News from 1930: Bank closings and stimulus packages
This comes from the blog News from 1930 on financial news from this day in… 1930 (I don’t what they plan to do after New Year’s Day):
Bankers Trust of Philadelphia closed after heavy withdrawals; had 135,000 depositors, total deposits $42.5M; Penn. Sec. of Banking says financial situation in Philadelphia sound, no reason for depositors in other banks to be alarmed. City National Bank in Miami closes after heavy withdrawals; had deposits of $5.9M; E. Black, Fed. Reserve Bk. of Atlanta Gov., says other Miami banks sound. Four of five banks in Greenwood, Miss. closed, also banks in N.C., Mo., Ind., Ga.
Fed. Reserve policy will make banking funds more plentiful in early 1931 than any time in the current depression. This should eventually extend easy short-term money rates in financial centers to the long term money market and throughout the country; should stimulate bond and mortgage markets. Fed plans to keep close to the current $700M in govt. securities and over $1B credit outstanding even after holidays when demand for credit slackens.
In spite of “bickerings and demagogy,” Congress is making fair progress. It has already passed bills for $116M emergency construction, $45M drought relief, and $150M Farm Board appropriation. Muscle Shoals agreement seems near; World Court issue was postponed. Regular appropriations to be acted on when holiday recess ends Jan. 5.
Maybe Obama will find solace in this little poetic ditty given his plunging poll numbers. You aren’t the only American President who got the blame for a deep economic slump:
Poem by E.R. Hoyt:
“Who’s to blame for China’s woes, Her famine, misery and strife – … Why – Hoover.
Who’s to blame for Europe’s plight, Love replaced by bitter hate.
Doles for hordes of hungry men, Who deserve a better fate? Why – Hoover. …
Who’s to blame for every ill, From chillblains to sore throat?
We cannot face our foolishness, Where can we find a handy goat? Why – Hoover.
When men wake up and face the facts, Admit their greediness and sin
That each and all have been at fault, Appreciation will begin – For Hoover.”
If you don’t see the parallels in policy and outcome, you’re missing some serious historical analogies.