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Within weeks, all other states held their own bank holidays in an attempt to stem the bank runs, with Delaware becoming the 48th and last state to close its banks on March 4. [ 2 ] [ 3 ] Following his inauguration on March 4, 1933, President Franklin Roosevelt set out to rebuild confidence in the nation's banking system and to stabilize America ...
After the closing of banks nationwide in early March 1933, press reports and public statements by Congressional leaders suggested banks might be nationalized or the existing system of "dual banking" might be eliminated through federal legislation, or even a Constitutional amendment, to prohibit state chartering of banks.
By the time Roosevelt took office, gubernatorial proclamations had closed the banks in 32 states; in the remaining states, many banks were closed and depositors were permitted to withdraw only five percent of their deposits. [15] On March 5, Roosevelt declared a federal bank holiday, closing every bank in the nation.
President Roosevelt issued Executive Order 2039, declaring a nationwide "bank holiday", temporarily closing every bank in the United States and freezing all financial transactions. The 'holiday' ended on March 13 for the 12 federal reserve banks, and by March 15 for all banks, which then had to apply for a license. [3]
A Chemical Bank advertisement boasted "On Sept. 2 our bank will open at 9:00 and never close again." [33] Chemicals' ATM, initially known as a Docuteller was designed by Donald Wetzel and his company Docutel. Chemical executives were initially hesitant about the electronic banking transition given the high cost of the early machines.
The bank had over $160 million in deposits and was the fourth largest bank in the United States at the time, and its failure is widely considered to be the moment when the banking collapse in the United States hit a critical mass, sparking a nationwide run on the banking system that was a major contributor to the deflationary spiral of 1931–1933.
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(In all, 9,000 banks failed during the 1930s.) By April 1933, around $7 billion in deposits had been frozen in failed banks or those left unlicensed after the March Bank Holiday. [103] Bank failures snowballed as desperate bankers called in loans that borrowers did not have time or money to repay.