Franklin D. Roosevelt's first action as president was signing into law the Emergency Banking Relief Act, initiating his New Deal in a special session of Congress. This act gave the Federal Reserve the ability to issue as much cash as necessary to certain banks in trouble.
The effect of the Emergency Banking Relief Act was to stabilize American banks, returning confidence to account holders that their money would be safe when deposited. It was a de facto 100 percent federal insurance guarantee for banks that were federally inspected and deemed solvent.
This act was not intended to be a permanent solution. Later, Roosevelt signed the Glass-Steagal Act, which initiated the FDIC to protect bank account holders nationwide. These acts, however, took the United States off the gold standard, an action that increased the risk of inflation.