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In mid-February 1933, banking difficulties developed in Detroit, Michigan. The RFC was prepared 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 particular bank. Michigan Senator James Couzens demanded that Henry Ford subordinate his deposits in the distressed bank as a condition of the loan. If Ford agreed, he would run the risk of losing all of his deposits before any other depositor lost a cent. Ford and Couzens had once been partners in the automotive company, but had become bitter rivals.
When the settlements stopped working, the governor of Michigan stated a statewide bank holiday. In spite of the RFC's willingness to assist 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 country. Every day of Roosevelt's inauguration, March 4, all states had actually stated bank vacations or had limited the withdrawal of bank deposits for cash. As one of his first function as president, on March 5 President Roosevelt announced to the nation that he was declaring a nationwide bank vacation. Almost all monetary organizations in the nation were closed for service throughout the following week. https://hub.docker.com/r/camrusqyia/website |
