Then, on March 14, banks in cities with recognized clearing houses (about 250 cities) would reopen.
In that Fireside Chat, Roosevelt announced that the next day, March 13, banks in the twelve Federal Reserve Bank cities would reopen. Title IV gave the Federal Reserve the flexibility to issue emergency currency-Federal Reserve Bank Notes-backed by any assets of a commercial bank.Title III allowed the secretary of the treasury to determine whether a bank needed additional funds to operate and “with the approval of the President request the Reconstruction Finance Corporation to subscribe to the preferred stock in such association, State bank or trust company, or to make loans secured by such stock as collateral.”.Title II gave the comptroller of the currency the power to restrict the operations of a bank with impaired assets and to appoint a conservator, who “shall take possession of the books, records, and assets of every description of such bank, and take such action as may be necessary to conserve the assets of such bank pending further disposition of its business.”.Title I expanded presidential authority during a banking crisis, including retroactive approval of the banking holiday and regulation of all banking functions, including “any transactions in foreign exchange, transfers of credit between or payments by banking institutions as defined by the President, and export, hoarding, melting, or earmarking of gold or silver coin.”.The Act, which also broadened the powers of the president during a banking crisis, was divided into five sections: The new currency is being sent out by the Bureau of Engraving and Printing to every part of the country.” The new law allows the twelve Federal Reserve Banks to issue additional currency on good assets and thus the banks that reopen will be able to meet every legitimate call. gave authority to develop a program of rehabilitation of our banking facilities. In his first Fireside Chat on March 12, 1933, Roosevelt explained the Emergency Banking Act as legislation that was “promptly and patriotically passed by the Congress. 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 fact, many in Congress did not even have an opportunity to read the legislation before a vote was called for.
It passed later that evening amid a chaotic scene on the floor of Congress. The legislation, which provided for the reopening of the banks as soon as examiners found them to be financially secure, was prepared by Treasury staff during Herbert Hoover’s administration and was introduced on March 9, 1933. This action was followed a few days later by the passage of the Emergency Banking Act, which was intended to restore Americans’ confidence in banks when they reopened. In response, the new president called a special session of Congress the day after the inauguration and declared a four-day banking holiday that shut down the banking system, including the Federal Reserve.
Many people were withdrawing their money from banks and keeping it at home. At the time, the Great Depression was crippling the US economy. Immediately after his inauguration in March 1933, President Franklin Roosevelt set out to rebuild confidence in the nation’s banking system. President Franklin Roosevelt in his first Fireside Chat, March 12, 1933 “I can assure you that it is safer to keep your money in a reopened bank than under the mattress.” Secretary of the Treasury William Woodin, March 9, 1933 The extraordinary rapidity with which this legislation was enacted by the Congress heartens and encourages the country.”
“The emergency banking legislation passed by the Congress today is a most constructive step toward the solution of the financial and banking difficulties which have confronted the country.
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