23-1

Mitch Lillard

By 1933 many Americans did not have any faith in the banking system in America, but on March 5, one day after Franklin D. Roosevelt took office he declared a bank holiday where he closed all banks. Congress then passed the emergency Bank Relief Act which allowed the treasury department to go inspect banks around America. Banks that were able to support themselves were allowed to reopen immediately, but banks that were failing stayed closed. This made the public begin to believe in banks again. On March 12 Roosevelt gave the first of many fireside chats where he spoke to the American people on the radio about important issues going on in the country. He explained that the nations welfare depended on them supporting the government and the national banking system. This renewed Americans faith in the banking system and so many Americans returned their savings to the banks. Another step congress took to reorganize the banking system was to pass the GLass-Steagall Banking Act of 1933 which established the Federal Deposit Insurance Corporation which provided insurance for bank accounts of less than 5,000 dollars. This further reassured millions of Americans that American Banks were safe again.