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In mid-February 1933, banking troubles established in Detroit, Michigan. The RFC wanted to make a loan to the struggling bank, the Union Guardian Trust, to avoid a crisis. The bank was one of Henry Ford's banks, and Ford had deposits of $7 million in this specific bank. Michigan Senator James Couzens demanded that Henry Ford subordinate his deposits in the struggling bank as a condition of the loan. If Ford concurred, he would run the risk of losing all of his deposits before any other depositor lost a penny. Ford and Couzens had actually when been partners in the vehicle organization, but had actually ended up being bitter rivals.
When the negotiations failed, the guv of Michigan declared a statewide bank holiday. In spite of the RFC's willingness to help the Union Guardian Trust, the crisis could not be avoided. The crisis in Michigan resulted in a spread of panic, initially to surrounding states, however eventually throughout the nation. By the day of Roosevelt's inauguration, March 4, all states had actually declared bank holidays or had limited the withdrawal of bank deposits for cash. As one of his first serve as president, on March 5 President Roosevelt announced to the country that he was stating a nationwide bank vacation. Practically all banks in the country were closed for service during the following week. https://www.teachertube.com/user/channel/solenaevpa |
