Milford chronicle., 1935-12-13

SeVelL was luduBuIaLtu u6 AOunu
most of the banks of the country
closed by order of the several state
executives. This had been made nee
essary because the failure of two or
three large banks had started a pan
ic which swept the country, driving
hundreds of thousands of depOsitOrs
TO withdraw their funds from per-
fectly sound banks. No bank, how
ever sound, is able to pay off all Of
its depOsitOrs on demand at the same
time. Therefore in the interest of the
depositors, Governors of the Tespec-
tive commonwealth declared state
bank holidays.
On March 6, 1888, President ROose-
welt issued an order declaring a ma
tiOnal banking holiday, applicable
not only to all banks, but to trust
companies, savings banks, building
and loan associations, and any cor
pOration or partnership engaged in
the business of receiving deposits,
making loans, diseOunting business
paper, or tTansacting any other form
of banking business"
The order was effective as Of that
March 13, a period Of seven days.
On Sunday evening, March II, 1888
the President delivered a nationwide
radio talk to the American people.
His subject was the bank holiday
and banking in general. He stated
the banks in cNe country had been
closed not because the banks them
selves were uRsOund, but because
''Of undermined confidence on the
part of the public, there was a gen
CTal rush by large portion of our
population to turn bank deposits In
to currency or gold-a rush so great
that the sOundest hanks could not
get enough currency to meet the de-
lnand."
The President stated the weeks
holiday which he had declared had
resulted in the panic subsiding and
confidence being restored. He then
said:
"As a result we start tomorrow,
Monday, with the opening of banks
in the twelve Federal Reserve Bank
cities, those banks which on first eY-
animation by the Treasury have al
ready been found to be all right.
This will be followed on Tuesday by
the resumption of all their functions
by banks already found to be sound,
in cities where there are recognized
clearing houses. That means about
$50 cities of the United States.
"On Wednesday, and succeeding
days, banks in smaller places all
through the country will resume
business, subject, of course, to the
governments physical ability to
complete its survey"
Under this program, by March 25
two weeks after the President lift
ed the bank holiday--S0 per cent OF
the banking institutions in the Uni
ted States, which had been closed
either by order of state authorities
or by the President, were open and
doing business on an unrestricted
basis. Within a reasonably short \
time, three-fourths of the remain
ing 20 per cent reopened. When the
banks reopened there was no stam-
pede upon the part of depOsitors to
withdraw their money which had
been impOunded during the period of
the holiday. To the contrary, mill
lions of regular bank customers re-
deposited money they had withdrawn
in their fear, just prior to the decla-
ration of the bank holiday. {
The fact that 80 per cent Of the I
banks Immediately reOpened clearly
showed they were sound when they }
we're closed. They had been run /
wisely and honestly as well as leg G
lily. This fact is proved by the Pres l
dents assurance that no bank would t
he permitted to reopen unless it was t
found to be sound, and by the fur
her fact that inaSmuch Rs there had p
been no legislation in the interim, Fl
no reconstruction Of our banking n
'ystem, no "NeW Deal" financial exc s
leriments, during the six days the Il
Danks we're closed by the Presidents @
rider, the sound conditions Of the IL
Ianks which justified the Presidents b
,ermltting them to reopen was not c.
Inc TO any "NeW Deap policies. d
Moreover, that fact completely re-
utes the charges which have repeat ]
dly been made by spokesmen Of the
New Deal" that when the President a
anne into power, he found banking tn
ystem which was unsound. During til
he bank holiday the only thing sc
.hich took place to change the con- pc
itiOns was the disappearance of an
ublic hysteria. There had been no tn
hange in our banking system.
Public confidence returned, and ch
eople began to do business as usu- tn
!. in
Every week, from March 25-the
ate that 80 per cent Of the banking ga
lstitutiOns had reonened without re- fol
.riction-until the first week in Au- Yo
ust, showed constant and continu- err
Is improvement in practically every i'm
ED of private enterprise. Further Sh
ore, the rapidity of recovery was su,
without parallel in the his
Try of the United States. IN
This statement is based upon off, po
al statistics furnished by various Sp'
overnment Departments and Bur- i. ne'
Ius-see "Table A. at end of ar tlil
sIe. The index numbers in this ta- III
e show that beginning with the re- 7
,ening Of the banks in March, 1888, n,
ID continuing without recession or 20 a.
Permission until late in July or the M HSt
st Of August, there was an almost IIi.
improvement IN agricul- 60
raj, Industrial, commercial, finan- 6
Il, construction and transportation lea
tivities. chi
During that period the same eco. r,oi mn,
y