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In mid-February 1933, banking troubles established 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 required that Henry Ford subordinate his deposits in the troubled bank as a condition of the loan. If Ford concurred, he would risk losing all of his deposits before any other depositor lost a cent. Ford and Couzens had actually when been partners in the vehicle business, but had become bitter competitors.
When the negotiations stopped working, the guv of Michigan stated a statewide bank holiday. In spite of the RFC's determination to help the Union Guardian Trust, the crisis might not be averted. The crisis in Michigan resulted in a spread of panic, initially to nearby states, however ultimately throughout the country. By the day of Roosevelt's inauguration, March 4, all states had declared bank vacations or had 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 country that he was declaring a nationwide bank vacation. Almost all monetary organizations in the nation were closed for service during the following week. http://www.xn----btbbc1bctice0bhec4i.xn--p1ai/user/cormaneaww |
