The New Deal (banking and finance)

Question 1

How did Roosevelt address the problems facing the banks in 1933?

Answer 1

• Closed all banks for 6 days to prevent money being withdrawn
• Emergency Banking Relief Act: gave the government the power to investigate banks threatened with collapse and take on their debts
• Fireside chats explained the need for people to return money to the banks
• Glass-Steagall Act insured bank deposits up to $2,500
• By the beginning of April, $1billion had been returned to the banks

Question 2

Individual measures

Answer 2

• Economy Act (1933) cut government salaries, which increased public support for the New Deal
• Truth-in-Securities Act (1933) and the Securities Act (1933) were successful in preventing fraud in the stock exchange:
• Richard Whitney (President of the Stock Exchange from 1933-35) was charged with fraud