Business had been essentially normal at Oneonta’s three major banking institutions during February 1933. Light to moderate withdrawals had been made at the Wilber National Bank, Citizen’s National Bank and Trust, and Oneonta Building and Loan Association. This wasn’t the case at most banks across the U.S., as currency and gold were being hoarded, because depositors had mounting concerns about the steady news of banks closing in the early years of the Great Depression.
What resulted, beginning on Saturday, March 4, 1933, was the start of national banking holidays. President Franklin D. Roosevelt was sworn into office that same day, and 32 of 48 states had ordered their banks closed, due to the excessive withdrawals.
“The word of the banking holiday came as a surprise to Oneonta’s three banking institutions … and to other banks throughout this vicinity,” it was reported by The Oneonta Star on Monday, March 6. “Bank employes (sic) were at their places of business Saturday morning ready to open as usual when telegrams were received announcing the holidays and ordering all banks to close.”
New York’s closures were ordered by Gov. Herbert H. Lehman.
Initially the banks were set to close only for that Saturday and Monday, but President Roosevelt then extended the closures until Monday, March 13.
“Officials of the three Oneonta banking institutions … reaffirmed their confidence that the banks of this vicinity are in exceptionally good condition and said that although the holiday might have been necessary for some of the largest New York banks, they regretted that even temporary inconvenience had been caused to their depositors.”
Some local businesses found difficulty in securing sufficient change to carry out business as usual on the weekend, but there were no major hardships. Two of Oneonta’s theaters, The Palace and The Oneonta, advertised that a check would be acceptable as a means of admission to shows.
Some communities across the U.S. went briefly to the use of scrip as a means of exchange, and while Oneonta considered it, it never actually went into use. City employees and those working on unemployment relief projects were paid in cash during the bank holidays.
During the week of no banking activities, Roosevelt and Congress passed the Emergency Banking Act on Wednesday, March 8, to encourage public confidence in the banking system, as well as encourage the Federal Reserve to create full deposit insurance in the reopened banks.
Most banks reopened on Monday, and across the nation it was evident that people were anxious to get back to normal in purchasing and banking procedures. Oneonta’s banking institutions resumed normal business on Wednesday.
Public confidence in banking was restored. The three local banks took out an advertisement in the Star on Thursday, March 16, that exclaimed, “Yesterday We Received $440,000 in Deposits.” Nationally, more than half of the hoarded cash in February was deposited in banks on the first day they reopened.
In March 1978, local bankers reflected on their experiences with the bank holidays, and said that overall there was little difficulty during the 10-day disruption.
George Fisher, who had retired from his position as vice president at Wilber National Bank, said the economy was “fairly stable,” based on the D&H Railroad and agriculture. He said that people then didn’t have a lot of money with which to speculate and lose in the stock market.
“Nobody expressed any worry,” said Carl Smith, retired president of what was then the First National Bank of Morris, which later merged with Wilber National Bank. “Some people probably had money in their pockets at the beginning of the bank holiday and were able to get through it.”
“In a rural place where everyone knew everyone,” there was little problem in getting credit, Smith added.
Anthony Pedrone, also a retired vice president at Wilber National Bank said he couldn’t remember any runs on the banks after they reopened after the holidays.
“I have an impression they just felt relieved,” Pedrone said.
The local bankers recalled that one bank in Franklin closed down after the holidays, as well as several small local private banks, but none could recall that any people lost much of their money.
On Monday: Local residents braced for the “Blizzard of 1993.”
City Historian Mark Simonson’s column appears twice weekly. On Saturdays, his column focuses on the area during the Depression and before. His Monday columns address local history after the Depression. If you have feedback or ideas about the column, write to him at The Daily Star, or email him at firstname.lastname@example.org. His website is www.oneontahistorian.com. His columns can be found at www.thedailystar.com/marksimonson.