The New Deal Flashcards
At what rate in 1932 were banks closing per day?
The banks were closing at a rate of 40 per day.
How many banks were closed for a ‘bank Holiday’ I October 1932 to stop collapse?
550 banks closed for 8 days.
Between January and March 1934, how much did the nations gold reserves fall by?
Gold reserves fell from $1.3 billion to $400 million.
How much did American banks have, to meet the $41 billion worth of deposits?
$6 billion
Two days before the inauguration, how much money was withdrawn?
$500 million
on 6th March, why did Roosevelt close all banks in the country for 4 days?
To give the Treasury officials time to draft emergency legislation e.g. The Emergency Banking Relief Act
What was the aim of the Emergency Banking relief Act?
Simply to restore confidence in the American banking system
What power did ‘The Emergency Banking Relief Act’ give to the treasury?
Power to investigate all those banks threatened with collapse
What was the ‘Reconstruction Finance Corporation’ authorised to do? effectively making it the largest bank in the world.
Buy stock to support the failing banks, and take on their debts
How did the ‘fireside chats’ improve the situation?
it encouraged listeners to ‘put money in banks rather than under the mattress’
What was the effect of the ‘fireside chats’?
Solvent banks allowed to reopen, and others were reorganised by Government officials to put them on a better footing
How much in currency had been returned to bank deposits by April 1934?
$1 billion in currency, meaning the crisis was over
Which Act did Roosevelt draw up in order to put the banking system on a sounder, more long term footing?
The Glass-Steagall Act 1933
Name an effect the Glass-Steagall Act had:
Commercial banks that relied on small-scale depositers were banned from being involved in the type of investment banking which fuelled speculation in the 1920’s.
Name another effect of the Glass-Steagall Act:
Bank officials weren’t allowed to take personal loans from their own banks
