What Fresh Hell II: It Does Not Work

clipped from www.americanthinker.com Ironically, however, it was the major investment bankers like the House of Morgan that were diversified enough to weather the Depression. Royalism did not cause the great majority of bank failures. Regulation did. Some 90 percent of failures occurred in states whose "unit" banking laws forbade banks from branching out beyond their base. Canada, which had no such laws, had no such problems. In June 1933, Roosevelt signed into law the Glass-Steagall Act. Banks now had to choose between investment and deposit banking. They could not do both. A classic in political scapegoating, the act rewarded those banks that had done the worst and punished the banks that had done the best. It provided deposit insurance for the struggling banks and forced the successful ones to divest their investment banking operations. a bummed Morgenthau. "We are spending more money than we have ever spent before, and it does not work," he told a congressional hearing in 1939.