At 1:00 a.m., President Franklin D. Roosevelt issued Proclamation 2039, declaring a national emergency and ordering a nationwide “bank holiday.” Banks were told to stop normal transactions, including paying out deposits and dealing in foreign exchange, to halt runs and gold hoarding. The shutdown created time for federal and state officials to plan an orderly reopening.
With banks closed nationwide, Roosevelt called Congress into a special session to address the crisis. The goal was to quickly create legal authority for bank examinations, controlled reopenings, and emergency steps to stabilize payments. This legislative push set up the next phase: reopening only banks judged able to operate safely.
Congress passed, and Roosevelt signed, the Emergency Banking Act. The law expanded federal authority to manage the emergency and created a framework for reviewing banks so that sound institutions could reopen while weak ones were reorganized or closed. It also supported the banking system’s liquidity by strengthening the Federal Reserve’s ability to supply currency against acceptable assets.
Roosevelt issued Proclamation 2040 to keep the March 6 bank-holiday restrictions in effect beyond March 9. This extension preserved the nationwide pause while the new law was put into operation. It also reinforced that the emergency controls would continue until reopening rules were fully in place.
Roosevelt issued Executive Order 6073 to guide how banks could reopen after the holiday. The order centered the reopening process on licensing and supervision, so banks would return to business under defined federal rules rather than reopening all at once. This helped turn a chaotic panic into a staged, review-based restart of the payments system.
As reopening rules took shape, the Treasury issued regulations under the March 6 and March 9 proclamations (and related executive orders). These rules aimed to stop hoarding by allowing banks to question unusually large withdrawals and restrict those believed intended for hoarding. The regulations signaled that reopening would come with controls designed to prevent a renewed run.
On the night before major reopenings, Roosevelt spoke by radio in his first fireside chat, explaining how banks work and why the shutdown was necessary. He described the reopening approach in plain terms and urged people to trust the reviewed banks. The address was designed to rebuild public confidence so deposits would return when doors reopened.
The staged reopening began, with the Federal Reserve Banks resuming operations and reviewed banks in key financial centers reopening first. This step mattered because it restarted core payments and settlement functions needed for payrolls, trade, and basic commerce. Early reopenings also served as a public test of whether confidence would return without renewed runs.
Reopenings continued to widen beyond the first day, extending to additional cities and bank networks (including clearinghouse-linked locations). The gradual pace was meant to match supervision capacity and reduce panic by signaling that reopening was based on review rather than pressure. Each day of orderly operation made it more likely that cash would flow back into banks.
A broader reopening followed as more banks judged viable resumed normal business under licenses. Many institutions still remained closed, reflecting the policy choice to separate “sound” banks from those needing reorganization or closure. This turning point shifted the crisis response from emergency shutdown to supervised reconstruction of the banking system.
Banks that could not reopen immediately were often placed under conservatorship or similar control, giving officials authority to manage them while they were reorganized. State and federal agencies played roles depending on a bank’s charter (state or national), coordinating reopenings and restructurings. This approach aimed to protect depositors and keep the payments system functioning while weak banks were repaired or wound down.
By early April, the licensing program had advanced far enough that a large share of U.S. deposits and banking resources were again available through reopened banks. Reports from this period emphasize that currency began flowing back into banks after reopening, marking a reversal from the run-driven withdrawals of February and early March. The immediate emergency phase ended with banking activity largely restored, even though many weak banks remained under reorganization and some never reopened.
Bank Holiday, the Emergency Banking Act, and State Bank Reopenings (Mar–Jun 1933)