A Foolish Take: U.S. Financial History in 1 Chart

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The chart that best captures the ups and downs in the financial history of the United States doesn't track economic growth or unemployment. It instead tracks annual bank failures.

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Almost every major financial event has caused banks to fail over the past century and a half -- i.e., since the Civil War, which is when the modern American banking system was born out of a need to finance the conflict.

There were the frequent financial panics and depressions of the Gilded Age, spanning the late 1860s to the early 1900s. Then there was a severe agricultural depression through the 1920s, followed immediately by the Great Depression.

Later, thousands of banks were forced into insolvency in the 1980s and 1990s as a result of the savings and loan crisis,  as well as the less-developed country crisis (the latter consisted of loans to governments in Central and South America that weren't being paid back).

And most recently, there was the financial crisis of 2008-2009, in the wake of which more than 500 banks went under.

While bank failures are just one piece of a bigger economic puzzle, a chart of them reads like a table of contents in a book about the history of the U.S. financial system.

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