![]() ![]() The Bank Holiday and the Emergency Banking Act of 1933 reestablished the integrity of the payments system and demonstrated the power of credible regime-shifting policies. The public responded by returning more than half of their hoarded cash to the banks within two weeks and by bidding up stock prices on March 15, 1933, the first trading day after the Bank Holiday ended, by the largest ever one-day percentage price increase. The very first of the Fireside Chats was made by FDR on Sunday March 12, 1933, just over a week after he had assumed the presidency. New York’s deserted financial district during the bank holiday of March 1933 (left), and President Franklin Roosevelt giving a fireside chat to the American people (right) (Photo: Associated Press) In his first Fireside Chat on March 12, 1933, Roosevelt explained the Emergency Banking Act as legislation that was promptly and patriotically. The country had recently experienced a month-long run on the banks, which prompted FDR to announce a Bank Holiday, shutting down. ![]() The president used the address to explain the ongoing bank holiday and ask Americans for their cooperation in the midst of America’s banking crisis. ![]() The contemporary press confirms that the public recognized the implicit guarantee, and as a result, believed the President’s words in his first Fireside Chat on March 12, 1933, that the reopened banks would be safe. FDR’s first fireside chat was delivered on March 12, 1933. Roosevelt used the emergency currency provisions of the Act to prod the Federal Reserve to create de facto deposit insurance in the reopened banks. This paper traces the remarkable turnaround in the public’s confidence to the Emergency Banking Act, passed by Congress on March 9, 1933. When banks reopened on March 13, 1933, depositors stood in line to return their hoarded cash. Bank Holiday Great Depression Federal Reserve Deposit InsuranceĪfter a month-long run on American banks, Franklin Delano Roosevelt proclaimed a Bank Holiday beginning Mathat shut down the banking system. ![]()
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