The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-03-06
BANK HOLIDAY
FIRST IN ALL
U. S. HISTORY
Drastic Step Never Taken in
Course of Nineteen
Major SIumpS.
BY JOHN T. HAWKINS
Times Financial Editor

For the first time in the his
tory Of the United States, banks OF
the nation have been closed by pres
idential proclamation.
Throughout a series Of nineteen
major depresssions and panics, this
drastic step never has been en-
ployed to readjust the financial
workings Of the nation, according to
financial histories.
Only three times has the COLO
movement of the country been in
terfered with by federal orders.
Shortly after the Civil war the
United States treasury refused TO
redeem treasury certificates in gold
and during the panic days Of the
COS an embargo was placed for
short time on gold preventing its
shipment to foreign countries. In
1918 the last embargo was placed on
gold by the late President Wilson.
First financial collapse Of major
part Of the country occurred in 1888
to 1889, when the treasury Of the
young states ran ahead Of receipts
and paid out more than the income
of that period.
New Law Is Set Down
The result was money issued with
insufficient backing and a general
scramble for gold This panic re-
suited in the convention of 1887 and
the formation of a new Constitu-
ton which became the law of the
nation in 1889.
Land speculation in the western
states of Indiana, Ohio, Illinois and
Michigan brought on the next great
financial upheavaI in 1887. With
opening up Of new lands, Specula-
tors ran wild. Small banks had
been opened solely for the purpose
Of aiding the spectators.
The panic of 1873 affected eyerv
branch of industry and finance in |
the United States An enormous
expansion of railway construction
had taken place with its effects
reaching all allied industries. Credit
was stretched to the limit to pro-
vide working capital for new in
duStries.
Situation Is Relieved
The situation finally was relieved
by the secretary of the treasury is
suing $26,000,00O of legal tender
notes for the purchase Of govern
ment bonds.
With the beginning of Clevelands
second term in 1888 the country was
in the grip of severe depression.
Silver was being demonetized by
leading nations of the world and
gold at a premium.
Production in all lines of industry
was at a standstill. One hundred
fifty-siX railways went into the
hands of receivers. Labor strikes
and riots were general. CoXey'sI
march on Washington was one of
the highlights of the period Della
ton and writing off the loss
eventually brought order to the
financial centerS of the nation.
Speculation Gets Blame
Speculation was the cause of the
crash Of 1907. The big banks of
the country had overexerted them
selves in extending credit. Bank
reserves showed deficits. Resources
of the New York banks were
strained to the limit.
In October, 1907, the Knicker-
booker Trust Company of New York
failed, followed by other trust COM
panies. Banks whose ultimate re-
sources were with these banks COL
lapsed There were almost no none
tary payments throughout the ma
ton except through clearing house
certificates.
Then came the depression of 1921.
which was short lived and marked
by labor outbreaks. The stock
crash of 1929 completes the list of
economic upheavals until the pres
emf situation