bonds, commercial paper, mortgages and many other kinds of loans.
In other words, the bank puts your money to work to keep the wheels
of industry and of agriculture turning around. A comparatively
small part of the money you put into the bank is kept in currency--
an amount which in normal times is wholly sufficient to cover the
cash needs of the average citizen. In other words, the total amount
of all the currency in the country is only a small fraction of the
total deposits in all of the banks.

What, then, happened during the last few days of February and the
first few days of March? Because of undermined confidence on the
part of the public, there was a general rush by a large portion of
our population to turn bank deposits into currency or gold--a rush
so great that the soundest banks could not get enough currency to
meet the demand. The reason for this was that on the spur of the
moment it was, of course, impossible to sell perfectly sound assets
of a bank and convert them into cash except at panic prices far
below their real value.

By the afternoon of March 3d scarcely a bank in the country was
open to do business. Proclamations temporarily closing them in
whole or in part had been issued by the governors in almost all the
states.

It was then that I issued the proclamation providing for the
nation-wide bank holiday, and this was the first step in the
government's reconstruction of our financial and economic fabric.

The second step was the legislation promptly and patriotically
passed by the Congress confirming my proclamation and broadening my