chapter  4
34 Pages

Banking and Currency Crisis

The proclamation, issued Monday morning, March 6, under the old Trading-with-the-Enemy Act, declared a four-day bank holiday during which all banking functions were suspended, though such a minor service as the making of change was permitted. Hazardous practices of country bankers, encouraged by loose state banking laws and slack enforcement, needed only the collapse of crop prices and land values to render them fatal. The Emergency Banking Act gave the President authority over gold during the continuance of the crisis. Herbert Hoover became convinced that all of the alarming manifestations of the crisis—loss of gold stocks, hoarding, bank failures, and the epidemic of bank holidays to prevent more failures—were due to no neglect of his. The Republicans had renamed President Hoover and Vice-President Charles Curtis, standing with Spartan fortitude on the administration's record. The London Conference, in its preliminary plans, was a holdover from Hoover.