Part 8

On my recent trip many people have talked to me about the millions of men and women and children who still work at insufficient wages and overlong hours.

American industry has searched the outside world to find new markets--but it can create on its very doorstep the biggest and most permanent market it has ever had. It needs the reduction of trade barriers to improve its foreign markets, but it should not overlook the chance to reduce the domestic trade barrier right here--right away--without waiting for any treaty. A few more dollars a week in wages, a better distribution of jobs with a shorter working day will almost overnight make millions of our lowest-paid workers actual buyers of billions of dollars of industrial and farm products. That increased volume of sales ought to lessen other cost of production so much that even a considerable increase in labor costs can be absorbed without imposing higher prices on the consumer.

I am a firm believer in fully adequate pay for all labor. But right now I am most greatly concerned in increasing the pay of the lowest-paid labor--those who are our most numerous consuming group but who today do not make enough to maintain a decent standard of living or to buy the food, and the clothes and the other articles necessary to keep our factories and farms fully running.

Farsighted businessmen already understand and agree with this policy. They agree also that no one section of the country can permanently benefit itself, or the rest of the country, by maintaining standards of wages and hours far inferior to other sections of the country.

Most businessmen, big and little, know that their government neither wants to put them out of business nor to prevent them from earning a decent profit. In spite of the alarms of a few who seek to regain control of American life, most businessmen, big and little, know that their government is trying to make property more secure than ever before by giving every family a real chance to have a property stake in the nation.

Whatever danger there may be to the property and profits of the many, if there be any danger, comes not from government's attitude toward business but from restraints now imposed upon business by private monopolies and financial oligarchies. The average businessman knows that a high cost of living is a great deterrent to business and that business prosperity depends much upon a low price policy which encourages the widest possible consumption. As one of the country's leading economists recently said, "The continuance of business recovery in the United States depends far more upon business policies, business pricing policies, than it does on anything that may be done, or not done, in Washington."

Our competitive system is, of course, not altogether competitive. Anybody who buys any large quantity of manufactured goods knows this, whether it be the government or an individual buyer. We have anti-trust laws, to be sure, but they have not been adequate to check the growth of many monopolies. Whether or not they might have been adequate originally, interpretation by the courts and the difficulties and delays of legal procedure have now definitely limited their effectiveness.

We are already studying how to strengthen our anti-trust laws in order to end monopoly--not to hurt but to free legitimate business.

I have touched briefly on these important subjects, which, taken together, make a program for the immediate future. To attain it, legislation is necessary.

As we plan today for the creation of ever higher standards of living for the people of the United States, we are aware that our plans may be most seriously affected by events in the world outside our borders.

By a series of trade agreements, we have been attempting to recreate the trade of the world which plays so important a part in our domestic prosperity; but we know that if the world outside our borders falls into the chaos of war, world trade will be completely disrupted.

Nor can we view with indifference the destruction of civilized values throughout the world. We seek peace, not only for our generation but also for the generation of our children.

We seek for them the continuance of world civilization in order that their American civilization may continue to be invigorated by the achievements of civilized men and women in the rest of the world.

I want our great democracy to be wise enough to realize that aloofness from war is not promoted by unawareness of war. In a world of mutual suspicions, peace must be affirmatively reached for. It cannot just be wished for. And it cannot just be waited for.

We have now made known our willingness to attend a conference of the parties to the Nine Power Treaty of 1922--the Treaty of Washington--of which we are one of the original signatories. The purpose of this conference will be to seek by agreement a solution of the present situation in China. In efforts to find that solution, it is our purpose to cooperate with the other signatories to this Treaty, including China and Japan.

Such cooperation would be an example of one of the possible paths to follow in our search for means toward peace throughout the whole world.

The development of civilization and of human welfare is based on the acceptance by individuals of certain fundamental decencies in their relations with each other. The development of peace in the world is dependent similarly on the acceptance by nations of certain fundamental decencies in their relations with each other.

Ultimately, I hope _each_ nation will accept the fact that violations of these rules of conduct are an injury to the well- being of _all_ nations.

Meanwhile, remember that from 1913 to 1921, I personally was fairly close to world events, and in that period, while I learned much of what to do, I also learned much of what _not_ to do.

The common sense, the intelligence of America agree with my statement that "America hates war. America hopes for peace. Therefore, America actively engages in the search for peace."

April 14, 1938.

My Friends:

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 that the hope of Easter may be more real at firesides everywhere, and therefore that it is not inappropriate to encourage peace when so many of us are thinking of the Prince of Peace.

Five years ago we faced 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.

This recession has not returned us 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 percent 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 seriously, 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 the 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.

Therefore, my friends, 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.

In that message I analyzed the causes of the collapse of 1929 in these words: "over-speculation in and overproduction of practically every article or instrument used by man. . . millions of people, to be sure, had 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 citizens and families of the United States--every farmer, every worker, every banker, every professional man and every person who lived on income derived from investments--that national income had amounted, in the year 1929, to eighty-one billion dollars. By 1932 this had fallen to thirty-eight billion dollars. Gradually, and up to a few months ago, it had risen to a total, an annual total; of sixty-eight billion dollars--a pretty good come-back from the low point.

I then said this to the Congress:

"But the very vigor of the recovery in both durable goods and consumers' goods brought into the picture early in certain highly undesirable 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 of them was fear--fear of war abroad, fear of inflation, fear of nation-wide strikes. None of these fears have been borne out.

". . .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 middle men 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 twenty-four hour basis, and the tire companies and cotton factories and glass factories and others speeded up to meet the same type of abnormally stimulated demand. The buying power of the nation lagged behind.

"Thus by the autumn of 1937, last autumn, 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 out the raw 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."

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 in 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 larger 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 the top to the bottom share in the prosperity. I repeated to the Congress today that neither it nor the Chief Executive can 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 all 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, and 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.

"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 and 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-ceasing evolution of human society will 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 or 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 primarily from a failure of consumer demand because of lack of buying power. Therefore 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 in my message today to propose three groups of measures and I will summarize my 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 expenditure 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.

These appropriations, made necessary by increased unemployment, will cost about a billion and a quarter dollars more than the estimates 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 one billion four hundred million dollars of gold now in 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 best judgment insufficient by themselves to start the nation on a sustained upward movement.

Therefore, I came to the third kind of government action which I consider to be vital. I said to the Congress:

"You and I cannot afford to equip ourselves with two rounds of ammunition where three rounds 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."

This 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 our states, and their 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 for flood control and reclamation.

Fifth, to add twenty-five million dollars additional for federal buildings in various parts of the country.

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.

Democracy has disappeared in several other great nations-- disappeared 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 and 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.

History proves that dictatorships do not grow out of strong and successful governments but out of weak and helpless governments. 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 republic we were short of capital, short of workers and short of industrial production; but we were rich in 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 have had a tradition of substantial government help to our system of private enterprise. But today the government no longer has vast tracts of rich land to give away and we have discovered, too, that we must spend large sums of money 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 many 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.

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, it is a loss to the nation. Because of idle men and idle machines this Nation lost one hundred billion dollars between 1929 and the Spring of 1933, in less than four years. This year you, the people of this country, are making about twelve 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 thirty billion dollars more last year in 1937 than it was in 1932. It is true that the national debt increased sixteen billion dollars, but remember that in that increase must be included several billion dollars worth of assets which eventually will reduce that 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 thirty-one hundred counties in the United States.

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. They will tell you that business revived 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. That is why the total addition to 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, and lending or spending public funds. It is essential in our economy that private funds must be put to work and all of us recognize that such funds are entitled to a fair profit."