Indianapolis Times, Indianapolis, Marion County, 14 March 1938 — Page 4

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Official T ranscript of Important

.

onferences

The first press conference, March 8, 1933 (Proce lure for press conferences

: rete ney legislative program—

Gold stz ndard—Adequate but sound currency —Guarantee of bank deposits.)

THE “RESIDENT-It is very good to’ see you all. My nope Js that the; 2 conferences are going to be mere’- enlarged editions of the kind of “ery delightful family conferences I have béen holding in Albany for the last four years. I am told that what I am about to do w 1 become impossible, but I am going to try it.” We are not going tc have any more written questions: and, of course, while I cannot answer 75 or 100 questions because simply haven't got the time, I sc2 no reason why I should not talk ‘o you ladies and gentlemen off ‘he record in just the way I have b=en doing in Albany and in the wav I used to do in the Navy Quite a number of you, I am glad to see, date back to the days of the previous existerite which I led in Washington. And so I think we shall discontinue the practice of compelling the submitting of questions in writing befor: the conference in order to get ar answer. There will be a great many questions, of course, that I won't answer, either because they are “if” questions—and I never answer them—and Brother Stephenson will tell you what an “ie? question is— MR. STEPHENSON (Reporter)— I ask 40 of them a day.

THE PRESIDENT — And the others, of course are the questions which for various reasons I do not want to discuss,’or I am not ready to discuss or I. do not know anything about. There be a great many ques tions you will. ask that I do not know enough about to anSWer. Then, in regard to news announcements, Steve (Early, Assistant Secretary to the President) and I thought ‘hat it would be best that straight news for use from this office should always without direct quotations. In er words, 1 do not want to be directly quoted,

unless direct quotations are given

out by Steve in writing. That makes that perfectly clear. Then there are two other matters we will talk about: The first is “background information,” which means maierial which can be used by all of you on your own authority and responsibility, not to be attributed to the White House, because I do not want to have to revive the Ananias Club. (Laughter.) The second thing is the “off the record” information which means, -of course, confidential information which is given only to those who attend the conference. Now there is one thing I want to say right now about which I think you will go along with me. I want to ask you not to repeat this “off the record” confidential information either fo your own editors or -to your associates who are not here; because there is always the danger thai while you people may not violate the rule, somebody may forget to say, “This is off the ’ record and confidential,” and the other may use it in-a story. That is to <ay, it is not to be used and not to be told to those fellows who happen not to come around to the conference. In other words, it is only for those present. ~— Now, as fo news) I don’t think there is any. sGaughial) Q—Will you go ngress or

~ send your message?

THE PRESIDENT—Send it. -Q—Will it be brief? THE PRESIDENT—The sifuation demands brevity. Q—On the Hill they say you only) recommend emergency stuff, and that Congress will possibly adjourn next Monday or earlier and recon-: vene a short time after, and take up permanent stuff as well as your ote program. Is that your idea of it?

THE PRESIDENT—I think I can}

put it this way—and this comes under the second category, “back-

ground information” and “not oft

the record,” because there is no reason why vou should not use it in writing your stories. The general thought at the present time is that it is absolutely impossible by tomorrow to draft any complete or permanent lcgislation either on banking, or on-budget balancing, or on anything cise, because the situation, as you zll know, is changing very much from day to day, so much so that if I were to ask for any ¢ and detailed legislation it might be that the details will have to be: ' by & week from today. ore it is necessary — 1 y good guess—that I shall have to ask for fairly broad powers in regard to banking—such powers as would make it possible to meet the changing situation from day to day in

different parts of the country. We

cannot write a petrmanent banking act for he Nation in three days. That is about the size of it.

Q—Do you favor national scrip or |.

scrip issued by clearing houses?

Ine

i HL

ing to keep hold of this banking situation until permanent legislation is enacted? THE PRESIDENT-—OfT the record | answer, yes. Q—Your idea is that after getting through the emergency you: may get a breathing spell until the permanent program is in form. : THE PRESIDENT—Yes, I was coming to that. This is what might be called the “present thought” because everything is subject to change these days within 24 or even 12 hours. The general thought is

{that we would try to get through

the two or three emergency matters as quickly as possible, and that then —and, mind you, I haven't even talked to the Congressional leaders about this, so there is no agreement on it—Congress should recess for I don’t know how long a time but not for very long—for a matter of two or three weeks—to enable me to work out and draft more permanent legislation. . Q—Wnhat is going to happen after Thursday night, Mr. President, when the holiday ends? Are you going to call another one? THE PRESIDENT—That depends on how fast things move. Q=-Depending on what Congress does too THE PRISIAENT <i) ot course, in regard to-certain phases of the fimancial situation, undoubtedly there will be necessary some additional proclamations. That includes, ‘for example, the question of control of gold. That: is obvious. As long as nobody asks me whether we are off the gold standard or gold basis, that is all right, because nobody knows what the gold basis or gold standard really is. . . . Q—May I ask if the long-time settlement of the banking situation is intermeshed with the World Economic Conference? THE PRESIDENT-—I should say on that background information so far as banks go within the United States, no; so far as international exchange goes, yes. I think that is the easiest way of putting it. In other words, the opening of banks and the maintaining of banks once they are opened’ are not connected with the World Economic Conference. Q—In your inaugural address, in which you only touched upon things, you said you are for sound and adequate . THE PRESIDENT—I put it the other way around. I said “ade-

‘quate but sound.” Q—Now that you have more time,

can you define what that is? THE PRESIDENT—No. (Laughter.) In other words—and I should call this “off the record” information—you cannot define the thing too closely one way or the other. On Friday afternoon last we undoubtedly did not have adequate currency. - No question about that. There wasn’t enough circulating money to go around. Q—1I believe that, (Laughter. THE PRESIDENT—We hope that when the banks reopen a great deal of the currency that was withdrawn for one purpose or another will find its way back. - We have got to provide an adequate currency. Last Friday we would have had to provide it in the form of serip, and probably some additional issues of Federal Bank notes. If things go along as we hope they will, the use of scrip can be very greatly curtailed, and the amounts of new Federal Bank issues, we hope, can be also limited to a very great extent. In other words, what you are coming to now really is a managed currency, the adequateness of which will depend on the conditions of the moment. It may expand one week and it may contract another week. That part is all off the record. Q—Can we use that part—managed? - THE PRESIDENT—No, I think no Q—Now you came down to adequacy; but you haven't defined what you think is sound, Don’t you want to define that now? THE PRESIDENT —1 don’t want to define “sound” now. In other: words, in its essence—this is entirely off the record—in its essence we must not put the Government any further in debt because of failed banks. Now, the real mark of delineation between sound and unsound is when the Government starts to pay its bills by starting printing presses. That is about the size of it. Q—<Couldn’t you take that out and give it to us? That's a very good thing at this time. THE PRESIDENT-I don’t think so. There may be some talk about it tomorrow. Q—When you speak of a managed currency, do you speak of a temporary proposition or a permanent system? THE PRESIDENT—It ought to be part of the permanent system— that is off the record—it ought to be part of the permanent system, so we don’t run into. this thing again. Q—Can you tell us anything guaranteeing of bank deposits? THE PRESIDENT—TI can tell you as to guaranteeing bank deposits my own views, and I think those of the old Administration. The.general underlying thought behind the use of the word “guarantee” with respect to bank deposits is that you guarantee bad banks as well as

1good banks. The minute the Gov=ernment starts to do that the Gov-.

ernment runs into a probable ‘loss.

JI will give you an example. Sup-

pose there are three banks in town; one is 100 per cent capable of working out, one 50 per cent and another 10 per cent. Now, if the Government assumes a 100 per cent guarantee, it will lose 50 per cent on one and 90 per cent on the other. If it takes on a 50 per cent

the first and second, but will lose a Jot on the 10 per cent solvent bank. Any form of general guarantee

Ss 8’ definite loss to the Gov-

guarantee, it will lose nothing on.

rors of individual banks, and put a premium on unsound banking in the future. Q—That is off the record? THE PRESIDENT—Yes, Q—Couldn’t you make it background? There is 8 demand for the guarantee’ proposition. ; THE PRESIDENT—As long as you don’t write stories to give the average depositor the thought that his own particular bank isn’t going to pay. That is what I want to avoid, because, when you come down to it, the great maori of banks are going to pay up. many other banks which Te yu pay out the whole thing immediately, but will pay ou: 100 per cent in time. There will be a very small

number of banks that will probabiy.

have to Wg to the, Examiner} ue anybody to get the idea in a the stories that the average bank 8 ont going to pay 100 cents on the dollar, because i “avenge bank is going-to pay. it. .

Discusses Gold Standard, Commodity Prices

{Excerpts from 13th Press Conference, April 19, 1933.) Q—Have you any other ideas in mind on this so-called inflation or

reflation as to the steps to be taken? |

THE PRESIDENT-—Nothing else. I think on the general Subject 4 it is awfully difficult to particula It is a little bit like a Ho il team that has a general plan of

incidents.

They provide a summary of what

to do tomorrow.

March

IN

game against the other side. Now, the captain and the quarterback of

{that team know pretty well what

the next play is going to be and they know the general strategy of the team; but they cannot tell you what the play after the next play is going to be until the next play is run off. ' If the play makes ‘10 vards, the succesding play will be different from what it would have been if they had been thrown for a loss. I think that is the easiest way to explain it. Here is a team that has a perfectly definite objective, which is to make a touchdown, so far as commodity prices go. The basis of the whole thing really comes down to commodity prices. And, this is entirely off the record, the general thought is that we have got to bring commodity prices back to a recent level, but not to the 1929 level except ‘in certain instances. You take, for instance, city real estate in 1929. It was.then altogether too high, and you ought not to bring city real estate back to the 1929 level. That is obvious. On the other hand, farm commodity prices were comparatively low ‘in 1929 and have been going down since rather steadily for five or six years. So that it has got to be a definitely. controlled inflation, because the man on the street does not understand it any more than the average banker understands it. It has got to be a controlled price level. Q—Mr. President, is it still the desire of the United States to go back on the international gold standard? THE PRESIDENT — Absolutely; one of the things we hope to do is to get the world as a whole ack on some form of gold standard.

Slum Clearance - Problem Explained

(Excerpts From’ 108th Press Con-

the City assessment is way ‘above

for. There are a great many tene-ment-house owners that would be tickled to death if they could get 75 per cent of the assessed value: in cash, Obviously, just so long as you have to pay exorbitant real-estate prices in clearing slum properties, you cannot put up any new buildings on a sufficiently sound basis so that you will be able to get your money back. What we would like to see is sorb be I method of getting lower real-estate costs; and, if we can get that, it means we would be able to put up buildings in the City of New York that would rent for $6 to'$7 instead of $10 or $12 a room a month. We are being held up by the real-estate ‘problem. That is the answer. If we can get around that and purchase real estate at a lower price so that we can put up build with low ‘rents, the Fede © Government stands ready to increase very greatly its slum-clearance allotment out of its next year’s aj riation. Q—Subject to that condition? THE PRESIDENT — Subject to that condition. : Q—You mentioned New : York. Does that hold good elsewhere? THE PRESIDENT -— Yes, except that in other places the scale of real-estate prices is a different one, of course. For example, in a great deal smaller e¢ity that has a slum

Deal has done, serve as a guide to understanding what it is doing today, what it plans 4

clearance problem, $6 or $7 a month

Chosen and grouped according to topic, these commentaries from five forthcoming books by the President upon his Administration, record its events, elaborate and make explicit its motives, recall many of its unforgettable

compact the New

PRESIDENT ROOSEVELT’S

do. the employers tive to trade

Comments ¢ on Ruling iv: Affecting Code-Making |

The so. yeu ersten fo. |

cerpts), May 20, 1038:

ts en talline ¢ the dosnt |

about this NRA THE

so...

i PRESIDENT—No, the coal

| ‘THE situation is a good deal like a good | many of the other situbtions that |.

are brought about by the Supreme Court decision. Well, if I were going to Write the story—I am afraid | ation you .are -going to get so

now—if I were going to write the story I would do it something like this: The spot news'is not in Washington! Now, I know what & difficult spot that puts you in, all of you,

EXCLUSIVE!

—Beginning next week :

OWN STORY

The series of articles —exclusively in this city—will appear beginning

23

The Indianapolis T imes

per room is too high. In a city of that kind, you want rentals of $4 or $5 a month per room. ‘

The Bargaining Principle In Labor Legislation

The 130th press conference (excerpts), June 15, 1934; Q—Did you .tell Senator Robinson, sir, that you wanted labor legislation this session before adjourn= ment? THE PRESIENTYes quite a while ago. . . . Q—Mr. President, can you comment on those three or four principal objections to the terms, such as limiting it to one year and restricting power? : THE PRESIDENT-—There is no objection to restricting it to one year. There was definite objection to eliminating the w “organization” from the a ry, of representation. In other words 7-A. This might just as well be made absolutely clear once and for all: About 120,000,000 people out of 125,000,000 understand plain English; there seems to be a very, very small minority that does not understand plain English. . . . Section 7-A says that the Workezs can choose tatives. Now if they want to choose the Ahkoond of t they have a.perfect right to do so. If. they want to choose the Royal aphic Society, they can do. t. If they want to choose a union, of any kind, wey can do that.

Sa on and that means not mere-

have free choice of repre-|_

OF THE NEW DEAL

Contained in an authorized advance publication of his notes and comments to ''The Public Papers and Addresses of Franklin D. Roosevelt."

because you are supposed to represent spot news. The real spot news in ihe present situation is what is happening as a result of the Supreme Court decision in every industry and in every community in the United States. . That is the spot news. I have, for instance, a good many resolutions that have come in. Here |

"is one, right in front of me, that

came in to me 10 minutes ago. It] is from the Cotton Textile Industry Committee resolving that they recommend that the cotfon textile '| industry make no change in the |

conduct of = business and urge.

the industry: to

‘accept this: as a; general policy. ;

by 3 statement the other day," he said that he hoped, and we all

with relation to wages and em ployment in general will be ‘main tained. That is fine. : NX

But, at the same time, what are |

we going. to do; let us say, in the cotton textile indt

Yo Ninety: piso pate

a couple of years ago, ’ t to play ¥

the game on happens-to th on the level if “x5 pave HER You have a situa

ly an individual or a worker, but it | 204 2 means a corporation or a union or | 2nyboay. ‘And that has to be made |

| If

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situation? 4 PRESIDENT dant think i ! Q—Any plans for dealing with the situation? -

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few telegrams that came out of this huge pile. They are all from businessmen, every one. I took out NY the telegrams from hsiessmen. ‘And ‘they illuslate | pretiy well ‘that the infor-

and Hon the radio has failed

of the Supreme Court's decision. In other words, they. are groping, end they have not yet had information from either the press or the radio or from me, which would put this situation in plain, lay language. Well, for instance, here is one A State association of small—well, they are drug-store people. They start off: “We commend you for what you have fone to protect the small businessman from ruthless destructive trade practices. We hope you will continue your sincere efforts to

I'the end that constitutional legisla-

tion be enacted that will save the small businessman from eventual

In other words, “Mr. President, do please get some constitutional legislation that will: save us.” He then read similar letters from many states. I suppose there are several thousand along the same: line, mainly from business men. Now, coming down to the decision itself. What are the implications? For the benefit of those of | you who haven't read it through.

| extinction.”

| I think I can put it this way: The

implications of this decision are much more important than almost certainly any decision of my lifetime or yours, more important than any decision probably since the Dred Scott case, because they bring

Hl the country as a whole up against

a very practical question. That is in spite of what one gentleman said in the paper this n:oming, that I. resented the decision. Nobody resents a Supreme Court decision. You can deplore a Supreme Court decision, and you can point out the effect of it. You dan call the attention of the country to what the implications are as to the future, what the re-

{sults of that decision are if future

decisions follow this decision.” Now. take the decision: itself; In the Schechter case the first part of it states the facts in the case, which you all know. Then it takes up the code itself and it points out that the code was the result of an act of Congress. : It mentions in passing that the act of Congress was passed in a great emergency .and that it sought to improve conditions. immediately through the establishing of fair practices, through the prevention of unfair practices. It then goes on in general and says that even though it was an emergency, it did not make any difference whether it was an emergency or not, it was unconstitutional because it did not set forth very clearly, in detail, definitions of the broad gé which was used in the act. fact, it says that it makes no ‘difference what kind of

| emergency this country ever gets

into, an act has to be constitutional. Of courwe, it might take a month or two of delay to make an .act constitutional and then vou wouldn’t know whether it was constitutional or not—you would have to do the best you could. Now, they have pointed out in regard to this particular act that it was unconstitutional because it delegated certain powers which should have beeh written into the act iteelf. And then there is this Interesting language that bears that ou’. It is on page eight. “We are told that the proVisions of the statute authorizing the adoption of the codes must be viewed in the light of the grave national crisis - with which Congress was confronted. Undoubtedly, - the conditions to which power ‘ is addressed are always to be considered when the ‘exercise of power is challenged. Ex- - conditions may ‘call for extraordinary remedies. But the argument necessarily stops short of an attempt to justify action which lies outside the sphere of constitutional authority. Bat in ry conditions go create or enlarge consti tutional power.” Of course, that is a very interesting implication. Some of us are old enough to Femeniber the war days— a J ne of 1017, Being s y an ag ) leislation

| tion of . powers.

to explain to them the implications |

delegated powers—ge B Jot the most serious implication

WR aver. you come down to something else which is the most important implication, and that relates to interstate commerce Before I go on to the other point there is one interesting paragraph on page 18 in regard to the delega-

“Section 3, of the Recovery Act is without precedent. It supplies no standards for any trade, industry or activity. It does not undertake to prescribe rules of conduct to be applied to particular states of fact determined by appropriate sdministrative procedure. . Instead of prescribing rules of conduct,” : It only prescribed, if you remember, objectives to be sought— “it authorizes the making of’ codes to prescribe them. For that legislative undertaking, Section 3 sets up no stand-. ards, aside from the statement of the general aims of rehabilitation, correction and expansion described in Section 1. ‘In view of the scope of that broad declaration, and of the nature of the few restrictions that are imposed, the discretion of the President in approving or prescribing codes, and thus enacting laws for the government of trade and industry throughout the ‘country, is virtually ettered. We think that the code-mak=-ing authority thus conferred is an unconstitutional delegation of legislative power.” . . Of course, there is a good deal said in the opinion about the im-. of As I remember it there was o one code imposed and that was the alcohol code. I don’t think there was any other code imposed by Executive Order. Now we come down to this big thing. The implication of the provisions as applied to intrastate transactions. Why is it— let me put it this way—why is it that so many of these telegrams are futile? Why is it that so many of these letters and telegrams show that the senders do not realize what the rest of this decision means?

‘Let’s Put the Decision In Plain Lay Language’

Let's put the decision in plain lay language in regard to at least the dictum of the- Court and never mind this particular sick chicken or whatever they call it. That was a question of fact, but of course the Court in ruling on the question of fact about these particular chickens said they were killed in New York and sold and probably eaten in New York, and therefore it was probably intrastate commerce. But of course the Court does not stop there. this decision, at least by dictum— and “remember that dictum is not always followed in the future—has gone back ‘to the old Knight case

application of interstate commerce to goods in transit—nothing else! * Since 1885 the Court in various decisions has enlarged on the definition of interstate commerce—railroad cases, coal cases and so forth and so on. It was clearly the opinion of the Congress before this decision and the opinion of various attorneysgeneral,’ regardless of party, that the .words “interstate: commerce” applied not only to an actual shipment of goods, but also to a great many other things that affected interstate commerce. . . . The whole tendency over these years has been to view the interstate commerce clause in the light of present-day civilization. The country was in the horse-and-buggy age when that clause was written and if you go back to the debates ‘on the Federal ‘Constitution. you will find in 1787 that one of the impelling motives for putting in that clause was this: There wasn't much interstate commerce at all —probably 80 or 90 per cent of the human beings in the 13 original states were completely self-support--ing within theirwn communities. They got their own food, their own clothes; they swapped or bought with any old kind of currency, because we had 13 different kinds of cwmvency. They bought from their nvighbors and sold to their neighbors. However, there was quite a fear that each of the 13 States could impose tariff barriers against each other and they ruled that out. They would not let the States impose tariff barriers, but they were afraid that the lawyers of that day would find some other method by which a State could discriminate its neighbors on one side or the other, or discriminate in favor of its neighbors on one side or the other. Therefore, the ‘interstate com-

| merce clause was put into the |

Constitution with the general objective of Proveniing discrimination by one these Sovereign States one another Sqversign

‘There Were No Social . 8. Questions Then’

In fact the Court in|.

in 1885, which in fact limited any |

against | terstate

y of the farmer does ect today on the manu~ The

eI Bir ty of New York has an effect on the prosperity of the farmer ‘in Wisconsin, and so it goes. We are interdependent—we are tied in to-

gether. And the hope has been that we could, through a period of years, interpret. the interstate commerce clause of the Constitution in the

our hope that under the interstate .

| commerce clause we could

recognize by legislation and by judicial decision that a harmful practice in one section of the country could be prevented on the theory that it was doing harm to another section of the country. That was why the Congress for a good many years, and most a. have had had the thought that in drafting legislation we could depend on an interpretation that would enlarge the Constitutional meaning of interstate commerce to include not only those matters of direct interstate commerce, but also those mate

| ters which indirectly affect inter

state commerce.

‘The Implication Is ... That

We Have Gone Back’ The implication, largely because of what we call ‘obiter dicta in this opinion, the implication of

no it tion anything that indirectly may affect interstate commerce. That hereafter they will decide the only thing in interstate commerce over which they can permit the exercise of Federal juris. diction is goods in transit plus, perhaps, a very small number of transactions "which would directly affect goods in transit, Furthermore, they say on Dpage 19, “(1) Were these transactions ‘in’ interstate commerce? Much is made of the fact that almost all the poultry coming to New York is sent there from other States “When defendants had made their purchases, whether at the West yashingion ashington Market in New York ty or at the railroad terminals serving the City, or elsewhere, the poultry was trucked to their slaughter houses in Brooklyn for local disposition. The interstate transactions in relation to that poulizy then ended.” Then to tome to, the next point, they take one very interesting stand; first they talk about necessary and well-established distinc tions between the direct and ine direct effects. They quote a nume ber of cases and finally come down to the quotation from Industrial Association vs. United States at the top of page 23: 3 “The alleged conspiracy and the acts here complained of spent their intended and direct force dpon a local site uation—for building is as ° essentially local as mining, manufacturing or (

come ‘mercial demand, interstate trade was curtailed either generally or in specific ine stances, that was a fortuis tous consequence so ‘remote and indirectly as plainly to cause it to fall outside the reach of the Sherman Act.”

Now that is interesting because the implication is this: We have in this country about five major human activities. One is transportae tion and that is not listed here. The other four are; first, cone struction. . I suppose the theory is that the building, even though the materials come from other states and none of the materials come from the locality of the building, that the building is part of the land and therefore that nothing entering into the erection of that build ing can have anything to do with the interstate commerce clause of the Constitution.

Stresses Manufacturing And Mining Problems

The. next, the third large occupation, is mining—that is to say the taking of coal, oil or copper or anything else out of thé ground. The: implication there is that no matter where the coal or oil or copper goes it. cannot be considered to have any relationship to interstate commerce because it came out of one place. It was a part of a place or locus. Another great occupation is manufacturing. The implication is that if I manufacture at Hyde Park, New York, let us say, a national article such as a national brand of tooth or a national brand of automobiles while I only sell a few tubes of tooth paste or four or five cars in the place of manufacture at Hyde Park, and sell the rest in incommerce, the actual han. ufacturing itself seems to closely tied to the actual Ph ig that it does not make any difference where the goods go and therefore the interstate commerce clause

any of the elements of the manufacturing at that place, either to come from