In the stock market crash in 1929, "hundreds of thousands" of customers began hurriedly withdrawing their deposits overnight. As the banks had no money to loan, and recipients of their loans couldn't pay them back, the banking crisis only got worse.
Much later, in 1933, Roosevelt took office and soon declared a three-day "National Bank Holiday" to stop people from withdrawing from banks, as a sort of cooling-off period. When the banks were allowed to open again, the cooling off had amazingly saved 1,000 banks. To help get this process going, he said: "The only thing we have to fear is fear itself."
On January 1st, 1934, the Federal Deposit Insurance Corporation (FDIC) was established in order to give depositors real security over their money. Since then, nobody has ever lost their money in the bank that they had insured.
At the end of it all, bank failures had cost Americans 140,000,000,000 dollars, as their hard-earned money was gone.
3 comments:
I like how you quoted Roosevelt to support your argument and facts. I like how you organized the information: what happened, how people reacted, what was established.
You have a lot of things that support your argument. Everything is very clear to be and it is very well organized which leads me into understanding his better.
Its devastating to see the way Americans were impacted by Bank Failures. This information is a great precursor to understanding the need for the protections implemented after the Depression.
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