Franklin Delano Roosevelt: Calling a ‘bank holiday’ for a collapsing economy

This is one in a series of 13 Yahoo News interviews with historians about defining moments in presidential leadership. The interviews were conducted by Andrew Romano, Lisa Belkin and Sam Matthews, and the videos were produced by Sam Matthews.

Pulitzer Prize-winning historian Doris Kearns Goodwin, author of “Leadership in Turbulent Times,” spoke to Yahoo News about FDR’s defining moment of presidential leadership: the “bank holiday” he declared almost immediately upon taking office in 1933, in the hope that doing so would stem the run on the banks and help stabilize the financial system.

 

 Excerpts:

As Roosevelt was waiting to be [inaugurated as] president, the banking situation almost completely collapsed. The only other president who came into office with such a huge problem to solve was Abraham Lincoln.

The first thing [FDR] did on assuming office was to give an inaugural that gave hope to the American people. Then he announced, almost the very next day [that] all the banks in the country were going to be closed for a week while he got legislation through the Congress to shore up the weaker banks, got federal money flown to those banks.

The following Monday they were going to open again, but they weren’t sure what would happen. People now had access to their money. Would they come running to take it out? There were huge lines that day, and a fear that that’s what’s happening, but instead they were coming to bring their money back to the bank.

Then once the banks were stabilized, Roosevelt realized the patient is not critical anymore. Now we have to figure out why did the patient get so sick. Once he started to talk about systemic reform, then he got lots of opposition. The business community said “We’re done now. The banks are OK. We’re stabilizing, so let’s just go on like we were before.” But he knew that that wasn’t going to work.

A lot of his bills were challenged on a constitutional assumption of power on the part of the federal government. But he was able to get people jobs, he was able to regulate the stock market, he changed the way we thought about the government and the people. It allowed him to have a huge majority in ’36, and then allowed him to break that third-term tradition in 1940.

If you are a leader, you have to connect with the people who you are leading. He used to say sometimes that there are people who walk the carpet at night wondering, “Have I done right? Have I done wrong? I simply know if I’ve made the best decision with the best information I had at the time, I’m going to go right to sleep.”
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Click below to view the rest of the 13-part series.

Cover thumbnail photo: President Franklin D. Roosevelt declares a national bank holiday in 1933. (Photo illustration: Yahoo News; photos: N.Y. Daily News via Getty Images)