The Fireside Chats of Franklin Delano Roosevelt

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.

The Congress also passed legislation authorizing the sale of beer
in such states as desired it. This has already resulted in
considerable reemployment and incidentally has provided much needed
tax revenue.

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

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
overproduction 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 encourage each industry
to prevent overproduction.

Our Railroad Bill falls into the same class because 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 resulting in railroad
receiverships and continuing operating deficits.

I am 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 were faced with a falling export
demand. We 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 lack of planning
and 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

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 overenthusiastic
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 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 percent 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
percent of cotton manufacturers pay starvation wages, require long
hours, employ children in their mills and turn out burdensome
surpluses? The unfair ten percent could produce goods so cheaply
that the fair ninety percent 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. 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

The same principle 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 percent 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
billions and that all of the gold in all of the world amounted to
only about eleven billions.

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 everyone 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 second, 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 to 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;
second, a cutting down of the trade barriers, in order to restart
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
this 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
widespread 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.

July 24, 1933.

After the adjournment of the historical special session of the
Congress five weeks ago I purposely refrained from addressing you
for two very good reasons.

First, I think that we all wanted the opportunity of a little quiet
thought to examine and assimilate in a mental picture the crowding
events of the hundred days which had been devoted to the starting
of the wheels of the New Deal.

Secondly, I wanted a few weeks in which to set up the new
administrative organization and to see the first fruits of our
careful planning.

I think it will interest you if I set forth the fundamentals of
this planning for national recovery; and this I am very certain
will make it abundantly clear to you that all of the proposals and
all of the legislation since the fourth day of March have not been
just a collection of haphazard schemes but rather the orderly
component parts of a connected and logical whole.

Long before inauguration day I became convinced that individual
effort and local effort and even disjointed federal effort had
failed and of necessity would fail and, therefore, that a rounded
leadership by the federal government had become a necessity both of
theory and of fact. Such leadership, however, had its beginning in
preserving and strengthening the credit of the United States
government, because without that no leadership was a possibility.
For years the government had not lived within its income. The
immediate task was to bring our regular expenses within our
revenues. That has been done.

It may seem inconsistent for a government to cut down its regular
expenses and at the same time to borrow and to spend billions for
an emergency. But it is not inconsistent because a large portion of
the emergency money has been paid out in the form of sound loans
which will be repaid to the treasury over a period of years; and to
cover the rest of the emergency money we have imposed taxes to pay
the interest and the installments on that part of the debt.

So you will see that we have kept our credit good. We have built a
granite foundation in a period of confusion. That foundation of the
federal credit stands there broad and sure. It is the base of the
whole recovery plan.

Then came the part of the problem that concerned the credit of the
individual citizens themselves. You and I know of the banking
crisis and of the great danger to the savings of our people. On
March sixth every national bank was closed. One month later 90
percent of the deposits in the national banks had been made
available to the depositors. Today only about 5 percent of the
deposits in national banks are still tied up. The condition
relating to state banks, while not quite so good on a percentage
basis, is showing a steady reduction in the total of frozen
deposits–a result much better than we had expected three months

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