The Fireside Chats of Franklin Delano Roosevelt

It was in this spirit thus described by Secretary Root that we
approached our task of reviving private enterprise in March, 1933.
Our first problem was, of course, the banking situation because, as
you know, the banks had collapsed. Some banks could not be saved
but the great majority of them, either through their own resources
or with government aid, have been restored to complete public
confidence. This has given safety to millions of depositors in
these banks. Closely following this great constructive effort we
have, through various federal agencies, saved debtors and creditors
alike in many other fields of enterprise, such as loans on farm
mortgages and home mortgages; loans to the railroads and insurance
companies and, finally, help for home owners and industry itself.

In all of these efforts the government has come to the assistance
of business and with the full expectation that the money used to
assist these enterprises will eventually be repaid. I believe it
will be.

The second step we have taken in the restoration of normal business
enterprise has been to clean up thoroughly unwholesome conditions
in the field of investment. In this we have had assistance from
many bankers and businessmen, most of whom recognize the past evils
in the banking system, in the sale of securities, in the deliberate
encouragement of stock gambling, in the sale of unsound mortgages
and in many other ways in which the public lost billions of
dollars. They saw that without changes in the policies and methods
of investment there could be no recovery of public confidence in
the security of savings. The country now enjoys the safety of bank
savings under the new banking laws, the careful checking of new
securities under the Securities Act and the curtailment of rank
stock speculation through the Securities Exchange Act. I sincerely
hope that as a result people will be discouraged in unhappy efforts
to get rich quick by speculating in securities. The average person
almost always loses. Only a very small minority of the people of
this country believe in gambling as a substitute for the old
philosophy of Benjamin Franklin that the way to wealth is through

In meeting the problems of industrial recovery the chief agency of
the government has been the National Recovery Administration. Under
its guidance, trades and industries covering over 90 percent of all
industrial employees have adopted codes of fair competition, which
have been approved by the President. Under these codes, in the
industries covered, child labor has been eliminated. The work day
and the work week have been shortened. Minimum wages have been
established and other wages adjusted toward a rising standard of
living. The emergency purpose of the N.R.A. was to put men to work
and since its creation more than four million persons have been
reemployed, in great part through the cooperation of American
business brought about under the codes.

Benefits of the Industrial Recovery Program have come, not only to
labor in the form of new jobs, in relief from overwork and in
relief from underpay, but also to the owners and managers of
industry because, together with a great increase in the payrolls,
there has come a substantial rise in the total of industrial
profits–a rise from a deficit figure in the first quarter of 1933
to a level of sustained profits within one year from the
inauguration of N.R.A.

Now it should not be expected that even employed labor and capital
would be completely satisfied with present conditions. Employed
workers have not by any means all enjoyed a return to the earnings
of prosperous times, although millions of hitherto underprivileged
workers are today far better paid than ever before. Also, billions
of dollars of invested capital have today a greater security of
present and future earning power than before. This is because of
the establishment of fair, competitive standards and because of
relief from unfair competition in wage cutting which depresses
markets and destroys purchasing power. But it is an undeniable fact
that the restoration of other billions of sound investments to a
reasonable earning power could not be brought about in one year.
There is no magic formula, no economic panacea, which could simply
revive over-night the heavy industries and the trades dependent
upon them.

Nevertheless the gains of trade and industry, as a whole, have been
substantial. In these gains and in the policies of the
administration there are assurances that hearten all forward-
looking men and women with the confidence that we are definitely
rebuilding our political and economic system on the lines laid down
by the New Deal–lines which as I have so often made clear, are in
complete accord with the underlying principles of orderly popular
government which Americans have demanded since the white man first
came to these shores. We count, in the future as in the past, on
the driving power of individual initiative and the incentive of
fair private profit, strengthened with the acceptance of those
obligations to the public interest which rest upon us all. We have
the right to expect that this driving power will be given
patriotically and whole-heartedly to our nation.

We have passed through the formative period of code making in the
National Recovery Administration and have effected a reorganization
of the N.R.A. suited to the needs of the next phase, which is, in
turn, a period of preparation for legislation which will determine
its permanent form.

In this recent reorganization we have recognized three distinct
functions: first, the legislative or policy making function;
second, the administrative function of code making and revision;
and, third, the judicial function, which includes enforcement,
consumer complaints and the settlement of disputes between
employers and employees and between one employer and another.

We are now prepared to move into this second phase, on the basis of
our experience in the first phase under the able and energetic
leadership of General Johnson.

We shall watch carefully the working of this new machinery for the
second phase of N.R.A., modifying it where it needs modification
and finally making recommendations to the Congress, in order that
the functions of N.R.A. which have proved their worth may be made a
part of the permanent machinery of government.

Let me call your attention to the fact that the national Industrial
Recovery Act gave businessmen the opportunity they had sought for
years to improve business conditions through what has been called
self-government in industry. If the codes which have been written
have been too complicated, if they have gone too far in such
matters as price fixing and limitation of production, let it be
remembered that so far as possible, consistent with the immediate
public interest of this past year and the vital necessity of
improving labor conditions, the representatives of trade and
industry were permitted to write their ideas into the codes. It is
now time to review these actions as a whole to determine through
deliberative means in the light of experience, from the standpoint
of the good of the industries themselves, as well as the general
public interest, whether the methods and policies adopted in the
emergency have been best calculated to promote industrial recovery
and a permanent improvement of business and labor conditions. There
may be a serious question as to the wisdom of many of those devices
to control production, or to prevent destructive price cutting
which many business organizations have insisted were necessary, or
whether their effect may have been to prevent that volume of
production which would make possible lower prices and increased
employment. Another question arises as to whether in fixing minimum
wages on the basis of an hourly or weekly wage we have reached into
the heart of the problem which is to provide such annual earnings
for the lowest paid worker as will meet his minimum needs. We also
question the wisdom of extending code requirements suited to the
great industrial centers and to large employers, to the great
number of small employers in the smaller communities.

During the last twelve months our industrial recovery has been to
some extent retarded by strikes, including a few of major
importance. I would not minimize the inevitable losses to employers
and employees and to the general public through such conflicts. But
I would point out that the extent and severity of labor disputes
during this period has been far less than in any previous,
comparable period.

When the businessmen of the country were demanding the right to
organize themselves adequately to promote their legitimate
interests; when the farmers were demanding legislation which would
give them opportunities and incentives to organize themselves for a
common advance, it was natural that the workers should seek and
obtain a statutory declaration of their constitutional right to
organize themselves for collective bargaining as embodied in
Section 7 (a) of the national Industrial Recovery Act.

Machinery set up by the federal government has provided some new
methods of adjustment. Both employers and employees must share the
blame of not using them as fully as they should. The employer who
turns away from impartial agencies of peace, who denies freedom of
organization to his employees, or fails to make every reasonable
effort at a peaceful solution of their differences, is not fully
supporting the recovery effort of his government. The workers who
turn away from these same impartial agencies and decline to use
their good offices to gain their ends are likewise not fully
cooperating with their government.

It is time that we made a clean-cut effort to bring about that
united action of management and labor, which is one of the high
purposes of the Recovery Act. We have passed through more than a
year of education. Step by step we have created all the government
agencies necessary to insure, as a general rule, industrial peace,
with justice for all those willing to use these agencies whenever
their voluntary bargaining fails to produce a necessary agreement.

There should be at least a full and fair trial given to these means
of ending industrial warfare; and in such an effort we should be
able to secure for employers and employees and consumers the
benefits that all derive from the continuous, peaceful operation of
our essential enterprises.

Accordingly, I propose to confer within the coming month with small
groups of those truly representative of large employers of labor
and of large groups of organized labor, in order to seek their
cooperation in establishing what I may describe as a specific trial
period of industrial peace.

From those willing to join in establishing this hoped-for period of
peace, I shall seek assurances of the making and maintenance of
agreements, which can be mutually relied upon, under which wages,
hours and working conditions may be determined and any later
adjustments shall be made either by agreement or, in case of
disagreement, through the mediation or arbitration of state or
federal agencies. I shall not ask either employers or employees
permanently to lay aside the weapons common to industrial war. But
I shall ask both groups to give a fair trial to peaceful methods of
adjusting their conflicts of opinion and interest, and to
experiment for a reasonable time with measures suitable to civilize
our industrial civilization.

Closely allied to the N.R.A. is the program of Public Works
provided for in the same Act and designed to put more men back to
work, both directly on the public works themselves, and indirectly
in the industries supplying the materials for these public works.
To those who say that our expenditures for public works and other
means for recovery are a waste that we cannot afford, I answer that
no country, however rich, can afford the waste of its human
resources. Demoralization caused by vast unemployment is our
greatest extravagance. Morally, it is the greatest menace to our
social order. Some people try to tell me that we must make up our
minds that for the future we shall permanently have millions of
unemployed just as other countries have had them for over a decade.
What may be necessary for those countries is not my responsibility
to determine. But as for this country, I stand or fall by my
refusal to accept as a necessary condition of our future a
permanent army of unemployed. On the contrary, we must make it a
national principle that we will not tolerate a large army of
unemployed and that we will arrange our national economy to end our
present unemployment as soon as we can and then to take wise
measures against its return. I do not want to think that it is the
destiny of any American to remain permanently on relief rolls.

Those, fortunately few in number, who are frightened by boldness
and cowed by the necessity for making decisions, complain that all
we have done is unnecessary and subject to great risks. Now that
these people are coming out of their storm cellars, they forget
that there ever was a storm. They point to England. They would have
you believe that England has made progress out of her depression by
a do-nothing policy, by letting nature take her course. England has
her peculiarities and we have ours but I do not believe any
intelligent observer can accuse England of undue orthodoxy in the
present emergency.

Did England let nature take her course? No. Did England hold to the
gold standard when her reserves were threatened? No. Has England
gone back to the gold standard today? No. Did England hesitate to
call in ten billion dollars of her war bonds bearing 5 percent
interest, to issue new bonds therefore bearing only 3-1/2 percent
interest, thereby saving the British treasury one hundred and fifty
million dollars a year in interest alone? No. And let it be
recorded that the British bankers helped. Is it not a fact that
ever since the year 1909, Great Britain in many ways has advanced
further along lines of social security than the United States? Is
it not a fact that relations between capital and labor on the basis
of collective bargaining are much further advanced in Great Britain
than in the United States? It is perhaps not strange that the
conservative British press has told us with pardonable irony that
much of our New Deal program is only an attempt to catch up with
English reforms that go back ten years or more.

Nearly all Americans are sensible and calm people. We do not get
greatly excited nor is our peace of mind disturbed, whether we be
businessmen or workers or farmers, by awesome pronouncements
concerning the unconstitutionality of some of our measures of
recovery and relief and reform. We are not frightened by
reactionary lawyers or political editors. All of these cries have
been heard before. More than twenty years ago, when Theodore
Roosevelt and Woodrow Wilson were attempting to correct abuses in
our national life, the great Chief Justice White said:

“There is great danger it seems to me to arise from the constant
habit which prevails where anything is opposed or objected to, of
referring without rhyme or reason to the Constitution as a means of
preventing its accomplishment, thus creating the general impression
that the Constitution is but a barrier to progress instead of being
the broad highway through which alone true progress may be

In our efforts for recovery we have avoided on the one hand the
theory that business should and must be taken over into an all-
embracing government. We have avoided on the other hand the equally
untenable theory that it is an interference with liberty to offer
reasonable help when private enterprise is in need of help. The
course we have followed fits the American practice of government–a
practice of taking action step by step, of regulating only to meet
concrete needs–a practice of courageous recognition of change. I
believe with Abraham Lincoln, that “The legitimate object of
government is to do for a community of people whatever they need to
have done but cannot do at all or cannot do so well for themselves
in their separate and individual capacities.”

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