While the stock market had crashed in 1929, its effects had not fully reached Tennessee by the 1930 elections. Just four days after Horton was reelected governor, however, the Bank of Tennessee, which was controlled by Lea and his business associate, Rogers Caldwell, was declared insolvent, and numerous banks controlled by Caldwell across the South soon followed. Horton had deposited over $6 million in state funds in Caldwell's banks, all of which was lost.
Crump and his allies, sensing an opportunity, assailed Horton for depositing state funds in the banks of his political allies. They also attacked Horton for awarding no-bid contracts to Caldwell's road-paving company, Kyrock. A motion calling for Horton's impeachment was voted on by the state House in June 1931, but the motion failed, 58 to 41. Horton was allowed to finish out his term, but did not seek further reelection, which would have been permissible under the term limit provision in the Tennessee State Constitution at the time, which limited an incumbent to three consecutive full two-year terms. However, both Lea and Caldwell were eventually convicted of bank fraud.
During Horton's tenure as governor, he continued most of Peay's reform initiatives. He abolished a land tax that had been unpopular with farmers, established a parole board, created a state division of aeronautics, and developed a secondary state highway system. He also had statues of Andrew Jackson and John Sevier placed in Statuary Hall in Washington, D.C
Impeached and acquitted (Council of State Governments, list for publication in 2004 Book of the States).
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