Question

"The emergency banking legislation passed by the Congress today is a most constructive step toward the solution of the financial and banking difficulties which have confronted the country. The extraordinary rapidity with which this legislation was enacted by the Congress heartens and encourages the country."—Secretary of the Treasury William Woodin, March 9, 1933

What was the aim of the legislation referred to in this excerpt? (5 points)


Reopen banks and convince people to redeposit their cash

Create a federal insurance program for funds held in banks

Separate the banking from the investment industries

Permanently close all of the poorly performing banks

Answer 1

The aim of the legislation referred to in this excerpt is:

Reopen banks and convince people to redeposit their cash

President Franklin Roosevelt said three days after the signing of the Act "“I can assure you that it is safer to keep your money in a reopened bank than under the mattress.”

During the Great Depression, a lot of depositors withdrew their money and kept it at home for fear of losing their money when banks declare bankruptcy. 

The above Act was passed for the purpose of restoring American confidence in banks when they reopen. The banks underwent financial examination and only those banks deemed financially secure were reopened.