EDITOR’S NOTE: Each week we cross-post an excerpt from Katrina vanden Heuvel’s column at the WashingtonPost.com. Read the full text of Katrina’s column here.
“I want to talk for a few minutes with the people of the United States about banking.”
So began President Franklin D. Roosevelt’s fireside chats on a bleak evening in March 1933—the darkest days of America’s Great Depression. The stock market had lost 75 percent of its value stemming from the 1929 crash. At least four thousand banks were completely drained of funds. American families lined up at soup kitchens, with one in four households out of work. Upon entering office, FDR swiftly declared a national bank holiday and signed the Emergency Banking Act, preserving the savings of millions of Americans.
But there was a problem: The public no longer had any faith in banks. Without their trust, FDR’s efforts to keep the country afloat would be futile. So, he set out to win them over.
He joined 60 million anxious Americans in their living rooms and kitchens, addressing them fondly as “friends.” He assured them “that it is safer to keep your money in a reopened bank than under the mattress.” When banks reopened, many Americans pulled their cash out of mattresses and Mason jars and rushed to reinvest. The markets saw a historic rise, and within two weeks, the banks recovered almost half the money they had lost.
Read the full text of Katrina’s column here.