Banking panics occur when customers demand immediate liquidation of all the money they have deposited in their bank. The problem arises because a bank generally holds only a fraction of the total money that should be in the accounts of all its customers. With the people of the United States losing faith in the solvency of banks, waves of people demanded all their money at once, forcing banks to liquidate loans to raise the money needed to meet all demands. This immediate liquidation process quickly caused the failure of most banks. This type of banking panic continued until 1933, prompting President Roosevelt to declare a national “bank holiday.” Banks nationwide were closed until they were inspected and could demonstrate to the government that they were solvent. Due to the panic caused by the stock market crash and distrust in the banking system, a fifth of existing banks failed and closed in 1933. “The Federal Reserve did little to try to stem the banking panic. Economists Milton Friedman and Anna J. Schwartz, in the classic study A Monetary History of the United States, 1867–1960 (1963), argued that the death in 1928 of Benjamin Strong, who had been governor of the Federal Reserve Bank of New York, York from 1914, was a significant cause of this inertia. Strong had been a strong leader who understood the central bank's ability to limit panic. His death left a power vacuum at the Federal Reserve and allowed leaders with less sensible views to block effective intervention. The panic caused a dramatic increase in the amount of currency people wanted to hold relative to their bank deposits.” (Pells) This increase in the currency-to-deposit ratio was one of the main reasons why the money supply decreased dramatically by 31% between 1929