March 12, 1933
FDR’s First Radio Address
Today is our fifth — and final — excerpt from the first of FDR’s famous “Fireside Chats.”
Personally, it’s my favorite part. The man knows how to close the sale.
All emphasis mine.
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 any new capital that may be required.
I hope you can see, my friends, from this elemental recital of what your government is doing that there is nothing complex, nothing 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 of the United States 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. And so it became the government's job to straighten out this situation and do it as quickly as possible, and that job is being performed.
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 more 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; and it is up to you to support and make it work.
It is your problem, my friends, your problem no less than it is mine. Together we cannot fail.
Again, this man knows how to close the argument.
He addresses the people directly, using the second person — telling them that they are part of the solution.
In fact, he states that their cooperation and confidence is the thing that’s going to make the whole thing work.
He tells them that his solution isn’t perfect, but it’s better than doing nothing and “continuing to drift.”
He closes by stating, essentially, that we are all in this together — and that if we keep the faith in each other we cannot fail as a nation.
I’ve said it before and I’ll say it again: there’s a reason this man helped save the Free World.
Audio begins at 9:54:
Some historic context from Wikipedia on the Emergency Banking Act: A draft law, prepared by the Treasury staff during Herbert Hoover's administration, was passed on March 9, 1933. The new law allowed the twelve Federal Reserve Banks to issue additional currency on good assets so that banks that reopened would be able to meet every legitimate call.
The Emergency Banking Act, an amendment to the Trading with the Enemy Act of 1917, was introduced on March 9, 1933, to a joint session of Congress, and was passed the same evening amid an atmosphere of chaos and uncertainty as over 100 new Democratic members of Congress swept into power determined to take radical steps to address banking failures and other economic malaise.
The EBA was one of President Roosevelt's first projects in the first 100 days of his presidency. The sense of urgency was such that the act was passed with only a single copy available on the floor of the House of Representatives and legislators voted on it after the bill was read aloud to them by Chairman of the House Banking Committee Henry Steagall. Copies were made available to senators as the bill was being proposed in the Senate, after it had passed in the House.
According to William L. Silber: "The Emergency Banking Act of 1933, passed by Congress on March 9, 1933, three days after FDR declared a nationwide bank holiday, combined with the Federal Reserve's commitment to supply unlimited amounts of currency to reopened banks, created 100 percent deposit insurance".
On March 12, the evening before banks began to reopen, FDR gave his first fireside chat, a national radio address explaining the alterations made by the federal government on the banking industry.
Due to confidence in FDR and the proposed alterations, Americans returned $1 billion to bank vaults in the following week.
Tomorrow and Sunday I’m going to jump around in time to some different speeches where FDR is in “fighting mode.”
You’re gonna love it.
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