MARCH 5, 1933 -- FRANKLIN ROOSEVELT ISSUES EXECUTIVE PROCLAMATION 2039 DECLARING A BANK “HOLIDAY”

1933 -- FRANKLIN ROOSEVELT ISSUES EXECUTIVE PROCLAMATION 2039 DECLARING A BANK “HOLIDAY”
The “holiday” meant that all banks would be closed from March 6-9 to prevent further runs by depositors. Bank failures were a result of earlier speculative investments and banks loaning out more money than they actually possessed (called “fractional reserve banking”). When too many people came to a bank at the same time wanting their deposits, the banks collapsed since they lacked sufficient assets. The bank “holiday” was meant to restore confidence in the banking system.