Banks Get A Holiday, and Government Rolls Up Its Sleeves
- Roosevelt reviews the events of the past few days.
- In a nutshell, Americans lost confidence in their country's economy (can't really blame them…), rushed to the bank, and tried to withdraw all of their money at once out of fear that the cash wouldn't be there in another day, or week, or month.
- As you can imagine from what FDR described in Section 1, the banks didn't have enough cash on hand to give everyone what they demanded.
- Banks ran out of cash, and they couldn't call in their loans fast enough to pay people the money that they rightfully owned.
- The result? A whole lot of banks with nothing to offer, and a whole lot of very angry customers.
- (If you want to see what this scene might have looked like, check out this clip from It's A Wonderful Life.)
- FDR says that it was at this point that he declared the "nation-wide bank holiday" (18), a necessary closing of banks around the country. (Clever president, calling it a holiday to help people get on board with the idea.)
- After shutting down the banks, Roosevelt turns to Congress. He says that Congress "patriotically passed" (19) new laws that give him some expanded powers over the banking system during this crisis.
- In addition, he makes sure to point out that the new law was approved by both Republicans and Democrats, and that the purpose is "public welfare" and "the necessity for speed" (21).
- Next FDR says that it's very important for the banks to reopen (as the public no doubt understands), because many people need money for food and "household necessities" (22).
- He's acknowledging that he knows this situation is a major problem (again, no credit cards or ATMs).
- Roosevelt offers some reassurance next, by saying that this bank holiday will help the banks get back under control.
- He tells Americans that "no sound bank is a dollar worse off than it was when it closed its doors," (24) meaning the people can have confidence that when their banks reopen there will be money available to withdraw.
- As FDR gets ready to launch into his full plan, he tells his listeners that the government is issuing new currency to be sent out to every part of the country, and that the currency is backed by the U.S. Treasury.