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The conference in the Treasury went on, adjourned for supper, went on again. After his first report from Secretary Woodin, President Roosevelt took the first and long anticipated step of his promised "action": He called the new Congress for March 9. Not till nearly midnight when the deliberations of the Treasury conference had been well mulled over, did he take his first direct action on the banking situation. Calmly in his study, with a fresh cigaret carefully placed in ivory holder, he proclaimed — under the Trading-with-the-Enemy Act of 1917-which gave the President power to regulate foreign exchange and prevent hoarding:
1) From March 6 to 9 inclusive, a complete holiday for all banks in the U. S.
2) Power for the Secretary of the Treasury to make specific exceptions to this rule.
3) Power for the Secretary to direct Clearing Houses to issue scrip.
4) Power for the Secretary to allow the establishment by banks of trust accounts ("cash box" deposits).
The nation took a breathing spell. President Roosevelt slept and rose to tell the Governors of 25 States, summoned a month before to the White House, how they must work as henchmen of the Federal Government to make its banking plans —not yet worked out—effective everywhere throughout the nation.
Gold Standard-First question to arise after the New York Federal Reserve Bank closed, thereby stopping gold payments, was: "Are we off the gold standard?'' Secretary Woodin loudly answered: "We are definitely on the gold standard. Gold merely cannot be obtained for several days." Definite answer to the question will be known March 15 when $700,000,000 of Treasury obligations fall due. Unless the Government makes gold or gold certificates available for their payment, the U. S. will obviously not be on the gold standard. In London, opinion developed that the U. S. would soon be on the "gold bullion basis"—i. e. gold would be available for international trade but not for national circulation.
Meantime although trading in dollar exchange was suspended in London and Paris, unofficial traders in London quoted $3.65 to the pound. Greater repercussions took place in Cuba where after suppressing the news of the bank moratorium in the U. S., President Machado finally declared one for Cuba. When Governor General Theodore Roosevelt cabled from Manila to find out what he should do. the weary Treasury told him to do what he liked. He resigned, handing his office over to Vice Governor John Halliday.
Inflation. In the U. S. a slight tendency toward higher prices was observable. Some slowing up of food-to-market was expected which might result in higher prices for produce. Abroad, U. S. stocks tended to rise—but much less than would have been the case if any real danger of inflation had loomed.
Rules. The bankers of the nation soon began asking Washington precisely how the President's proclamation must be interpreted. Late Monday afternoon little Mr. Woodin. blue-shirted. check-suited, spatted, was able to sit on the edge of his desk and, swinging his feet, explain:
1) All banks could proceed at once to make change, to relieve the shortage of small bills and coin.
2) All banks regardless of condition were empowered to make loans necessary for the movement of food for men, feed for beasts.