Did depositors lose their money when a bank was robbed in the Old West?
By and large, investors were out of luck when outlaws pulled a holdup. That’s why citizens in Northfield, Minnesota, and Coffeyville, Kansas, so ferociously took on the James-Younger Gang and the Dalton brothers respectively.
A benevolent banker might try and repay the citizens a portion of their savings, but that would happen only if the banker was rich enough and generous enough to make it right. Most people stuck to hiding their money in their mattresses.
The first program to protect bank deposits came with the creation of the Federal Deposit Insurance Corporation in 1933 during the Great Depression. The FDIC was created to guarantee deposits up to a certain amount of money to stem the tide of loss by people who had usually lost their savings when banks closed.