Reply #13: Are you saying there are runs on banks going on right now? [View All]

[muriel_volestrangler]

That would be the situation in which stopping people taking their money out would make sense - when there's a panic, and a pause for reflection will make people realise the situation is OK.

Here's FDR's description of what was going on then:

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 3 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.

http://www.fdic.gov/about/history/3-12-33transcript.html

So how many banks are unable to meet the demand for cash at the moment?