America Explained | Franklin D. Roosevelt Makes Banking Make Sense

Wendy & Rich 0:01
Coming to you from the Freedom Federal Credit Union Studios, Hartford County Living presents Conversations with Rich Bennett. 

Rich Bennett 0:33
I had to think of somebody's voice that was either just as good or better. Trust me, I think you're going to really enjoy this. But before we dive into today's episode of this series, America Explained, I want you to take a moment and imagine something. It's March of 1933. The country is in the middle of the Great Depression. Banks are closing. Families are terrified. They've lost everything. People are standing in lines who've been aching with draw what little money they have left. Trust in the financial system is gone. Confidence in the future is fading. And fear is spreading faster than facts. And just eight days after taking office, the President of the United States steps in front of a microphone. Not to give a political speech, not to assign blame, not to say unbearable, but to talk. Common, clearly, and honestly to the American people. That President was Franklin D Roosevelt. What you're about to hear is the first fireside chat delivered on March 12, 1933. In this historic radio address, President Roosevelt explained the banking crisis in plain language and reassured a frightened nation that their money and their future receive. This recording is provided under public domain and comes from Wikimedia Commons. So sit back, listen closely and imagine what it must have felt like to hear these words for the very first time. Here is President Franklin Dellner, Roosevelt

Fireside Chat 2:27
Ladies and gentlemen, the President of the United States. 

My friends, I want to talk for a few minutes with the people of the United States about banking. To talk 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 capitals and from Washington, the legislation, the Treasury regulations and so forth, couched for the most part in banking and legal terms, thought to be explained for the benefit of the average citizen. I owe this in particular because of the 42h and the good temper, which everybody has accepted the inconvenience and the hardships of the banking holiday. And 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 health 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 bulk. It invests your money in many different forms of credit in bonds and commercial paper and mortgages and in many other kinds of loans. In other words, the bank puts your money to work to keep the fields of industry and of agriculture turning round. A comparatively small part of the money that 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 the banks of the country. 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 couldn't 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 3rd, a week ago last Friday, scarcely a bank in the country was open to do business. Proclamations closing them in the hall or in part had been issued by the governors in almost all of the states. It was then that I issued the proclamation, providing for the National Bank holiday. And this was the first step in the government's reconstruction of our financial and economic fabric. The second step, last Thursday, 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 extend the holiday and lift the ban of that holiday gradually in the days to come. This law also gave authority to develop a program of rehabilitation, of our banking facilities. And 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 all our history. The third stage has been the series of regulations, permitting the banks to continue their functions, to take care of the distribution of food and household necessities, and the payment of payroll. 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. Remember that no sound bank is a dollar worth off, then it was when it closed its doors last week. Neither is any bank, which may turn out not to be in a position for immediate opening. The new law allows the 12 Federal Reserve Bank 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. Another question that you will ask is this, why are all the banks not to be reopened at the same time? The answer is simple, and I know you will understand it. 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 12 Federal Reserve Bank cities. Those banks, which on first examination by the Treasury, have already been found to be all right. That will be followed on Tuesday by the resumption of all other functions, by banks already found to be sound, in cities where there are recognized clearing houses. That means about 250 cities of the United States. In other words, we are moving as fast as the mechanics of the situation will allow us. 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 permit the banks to make applications for the necessary loans, to obtain currency, needed to meet their requirements, and to enable the government to make common sense check-ups. Please 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 worrying about state banks that are not members of the Federal Reserve System. There is no occasion for that worrying. These banks can and will receive a system from member banks and from the Reconstruction Finance Corporation, and of course they are under the immediate control of the state banking authorities. These state banks are following the same cost as the national banks, except that they get their license 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'm so 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 theory. 

It's a historical demands of hordes, and it is my belief that hoarding during the past week has become an exceedingly unfashionable pastime in every part of our nation. It needs no profit 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, my friends, that it is safer to keep your money in a reopened bank than it is to keep it under the mattress. The success of our whole national program depends of course on the cooperation of the public, on its intelligence support, and its 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 these 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 any new capital that may be required. I hope you can see my friends from this essential recital of what your government is doing, is doing that there is nothing complex, nothing radical in the process. We have had a bad banking situation. Some of our bankers have 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 fuel had tainted them all. And so it became the government's job to straighten out this situation, and to 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, promise you salvation for some at least of the solid 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 that they have given me in their acceptance of the judgment. That has dictated our costs, even though all our processes may not have seemed clear to them. After all, there is an element in the re-adjustment of our financial system, more important than currency, more important than gold, and that is the confidence of the people themselves. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith. You must not be stampeded by rumours 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 friend. Your problem no less than it is mine. Together, we cannot fail. Ladies and gentlemen, the President of the United States has spoken to you from the White House in Washington, D. C. 

Rich Bennett 15:30
In 1933, Americans needed to believe in their banks again. Today, we're fortunate to have community-focused institutions like Freedom Federal Credit Union that prioritize people over profit. I want to share something really special about a company that I not only trust but also use, and also truly admire Freedom Federal Credit Union. Why Freedom? Because they go beyond every day banking to really make a difference in our community. They've established a Freedom of the Help Foundation, which actively supports local initiatives, making our neighborhoods stronger and more connected. Whether it's promoting financial education or backing community projects, Freedom Federal Credit Union is there, investing in our shared future. And it's not just about community programs. I trust them because they provide excellent, personal, and business banking services that make managing finances straightforward and secure. Their commitment to our community and their members really sets them apart. So if you're looking for a financial partner that aligns with your values and actively contributes to bettering the community, check out Freedom Federal Credit Union. Visit them today at freedomfcu. org or call 1,800-440-4120. Join me in banking where it matters. Listening to that fireside chat, it is hard not to feel the weight of that moment in history. Imagine sitting in your living room in 1933, not knowing if your savings were gone, not knowing what tomorrow would bring, and hearing the President speak to you not as a politician, but as a person who understood your fear. That is what made Franklin D. Roosevelt so effective. He did not talk at people. He talked with them. He respected their intelligence. He acknowledged their concerns. And he gave them something they desperately needed. Reassurance. What stands out to me the most is how powerful, simple, honest communication can be. Roosevelt did not rely on complicated language or dramatic delivery. He relied on trust. And because of that, millions of Americans felt calmer, more confident, and more hopeful about hearing him speak. This moment reminds us that leadership is not always about having all the answers. Sometimes it's about showing up, speaking clearly, and helping people feel less alone in uncertain times. As we continue this journey through America explained, looking back at the voices that shaped our nation, this fireside chat is a powerful reminder that history is not just about events. It is about people, moments, and the words that brought us through that. What you just heard wasn't just a speech. It was a turning point in American history. At a time when fear was overwhelming the nation, Franklin D. Roosevelt chose clarity over complexity. Reassurance over rhetoric and connection over politics and the impact was immediate. When banks reopened after this address, Americans didn't rush to withdraw their money. They rushed to put it back. Confidence began to return, and the foundation of recovery was leaving. This is why the fireside chats remain one of the most powerful examples of leadership through communication. Roosevelt didn't just speak to the country, he spoke with it. As we continue this America Explained series celebrating the 250th anniversary of the United States, this moment reminds us that sometimes the most powerful voice in history is in policy or power. It's trust. Thank you for listening, and I hope this historic voice from the past helps you better understand the strength, resilience, and spirit that have shaped our nation. 

Rich Bennett 19:46
Thank you for listening to the conversations with Rich Bennett. I hope you enjoyed today's episode and learned something from it as I did. If you'd like to hear more conversations like this, be sure to subscribe to the podcast so you never miss an episode. And if you have a moment, I'd love it if you could leave a review. It helps us reach more listeners and share more incredible stories. Don't forget to connect with us on social media or visit our website at Conversations with RichBentit.com for updates, giveaways and more. Until next time, take care, be kind and keep the conversations going. You know, it takes a lot to put a podcast together. And my sponsors help add a lot, but I also have some supporters that actually help me when it comes to the editing software, the hosting and so forth. There's a lot that goes in to putting this together. So I want to thank them. And if you can, please, please visit their websites, visit their businesses, support them however you can. So please visit the following Full full circle boards. Nobody does charcuterie, like full circle boards, visit them at fullcircleboards.com. Sincerely, Sincerely Sincerely, so your photography live in the moment, they'll capture it. Visit them at sincerely so your.com. The Jopitan Lions Club serving the community since 1965. Visit them at jopitanlinesclub. org, And don't forget the E at the end of Jopetown because they're extraordinary.