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In mid-February 1933, banking problems established in Detroit, Michigan. The RFC was willing 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 concurred, he would run the risk of losing all of his deposits prior to any other depositor lost a cent. Ford and Couzens had actually when been partners in the automobile service, but had actually ended up being bitter rivals.
When the settlements failed, the guv of Michigan declared a statewide bank holiday. In spite of the RFC's determination to assist the Union Guardian Trust, the crisis might not be prevented. The crisis in Michigan led to a spread of panic, initially to surrounding states, but eventually throughout the nation. By the day of Roosevelt's inauguration, March 4, all states had declared bank holidays or had actually restricted the withdrawal of bank deposits for cash. As one of his first function as president, on March 5 President Roosevelt revealed to the nation that he was declaring a nationwide bank vacation. Nearly all banks in the nation were closed for service throughout the following week. https://severinelhb.contently.com/ |
