What major event brought monetary issues to a crisis point in the US?

The Great Depression is recognized as the major event that brought monetary issues to a crisis point in the US primarily due to the dramatic economic downturn that began in 1929 and lasted for a decade. This era was characterized by widespread bank failures, skyrocketing unemployment, and a severe contraction of the money supply. As businesses collapsed and consumer confidence plummeted, many faced financial ruin, leading to a significant decrease in both production and spending.

During this time, the banking system faced immense pressures, with many banks unable to meet withdrawal demands, which triggered a wave of bank runs. The resulting instability highlighted the flaws in the existing monetary system and the need for reforms to prevent such failures in the future.

The Federal Reserve's responses during the Depression also exacerbated the crisis. Instead of increasing the money supply to stimulate the economy, the Fed raised interest rates and allowed bank failures to occur, which deepened the economic contraction. Ultimately, the Great Depression prompted the introduction of numerous reforms including the establishment of the Federal Deposit Insurance Corporation (FDIC) to restore trust in the banking system and stabilize the economy.

In contrast, while other events like World War I, the Civil War, and the Roaring Twenties had significant impacts on the economy and monetary policy