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In mid-February 1933, banking problems developed in Detroit, Michigan. The RFC was prepared to make a loan to the troubled bank, the Union Guardian Trust, to prevent a crisis. The bank was among 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 distressed bank as a condition of the loan. If Ford concurred, he would risk losing all of his deposits before any other depositor lost a cent. Ford and Couzens had actually once been partners in the automotive business, however had ended up being bitter competitors.
When the negotiations stopped working, the guv of Michigan declared a statewide bank vacation. In spite of the RFC's determination to assist the Union Guardian Trust, the crisis could not be prevented. The crisis in Michigan led to a spread of panic, first to adjacent states, however eventually throughout the country. Day by day of Roosevelt's inauguration, March 4, all states had declared bank vacations or had restricted the withdrawal of bank deposits for money. As one of his very first serve as president, on March 5 President Roosevelt revealed to the country that he was declaring a nationwide bank holiday. Almost all banks in the country were closed for company throughout the following week. https://musescore.com/user/51042105 |
