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In mid-February 1933, banking difficulties developed in Detroit, Michigan. The RFC was ready to make a loan to the distressed bank, the Union Guardian Trust, to prevent 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 concurred, he would risk losing all of his deposits prior to any other depositor lost a cent. Ford and Couzens had once been partners in the automobile organization, however had actually become bitter competitors.
When the negotiations stopped working, the guv of Michigan stated a statewide bank vacation. In spite of the RFC's determination to help the Union Guardian Trust, the crisis might not be averted. The crisis in Michigan led to a spread of panic, initially to surrounding states, however ultimately throughout the country. Every day of Roosevelt's inauguration, March 4, all states had stated bank vacations or had actually restricted the withdrawal of bank deposits for money. As one of his first acts as president, on March 5 President Roosevelt revealed to the nation that he was stating an across the country bank holiday. Almost all monetary organizations in the nation were closed for business throughout the following week. https://openclassrooms.com/en/members/ljxz7rj24153 |
