|PART THREE , EXAMPLES|
|I . RADIO, NEWSPAPERS, MOTION PICTURES|
|1 . "The Radio Presidents"||139|
|2 . President Roosevelt on the Banks, from Radio Talk; |
|a . in President Roosevelt's words and b . in Basic||142|
|3 . "Psychiatry Good and Bad"||152|
|4 . "Numbers and Reason"||153|
|5 . "Talking is now Possible"||155|
|6 . Selection from a motion picture scene, "Cradle Song"||156|
My friends, 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 of you 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, and 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, ought to be explained for the benefit of the average citizen. I owe this in particular because of the fortitude and the good temper with which everybody has accepted the inconvenience and the 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 your 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 -— in 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 comparatively small proportion of the total deposits in all of the banks.
. . . (more) . . .
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.
My friends, I am here to have a short talk with the men and
women of the United States about banking -— with the small
number of persons who have a clear knowledge of the working
of banks, but more specially with the very much greater number of
you who make use of them for putting your money into an account
or taking it out by checks. I am here to give you an idea of
what has been done in the last day or two, and why it was done,
and what steps are to be taken in the future.
Public orders have been given out in great numbers from State Capitols, and from Washington ; there have, been new laws, Treasury decisions and so on. Most of them have been in the language of banking or of the law, and it is right for their purpose to be made clear in the interests of the common man. There is a special need for me to do this, because of the high hope and good feeling with which everyone has taken the loss of comfort and the troubles caused by the fact that banking business has been stopped for a time.
I am certain that when you are clear about what we in Washington have been doing, I will again have your support as fully as I have had your kind thoughts and your help in the last week.
First of all, let me put forward the simple fact that when you take your money to a bank, the bank does not put it into a safe in which things of value are kept. It puts your money into a number of different forms of credit—government paper, business paper, rights to land and property, and all sorts of agreements for getting it back with interest.
In other words, the bank makes use of your money to keep the wheels of industry and farming going. Only a small part of the money you put into the bank is kept as money —- an amount which in normal times is quite enough for the needs of the public from day to day. In other words, the amount of all the ready money in the country taken together is only a small part of what has been put into all the banks.
. . . (more) . . .
I am hoping, my friends, that you will be able to see from this simple account of what your Government is doing that there is nothing complex, nothing violent, in the process.
Our banking position was bad. Some of our bankers had made it clear that they were without the right qualities for such positions, or were unable to keep straight in their control of the public’s money. They had made use of the money put in their care to take chances and to give credit unwisely.
This was clearly not true in the greater number of our banks, but it was true in enough of them for the public of the United Sates to be shocked for a time into a sense of danger —- so that it got into a condition of mind where it made no sharp divisions but seemed to take it as a fact that the acts of quite a small number of the banks had made them all unsafe. And so it became the business of the Government to get all this straight, and to do it as quickly as possible —- and that is what is now being done.
I do not say that every bank will be open again, or that there will not be some losses ; but there will be no unnecessary losses, and there would have been more and greater losses if we had gone on in the same way. I am even able to say that some at least of the banks in the worst positions will be made safe. Our purpose will be not only to put good banks in working-order again but to get more good banks started through a new organization.
It has been a great experience to me to be made conscious of the signs of an increasing belief in the future all over the country. It will not be possible for me ever to say how much pleasure it has given me to have such true help from the public, through their support for the decisions by which we have been guided, even though all our processes may not have seemed clear.
After all, there is something in the new adjustment of our banking system more important than money, more important than gold ; and that is the public’s belief in us.
Such belief in the face of danger is what is most needed if we are to go through with what we have undertaken. It is necessary for you to have belief in us. Do not be put off your balance by false storks and chance ideas. Let us be unified in putting fear out of our hearts. We have given you an organization by which our banking system may be made safe again, and it is for you t give it your support and get it working.
This is your business, my friends, no less than mine. Together we are certain to come through.
AMONG THE PERSONS IN THE PICTUREJOANNA . Young and pleasing.