Fighting "Fear Itself": The Bank Holiday of March 1933

In the month preceding Franklin Roosevelt’s inauguration, a panic overwhelmed the U.S. banking system. Immediately after assuming office, Roosevelt declared a nationwide bank holiday and vowed to reopen only sound banks. Five days after the holiday ended, nearly 11,000 of the nation's more than 18,000 commercial banks had reopened. Nearly 4,000 never reopened or had to be reorganized. The holiday is often credited with helping reestablish financial stability, but little is known about the mechanisms underlying the reopening process and the way in which payment systems were restored. We detail the process of reopening the banking system using narrative records provided by contemporary policymakers. Further, with new data on the date and type of reopenings, we provide descriptive statistics showing spatial and serial relationships of bank operations. Lastly, we discuss the rehabilitation programs that followed after the Holiday.