The Clinton administration is not considering a presidential
proclamation to close banks in case of a widespread run to withdraw
money due to Y2K-related fears, according to White House and other
officials who spoke with WorldNetDaily.
A spokesman for the President’s Council on Year 2000 Conversion said
her office had not been notified by the president that such an action
was under consideration, nor had it been recommended.
“I’ve never heard anybody mention it or even the possibility of it
come up,” she said.
Title 12 of the
United States Code grants the president the authority to declare a
national holiday, thereby closing all member banks within the Federal
Reserve system, “to provide for the safer and more effective operation
of the national Banking System. …”
A spokesman from the U.S. Treasury Department also confirmed to
WorldNetDaily that indeed the Clinton administration had not mentioned
the possibility of a banking holiday, should consumers make a run on
“Nobody from the administration has mentioned such a possibility to
us,” he said. He also denied knowing whether or not the Federal Reserve
had placed any orders with Treasury to print more money as a hedge
against a possible run. Earlier reports said the Fed was planning to
have about $80 billion in extra reserves distributed to banks before the
end of the year. Some reports have put that amount at nearly $150
president of the Ludwig von Mises Institute
and a columnist for WorldNetDaily, said he wasn’t as concerned about the
president declaring a banking holiday as he was about an exodus by the
public to redeposit cash reserves after fears over Y2K subsided.
“I don’t see Clinton believing he can get away with declaring a
banking holiday and preventing the public from accessing their own
money,” he said. “The American public wouldn’t let him get by with it.”
“In fact, banks are planning to be open Jan. 1, 2000” in an effort to
demonstrate confidence in the system, he said.
However, Rockwell said the potential for hyperinflation as a result
of massive redeposits of cash “could potentially be very devastating” to
the country’s economic infrastructure.
Federal Reserve Chairman Alan Greenspan cautioned Americans not to
withhold or withdraw “inordinate amounts of cash.”
“I’m sure that people will get very wise soon and recognize that the
last thing you want to do is to draw inordinate amounts of currency out
of the banks,” he said, noting that people who have large cash reserves
may be become subject to robberies by thieves who “see an opportunity to
get their hands on some real cash.”
President Clinton also reassured Americans during a White House press
conference Nov. 10, stating that there would be “no major national
breakdowns” of computer systems at the end of the year, including the
country’s banking system.
Expressing confidence that the government is fully prepared for the
Year 2000, Clinton said, “The American people can have full faith that
everything from air traffic control systems to Social Security payment
systems will work like they should.”
“I expect we will experience no major national breakdowns as a result
of the year 2000 date change,” Clinton told reporters on the White House
south lawn. He did say that several local governments, hospitals and
small businesses are lagging behind in making Y2K-related repairs.
John Koskinen, Clinton’s senior Y2K adviser, said organizations that
adopted a “wait and see attitude” toward Y2K compliance were “basically
asking for trouble.” Other experts have warned that Y2K-related
financial problems may be exacerbated by any “run” on cash.