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Bank Holiday/ Emergency Banking Act

Bank Holiday/ Emergency Banking Act. Luke Engelhardt and Tim Gillespie. Bank Holiday . Purpose : shut down banks to prevent collapse and to gain public confidence Enacted 2 days after FDR’s inauguration March 6 th to March 9 th , but extended to March 13 th for additional banks

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Bank Holiday/ Emergency Banking Act

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  1. Bank Holiday/ Emergency Banking Act Luke Engelhardtand Tim Gillespie

  2. Bank Holiday • Purpose: shut down banks to prevent collapse and to gain public confidence • Enacted 2 days after FDR’s inauguration • March 6th to March 9th , but extended to March 13th for additional banks • Banks shutdown • Banks went under review: if the bank was deemed healthy it was to be reopened, if not the bank was closed until it was ready to reopen. • It was a success however • Had questionable constitutionality

  3. The Emergency Banking Act • Passed during the banking crisis • Purpose: strengthen nation’s banking system • Reason: prevent a banking system collapse • Passed by FDR in 1933 • Unanimous vote by the House of Representatives • Took effect immediately

  4. How it Worked • Allowed the government to issue new currency • Removed national gold standard • Federal examination of banks prior to reopening • Roosevelt enforced reinvestment • Fireside chats • FDR Broadcasts over the radio • Gave hope and kept morale of people positive • Connected the president with the country more

  5. Change in Government Powers • Government gained control over banks • Control lasted for the state of emergency • Permission of RFC to purchase stock of failing banks • Major powers given to the secretary of Treasury • Led to Glass-Steagal Act which gave the Federal Reserve more power to banks

  6. The Government and the Economy • During a state of emergency: -Government control over foreign exchange -Bank shut down (Bank Holiday) -Sec. Treasury Gold to currency exchange -Made bank operation unlawful • Allowed for the issuing of new currency • No nationalization of banks

  7. Successful? • YES!!! • Roosevelt said reinvestment in banks was safe • Public more confident • Deposits to reopened banks exceeded withdrawals • Just 8 days after FDR took office • Some believed government was overstepping boundaries, but was not overturned

  8. Progress under FDR

  9. Time line Black Tuesday Raid on Banks FDR Bank Holiday Banks Saved October 29, 1929 The Following Months 3/6-13/1933 3/4/1933 The emergency banking act was in effect

  10. Works Cited • Genovese, Michael A. "Bank Holiday of 1933." Encyclopedia of the American Presidency. New York: Facts On File, Inc., 2004. American History Online. Facts On File, Inc. http://www.fofweb.com/activelink2.asp?ItemID=WE52&iPin=EAP0051&SingleRecord=True (accessed November 20, 2011). • Jeffries, John W. "Emergency Banking Relief Act." In Jeffries, John W., and Gary B. Nash, eds. Encyclopedia of American History: The Great Depression and World War II, 1929 to 1945, Revised Edition (Volume VIII). New York: Facts On File, Inc., 2010. American History Online. Facts On File, Inc. http://www.fofweb.com/activelink2.asp?ItemID=WE52&iPin=EAHVIII087&SingleRecord=True (accessed November 20, 2011). • Parke, William R. "Stock Market Crash Causes Depression." The Econ Review - Economics News with a Historical Perspective. 2007. Web. 20 Nov. 2011. <http://www.econreview.com/events/stocks1929b.htm>. • Roosevelt, Franklin D. "Bank Holiday Declaration." The Public Papers and Addresses of Franklin D. Roosevelt.American History Online. Facts On File, Inc. http://www.fofweb.com/activelink2.asp?ItemID=WE52&iPin=E02580&SingleRecord=True (accessed November 20, 2011 • Primary Source: • U.S. Congress. "Emergency Banking Relief Act." United States Statutes at Large,73rd Congress, 1933 p. 1-7. American History Online. Facts On File, Inc. http://www.fofweb.com/activelink2.asp?ItemID=WE52&iPin=E00110&SingleRecord=True (accessed November 20, 2011).

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