It also gave the President broad authority in a banking crisis. It formally legalized President Roosevelt’s decision to call for a banking holiday.On March 13th the 12 regional Federal Reserve banks re-opened. Banks were only allowed to re-open when they were deemed financially sound. During the holiday, bank examiners identified banks that were solvent and those that should remain closed. Few had reviewed the bill, but the EBA passed after 40 minutes of chaotic debate. Shortly after taking office, they were asked to pass the EBA. The election that President Roosevelt easily won also swept many democrats into office. The bill had been prepared by President Hoover’s Treasury. The Emergency Banking Relief Act was passed by Congress on March 9, 1933. Just one day after taking office, President Roosevelt followed the lead of many states and closed all banks calling it a National Bank holiday on March 6, 1933. Economic recovery depended on restoring confidence in the banking system. Many banks were unable to handle the volume of withdrawals. Understandably, a rumor of a bank being in trouble frequently resulted in a bank run because people who feared the worst lined up to withdraw all their money. Many people lost their life savings because their bank failed, and their deposits were not insured. The failure of many banks during the Great Depression destroyed the nation’s confidence in its banking system. The Emergency Banking Relief Act (EBA) was passed on March 9, 1933, to end bank runs and restore confidence in the United States’ banking system. View FREE Lessons! Definition of Emergency Banking Relief Act:
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