"We are at the end of our string. There is nothing more we can do."
- President Herbert Hoover, March 4, 1933
FDR's election restored hope to many. But before he could take office in March the economy took a disastrous turn.
America's troubled banking system began to collapse.
During January and February 4,000 banks were forced out of business. Because accounts were not government-insured, millions lost their life savings. Panicked depositors rushed to the remaining banks to withdraw their money. These bank runs threatened the entire financial system.
In desperation, 32 states declared "bank holidays" - temporarily shutting their banks to prevent depositors from removing cash. Remaining states put strict limits on withdrawals. In an era before widespread credit cards, this meant people could not make purchases. In many places barter, IOUs, and money substitutes called "scrip" replaced cash transactions.
America's economy faced destruction, but President Hoover hesitated to act. President-elect Roosevelt gave few clues about his intentions.
The 20th Amendment
Roosevelt faced a long delay between his election in November 1932 and his inauguration on March 4, 1933. America's Founders established March 4 as Inauguration Day. Living in an age of slow communication and travel, they wanted to ensure that a newly-elected president had sufficient time to settle his affairs and journey to Washington, D.C. All American presidents from George Washington until FDR took the oath of office on that date.
By the twentieth-century, dramatic improvements in transportation made this long interregnum impractical. In March 1932, Congress passed the 20th Amendment to the Constitution, changing Inauguration Day to January 20. The amendment was ratified by the states on January 23, 1933.
The new amendment took effect in 1937. All subsequent inaugurals have been held on January 20.