This Day in (Banking) History

On March 5, 1933, seventy-five years ago today, newly inaugurated President of the United States Franklin Delano Roosevelt found himself, and the country he was voted to lead, in the midst of what is now commonly referred to as “the banking crisis of 1933.” The crisis was a direct result of the Great Depression, which, contrary to what its name implies, wasn’t so great for the citizens of FDR’s country, from what I understand. In response to the crisis, Mr. New Deal himself, less than 48 hours into his presidency, called a special session of Congress, which proceeded to institute a mandatory bank holiday that effectively closed every bank in the U.S. for four days, from March 6 to March 9, 1933. The holiday allowed financial regulators to inspect ailing U.S. banks to make sure they were strong enough to survive.

According to an article in the Los Angeles Times, published on the day that the holiday passed, for the ensuing four days "no withdrawals of gold, silver or currency may be made and no exportations of coin or bullion will be permitted."

Apparently, some folks, including those in charge of running the finer, higher institutions of learning in the U.S., were prepared for the holiday, specifically for dealing with students’ inability to make withdrawals from their bank accounts.

According to the March 4, 1933 edition of the Boston Globe, “A temporary dining hall has been established on the second floor of the Harvard Union, at which students of the university may obtain their meals on credit by presenting their bursar cards. Prices for meals will be 20 cents for breakfast, 50 cents for lunch, and 65 cents for dinner. The charge will be billed on the fourth term bill.”

Other folks, including those in charge of entire states in the country, were not as prepared. On March 6, 1933, the Globe reported that “at least one governor was caught by his own bank holiday proclamation. Gov. Gifford Pinchot of Pennsylvania said tonight that when he proclaimed the holiday in his state, he had exactly 95 cents to his name."