Indianapolis Times, Indianapolis, Marion County, 15 April 1938 — Page 5

Text of Roosevelt Fireside Chat on ‘Pump Priming’

WASHINGTON, April 15 (U. P.).—The text of President Roosevelt's fireside chat follows:

a Five months have gone by since ‘I last spoke to the people of the _ nation about the state of the nation.

-I had hoped to be able to defer this talk until next week, because, as we all know, this is Holy Week. But what I want to say to you, the people of the country, is of such immediate need and relates so closely -to the lives of human beings and the prevention of human suffering ‘that I have felt that there should be no delay. In this decision I have been strengthened by the thought that by speaking tonight there may be greater peace of mind and the hope of Easter may be more real at firesides everywhere, and that it is not inappropriate to en‘eourage peace when so many of us .are thinking of -the Prince of Peace. Five years ago we faceg a very serious problem of economic and social recovery. For four and a half years that recovery proceeded apace. It is only in the past seven months that it has received a visible setback. ; And it is only within the past two months, as we have waited patiently . to see whether the forces of business itself would counteract it, that it. has become apparent that Government itself can no longer safely fail to take aggressive Government steps to meet it. :

MANY HAVE LOST JOBS

This recession has not returned us to the disasters and suffering of the beginning of 1933. Your money in the bank is safe; farmers are no * longer in deep distress and have greater purchasing power; dangers of security speculation have been minimized; national income is almost 50 per cent higher than in 1932; and Government has an established and accepted responsibility for relief. But I know that many of you have lost your jobs or have seen your friends or members of your families lose their jobs, and I do not propose that the Government shall pretend not to see these things. I know that the effect of our present difficulties has = been uneven: that they have affected

some groups and some localities se-

riously, but that they have been scarcely felt in others. But I conceive the first duty of Government is to protect the economic welfare of all the people in all sections and in all groups. I said in my message opening the last session of Congress that if private enterprise did not provide jobs this spring, Government would take up the slack— that I would not let the people down. We have all learned the lesson that Government cannot afford to wait until it has lost the power to act. | Therefére, I have sent a message of far-reaching importance to the Congress. I want to read to you tonight certain passages from that message, and to talk with you about them. per In that message ‘I analyzed the causes of the collapse of 1929 in these words: “Overspeculation in and overproduction of practically every article or instrument used by man. been put to work, but the products of their hands had exceeded the . purchasing power of their pocketbooks. . . . Under the inexorable law of supply and demand, supplies so overran demand which would pay that production was compelled to * stop. Unemployment and closed factories resulted. Hence the tragic years from 1929 to 1933.” I pointed out to the Congress that the national income—not the Government’s income; but the total of the income of all the individual citjzens and families of the Unitéd States—every farmer, every worker, every banker, every professional man and every person who lived on income derived from investments— that national income amounted, in the year 1929, to 81 billion dollars. By 1932 this had fallen to 38 billion dollars. Gradually, and up to a few months ago, it had risen to a total of 68 billion dollars—a pretty good ~ comeback from the low point.

- ‘FEARS ARE UNFOUNDED’

I then said this to the Congress: “But the very vigor of the. recovery in both durable goods and con- . sumers’ goods brought into’ the picture early in 1937 certain highly un-

WASHINGT

‘gz FF ERTS Kia ld Kangs s

Millions ‘of, people had |

desirable practices, which were in large part responsible for the economic decline which began in the later months ,of that year. Again production outran the ability to buy. “There were many reasons for this overproduction. One was fear —fear of war abroad, fear of inflation, fear, of nation-wide strikes. None of these fears have been borne oy « , . Production in many .important lines of goods outran the ability of the ‘public to purchase them. For example, through the winter and spring of 1937 cotton factories in hundreds of cases were running on a three-shift basis, piling up cotton goods in the factory and in the

hands of middlemen and retailers.

For example, also, automobile manufacturers not only turned out a normal increase of finished cars, but encouraged the normal increase to run into abnormal figures, using every known method to push. their sales. This meant, of course, that the steel mills of the nation ran on a 24-hour basis, and the tire companies and cotton factories speeded up to meet the same type of abnormally stimulated demand. The buying pdwer of the nation lagged behind.

“Thus by the autumn of 1937 the nation again had stocks on hand which the consuming public could not - buy because the purchasing power of the consuming public had not kept pace with the production. “During the same period. . . the prices of many vital products had risen faster than was warranted. . . . In the case of many commodities the price to the consumer was raised well above the inflationary boom prices of 1929. In many lines of goods and materials, prices got so high that buyers and builders ceased to buy or to build.

“. .. The economic process of getting oyt the aw materials, putting them through the manufacturing and finishing processes, selling them to the retailers, selling them to the consumer, and finally using them, got completely out of balance.

“ .. The laying off of workers came upon us last autumn and has been continuing at such a pace ever since that all of us, Government and banking and business and workers, and those faced with destitution, recognize the need for action.”

‘SECURITY GREATEST NEED’

All of this I said to the Congress today and I repeat it to you, the people of the country tonight. - I went on to point out to the Senate and the House of Representatives that all the energies of Government and business must be directed to increasing the national income, to putting more people into private jobs, to giving security and a feeling of security to all people irr all walks of life. I am constantly thinking of all our people—unemployed and employed alike—of their human problems of food and clothing and homes and education and health and old age. You and I agree that security is our greatest need—the chance to work, the opportunity of making a reasonable profit in our business— whether it be a very small business or a large one—the possibility of selling our farm products for enough money for our families to live on decently. I know these are the things that decide the well-being of all our people. Therefore, I am determined to do all in my power to help you attain that security and because I know that the people themselves have a deep conviction that secure prosperity of that kind. cannot be a lasting one except on a basis of business fair dealing and a basis where all from top to bottom share in

gress today that neither it nor the Chief Executive ean afford “to weaken or destroy great reforms

. which, during the past five years,

have been effected on behalf of the American people. In our rehabilitation of the banking structure and of agriculture, in our provisions for adequate and cheaper credit for ail

prosperity, I repeated to the Con-

types of business, in our acceptance of national responsibility for unemployment relief, in our strengthening of the credit of state and local government, in our encouragement of housing, slum clearance and home ownership, in our supervision of stock exchanges and public utility holding companies and the issuance of new securities, in our provision for social security, the electorate of America wants no backward steps taken.

‘RECOGNIZE LABORS RIGHT’

“We have recognized the right of labor to free organization, to collective bargaining; and machinery for the handling of labor relations

is now in existence. The principles are established even though we can all admit that, through the evolution of time, administration practices can be improved Such improvement can come about* most quickly © and most peacefully through sincere efforts to understand and assist on the part of labor leaders and employers alike. “The never-increasing evolution of human sociefy wili doubtless bring forth new problems which will require new adjustments. Our immediate task is to consolidate and maintain the gains achieved.

“In this situation there is no

reason and no occasion for any American to allow his fears to be aroused for his energy and enterprise to be paralyzed by doubt or uncertainty.” I came to the conclusion that the present-day problem calls for action both by the Government and by the people, that we suffer from a failure of consumer demand because of lack of buying power. It is up to us to create an economic upturn. “How and where can and should the Government help to start an upward spiral?” I went on to propose three groups of measures and I will summarize the recommendations. : First, I asked for certain appropriations which are intended to keep the Government expenditures for work relief and similar purposes during the coming fiscal year at the same rate of expenditures as at present. That includes additional money for the Works Progress Administration; additional funds for the Farm Security Administration; additional allotments for the National Youth Administration, and more money for the Civilian Conservation Corps, in order that it can maintain the existing number of camps now in operation.

EXPANSION PROPOSED

These appropriations, made necessary by increased unemployment, will cost, about a billion and a quarter more than the estimatés which I sent to the Congress on the third of January. Second, I told the Congress that the Administration proposes to make additional bank reserves available for the credit needs of the country. About:ione billion four hundred -million dollars of gold now im the Treasury will be used to pay these additional expenses of the Government, and three-quarters of a billion dollars of additional credit will be made available to the banks by reducing the reserves now required by the Federal Reserve Board. These two steps taking care of relief needs and adding to bank credits are in our judgment insufficient by themselves tg start the nation on a sustained upward movement, Therefore, I. came the third kind of Government a¢tion which I consider to be vital. /I said to the Congress: | “You and I cannot /afford to equip ourselves wtih two rounds of amunition where three rouhds are necessary. If we stop at relief and credit, we may find ourselves Without ammunition before the enemy is routed. If we are fully equipped with the

third round of ammunition, we stand to win the battle against adversity.” ; r The third proposal is to make definite additions to the purchasing power of the nation by providing new work over and above the continuing of the old work. First, to enable the United States Housing Authority to undertake the immediate construction of about three hundred million dollars of additional slum clearance projects.’ Second, to renew a public works program by starting as quickly as possible about one billion dollars worth of needed permanent public improvements in states, counties and cities. Third, to add one hundred million dollars to the estimate for Federal aid highways in excess of the amount I recommended in January. Fourth, to add thirty-seven million dollars over. and above . the former estimate of sixty-three million dollars for flood control and reclamation. : Fifth, to add twenty-five million dollars additional for Federal buildings in various parts of the country.

‘THINKING OF DEMOCRACY’

In recommending this program I am thinking not only of the immediate economic needs of the people of the nation, but also of their personal liberties—the most precious possession ‘of all Americans. - I am thinking of our democracy and of the recent trend in other parts of the world away from the democratic ideal. 3 Democracy his disappeared in several other nations—not because the people of those nations disliked democracy, but because they had grown tired of unemployment and insecurity, of seeing their children hungry while they sat helpless in the face of. government confusion, government weakness, through lack of leadership in government. Finally, in desperation, they chose to sacrifice liberty in the hope of getting something to eat. We in- America know that our own democratic institutions can be preserved and made to work. But in order to preserve them we need to act together, to meet the problems of the nation boldly, and to prove that the practical operation of democratic government is equal to the task of protecting the security of the people. Not only our future economic soundness but the very soundness of our democratic institutions depends on the determination of our Government to give employment to idle men. The people of America are in agreement in defending their liberties at any cost, and the first line.of that defense lies in the protection of economic security. Your Government, seeking to protect democracy, must prove that Government is stronger than the forces of business depression.

BREEDS DICTATORS

History proves that dictatorships do not grow out of strong and successful Governments but out of weak and helpless ones. If by Democratic methods people get a Government strong ‘enough to protect them from fear and starvation, their democracy succeeds, but if they do not, they grow impatient. Therefore, the only sure bulwark of continuing liberty is a Government strong enough. to protect the interests of the people, and a people strong enough and well enough informed to maintain its sovereign control over its Government. We are a rich nation; we can afford to pay for security and prosperity without having to sacrifice our liberties into the bargain. In the first century of our repubiic we were short of capital, short of workers and short of industrial pro= duction, but we were rich in the free land, free timber and free mineral

wealth. The Federal Government |

rightly assumed the duty of promoting business and relieving depression by giving subsidies of land and other resources. ' | Thus, from our earliest days we

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private enterprise. But today : the Government no loriger has vast tracts of rich land to give away and we have discovered that we must spend. large sums to conserve: our land from further erosion and our forests from further depletion. The situation is also very different from the old days, because now we have plenty of capital, banks and insurance companies loaded with idle money; plenty of industrial productive capacity and several millions of workers looking for jobs. It is following tradition as well as necessity, if Government strives to put idle money and idle men to work, to increase our public wealth and to build up the health and strength of the people—and to help our system of private enterprise to function.

‘LOST TIME IS LOST MONEY’

It is going to cost something to get out of this recession this way, but the profit of getting out of it will pay for the cost several times

over. Lost working time is lost money. Every day that a workman is unemployed, or a machine is unused, or a business organization is marking time, is a loss to the nation. Because of idle men and idle machines this nation lost 100 billion dollars between 1929 and the spring of 1933. This year you, the people of this country, are making about 12 billion dollars less. than last year. If you think back to the experiences of the early years of this Administration you will remember the doubts and fears expressed about the rising expenses of Government. But to the surprise of the doubters, as we proceeded to carry on the program which included public works and work relief, the country grew richer instead of poorer. It is worthwhile to remember that the annual national people's income was 30 billion dollars more in 1937 than in 1932. It is true that the national debt increased 16 billion dollars, but remember that in

eral billion- dollars worth of assets

debt and that many billion dollars of permanent public improvements —schools, roads, bridges, tunnels, public buildings, parks and a host of other things meet your eye in every one of the 3100 counties in the United States. .

‘SPENDING IS TRIGGER’

No doubt you will be told that the Government spending program of the past five years did not cause the increase in our national income.

vived because of private spending and investment. That is true in part, for the Government spent only a small part of the total. But that Government spending acted as a trigger to set off private activity.

our national production and national income has been so much greater than the contribution of the Government itself. : In pursuance of that thought I said to the Congress today: “I want to make it clear that we do not believe that we can get an adequate rise in national income merely by investing, lending or spending public funds. It is essential in our economy that private funds be put to work and all of us recognize that

Government help to our system of |

That is why the total addition to |

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