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Will Rogers welcomed the speech: "Mr. Roosevelt stepped to the microphone last night and knocked another home run. His message was not only a great comfort to the people, but it pointed a lesson to all radio announcers and public speakers what to do with a big vocabulary - leave it at home in the dictionary.
Our President took such a dry subject as banking and when I say dry, I mean dry, for if it had been liquid, he wouldn't have to speak on it at all and made everybody understand it, even the bankers. The following year Eccles and Lauchlin Currie drafted a new banking bill to secure radical reform of the central bank for the first time since the formation of the Federal Reserve Board in It emphasized budget deficits as a way out of the Great Depression and it was fiercely resisted by bankers and the conservatives in the Senate.
The banker, James P. Warburg commented that the bill was: "Curried Keynes Maynard Keynes With strong support from California bankers eager to undermine New York City domination of national banking, the Banking Act was passed by Congress. Roper urged President Roosevelt to balance the budget. All through the Twenties, they were having about six hundred banks a year close.
In and they got into thousands. Closing every day. There was one bank in New York, the Bank of the United States - in the wake of that closing, two hundred smaller banks closed because of the deposits in that bank from the others. Bank officials didn't show up at church services and weren't home at one o'clock to eat the usual big Sunday dinner with their families. The lobby of the First-Central Trust Company was a madhouse.
Bewildered grocery store owners and frantic housewives stood in line with their passbooks shrilly demanding their money. Soft-voiced clerks explained, over and over, that "everything was all right".
Ist March: The local newspapers spread great cheer over the local banking situation. Pay rolls were said to be passing through the bank, taxes were being paid, business places were finding their operations unhampered. The first banks to reopen, on March 13, were the 12 regional Federal Reserve banks. These were followed on the next day by banks in cities with federal clearinghouses.
The remaining banks deemed fit to operate were given permission to reopen on March Uncertainty, even anxiety, about whether people would listen to President Roosevelt's assurances that their money was now safe all but evaporated as banks reopened to long lines after the shutdown ended.
The stock market also weighed in enthusiastically, with the Dow Jones Industrial Average rising by 8. The implications of the Emergency Banking Act continued, with some still felt even today. Certain provisions, such as the extension of the president's executive power in times of financial crisis, remain in effect. The Act also completely changed the face of the American currency system by taking the United States off the gold standard. The loss of personal savings from bank failures and bank runs had gravely damaged trust in the financial system.
Perhaps most importantly, the Act reminded the country that a lack of confidence in the banking system can become a self-fulfilling prophecy, and that mass panic about the financial system can do it great harm. The Emergency Banking Act was preceded, and has been succeeded, by other pieces of legislation designed to stabilize and restore trust in the U.
Approved during Herbert Hoover's administration, the Reconstruction Finance Corporation Act sought to provide aid for financial institutions and companies that were in danger of shutting down due to the ongoing economic effects of the Depression. A few related pieces of legislation were passed shortly after the Emergency Banking Act.
The Glass-Steagall Act , also passed in , separated investment banking from commercial banking in order to combat the corruption of commercial banks by speculative investing, which had been recognized as a key cause of the stock market crash. Glass-Steagall was repealed in , however, and some believed its demise helped contribute to the global credit crisis. In contrast to the Emergency Banking Act, the focus of this legislation was the mortgage crisis, with legislators intent on enabling millions of Americans to keep their homes.
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