(Roosevelt and the First New Deal, 1933-1935) Reforming the financial system Flashcards
What 4 measures were taken to reform the financial system?
Emergency Banking Relief Act
Glass-Steagall Act
Truth in Securities Act
Securities Act
What did the Emergency Banking Relief Act of March 1933 do to reform to financial system? (3)
(restore, explain, authority)
6th March 1933, all banks closed for 4 days to restore confidence.
FDR gave the 1st fireside chat, explaining the situation simply.
Gave Treasury authority to investigate any bank & RFC authorised to buy up their debts.
The Emergency Banking Relief Act of March 1933 closed banks for 4 days to restore confidence in the banking system again.
Evaluate this.
By 1st April, $1 billion had been redeposited in banks.
What did the Glass-Steagall Act to do reform to financial system?
(3)
Banned savings banks from speculative investment.
Federal Reserve Board had more ability to supervise & regulate.
Set up Federal Deposit Insurance Corporation to insure individual bank deposits up to $2,500 - state banks had to join Federal Reserve system to qualify
How is the Glass-Steagall Act different to other measures taken to reform the financial system?
More long term that aimed to prevent another collapse.
The Glass-Steagall Act was set up to provide a long-term measure that aimed to prevent another collapse.
Evaluate it.
(3)
Some people felt there should be more direct govt control.
Some felt banks were being subsidised to stay open as a reward for their inefficiency
Some felt the Federal Reserve given too much control.
What 2 acts were introduced to provide regulation of the Stock Exchange?
The Truth in Securities Act
The Securities Act
The Truth in Securities Act was set up to provide regulation of the Stock Exchange.
What did it do?
Brokers had to be honest about securities they were selling.
The Securities Act of 1934 was set up to provide regulation of the Stock Exchange.
What did it do?
Set up the Securities Exchange Commission to oversee the stock market and prevent fraudulent activities like insider dealing.
The Securities Act of 1934 set up the Securities Exchange Commission to oversee the stock market and prevent fraudulent activities.
Evaluate it.
(2)
It was successful despite opposition from Wall Street.
Famous broker Richard Witney arrested for embezzlement in 1938.
Who introduced the Emergency Banking Relief Act?
Where did this persona attend?
Adolf Berle
Harvard
What act links to the Emergency Banking Relief Act?
The Economies Act that cut government salaries.
