The Emergency Banking Act (also known as the Emergency Banking Relief Act) was an act of the United States Congress spearheaded by President Franklin D. Roosevelt during the Great Depression. It was passed on March 9, 1933. The act allowed a plan that would close down insolvent banks and reorganize and reopen those banks strong enough to survive.
On March 5, 1933, the day after Roosevelt's inauguration, he called a special session of Congress which instituted a mandatory four-day bank holiday. This act provided for the reopening of banks after federal inspectors had declared them to be financially secure.
The bill also gave the Secretary of the Treasury the authority to confiscate the gold of private citizens, in exchange for an equivalent amount of paper currency which was subject to later devaluation with relation to gold.
Despite the importance of the bill, it was passed in immense haste by Congress. Few, if any, Congressmen had the chance to read the bill; most were only able to hear the clerk read it. Quite a few Congressmen vocally protested the haste in which the bill was considered, but nevertheless it was passed sight unseen.
Within 300 days of the act's passage, 5,000 banks had passed inspection and were reopened. Roughly two-thirds of U.S. banks quickly reopened under this act, and faith in banking institutions was somewhat restored.
This act was a temporary solution to a major problem. The 1933 Banking Act passed later that year presented elements of a more permanent solution, including formation of the Federal Deposit Insurance Corporation (FDIC).
notice what this says:
Despite the importance of the bill, it was passed in immense haste by Congress. Few, if any, Congressmen had the chance to read the bill; most were only able to hear the clerk read it. Quite a few Congressmen vocally protested the haste in which the bill was considered, but nevertheless it was passed sight unseen.
and this:
The bill also gave the Secretary of the Treasury the authority to confiscate the gold of private citizens, in exchange for an equivalent amount of paper currency which was subject to later devaluation with relation to gold.
