bank holiday

Examples of bank holiday in the following topics:

• Banking and Finance Reform

  • Roosevelt declared a bank holiday, suspending all bank operations in order to prevent bank runs.
  • Previous president Herbert Hoover had considered a bank holiday to prevent further bank runs, but rejected the idea because he was afraid it would only incite incite further panic.
  • The banking holiday thus closed the nation's banks (until new legislation was passed) without prompting panic.
  • By the end of 1933, 4,004 small local banks were permanently closed and merged into larger banks.
  • As the banks reopened, billions of dollars in hoarded currency and gold flowed back into the banks within a month, thus stabilizing the banking system.

• Strengthening the Monetary System

  • With approximately only one third of banks belonging to the Federal Reserve System and thousands of unregulated commercial banks, the banking system was on the verge of collapse.
  • This national bank holiday, with banks closed and Americans having no access to their deposits, gave Congress enough time to propose banking reform legislation.
  • This emergency law, initiated by the Hoover administration, retroactively approved of the bank holiday and presented a set of rules on how and which banks would be redeemed sufficiently stable to be reopened.
  • Separation of commercial banking from investment banking.
  • Regulation of transactions between Federal Reserve member banks and their non-bank affiliates.

• Launching the New Deal

  • The banking system was on the verge of total collapse, the unemployment rate reached nearly a quarter of labor force, and farmers were destroying crops after their market value dropped dramatically.
  • Only 36 hours after taking the presidential oath, Roosevelt closed all the banks (the so-called Bank Holiday).
  • The Emergency Banking Act followed the Proclamation and enabled the government to close weak banks and reopen more stable banks.
  • The initiative helped to rebuild trust in the U.S. banking system.

• The Development of Holidays

  • Public holidays in the United States originated from established federal holidays, which were enacted by Congress in the 1870s.
  • Holidays are most commonly observed with paid time off; however, many holiday celebrations are honored without time off.
  • Federal holidays are only established for certain federally chartered and regulated businesses (such as federal banks) and for Washington, D.C.
  • The history of federal holidays in the United States dates back to June 28, 1870, when Congress created federal holidays to correspond with holidays already celebrated and observed by the States.
  • George Washington's birthday became a federal holiday in 1880.

• The Second Bank of the United States

  • The Second Bank of the United States was chartered in 1816, five years after the First Bank of the United States lost its own charter.
  • The Second Bank of the United States, like the First Bank before it, was created as part of the American System of economics.
  • Taney transferred the government's Pennsylvania deposits in the Second Bank of the United States to the Bank of Girard in Philadelphia.
  • Nicholas Biddle, desperate to save his bank, called in all of his loans and closed the bank to new loans.
  • In 1836, the Bank's charter was allowed to expire.

• Bankers and Lawyers

  • The role of banks in the United States during the Market Revolution was an extremely divisive issue.
  • Anti-federalists viewed the bank's tight control over the nation's currency as a monopoly, and argued that the powers and privileges possessed by the Second Bank were unconstitutional.
  • In 1818, Maryland attempted to impose a tax on the state branch of the Second Bank.
  • The bank refused to pay the tax, and in 1819, Daniel Webster, the bank's attorney as well as director of its Boston branch, brought the case before the Supreme Court.
  • Jackson's war on the bank set the stage for the emergence of modern populism.

• The Bank War and Economic Boom

  • The Bank War refers to the political struggle that developed over the issue of rechartering the Second Bank of the United States (BUS) during the Andrew Jackson administration (1829-1837).
  • Pro-Bank interests warned the public that Jackson would abolish the Bank altogether if granted a second term.
  • Biddle had believed that this would highlight the need for a central bank.
  • Jackson's campaign against the Bank had triumphed.
  • After removing federal funds from the bank, Jackson placed the money in so called "pet banks," which were privately owned.

• The First National Bank

  • In Hamilton's Second Report on the Public Credit, submitted to Congress in 1790, he recommended the chartering of a national bank, modeled on the Bank of England.
  • Hamilton's proposed national bank would function purely as a depository for federal funds, rather than a lending bank.
  • However, unlike the Bank of England, the primary function of the Bank would be such commercial and private investment interests.
  • It was considered highly important, but still secondary, in the nature and purpose of the Bank.
  • Analyze the debate surrounding the charter of the First National Bank

• Jackson's Democratic Agenda

  • This position was one basis for the Jacksonians' opposition to the Second Bank of the United States.
  • The Jacksonians opposed government-granted monopolies to banks, especially the central bank known as the Second Bank of the United States.
  • Despite this, Jackson did not actively seek to destroy or fight the Bank, but did veto the Bank's recharter and subsequently pulled federal reserves out from the institution.
  • By contrast, the Whigs strongly supported the Bank; they were led in their efforts by Daniel Webster and Nicholas Biddle, the bank chairman.
  • Democratic cartoon from 1833 showing Jackson destroying the bank, to the approval of the Uncle Sam-like figure to the right and the annoyance of the bank's president, depicted as the Devil.

• Economic Booms and Busts

  • The suspension of the obligation to back transactions with hard currency spurred the establishment of new banks and the expansion of bank note issues .
  • In May 1837, banks began to accept payment only in specie, forcing a dramatic, deflationary backlash.
  • Run on the Seamen's Savings' Bank during the Panic of 1857
  • Bank runs, in which patrons remove all of their funds from a failing bank, were common features of early banking panics in the U.S.
  • The widespread use of bank notes contributed to the economic crises of 1819 and 1837.