Friday, September 19, 2008

FDR's Fireside Chat on Backing Up the Banking System

The failure of many banks, runs on banks, and a general climate of financial panic played an important role in the Great Depression. After taking office in early March 1933, President Franklin D. Roosevelt made a radio address (a "Fireside Chat") outlining federal strategy to reopen the banking system. The system had been closed as part of a "bank holiday" declared by president to halt panics and runs. Although many other aspects of New Deal policy often receive more attention, backing up the banking system at least prevented the Depression from worsening. Prevention of financial panics remains an important economic policy in the contemporary world. This is Part 1.