נאום "משבר הבנקים" מסידרת "שיחות ליד האח" של פרנקלין ד. רוזבלט

Many of the articles on Barack Obama And the change of power between him and George Bush includes a comparison with Roosevelt's entry into office in 1933. Even then, the United States and the world were in the midst of a deep economic crisis and the incumbent president (Republican Hoover) seemed powerless. פרנקלין רוזבלט בנאום המופת שלו המסביר את משבר הבנקים

As today, even then the president-elect used the latest technology in the field of communication to contact the American public directly and explain his intentions and actions. The one revolutionary innovation that Roosevelt took advantage of was the radio, and throughout his long tenure there was a weekly tradition of recorded speeches called "fireside chats", the first of which dealt with the banking crisis. It was revolutionary not only because of the new medium but also because of Roosevelt's great ability to explain financial complexities in layman's language. The New York Times wrote the next day that "the president was able to take a boring and incomprehensible subject like banking and explain it in a language that anyone can understand, even bankers."

Historical (and economic) background

The economic crisis broke out in 1929 and reached its peak two weeks before Roosevelt's inauguration. Within a few days about 4,000 banks went bankrupt all over the United States because an economic phenomenon of loss of trust. The first step of the incoming administration was to declare a bank holiday and close all bank branches in order to put things in order and provide cash to banks that were affected by the turmoil but whose basic condition was normal. For the process to be successful it was essential that the public trust it, but after three years of recession the American public was extremely suspicious. The speech was successful in its role - thanks to Roosevelt's ability to explain to the public (including the bankers' public) the new rules of the game, in the following days all the banks in the United States were gradually opened up and the way was opened to the 'New Deal' policy in which organizational solutions were put in place to prevent the recurrence of the crisis (such as deposit insurance and strengthening the central bank ).

The rhetoric of the speech

Roosevelt took advantage of the radio that allowed him to reach the citizens directly and delivered a speech that could be called 'Introduction to Banking Theory' - more of a lecture than a speech. He begins by explaining the importance of handling banking and that the general public needs and has the right to understand the actions of the government, and presents the structure of his speech. After that, he presents the operating principles of a commercial bank in clear and simple language with an emphasis on the idea of credit - the bank does not really keep the money you deposited in the safe but lends it to others. He then explains the reasons for the crisis and emphasizes that they actually stemmed from self-fueled panic. In the next step, he explains how the government's actions - closing branches and printing money - are designed to prevent a recurrence of the panic. Finally, he presents the plan for reopening the banks and reassures the public that the banks cannot all open in one day, so don't stress if 'your' branch doesn't open on the first day.

You can listen to a recording of the speech Here

Opening - I want to explain what we did and what we will do in understandable language

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 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, 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 should be explained for the benefit of the average citizen. I owe this in particular because of the fortitude and good temper with which everyone has accepted the inconvenience and 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 help during the past week

First part: what is a bank and what is a banking crisis

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-bonds, commercial paper, mortgages and many other types of loans. In other words, the bank puts your money to work to keep the wheels of industry and 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 entirely 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 small fraction of the total deposits in all of the banks.

What, then, happened during the last few days of February and the first few days of March? Because of undermined confidence on the part of the public, there was a general rush by a large portion of our population to turn bank deposits into currency or gold. — A rush so great that the soundest banks could not get enough currency to meet the demand. The reason for this was that on the spur of the moment it was, of course, impossible to sell perfectly sound assets of a bank and convert them into cash except at panic prices far below their real value.

By the afternoon of March 3 barely a bank in the country was open to do business.

Part two - the actions taken to handle the crisis

Proclamations temporarily closing them in whole or in part had been issued by the Governors in almost all the states. It was then that I issued the proclamation providing for the nation-wide bank holiday, and this was the first step in the Government's reconstruction of our financial and economic fabric.

The second step was the legislation promptly and patriotically passed by the Congress confirming my proclamation and broadening my powers so that it became possible in view of the requirement of time to understand (sic) the holiday and lift the ban of that holiday gradually. This law also gave authority to develop a program of rehabilitation of our banking facilities. I want to tell our citizens in every part of the Nation that the national Congress — Republicans and Democrats alike — showed by this action a devotion to public welfare and a realization of the emergency and the necessity for speed that it is difficult to match in our history.

The third stage has been the series of regulations allowing the banks to continue their functions to take care of the distribution of food and household necessities and the payment of payrolls.

This bank holiday while resulting in many cases in great inconvenience is affording us the opportunity to supply the currency necessary to meet the situation. No sound bank is a dollar worse off than it was when it closed its doors last Monday. Neither is any bank which may turn out not to be in a position for immediate opening. The new law allows the twelve Federal Reserve banks to issue additional currency on good assets and thus the banks that reopen will be able to meet every legitimate call. The new currency is being sent out by the Bureau of Engraving and Printing in large volume to every part of the country. It is sound currency because it is backed by actual, good assets.

Part three - the action plan

A question you will ask is this - why are all the banks not to be reopened at the same time? The answer is simple. Your government does not intend that the history of the past few years shall be repeated. WE do not want and will not have another epidemic of bank failures.

As a result we start tomorrow, Monday, with the opening of banks in the twelve Federal Reserve Bank cities — those banks which on first examination by the Treasury have already been found to be all right. This will be followed on Tuesday by the resumption of all their functions by banks already found to be sound in cities where there are recognized clearinghouses. That means about 250 cities of the United States.

On Wednesday and succeeding days banks in smaller places all through the country will resume business, subject, of course, to the Government's physical ability to complete its survey. It is necessary that the reopening of banks be extended over a period in order to allow the banks to make applications for necessary loans, to obtain currency needed to meet their requirements and to enable the Government to make common sense checkups.

Let me make it clear to you that if your bank does not open the first day you are by no means justified in believing that it will not open. A bank that opens on one of the subsequent days is in exactly the same status as the bank that opens tomorrow.

I know that many people are worried about State banks not members of the Federal Reserve System. These banks can and will receive assistance from member banks and from the Reconstruction Finance Corporation. These state banks are following the same course as the national banks except that they get their licenses to resume business from the state authorities, and these authorities have been asked by the Secretary of the Treasury to permit their good banks to open up on the same schedule as the national banks. I am confident that the state banking departments will be as careful as the National Government in the policy relating to the opening of banks and will follow the same broad policy.

Fourth part - instructions to the public in preparation for the resumption of bank activity

It is possible that when the banks resume a very few people who have not recovered from their fear may again begin withdrawals. Let me make it clear that the banks will take care of all needs — and it is my belief that hoarding during the past week has become an exceedingly unfashionable pastime. It needs no prophet to tell you that when the people find that they can get their money — that they can get it when they want it for all legitimate purposes — the phantom of fear will soon be laid. People will again be glad to have their money where it will be safely taken care of and where they can use it conveniently at any time. I can assure you that it is safer to keep your money in a reopened bank than under the mattress.

The success of our entire great national program depends, of course, upon the cooperation of the public — on its intelligent support and use of a reliable system.

Remember that the essential accomplishment of the new legislation is that it makes it possible for banks more readily to convert their assets into cash than was the case before. More liberal provision has been made for banks to borrow on these assets at the Reserve Banks and more liberal provision has also been made for issuing currency on the security of those good assets. This currency is not fiat currency. It is issued only on adequate security — and every good bank has an abundance of such security.

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 new capital which may be required.

I hope you can see from this elementary recital of what your government is doing that there is nothing complex, or 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 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. It was the government's job to straighten out this situation and do it as quickly as possible — and the job is being performed.

Summary - Your trust is the most important element in the success of the program

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 at least some of the sorely pressed banks. We shall be engaged not merely in reopening sound banks but in the creation of sound banks through reorganization. It has been wonderful for 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 of 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; it is up to you to support and make it work.

It is your problem no less than it is mine. Together we cannot fail.

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