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With sirens shrieking, a swarm of motorcycles shot down Fifth Avenue, Manhattan, and turned west on 57th Street. After them sped a black limousine with secret service men standing like supernumerary footmen on its running boards. A truck full of trunks followed. It was Thursday, March 2, and Citizen Franklin Delano Roosevelt was moving to the White House.

Thursday, March 2, and New Orleans was completely recovered from its Mardi Gras hangover--recovered as if struck by a douche of cold water, for that morning all Louisiana banks had been closed by proclamation. Hundreds of distracted visitors found they could not get funds to get home. Distracted thousands, natives and visitors, cursed Huey Long's Governor Allen, who the night before had entrained for the inauguration, who with his expense money in his pocket had dictated the proclamation and left it to be issued after his departure.

All Thursday afternoon an inauguration-bound train roared through mist and cold rain, through vistas of New Jersey, Pennsylvania, Delaware and Maryland. Citizen Roosevelt and captains of the Democratic host were speeding to the reward of victory at the polls.

But Citizen Roosevelt had no lust to gloat over the wintry country he was soon to rule. At his side sat little child-faced William Hartman Woodin, soon to be master of the greatest treasury in the world. At his side sat professorial Raymond Moley, raised from the classroom to the councils of the great, but they had few thoughts of pomp and circumstance. The ruthless pressure of events gave them time to consider but one hard fact: that in four days the bank deposits of twelve states had been seized by the frozen hand of Depression.

When Citizen Roosevelt reached the Presidential suite of the Mayflower Hotel, slips of yellow paper were already accumulating: "Boise, Idaho . . . Acting Governor Hill today declared a 15-day bank holiday. . . ." "Salem, Ore. Governor Meier today proclaimed a three-day bank. . . ." "Phoenix, Ariz. Governor Mocur today declared. . . ." "Carson City, Nev. A four-day legal. . . ." "Austin, Texas. . . ." "Salt Lake City. . . ."

Came Friday morning and Citizen Roosevelt awoke from the sleep of the elected to hear that 22 states and the District of Columbia were in the depths of banking restrictions and moratoria.

The New York Stock Exchange opened with trading quiet but prices firm. An hour later the quiet was broken. Shorts took fright: how long could the Exchange remain open? No time at all if great New York banks closed. And when exchanges close prices are usually higher at reopening--said those with memories of 1914. The market began to boil, prices to mount, traders to chime in, eager to own stocks if currency was going to depreciate, bank deposits to be tied up.

Noontime and bankers knew that the public was taking cash out of New York banks, savings banks in particular. A savings bank in Newark had already been besieged. Now in 42nd Street opposite Grand Central Station a crowd gathered in the magnificent Byzantine banking hall of the Bowery Savings Bank, largest private savings bank in the world, one of the oldest mutual savings banks in the U. S., famed for its conservatism and strength. Good natured but eager, bootblacks. Jewish matrons, silk-stockinged stenographers and shawled immigrants carried off cash from the paying windows. Three o'clock and the bank closed with a mob still at its doors. The banking disease had reached Manhattan, heart of the nation's banking system.

At 4 p. m. Citizen Roosevelt called at the White House--to pay the visit of courtesy due on the day before inauguration. Courtesies passed--and were forgotten. What to do about the banks? Citizen Roosevelt sent for Professor Moley, President Hoover for Secretary Mills. Four heads were put together. Messages from Governors were urging a national banking moratorium. Citizen Roosevelt was willing the President should proclaim it. President Hoover was not. Should the Government guarantee 50% of all bank deposits? President Hoover was willing to send an emergency message to Congress. Citizen Roosevelt was not. An hour and a half passed. They parted. Nothing was done.

Bankers everywhere began to count up the toll of damage done. Hasty calculators figured that on Thursday and Friday $500,000,000 of currency had been drained from the Federal Reserve System, $500,000,000 on top of $732,000,000 that had gone into circulation in the previous seven days. An all time record: $116,000,000 worth of gold had been taken from the Federal Reserve banks in one day, mostly by the withdrawal of foreign balances.

Citizen Roosevelt should have gone to bed early on the night before he became President. His mother and children were at a National Symphony Orchestra concert. First number played after the intermission was "On the Prairie," by Composer William H. Woodin. Mr. & Mrs. Woodin had a box and invited guests to hear it, but when the number was played, Mr. Woodin was not there. He was at the Mayflower Hotel along with Secretary of State-to-be Hull, and Texan Jesse Jones of the R. F. C. conferring with Citizen Roosevelt. Worry, worry--what to do about the banks?

When Citizen Roosevelt went finally to bed, little Mr. Woodin rushed with Professor Moley to the Federal Reserve Board which was in session, and connected by long distance telephone with two other meetings: one in the office of George Leslie Harrison, Governor of the Federal Reserve Bank in Manhattan, the other in the office of Eugene Morgan Stevens, Governor of the Federal Reserve Bank in Chicago.

At the New York Bank were gathered: Thomas Lament and Russell Leffingwell, stalwarts of the House of Morgan, Frank Altschul of Lazard Freres, Richard Whitney, president of the Stock Exchange, Mortimer Buckner, head of the Clearing House, Joseph Broderick, State Superintendent of Banks, President Gordon Rentschler of National City Bank and James Perkins, its chairman--successor of Charles Edwin Mitchell whose downfall had helped precipitate the national crisis.

Great was their perturbation, long the ashes protruding from their cigars. How long could the New York banks stand the strain? One answer to that question was suggested when the bankers summoned to their presence a short, stocky athletic man of 64, Daniel Ellis Woodhull, president of American Bank Note Co. The bankers asked him to print $250,000,000 worth of scrip for the New York Clearing House to use in case they needed it.

At midnight they poured out of the Federal Reserve Bank and 16 of the biggest of them mounted into five waiting limousines, sped northward up silent lower Broadway past the slumbering warehouses of Lafayette Street, up Park Avenue, among the taxis of night-club-goers to the home of Governor Lehman who was patiently staying home for them, having given up his trip to the inauguration.

Meanwhile in Chicago a similar group had gathered in the Federal Reserve Bank: Melvin Traylor (First National). Stanley Field (Continental Illinois), Philip Clarke (City National), Solomon Smith (Northern Trust), Howard Fenton (Harris Trust), Charles G. Dawes and their fellows. Theirs were similar problems: $350,000,000 had been drawn from the Chicago banks in two weeks, much of it by banks in neighboring territory where the banking disease was bad. Governor Henry Horner of Illinois sat with them till 5 p.m., then retired to the Congress Hotel to sleep. At 1:45 a.m. he was aroused by telephone and taxied back to the Reserve Bank on South LaSalle Street. Shortly afterward a long distance telephone call announced that Governor Lehman had declared a two-day banking moratorium in New York. Governor Horner followed suit: the two Jewish Governors had the unhappy distinction of closing the banks of the country's two largest financial centres.

But gentile Governors were not allowed to sleep. Before dawn that Saturday morning there were moratoria in Iowa. Missouri, Minnesota, with others following fast. Before 10 a.m. the closing of all the security and commodity exchanges of Chicago and New York had been announced-- all except the Livestock Exchange in Chicago, for livestock is perishable, its distribution must go on. By that hour the three-block-long factory of the American Bank Note plant in The Bronx was roaring with activity, with police at the doors to keep the inquisitive away. At 1 :oo p.m. 100,000 citizens whose banks were closed saw Citizen Roosevelt transformed to President.

Ten a.m. on a bright Sunday morning and a very worried little Mr. Woodin scurried into the Treasury Building. A score of bankers rather the worse for wear after a night on the train on top of several previous nights of worry straggled up the steps--prominent bankers but the same group who were familiar in the Treasury-Department during the late Hoover regime. Of special note was George W. Davison of Central Hanover Bank who fathered the great scrip issue of 1907. Standing by from the Hoover regime were Eugene Meyer, Ogden Mills, Under-Secretary Ballantine, Assistant Secretary Jim Douglas.

After a hasty lunch, Mr. Woodin went to the first meeting of the new Cabinet, to tell his fellows what progress had been made. At 3 p.m. he emerged smiling: "I feel ten years younger than when I entered the conference and discussed the problem with the Cabinet."

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.

3) All banks should allow free access to safety deposit boxes so hoarders could bring their hoardings back to light.

4) All Postal Savings banks should stay open.

5) All banks might cash checks drawn on the Treasurer of the U. S.

6) All banks should be allowed to receive payments due them.

7) In the exercise of all these privileges no bank should pay out gold coin or gold certificates. The nation's gold supply must be conserved.

But this last rule was soon modified by permitting banks to pay out currency (not gold) for payrolls, medicine, the necessities of life. Many a bank was doing business on this basis Tuesday.

National Scrip? But bankers still puzzled over their main problem: how to set the wheels of finance turning. Many of them turned to scrip thoughts. Chicago and a hundred other cities made tentative plans to issue it. There was talk of a national scrip to make nation-wide trade possible, but Secretary Woodin and Banker Davison, the 1907 veteran, opposed this. Main things, and main causes of delay, were 1) to get enough scrip printed. 2) to make the scrip of various cities interchangeable and 3) possibility that scrip could be avoided.

Bottom. Conservative economists look-ing back on last week's events called them the greatest debacle in banking history: the spectacle of a nation with $4,344,000,000 in gold ($2,892,000,000 of it held by the Federal Reserve System) watching powerless while its entire banking system disintegrated state by state. They also drew a moral: that the futile attempt of the nation to convert its $42,000,000,000 of bank deposits into currency sprang from the fact that a few unsound banks which should have been liquidated had instead been nursed along till public confidence was impaired. Finally, the situation gave them hope: Now the banking system of the country must clean house-- sweep out its weaker members before reopening, thereby ending an unsound banking situation that has hung over the conn try retarding business recovery. Said Secretary Woodin: "I think we're on the bottom and can't go any lower."

Guaranty. Preparing for record-quick-acting session of Congress, Speaker Rainey forecast some sort of Govern-ment guaranty of bank deposits. Prob-lem : to make guaranty effective for good banks only.

*Which he himself remembered, had looked up.

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