What Did We Learn from the Monetary Experience of the United States in the Great Depression?

The depression that began in 1929 provides a series of challenges for the student of US monetary history. Why did monetary policy fail to stop the decline in output? Why did monetary policy fail to prevent a decline in the money supply or in bank earning assets? Why did the Federal Reserve System permit banks to fail at an unprecedented rate or permit the public's conversion of demand deposits into currency to increase the number of bank failures? What blunder, tragic error, or chance sequence of events produced or permitted a decline of 25 per cent in the money supply, currency, and demand deposits, and a 50 per cent decline in industrial production between August 1929 and March 1933?