This study traces the history of remedial banking legislation enacted during the period of the Great Depression. Two major themes are developed: the role of the banking community in determining commercial bank reform legislation, and the evolution of the New Deal banking policies.
During the Roosevelt administration, three major banking measures--the Emergency Banking Act of 1933, the Banking Act of 1933, and the Banking Act of 1935--were enacted. The first of these, the Emergency Banking Act of 1933, was born of the necessity of the hour. The banks of the nation were closed; their reopening, together with the restoration of public confidence, was essential. This measure achieved that end.
The Banking Act of 1933 was enacted during the first hundred days of the Roosevelt administration. While this measure is usually considered as part of the Roosevelt recovery program, it had only nominal support of the administration. The force of circumstances and public opinion played an important role in the passage of this legislation which increased federal supervision of banking and provided a guaranteed safety for bank deposits.
A study of the evolution of the New Deal banking program necessitates an examination of Franklin Roosevelt's outlook on banking. His views were crucial in determining the banking policies followed during his administration. Roosevelt sought the cooperation of the bankers, but the bankers feared what