Financial Illusion from Martin Wolf

Which Yglesias buys, hook, line and sinker:

Another is that, as happened in the US in the 1930s, the collapse of many small and undiversified banks can be highly destructive.

So I ask Martin, if, in the 1930s, the population decided it was time to resettle themselves so as to obey Zipf's Law, for example, then how would the population do such a thing without closing down the small banks in their small towns? What if citizens had technology and incentives to keep this potential move a secret from local bankers?