Okay.
Before 1933, there was no such thing as "insured" Bank Accounts. Banks could keep as much cash as hand as they wanted--because they figured that nobody would want all their money in all accounts at the same time.
Well, that backfired during the Depression--when people needed ALL the money in their Accounts desperately--and the Banks LITERALY RAN OUT OF AVAILABLE FUNDS.
People began rioting in front of banks to get their money--in many cities--it almost turned into "mob war".
The FIRST THING F.D.R. did when he took office was declare a "Bank Holiday"--ALL BANKS were closed until future notice.
He then hustled through Congress the establishment of the FDIC (Federal Deposit Insurance Corporation.)
The FDIC mandated that in the future, EVERY Bank would run under FDIC stipulations--in other words, ALL accounts were "backed" by the government to the last penny (Up to a limit of $100,000--I believe.)--and Depositers were assured they could get EVERY PENNY OF THEIR MONEY WHENEVER THEY WANTED.
F.D.R. then reopened the Banks under FDIC surveillance--and this Agency--still monitors all Banking done today.
"I say YOU'RE the CUTEST one. No, I say YOU'RE the CUTEST One. And we go on like that from dawn to three."
Updated On: 5/1/05 at 11:09 PM