Banking Holiday of 1933

On March 12, 1933 President Theodore Roosevelt announced the bank crisis. He stated to the people that their money that they were depositing was not put into a safe deposit vault. It was being invested into many different forms of credit bonds, commercial paper, mortgages, and many other different types of loans. A very small portion of your money was put in the bank and kept in currency, which is an amount that sufficiently covers the cash needed of the average citizen. Which means that the total amount of all the currency in the country is only a small fraction of the total deposits in all the banks.
When the afternoon rolled around on March 3rd scarcely any bank in the country was open to do business. Proclamations temporarily shut them down in whole or in part had been issued by the Governors in almost all the states. The reason for the this quick decision was , impossible to sell perfectly sound assets of a bank and convert them into cash except atpanic prices far below their real value. The bank holiday was resulting in many cases a huge inconvenience on the people which was affording the opportunity to supply the currency necessary to meet the situation.
President Roosevelt had promised a quick action with "The Hundred Days" policy which was ordered that all national banks closed until Congress could pass legislation which would allow the banks to reopen. Roosevelt had called this a " bank holiday", in hopes to restore public confidence in the banking system during the Great Depression. This was to help prevent people from rushing to their bank and withdrawing all of their money. A lot of people's trust was accomplished through the bank holiday, combined with other things such as Roosevelt's weekly, national radio broadcasts, known as " fireside chats", and emergency bank legislation. Due to what happened in the 1930's, Congress later created the Federal Deposit Insurance Cor…

x

Hi!
I'm Sandulf

Would you like to get a custom essay? How about receiving a customized one?

Check it out