Roosevelt had only been in office for five days. The country was in the grip of the Great Depression, and the banking system was on the verge of collapse as people rushed to withdraw their savings. Banks were closed in all 48 states. As soon as he took office, FDR called Congress into a special session that would last for three months. He declared a four-day “bank holiday” that shut down all banks and even the Federal Reserve while Congress worked on legislation. The Emergency Banking Act was introduced in the House first, and representatives were in such a hurry to pass it that they didn’t wait for their own individual copies, but rather listened as the single copy was read aloud, and voted on it immediately. In Roosevelt’s first radio Fireside Chat on March 12, 1933, he said: “The new law allows the 12 Federal Reserve Banks to issue additional currency on good assets and thus the banks that reopen will be able to meet every legitimate call. The new currency is being sent out by the Bureau of Engraving and Printing to every part of the country.” The government hoped that these assurances would be enough to lure people — and their money — back to the beleaguered banks.
When the banks began opening up again the next morning, people lined up to bring their money back, and by the end of March, about two-thirds of the money that had been taken out of the nation’s banks had been redeposited. Wall Street took note and the stock market began to rebound. The Emergency Banking Act was designed to be only a temporary measure; later that year, Congress passed the 1933 Banking Act, which established the Federal Deposit Insurance Corporation, or FDIC, which still guarantees deposits against bank failure.