the emergency banking act of 1933 was introduced on march 9, 1933.
the emergency banking act of 1933 was introduced on march 9, 1933.
what did the emergency banking act of 1933 do?
introduced on march 9, 1933
according to william l. silber: "the emergency banking act of 1933, passed by congress on march 9, 1933, three days after fdr declared a nationwide bank holiday, combined with the federal reserve's commitment to supply unlimited amounts of currency to reopened banks, created 100 percent deposit insurance. much to everyone's relief, when the institutions reopened for business on march 13, 1933, depositors stood in line to return their stashed cash to neighborhood banks. within two weeks, americans had redeposited more than half of the currency that they had squirreled away before the bank suspension. the stock market registered its approval as well. on march 15, 1933, the first day of stock trading after the extended closure of wall street, the new york stock exchange recorded the largest one-day percentage price increase ever with the dow jones industrial average gaining 8.26 points to close at 62.10; a gain of 15.34%. with the benefit of hindsight, the nationwide bank holiday and the emergency banking act of march, 1933, ended the bank runs that had plagued the great depression."
emergency banking act
the emergency banking act (the official title of which was the emergency banking relief act), public law 1, 48 stat. 1 (march 9, 1933), was an act passed by the united states congress in march 1933 in an attempt to stabilize the banking system. beginning on february 14, 1933, michigan, an industrial state which had been hit particularly hard by the great depression in the united states, declared an eight-day bank holiday. fears of other bank closures spread from state to state as people rushed to withdraw their deposits while they still could do so. within weeks, all other states held their own bank holidays in an attempt to stem the bank runs (on march 4, delaware became the 48th and last state to close its banks). following his inauguration on march 4, 1933, president franklin roosevelt set out to rebuild confidence in the nation's banking system. on march 6 he declared a four-day "national" banking holiday that kept all banks shut until congress could act. a draft law, prepared by the treasury staff during herbert hoover's administration, was passed on march 9, 1933. the new law allowed the twelve federal reserve banks to issue additional currency on good assets so that banks that reopened would be able to meet every legitimate call.
emergency banking act