In a telegram dated March 11, 1933, from Treasury Secretary William Woodin to New York Fed Governor George Harrison, Roosevelt said, To ensure the FedвЂ™s cooperation to lend freely to cash-strapped banks, Roosevelt promised to protect Reserve Banks against losses. What would happen if bank customers again made a run on their deposits once the banks reopened? Policymakers knew it was critical for the Federal Reserve to back the reopened banks if runs were to occur. Neither is any bank which may turn out not to be in a position for immediate opening.вЂќ Roosevelt added one more boost of confidence: вЂњRemember that no sound bank is a dollar worse off than it was when it closed its doors last week. On March 15, banks throughout the country that government examiners ensured were sound would reopen and resume business. Then, on March 14, banks in cities with recognized clearing houses (about 250 cities) would reopen. In that Fireside Chat, Roosevelt announced that the next day, March 13, banks in the twelve Federal Reserve Bank cities would reopen. Title IV gave the Federal Reserve the flexibility to issue emergency currency-Federal Reserve Bank Notes-backed by any assets of a commercial bank.Title III allowed the secretary of the treasury to determine whether a bank needed additional funds to operate and вЂњwith the approval of the President request the Reconstruction Finance Corporation to subscribe to the preferred stock in such association, State bank or trust company, or to make loans secured by such stock as collateral.вЂќ.Title II gave the comptroller of the currency the power to restrict the operations of a bank with impaired assets and to appoint a conservator, who вЂњshall take possession of the books, records, and assets of every description of such bank, and take such action as may be necessary to conserve the assets of such bank pending further disposition of its business.вЂќ.

Title I expanded presidential authority during a banking crisis, including retroactive approval of the banking holiday and regulation of all banking functions, including вЂњany transactions in foreign exchange, transfers of credit between or payments by banking institutions as defined by the President, and export, hoarding, melting, or earmarking of gold or silver coin.вЂќ.

The Act, which also broadened the powers of the president during a banking crisis, was divided into five sections: The new currency is being sent out by the Bureau of Engraving and Printing to every part of the country.вЂќ The new law allows the twelve Federal Reserve Banks to issue additional currency on good assets and thus the banks that reopen will be able to meet every legitimate call. gave authority to develop a program of rehabilitation of our banking facilities. In his first Fireside Chat on March 12, 1933, Roosevelt explained the Emergency Banking Act as legislation that was вЂњpromptly and patriotically passed by the Congress. New YorkвЂ™s deserted financial district during the bank holiday of March 1933 (left), and President Franklin Roosevelt giving a fireside chat to the American people (right) (Photo: Associated Press) In fact, many in Congress did not even have an opportunity to read the legislation before a vote was called for. It passed later that evening amid a chaotic scene on the floor of Congress. The legislation, which provided for the reopening of the banks as soon as examiners found them to be financially secure, was prepared by Treasury staff during Herbert HooverвЂ™s administration and was introduced on March 9, 1933. This action was followed a few days later by the passage of the Emergency Banking Act, which was intended to restore AmericansвЂ™ confidence in banks when they reopened. In response, the new president called a special session of Congress the day after the inauguration and declared a four-day banking holiday that shut down the banking system, including the Federal Reserve. Many people were withdrawing their money from banks and keeping it at home. At the time, the Great Depression was crippling the US economy.

Immediately after his inauguration in March 1933, President Franklin Roosevelt set out to rebuild confidence in the nationвЂ™s banking system. President Franklin Roosevelt in his first Fireside Chat, March 12, 1933 вЂњI can assure you that it is safer to keep your money in a reopened bank than under the mattress.вЂќ Secretary of the Treasury William Woodin, March 9, 1933 The extraordinary rapidity with which this legislation was enacted by the Congress heartens and encourages the country.вЂќ вЂњThe emergency banking legislation passed by the Congress today is a most constructive step toward the solution of the financial and banking difficulties which have confronted the country.

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