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In mid-February 1933, banking difficulties established in Detroit, Michigan. The RFC was prepared to make a loan to the distressed bank, the Union Guardian Trust, to prevent 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 agreed, he would run the risk of losing all of his deposits prior to any other depositor lost a penny. Ford and Couzens had actually once been partners in the automotive company, but had actually ended up being bitter competitors.
When the negotiations stopped working, the guv of Michigan stated a statewide bank holiday. In spite of the RFC's desire to help the Union Guardian Trust, the crisis could not be prevented. The crisis in Michigan led to a spread of panic, initially to nearby states, but eventually throughout the nation. By the day of Roosevelt's inauguration, March 4, all states had declared bank holidays or had limited the withdrawal of bank deposits for cash. As one of his very first acts as president, on March 5 President Roosevelt revealed to the country that he was stating an across the country bank vacation. Practically all monetary organizations in the country were closed for organization throughout the following week. https://we.riseup.net/geleynqbff |
