This according to a paper just published in the American Economic Review by Raghuram Rajan and Rodney Ramcharan about bank failures and farm land values in the 1920s:
“How important is the role of credit availability in inflating asset prices? Our evidence suggests it matters. Of course, the influence of credit availability on the asset price boom need not have implied it would exacerbate the bust. Continued easy availability of credit in an area could in fact have cushioned the bust. However, our evidence suggests that the rise in asset prices and the build-up in associated leverage were so substantial that bank failures (resulting from farm loan losses) were significantly more in areas with greater ex ante credit availability. Moreover, the areas that had greater credit availability during the commodity price boom had depressed land
prices and lower credit availability many decades after the bust, probably because farm loan losses resulted in the failure of banks that lent to farmers, and altered banking market structure in subsequent decades.”