What is a "Bank Holiday"... sounds agreeable ... like a holiday in Cyprus.
During the 1920s, a typical year might find 700 banks failing, with deposits totaling $170 million. In 1930, 1350 banks failed, with deposits of $837 million; in 1931, 2,293 banks collapsed, with deposits of $1,690 million; and in 1932, 1,453 banks failed, having $706 million in deposits. This enormous increase in bank failures was enough to give any bank pause—particularly when the bankers knew in their hearts that no bank (outside of the nonexisting ideal 100 percent bank) can ever withstand a determined run.
As a reaction, one by one, states imposed "bank holidays", thus permitting the banks to stay in business while refusing to pay virtually all of the just claims of their depositors (a pattern that had become almost traditional in America since the Panic of 1819).
Nevada had begun as early as October, 1932, but only 9 out of 20 banks took advantage of the state holiday, the others remaining open. Louisiana declared a brief holiday for the hard-pressed New Orleans banks in early February, but the bank holiday movement began in earnest with the proclamation of an eight-day holiday on February 14, 1933, by Governor William Comstock of Michigan. This action precipitated the bank runs and deflation of the latter part of February. For if one state could, with impunity, destroy property right in this manner, then others could—and did—and depositors began an intense scramble to take their money out of the banks.
On the request of bankers for government to save them from the consequences of their own mistakes, state after state, beginning with Indiana, declared moratoria and bank holidays. Governor Ritchie of Maryland declared a three-day bank holiday on February 24. On February 27, the member banks of the Cleveland Clearing House Association decided arbitrarily to limit withdrawals from all their branches, and no state officials acted to stop this blatant infringement of property right. They were promptly followed by Akron and Indianapolis banks. On February 27, the Ohio, Pennsylvania, and Delaware legislatures authorized the state banking officials to restrict the right of withdrawal of deposits.
By March 4, every state in the Union had declared a bank holiday. President Roosevelt closed down all the banks throughout the nation for an entire week, from March 6 to 13, with many banks remaining closed even longer.