And it ended risky stock speculation by commercial banks by separating commercial banking from investment banking. It granted the Federal Reserve System greater control over bank credit. To protect depositors, the Act created the Federal Deposit Insurance Corporation (FDIC), which still insures individual bank accounts. The Glass-Steagall Banking Act stabilized the banks, reducing bank failures from over 4,000 in 1933 to 61 in 1934. “Capitalism was saved in eight days,” adviser Raymond Moley later recalled.įrom 1929-1933, thousands of banks in towns and cities across the nation failed and millions of Americans lost their life savings. The following morning, when the banks reopened, depositors lined up to return their money. But would people trust them? On March 12, FDR went on nationwide radio to reassure Americans. The healthy banks were authorized to reopen on March 13. The Act gave the government authority to examine bank finances, provide needed capital, and determine which banks were fit to reopen. Rushed to Congress four days later, it was approved within hours. Treasury officials feverishly began work on the Emergency Banking Act. Then he called Congress into special session to pass emergency banking legislation. Declaring a “bank holiday,” he temporarily closed all the nation’s banks.
#Which room did fdr use to host his fireside chats full
On his first full day in office, FDR confronted his greatest challenge- the banking crisis that threatened to destroy America’s economy. He would use government to relieve hardship and pump life into a collapsed economy. Fireside Chat on the Banking Crisis Curriculum HubįDR believed recovery from the Depression was impossible without massive government action.
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