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In mid-February 1933, banking problems established 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 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 risk losing all of his deposits prior to any other depositor lost a penny. Ford and Couzens had when been partners in the vehicle business, but had become bitter rivals.
When the settlements stopped working, the governor of Michigan stated a statewide bank vacation. In spite of the RFC's desire to assist the Union Guardian Trust, the crisis could not be averted. The crisis in Michigan resulted in a spread of panic, initially to adjacent states, but eventually throughout the nation. By the day of Roosevelt's inauguration, March 4, all states had declared bank holidays or had restricted the withdrawal of bank deposits for cash. As one of his first function as president, on March 5 President Roosevelt announced to the country that he was declaring a nationwide bank holiday. Nearly all monetary organizations in the nation were closed for company throughout the following week. https://coub.com/nikolaoszxec346 |
