value from
the level of March, 1933. That situation in that crisis did not call for any
complicated consideration of economic panaceas or fancy plans. We were faced
by a condition and not a theory.
There were just two alternatives: The first was to allow the foreclosures to
continue, credit to be withheld and money to go into hiding, and thus forcing
liquidation and bankruptcy of banks, railroads and insurance companies and a
re-capitalizing of all business and all property on a lower level. This
alternative meant a continuation of what is loosely called "deflation",
the net result of which would have been extraordinary hardship on all property
owners and, incidentally, extraordinary hardships on all persons working for
wages through an increase in unemployment and a further reduction of the wage scale.
It is easy to see that the result of this course would have not only economic
effects of a very serious nature but social results that might bring
incalculable harm. Even before I was inaugurated I came to the conclusion
that such a policy was too much to ask the American people to bear. It
involved not only a further loss of homes, farms, savings and wages but
also a loss of spiritual values—the loss of that sense of security for
the present and the future so necessary to the peace and contentment of
the individual and of his family. When you destroy these things you will
find it difficult to establish confidence of any sort in the future. It was
clear that mere appeals from Washington for confidence and the mere lending
of more money to shaky institutions could not stop this downward course. A
prompt program applied as quickly as possible seemed to me not only justified
but imperative to our national security. The Congress, and when I say Congress
I mean the members of both political parties, fully understood this and gave
me generous and intelligent support. The members of Congress realized that the
methods of normal times had to be replaced in the emergency by measures which
were suited to the serious and pressing requirements of the moment. There was
no actual surrender of power, Congress still retained its constitutional
authority and no one has the slightest desire to change the balance of
these powers. The function of Congress is to decide what has to be done
and to select the appropriate agency to carry out its will. This policy it
has strictly adhered to. The only thing that has been happening has been to
designate the President as the agency to carry out certain of the purposes
of the Congress. This was constitutional and in keeping with the past American tradition.
The legislation which has been passed or in the process of enactment
can properly be considered as part of a well-grounded plan.
First, we are giving opportunity of employment to one-quarter of a
million of the unemployed, especially the young men who have dependents,
to go into the forestry and flood prevention work. This is a big task
because it means feeding, clothing and caring for nearly twice as many
men as we have in the regular army itself. In creating this civilian
conservation corps we are killing two birds with one stone. We are
clearly enhancing the value of our natural resources and second, we
are relieving an appreciable amount of actual distress. This great
group of men have entered upon their work on a purely voluntary basis,
no military training is involved and we are conserving not only our
natural resources but our human resources. One of the great values to
this work is the fact that it is direct and requires the intervention of
very little machinery.
Second, I have requested the Congress and have secured action upon a
proposal to put the great properties owned by our Government at
Muscle Shoals to work after long years of wasteful inaction, and
with this a broad plan for the improvement of a vast area in the
Tennessee Valley. It will add to the comfort and happiness of
hundreds of thousands of people and the incident benefits will reach the entire nation.
Next, the Congress is about to pass legislation that will greatly ease the
mortgage distress among the farmers and the home owners of the nation, by
providing for the easing of the burden of debt now bearing so heavily upon
millions of our people.
Our next step in seeking immediate relief is a grant of half a billion
dollars to help the states, counties and municipalities in their duty
to care for those who need direct and Immediate relief.
In addition to all this, the Congress also passed legislation authorizing
the sale of beer in such states as desired. This has already resulted in
considerable reemployment and, incidentally, has provided much needed tax revenue.
Now as to the future:
We are planning to ask the Congress for legislation to enable the Government
to undertake public works, thus stimulating directly and indirectly the
employment of many others in well-considered projects.
Further legislation has been taken up which goes much more fundamentally
into our economic problems. The Farm Relief Bill seeks by the use of several
methods, alone or together, to bring about an increased return to farmers for
their major farm products, seeking at the same time to prevent in the days to
come disastrous over-production which so often in the past has kept farm
commodity prices far below a reasonable return. This measure provides wide
powers for emergencies. The extent of its use will depend entirely upon what
the future has in store.
Well-considered and conservative measures will likewise be proposed which
will attempt to give to the industrial workers of the country a more fair
wage return, prevent cut-throat competition and unduly long hours for labor,
and at the same time to encourage each industry to prevent over-production.
One of our bills falls into the same class, the Railroad Bill. It seeks to provide
and make certain definite planning by the railroads themselves, with the assistance
of the Government, to eliminate the duplication and waste that is now results in
railroad receiverships and in continuing operating deficits.
I feel very certain that the people of this country understand and
approve the broad purposes behind these new governmental policies
relating to agriculture and industry and transportation. We found
ourselves faced with more agricultural products than we could
possibly consume ourselves and surpluses which other nations
did not have the cash to buy from us except at prices ruinously
low. We found our factories able to turn out more goods than we
could possibly consume, and at the same time we have been faced
with a falling export demand. We have found ourselves with more
facilities to transport goods and crops than there were goods and
crops to be transported. All of this has been caused in large part
by a complete failure to understand the danger signals that have been
flying ever since the close of the World War. The people of this
country have been erroneously encouraged to believe that they could
keep on increasing the output of farm and factory indefinitely and
that some magician would find ways and means for that increased output
to be consumed with reasonable profit to the producer.
But today we have reason to believe that things are a little better than
they were two months ago. Industry has picked up, railroads are carrying
more freight, farm prices are better, but I am not going to indulge in
issuing proclamations of over-enthusiastic assurance. We cannot ballyhoo
ourselves back to prosperity. I am going to be honest at all times with
the people of the country. I do not want the people of this country to
take the foolish course of letting this improvement come back on another
speculative wave. I do not want the people to believe that because of
unjustified optimism we can resume the ruinous practice of increasing
our crop output and our factory output in the hope that a kind providence
will find buyers at high prices. Such a course may bring us immediate and
false prosperity but it will be the kind of prosperity that will lead us into
another tailspin.
It is wholly wrong to call the measure that we have taken Government control of
farming, control of industry, and control of transportation. It is rather a
partnership between Government and farming and industry and transportation,
not partnership in profits, for the profits would still go to the citizens,
but rather a partnership in planning and partnership to see that the plans are carried out.
Let me illustrate with an example. Take the cotton goods industry. It is
probably true that ninety per cent of the cotton manufacturers would agree
to eliminate starvation wages, would agree to stop long hours of employment,
would agree to stop child labor, would agree to prevent an overproduction that
would result in unsalable surpluses. But, what good is such an agreement if the
other ten per cent of cotton manufacturers pay starvation wages, require long
hours, employ children in their mills and turn out burdensome surpluses? The
unfair ten per cent could produce goods so cheaply that the fair ninety per
cent would be compelled to meet the unfair conditions. Here is where government
comes in. Government ought to have the right and will have the right, after
surveying and planning for an industry to prevent, with the assistance of the
overwhelming majority of that industry, unfair practice and to enforce this
agreement by the authority of government. The so-called anti-trust laws were
intended to prevent the creation of monopolies and to forbid unreasonable
profits to those monopolies. That purpose of the anti-trust laws must be
continued, but these laws were never intended to encourage the kind of
unfair competition that results in long hours, starvation wages and overproduction.
And my friends, the same principle that is illustrated by that example
applies to farm products and to transportation and every other field of
organized private industry.
We are working toward a definite goal, which is to prevent the return of
conditions which came very close to destroying what we call modern
civilization. The actual accomplishment of our purpose cannot be
attained in a day. Our policies are wholly within purposes for which
our American Constitutional Government was established 150 years ago.
I know that the people of this country will understand this and will also
understand the spirit in which we are undertaking this policy. I do not
deny that we may make mistakes of procedure as we carry out the policy.
I have no expectation of making a hit every time I come to bat. What I
seek is the highest possible batting average, not only for myself but
for the team. Theodore Roosevelt once said to me: "If I can be right
75 per cent of the time I shall come up to the fullest measure of my hopes."
Much has been said of late about Federal finances and inflation, the gold
standard, etc. Let me make the facts very simple and my policy very clear.
In the first place, government credit and government currency are really
one and the same thing. Behind government bonds there is only a promise to
pay. Behind government currency we have, in addition to the promise to pay,
a reserve of gold and a small reserve of silver. In this connection it is
worth while remembering that in the past the government has agreed to
redeem nearly thirty billions of its debts and its currency in gold, and
private corporations in this country have agreed to redeem another sixty
or seventy billions of securities and mortgages in gold. The government
and private corporations were making these agreements when they knew full
well that all of the gold in the United States amounted to only between
three and four billion and that all of the gold in all of the world
amounted to only about eleven billion.
If the holders of these promises to pay started in to demand gold the first
comers would get gold for a few days and they would amount to about one
twenty-fifth of the holders of the securities and the currency. The other
twenty-four people out of twenty-five, who did not happen to be at the top
of the line, would be told politely that there was no more gold left. We
have decided to treat all twenty-five in the same way in the interest of
justice and the exercise of the constitutional powers of this government. We
have placed every one on the same basis in order that the general good may be preserved.
Nevertheless, gold, and to a partial extent silver, are perfectly good
bases for currency and that is why I decided not to let any of the gold
now in the country go out of it.
A series of conditions arose three weeks ago which very readily might have
meant, first, a drain on our gold by foreign countries, and secondly, as a
result of that, a flight of American capital, in the form of gold, out of
our country. It is not exaggerating the possibility to tell you that such
an occurrence might well have taken from us the major part of our gold
reserve and resulted in such a further weakening of our government and
private credit as to bring on actual panic conditions and the complete
stoppage of the wheels of industry.
The Administration has the definite objective of raising commodity prices to
such an extent that those who have borrowed money will, on the average, be
able to repay that money in the same kind of dollar which they borrowed. We
do not seek to let them get such a cheap dollar that they will be able to pay
back a great deal less than they borrowed. In other words, we seek to correct
a wrong and not to create another wrong in the opposite direction. That is why
powers are being given to the Administration to provide, if necessary, for an
enlargement of credit, in order to correct the existing wrong. These powers
will be used when, as, and if it may be necessary to accomplish the purpose.
Hand in hand with the domestic situation which, of course, is our first
concern, is the world situation, and I want to emphasize to you that the
domestic situation is inevitably and deeply tied in with the conditions
in all of the other nations of the world. In other words, we can get, in
all probability, a fair measure of prosperity return in the United States,
but it will not be permanent unless we get a return to prosperity all over the world.
In the conferences which we have held and are holding with the leaders of other
nations, we are seeking four great objectives. First, a general reduction of
armaments and through this the removal of the fear of invasion and armed attack,
and, at the same time, a reduction in armament costs, in order to help in the
balancing of government budgets and the reduction of taxation. Secondly, a
cutting down of the trade barriers, in order to re-start the flow of exchange
of crops and goods between nations. Third, the setting up of a stabilization
of currencies, in order that trade can make contracts ahead. Fourth, the
reestablishment of friendly relations and greater confidence between all nations.
Our foreign visitors these past three weeks have responded to these purposes in
a very helpful way. All of the Nations have suffered alike in this great
depression. They have all reached the conclusion that each can best be
helped by the common action of all. It is in this spirit that our
visitors have met with us and discussed our common problems. The
international conference that lies before us must succeed. The future
of the world demands it and we have each of us pledged ourselves to the
best Joint efforts to that end.
To you, the people of this country, all of us, the Members of the Congress and
the members of this Administration owe a profound debt of gratitude. Throughout
the depression you have been patient. You have granted us wide powers, you have
encouraged us with a wide-spread approval of our purposes. Every ounce of
strength and every resource at our command we have devoted to the end of
justifying your confidence. We are encouraged to believe that a wise and
sensible beginning has been made. In the present spirit of mutual confidence
and mutual encouragement we go forward.
And in conclusion, my friends, may I express to the National Broadcasting
Company and to the Columbia Broadcasting System my thanks for the facilities
which they have made available to me tonight.
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