The Fireside Chats of Franklin Delano Roosevelt


Radio addresses to the American people
broadcast between 1933 and 1944.

March 12, 1933.

I want to talk for a few minutes with the people of the United
States about banking–with the comparatively few who understand the
mechanics of banking but more particularly with the overwhelming
majority who use banks for the making of deposits and the drawing
of checks. I want to tell you what has been done in the last few
days, why it was done, and what the next steps are going to be. I
recognize that the many proclamations from state capitols and from
Washington, the legislation, the treasury regulations, etc.,
couched for the most part in banking and legal terms should be
explained for the benefit of the average citizen. I owe this in
particular because of the fortitude and good temper with which
everybody has accepted the inconvenience and hardships of the
banking holiday. I know that when you understand what we in
Washington have been about I shall continue to have your
cooperation as fully as I have had your sympathy and help during
the past week.

First of all let me state the simple fact that when you deposit
money in a bank the bank does not put the money into a safe deposit
vault. It invests your money in many different forms of credit–
bonds, commercial paper, mortgages and many other kinds of loans.
In other words, the bank puts your money to work to keep the wheels
of industry and of agriculture turning around. A comparatively
small part of the money you put into the bank is kept in currency–
an amount which in normal times is wholly sufficient to cover the
cash needs of the average citizen. In other words, the total amount
of all the currency in the country is only a small fraction of the
total deposits in all of the banks.

What, then, happened during the last few days of February and the
first few days of March? Because of undermined confidence on the
part of the public, there was a general rush by a large portion of
our population to turn bank deposits into currency or gold–a rush
so great that the soundest banks could not get enough currency to
meet the demand. The reason for this was that on the spur of the
moment it was, of course, impossible to sell perfectly sound assets
of a bank and convert them into cash except at panic prices far
below their real value.

By the afternoon of March 3d scarcely a bank in the country was
open to do business. Proclamations temporarily closing them in
whole or in part had been issued by the governors in almost all the

It was then that I issued the proclamation providing for the
nation-wide bank holiday, and this was the first step in the
government’s reconstruction of our financial and economic fabric.

The second step was the legislation promptly and patriotically
passed by the Congress confirming my proclamation and broadening my
powers so that it became possible in view of the requirement of
time to extend the holiday and lift the ban of that holiday
gradually. This law also gave authority to develop a program of
rehabilitation of our banking facilities. I want to tell our
citizens in every part of the nation that the national Congress–
Republicans and Democrats alike–showed by this action a devotion
to public welfare and a realization of the emergency and the
necessity for speed that it is difficult to match in our history.

The third stage has been the series of regulations permitting the
banks to continue their functions to take care of the distribution
of food and household necessities and the payment of payrolls.

This bank holiday, while resulting in many cases in great
inconvenience, is affording us the opportunity to supply the
currency necessary to meet the situation. No sound bank is a dollar
worse off than it was when it closed its doors last Monday. Neither
is any bank which may turn out not to be in a position for
immediate opening. The new law allows the twelve Federal Reserve
Banks to issue additional currency on good assets and thus the
banks which reopen will be able to meet every legitimate call. The
new currency is being sent out by the Bureau of Engraving and
Printing in large volume to every part of the country. It is sound
currency because it is backed by actual, good assets.

A question you will ask is this: why are all the banks not to be
reopened at the same time? The answer is simple. Your government
does not intend that the history of the past few years shall be
repeated. We do not want and will not have another epidemic of bank

As a result, we start tomorrow, Monday, with the opening of banks
in the twelve Federal Reserve Bank cities–those banks which on
first examination by the treasury have already been found to be all
right. This will be followed on Tuesday by the resumption of all
their functions by banks already found to be sound in cities where
there are recognized clearing houses. That means about 250 cities
of the United states.

On Wednesday and succeeding days banks in smaller places all
through the country will resume business, subject, of course, to
the government’s physical ability to complete its survey. It is
necessary that the reopening of banks be extended over a period in
order to permit the banks to make applications for necessary loans,
to obtain currency needed to meet their requirements and to enable
the government to make common sense checkups.

Let me make it clear to you that if your bank does not open the
first day you are by no means justified in believing that it will
not open. A bank that opens on one of the subsequent days is in
exactly the same status as the bank that opens tomorrow.

I know that many people are worrying about state banks not members
of the Federal Reserve System. These banks can and will receive
assistance from members banks and from the Reconstruction Finance
Corporation. These state banks are following the same course as the
national banks except that they get their licenses to resume
business from the state authorities, and these authorities have
been asked by the Secretary of the Treasury to permit their good
banks to open up on the same schedule as the national banks. I am
confident that the state banking departments will be as careful as
the national government in the policy relating to the opening of
banks and will follow the same broad policy.

It is possible that when the banks resume a very few people who
have not recovered from their fear may again begin withdrawals. Let
me make it clear that the banks will take care of all needs–and it
is my belief that hoarding during the past week has become an
exceedingly unfashionable pastime. It needs no prophet to tell you
that when the people find that they can get their money–that they
can get it when they want it for all legitimate purposes–the
phantom of fear will soon be laid. People will again be glad to
have their money where it will be safely taken care of and where
they can use it conveniently at any time. I can assure you that it
is safer to keep your money in a reopened bank than under the

The success of our whole great national program depends, of course,
upon the cooperation of the public–on its intelligent support and
use of a reliable system.

Remember that the essential accomplishment of the new legislation
is that it makes it possible for banks more readily to convert
their assets into cash than was the case before. More liberal
provision has been made for banks to borrow on these assets at the
Reserve Banks and more liberal provision has also been made for
issuing currency on the security of those good assets. This
currency is not fiat currency. It is issued only on adequate
security–and every good bank has an abundance of such security.

One more point before I close. There will be, of course, some banks
unable to reopen without being reorganized. The new law allows the
government to assist in making these reorganizations quickly and
effectively and even allows the government to subscribe to at least
a part of new capital which may be required.

I hope you can see from this elemental recital of what your
government is doing that there is nothing complex, or radical, in
the process.

We had a bad banking situation. Some of our bankers had shown
themselves either incompetent or dishonest in their handling of the
people’s funds. They had used the money entrusted to them in
speculations and unwise loans. This was, of course, not true in the
vast majority of our banks, but it was true in enough of them to
shock the people for a time into a sense of insecurity and to put
them into a frame of mind where they did not differentiate, but
seemed to assume that the acts of a comparative few had tainted
them all. It was the government’s job to straighten out this
situation and do it as quickly as possible–and the job is being

I do not promise you that every bank will be reopened or that
individual losses will not be suffered, but there will be no losses
that possibly could be avoided; and there would have been more and
greater losses had we continued to drift. I can even promise you
salvation for some at least of the sorely pressed banks. We shall
be engaged not merely in reopening sound banks but in the creation
of sound banks through reorganization.

It has been wonderful to me to catch the note of confidence from
all over the country. I can never be sufficiently grateful to the
people for the loyal support they have given me in their acceptance
of the judgment that has dictated our course, even though all our
processes may not have seemed clear to them.

After all, there is an element in the readjustment of our financial
system more important than currency, more important than gold, and
that is the confidence of the people. Confidence and courage are
the essentials of success in carrying out our plan. You people must
have faith; you must not be stampeded by rumors or guesses. Let us
unite in banishing fear. We have provided the machinery to restore
our financial system; it is up to you to support and make it work.

It is your problem no less than it is mine. Together we cannot

May 7, 1933.

On a Sunday night a week after my inauguration I used the radio to
tell you about the banking crisis and the measures we were taking
to meet it. I think that in that way I made clear to the country
various facts that might otherwise have been misunderstood and in
general provided a means of understanding which did much to restore

Tonight, eight weeks later, I come for the second time to give you
my report; in the same spirit and by the same means to tell you
about what we have been doing and what we are planning to do.

Two months ago we were facing serious problems. The country was
dying by inches. It was dying because trade and commerce had
declined to dangerously low levels; prices for basic commodities
were such as to destroy the value of the assets of national
institutions such as banks, savings banks, insurance companies, and
others. These institutions, because of their great needs, were
foreclosing mortgages, calling loans, refusing credit. Thus there
was actually in process of destruction the property of millions of
people who had borrowed money on that property in terms of dollars
which had had an entirely different 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 recapitalizing 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 hardships 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. To this policy it has
strictly adhered. 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 is in the process of
enactment can properly be considered as part of a well-grounded

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 we are relieving an appreciable amount of actual
distress. This great group of men has entered upon its 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.

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