WOODIN | FDR's First Treasury Secretary Calms the Bank Panic

Will Woodin (2nd from right) examines a sheet of
greenbacks. He had $2 billion in banknotes printed
and then had Pathé News film them being shipped.

March 9, 2021—On this date in 1933, which was the Thursday after President Franklin D. Roosevelt's Inauguration, the Emergency Banking Relief Act was passed and signed. It may be some kind of legislative record. Congress was called into session with a few days' notice. The bill (EBRA or just EBA) was passed in the House in the first part of the day, in the Senate in the second part. It was then signed by the president.

It didn't go entirely smoothly. Copies of the bill didn't get to all the Members of Congress and it had to be read out in the House. Big pieces were yet to be added to what became the Glass-Steagall Act of 1933, including the deposit insurance (FDIC) portion promoted by Rep. Henry B. Steagall and supported by many (not all) of the banks and the fencing off of insured banks from investment bankers, which was Senator Carter Glass's biggest interest.

When they arrived the previous weekend, Roosevelt and his first Treasury Secretary, William H. Woodin, got to work, supported by the "brain trust" led by Professor Raymond Moley and by some senior people from the outgoing staff of the Treasury and the Federal Reserve System. Woodin and Moley were staying at the Mayflower Hotel, but they worked well into the night trying to nail down the procedures for opening up the banks after they were closed by the national "bank holiday." Banks were closed in all 48 states. 

Roosevelt left Secretary Woodin to handle the legislation and the details of reopening the banks. Roosevelt worked on his first Fireside Chat, which was delivered on the radio   on March 12, 1933. Announcing Woodin's plan to a fearful nation, he said:

The new law allows the twelve Federal Reserve Banks to issue additional currency on good assets and thus the banks that reopen will be able to meet every legitimate call. The new currency is being sent out by the Bureau of Engraving and Printing to every part of the country.

Woodin, as a corporate CEO for 15 years, handled the printing of $2 billion in banknotes like he would any deadline for one of his railcar factories. He was there and he worked late to make sure that all the shifts were cranking out the greenbacks. Woodin made sure that Pathé News was there to record the money coming off the presses and the trucks loading up and zooming off to the different clearinghouse banks.

People got back in line at the banks, this time to redeposit the money they had taken out. By the end of March, two-thirds of the money that had been taken out of the nation’s banks had been redeposited.