Assigned blog #2

The Banking Act of 1935!!!

The great depression

The Great Depression, a worldwide economic downturn, hits the U.S. in 1929 and lasts until about 1939. It is the longest and most severe depression experienced by the U.S. Its social and cultural effects are staggering. Many banks fail, many because they have made loans to stock market speculators that are never repaid.
As the Depression eases into a national emergency, reaching its height between 1932 and 1933, the U.S. government establishes several agencies as a means for discharging new and emergency functions. The FDIC is one of these agencies.
Other effects include the following: Industrial production declines 47 percent, GDP falls 30 percent, wholesale price index declines (deflation) 33 percent, unemployment exceeds 20 percent.
In many ways, our lives are still governed by legislation spawned by the crash and the Depression.
President Franklin D. Roosevelt initiates a legislative agenda, known as the New Deal, for rescuing the U.S. from the Great Depression. The major initiatives of the New Deal: stock market reform, aid to the unemployed, and strengthening the banking system.

1935

There are 9,027 state banks and 4,692 national banks. The approximate number of banks remains consistent until the 1980s.
26 FDIC-insured banks fail.
The Federal Credit Union Act of 1935
This act establishes federal credit unions.

The Banking Act of 1935
This act:

Establishes the FDIC as a permanent agency of the government
Provides for permanent deposit insurance and maintains it at the $5,000 level.
The Federal Deposit Insurance Corporation (FDIC) was initially established by the Banking
Act of 1933 (P.L. 73-66, 48 Stat. 162) in response to the depression era closure of banks. Two years later, in the 1935 Banking Act, the FDIC was made a permanent agency of the federal government. It further provided that the stock of the FDIC was to be purchased by the Secretary of the Treasury on behalf of the United States, and that the deposit insurance system was to be maintained through assessments directly on the insured institutions. Additionally, this Act modified the Federal Reseve Act by replacing the Federal Reserve Board with a seven member Board of Governors and disqualified the Comptroller of the Currency and the Secretary of the Treasury from membership. It authorized the Board to set reserve requirements for member banks on time and savings deposits, and restructured the Federal Open Market Committee (FMOC) which then became an extension of the Federal Reserve Board, along with five district representatives.
Key points:
Permanent establishment of the FDIC and a funding stream for the insurance fund.
A newly established Federal Reserve Board of Governors
Why is it still relevant?
The Insurance fund and FDIC guidelines for safe and sound operations continue to bolster public confidence in the U.S. banking system.

Fire Side Chats

According to Roosevelt’s principal speechwriter Judge Clinton Sorrel, he first used "fireside chats" in 1929 during his first term as Governor of New York. Roosevelt faced a conservative Republican legislature so during each legislative session he would occasionally address the citizens of New York directly. He appealed to them for help getting his agenda passed. Letters would pour in following each of these "chats," which helped pressure legislators to pass measures Roosevelt had proposed. He began making the informal addresses as President on March 12, 1933, during the Great Depression.
While developing programs to help America emerge from the Great Depression, Roosevelt also needed to calm the fears and restore the confidence of Americans and to gain their support for the programs of the New Deal, including the NRA. One of the ways FDR chose to accomplish this was through the radio, the most direct means of access to the American people. During the 1930s almost every home had a radio, and families typically spent several hours a day gathered together, listening to their favorite programs. Roosevelt called his radio talks about issues of public concern "Fireside Chats." Informal and relaxed, the talks made Americans feel as if President Roosevelt was talking directly to them. Roosevelt continued to use fireside chats throughout his presidency to address the fears and concerns of the American people as well as to inform them of the positions and actions taken by the U.S. government.
The topic of this lesson's featured document, Fireside Chat on the Purposes and Foundations of the Recovery Program, was the NRA. Although this radio message, given on July 24, 1933, addressed some of the problems and issues of the Great Depression, it also focused on what industry, employers, and workers could do to bring about economic recovery.
quote from a fireside chat. "I owe this [radio talk with the people] in particular because of the fortitude [bravery] and good temper with which everybody has accepted the inconvenience and hardships of the banking holiday." --Franklin D. Roosevelt

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