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The Reconstruction Finance Corporation, the Gold Standard, and the Banking Panic of 1933

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  • James L. Butkiewicz

Abstract

The banking crisis of 1933, which forced a national holiday closing the entire U.S. financial system, is often blamed on either publication of the names of banks borrowing from the Reconstruction Finance Corporation, a speculative run on the gold-backed dollar due to fears that president-elect Roosevelt would devalue the currency, or both. Evidence presented here indicates that neither factor started the final banking crisis of the depression. The Michigan bank holiday ignited the panic, resulting in a series of bank holidays and a run on the dollar. This chain of events toppled the United States financial system.

Suggested Citation

  • James L. Butkiewicz, 1999. "The Reconstruction Finance Corporation, the Gold Standard, and the Banking Panic of 1933," Southern Economic Journal, Southern Economic Association, vol. 66(2), pages 271-293, October.
  • Handle: RePEc:sej:ancoec:v:66:2:y:1999:p:271-293
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    Cited by:

    1. Charles, Amélie & Darné, Olivier, 2014. "Large shocks in the volatility of the Dow Jones Industrial Average index: 1928–2013," Journal of Banking & Finance, Elsevier, vol. 43(C), pages 188-199.
    2. Butkiewicz, James, 2015. "Eugene Meyer And The German Influence On The Origin Of Us Federal Financial Rescues," Journal of the History of Economic Thought, Cambridge University Press, vol. 37(01), pages 57-77, March.
    3. Gary Gorton & Andrew Metrick, 2013. "The Federal Reserve and Panic Prevention: The Roles of Financial Regulation and Lender of Last Resort," Journal of Economic Perspectives, American Economic Association, vol. 27(4), pages 45-64, Fall.
    4. Anbil, Sriya & Vossmeyer, Angela, 2017. "Liquidity from Two Lending Facilities," Finance and Economics Discussion Series 2017-117, Board of Governors of the Federal Reserve System (U.S.).
    5. James L. Butkiewicz, 2011. "The German Influence on the Origin of U.S. Federal Financial Rescues," Working Papers 11-19, University of Delaware, Department of Economics.
    6. Gary B. Gorton & Andrew Metrick, 2013. "The Federal Reserve and Financial Regulation: The First Hundred Years," NBER Working Papers 19292, National Bureau of Economic Research, Inc.

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