History is tricky. You can turn it this way and that way and come up with two entirely different stories. If the one I am about to tell is the not the same one you know, remember that the truth is never as simple as black and white.
"Everything possible to be believed is an image of the truth” William Blake
Intro. The “Real” FDR The way some people talk, everything of substance achieved by FDR occurred in his first 100 days in office. If by “substance” they mean everything that had to do with saving the banks from their own folly, then I guess they have a point. For most of us, Roosevelt did much more than declare a bank holiday and establish the FDIC. He told the American people (of all colors) that they
deserved jobs, food, housing. He crafted Social Security, so that the elderly would not die on the streets after they working days were over. He (re)introduced the notion of “fairness” in public life.
How did this product of the American elite class go from friend of the banks to friend of the people? He did not spring forth, like Athena, a fully formed populist. It took him some time to find his groove.
I. America is Only as Strong as Its Banks 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.
FDR Fireside Chat #1, March 12, 1933
http://millercenter.org/scripps/archive/speeches/detail/3298While reading
Hard Times by Studs Terkel, a collection of reminiscences from those who lived through the Great Depression, I was struck by the words of some of his New Deal advisers. Predictably, those on the left complained that he was not liberal enough, while those on the right called him a communist. What I did not expect was to read that he started his first term with what some would call a Republican agenda.
Remember, Roosevelt at the start was very conservative.
People don’t realize that Roosevelt chose a conservative banker as Secretary of Treasury and a conservative from Tennessee as Secretary of State. Most of the political reforms that were put through might have been agreeable to Hoover….the bank rescue…was not done by Roosevelt---he signed the papers---but by Hoover leftovers in the Administration.
Raymond Moley, early FDR adviser who became a New Deal critic in 1933
Roosevelt was building up new ideas in a milieu of old ideas. His early campaign speeches were pure Old Deal. He called for a balanced budget. When he got into office, the whole banking system collapsed. It called for a New Deal.
Snip
The guarantee of bank deposits was put through by Vice President Garner, Jesse Jones (a Texas banker) and Senator Vandenburg---three conservatives. They rammed it down Roosevelt’s throat.
Gardiner C. Means, economic adviser
"Roosevelt committed himself in the campaign of ’32 to cutting government expenditures. It was the most conservative speech he ever made. So we all got started with our hands tied behind our back. A lot of things New Dealers wanted couldn’t be done without increasing expenditures.”
C. B. Baldwin, assistant to Henry Wallace, Secretary of Agriculture
That does not sound like the FDR we all know and love. What exactly happened during those famous first
100 Days ?
Much of the new legislation benefited banks and the wealthy. Restoring public confidence in the banking system and providing federal guarantees to depositors probably saved a lot of bankers from the unemployment line. With 40% of the nation’s homeowners facing foreclosure, a plan to refinance loans also helped the banks. Burning crops and slaughtering livestock were good for agricultural interests, since they kept prices up. They were not so good for the consumers who had no jobs or money. One bill you do not hear about much cut Veterans’ pensions by 50%. There were public works projects, including the Tennessee Valley Authority. Nothing here to make a banker mad---
http://www.epluribusmedia.org/features/2006/200609_FDR_pt4.htmlBut wait! One of FDR’s first acts in office was to remove the nation from the gold standard. Why did FDR hate gold? He didn’t. However, the value of the dollar was falling. If debtors could be forced to repay their loans in gold rather than dollars, many of them would see their debts increase by 50%. The same way that modern credit card holders can see their interest rates double or triple overnight at the discretion of the bankers.
http://www.history.com/this-day-in-history/fdr-takes-united-states-off-gold-standardI can see how this might have riled up the banks.
II. The Attempted Coup Between 1933 and 1934, some very rich and powerful Americans decided that FDR had to go. They attempted to persuade war hero, Major General Smedley Butler to take over. Instead, he turned them in.
http://coat.ncf.ca/our_magazine/links/53/53-index.htmlWhile Congress and the press hushed up the affair, it must have had some impact on FDR. Here he was, attempting to prop up the US banking system, and the very same banksters were now biting the hand that was feeding them. Was this enough to make FDR change his allegiance from the wealthy and elite with whom he had grown up to the American people as a whole? Since he isn’t alive to tell us we will never know. However, I do know what his next address to the American people was like.
III. America is Only as Strong as Its People From FDR’s April 28, 1935 fireside chat:
The objective of the Nation has greatly changed in three years. Before that time individual self-interest and group selfishness were paramount in public thinking. The general good was at a discount.
Three years of hard thinking have changed the picture. More and more people, because of clearer thinking and a better understanding, are considering the whole rather than a mere part relating to one section or to one crop, or to one industry, or to an individual private occupation. That is a tremendous gain for the principles of democracy. The overwhelming majority of people in this country know how to sift the wheat from the chaff in what they hear and what they read. They know that the process of the constructive rebuilding of America cannot be done in a day or a year, but that it is being done in spite of the few who seek to confuse them and to profit by their confusion
This is followed by a speech about Social Security, jobs creation, regulation of utilities, regulation of banks---
We all know that private banking actually exists by virtue of the permission of and regulation by the people as a whole, speaking through their government.
Sounds to me like FDR finally found his groove, two year after taking office.
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