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In mid-February 1933, banking difficulties developed in Detroit, Michigan. The RFC was willing to make a loan to the struggling bank, the Union Guardian Trust, to avoid a crisis. The bank was among Henry Ford's banks, and Ford had deposits of $7 million in this particular bank. Michigan Senator James Couzens required 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 prior to any other depositor lost a penny. Ford and Couzens had once been partners in the automotive business, however had actually become bitter competitors.
When the negotiations stopped working, the governor of Michigan declared a statewide bank vacation. In spite of the RFC's willingness to assist the Union Guardian Trust, the crisis might not be avoided. The crisis in Michigan led to a spread of panic, first to surrounding states, but eventually throughout the nation. Day by day of Roosevelt's inauguration, March 4, all states had actually declared bank vacations or had actually restricted the withdrawal of bank deposits for cash. As one of his first acts as president, on March 5 President Roosevelt revealed to the country that he was stating a nationwide bank holiday. Practically all banks in the country were closed for organization throughout the following week. https://artmight.com/user/profile/661883 |
