ID: Bank Holiday
When: March 6-10, 1933 (Officially proclaimed March 6th)
Who: President Franklin Delano Roosevelt
What:
A temporary closure of all banks nationwide, proclaimed by President Roosevelt on March 6, 1933, just two days after taking office. This closure was enacted to halt the widespread bank runs and restore confidence in the banking system. During the “holiday,” banks were inspected for solvency and only those deemed sound were allowed to reopen. This was part of FDR’s broader plan to address the banking crisis that was crippling the nation during the Great Depression. It was officially legislated by the Emergency Banking Act.
Impact: Why Significant?:
- Restored Confidence: The Bank Holiday and subsequent reopening of sound banks dramatically reduced panic and stopped the bank runs. People started redepositing money, stabilizing the banking system.
- Foundation for Reform: It provided a crucial breathing space for Congress to pass the Emergency Banking Act, which authorized the government to inspect banks and take further actions to stabilize the financial system.
- Increased Presidential Power: It demonstrated FDR’s decisive leadership and willingness to take bold action to address the economic crisis, solidifying public trust in his administration.
- Precursor to New Deal: It was one of the first and most visible actions of the New Deal, signaling a new era of government intervention in the economy.
- Federal Deposit Insurance: While the Bank Holiday was temporary, it paved the way for the creation of the Federal Deposit Insurance Corporation (FDIC), which permanently insured bank deposits and further strengthened public confidence in the banking system.