Prior to 1930, the economic role of the federal government was relatively small. Federal civilian employment barely exceeded 1 percent of total employment, and the government's share of the gross national product (GNP) was a mere 1.6 percent. Aside from veterans' pensions, the federal government did not provide a social safety net of transfer payments to the aged, the unemployed, or the merely poor. Larger banks were federally regulated, but there was no federal deposit insurance, and failures among smaller banks were common in the 1920s. The stock market boom of the 1920s proceeded without significant federal oversight. Only 2.5 million families paid any federal income tax in 1929.
