This paper argues that monetary intervention alleviated banking panics during the early stages of the Great Depression. Throughout the course of the depression, the Federal Reserve Bank of Atlanta aggressively intervened to stabilize its banking system. To assess the effectiveness of these policies, I analyze the performance of banks along counties straddling the border of the Atlanta Federal Reserve District. My results indicate that expansionary initiatives designed to inject liquidity into the banking system reduced the incidence of bank suspensions by 32 to 48% in some regions. Moreover, an analysis of the balance sheets of individual Federal Reserve Districts suggests that liquidity intervention did not expend large resources and that a concerted, system-wide interventionist policy response was feasible during the first half of the depression. Thus, the Federal Reserve System committed a major policy mistake by not acting as a lender of last resort to stabilize the country’s banking system in the early stages of the depression.