From Volume 5, Issue Number 18 of EIR Online, Published May 2, 2006
This Week in American History

May 2 — 8, 1933

FDR's Second Fireside Chat: Past Actions and Future Plans

On March 5, 1933, the day after his inauguration, President Franklin Roosevelt called Congress into extraordinary session in order to deal with a steadily escalating banking crisis. A plan to halt the crisis had been developed in the weeks leading up to his inauguration, and when it was about to be implemented, Roosevelt delivered his first "Fireside Chat" over the radio on March 12 to inform the American public about what he and the Congress were doing to reverse the situation.

Once the banking situation was stabilized, Roosevelt moved on to deal with other serious problems such as unemployment, and to send legislation to Congress which would establish the Civilian Conservation Corps and the Tennessee Valley Authority. Again, the President reported to the American people, this time in his Second Fireside Chat on May 7.

Roosevelt began by reminding his audience of the purpose of his fireside chats: "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 confidence.

"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, 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 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 we are relieving an appreciable amount of actual distress.

"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 homeowners 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.

"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 overproduction which so often in the past has kept farm commodity prices far below a reasonable return.

"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 cutthroat competition and unduly long hours for labor, and at the same time courage each industry to prevent overproduction.

"It is wholly wrong to call the measures that we have taken government control of farming, industry, and 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 a 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 90% 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 10% of cotton manufacturers pay starvation wages, require long hours, employ children in their mills, and turn out burdensome surpluses? The unfair 10% could produce goods so cheaply that the fair 90% 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 practices and to enforce this agreement by the authority of government.

"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.

"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.

"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 purpose. 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."

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