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In mid-February 1933, banking problems developed in Detroit, Michigan. The RFC wanted 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 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 prior to any other depositor lost a penny. Ford and Couzens had once been partners in the automotive company, however had ended up being bitter rivals.
When the settlements 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 avoided. The crisis in Michigan resulted in a spread of panic, first to adjacent states, however eventually throughout the nation. By the day of Roosevelt's inauguration, March 4, all states had actually declared bank vacations or had actually limited the withdrawal of bank deposits for cash. As one of his very first function as president, on March 5 President Roosevelt announced to the nation that he was stating an across the country bank holiday. Nearly all financial organizations in the nation were closed for company throughout the following week. https://giphy.com/channel/hafgarbqxl |
