Question

First of all let me state the simple fact that when you deposit money in a bank the bank does not put the money into a safe deposit vault. It invests your money in many different forms of credit-bonds, commercial paper, mortgages and many other kinds of loans. . . . A comparatively small part of the money you put into the bank is kept in currency—an amount which in normal times is wholly sufficient to cover the cash needs of the average citizen. . . . What, then, happened during the last few days of February and the first few days of March? Because of undermined confidence on the part of the public, there was a general rush by a large portion of our population to turn bank deposits into currency or gold. A rush so great that the soundest banks could not get enough currency to meet the demand. According to Roosevelt, what caused the bank runs? Americans were unwilling to take money out of their banks. The government was unable to print enough paper currency. Many Americans were scared that their bank was going to fail. Congress did not act quickly enough to stop the crisis.

Answer 1

In 1933 there was an uproar in the country when bank customers came to the banks to withdraw their assets but were canceled due to a lack of funds and debt.

What was the bank crisis of 1933?

The United States was in the grip of the Great Depression (1929-41), a time when the economy was in shambles, businesses were failing, and workers were losing their jobs.

There was an uproar in the country when bank customers were denied to withdraw their assets due to a lack of funds and debt.

President Roosevelt delivered a speech on the radio to address the citizens about the functioning of a Bank and reduce the tensions created among the people who are less aware of the mechanics of a Bank.

This given paragraph discusses the banking crisis faced by the United States during 1930 and 1933 where about 9,000 banks failed—4,000 in 1933 alone.

Thus, this paragraph explains the banking crisis faced by the United States between 1930 and 1933 and also shows the way President Roosevelt handled the difficult situation.

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