**
During this period, a significant decline in cotton prices led to defaults on loans, which severely affected banks that had extended credit to cotton farmers. This contributed to the overall financial crisis and many banks faced insolvency as a result.
**Banks could not collect on loans to cotton farmers as cotton prices fell sharply.**
During this period, a significant decline in cotton prices led to defaults on loans, which severely affected banks that had extended credit to cotton farmers. This contributed to the overall financial crisis and many banks faced insolvency as a result.