by Chris White with research by AvaHome
for ePluribus Media
Editors’ Note: On September 30, 1934 FDR had his sixth fireside chat with the nation. When many of us feel that our nation is on the brink of a different type of disaster, FDR’s words hold hope and inspiration for us all.
Writer Chris White and researcher AvaHome have prepared a 5-part series looking at the FDR legacy, especially in light of the current administration’s disasterous record. The entire series is on the ePluribus Media Journal in the FDR and the Unfinished Agenda feature.
"Every man has a right to his own property, which means a right to be assured, to the fullest extent attainable in the safety of his savings. By no other means can men carry the burdens of those parts of life which, in the nature of things afford no chance of labor; childhood, sickness, old age. In all thought of property, this right is paramount, all other property rights must yield to it. "
The speech was one of the centerpieces in his campaign, and involved his thinking on the relationship between personal and property rights over the course of American history.
What a difference from today! Who now argues for any of the particular pieces mentioned above as a right, rather than a particular measure?
Could it be that this Unfinished Agenda of Roosevelt’s remains unfinished precisely to the extent it has been reduced to a series of particular programs, and the life-bringing idea of the rights which move all, and to which all else is subordinate, has been left out, and forgotten.
Is it necessary to summarize where we stand 74 years later? No right to universal health care, and therefore no universal protection for the young, the adult or the aged from sickness. No right to safeguarded retirement, however long that might last, only pension plans targeted for looting, honey pots for pillage by corporate executives through the bankruptcy courts. No protection for savings, as the bankruptcy of Enron affirmed at the beginning of this administration, and all subsequent corporate bankruptcies have reaffirmed.
Roosevelt’s was certainly an Unfinished Agenda. Yet it remains an agenda whose fulfillment citizens are entitled to by right. The citizen, male or female, working or not, immigrant or native born, ought to have the means by which to exercise the responsibilities that are inherent in their political condition as citizens. And, lest we forget, the right to make a comfortable living, whatever happened to that–as once again we find ourselves in what some call a race to the bottom?
We’ve moved a long way beyond the vision of the country FDR stood for. The current conventional wisdom is that his New Deal was an abject failure, that the Great Depression continued until the mobilization for war finally turned things around, that his programs were just big-government-spending pork-barrels, better to stick to economic theory and keep government out of everything. And then, since his electoral victories depended on sweeping the south, his policies on blacks, and the anti-lynching campaigns of the 30’s would have been non-existent without the involvement of his wife Eleanor; he was talking most often about a man’s world.
So there’s not much good said about FDR these days, and there’s not much reason (in many eyes) to visit the electronic archives to see what all the fuss was about. But he lives on despite it all, viewed by many as the greatest American President since Lincoln, not only for what he did to win the war against Hitler, but also for what he did to bring the country back out of the depths of the great depression. No matter why it happened, he is the one who took the country from the lowest of the low to the heights of world power in just 12 years. Point to another President who can claim as much. It is one legacy, not two, from the bottom to the top, not sequential, dealing first with depression and then fighting war.
It is amazing really that so little attention is devoted to how it was done. The contrast with the succeeding men of small and minor achievement is so vast, it ought to be automatic that political candidates would seek the secrets of greatness from its well-spring, and not from trying to read by extrapolation from the misses and failures of the Lilliputian successors.
In 1929, most will remember, the New York stock exchange went through a series of shattering collapses. Between 1929 and 1932/3, the country’s Gross National Product fell by more than 25%. Exports, which were more than half agricultural goods, fell by more than 60%. Thirteen million, or 25% of the national labor force, was unemployed. In the manufacturing sector as a whole, unemployment was around 45%.
In cities like Chicago and Detroit, 40% and 50%, respectively, unemployment was far higher than the national average. The steel industry was operating at 12% of its pre-1929 capacity. The payroll of US Steel had fallen from 225,000 to a few thousand workers. Farmers, without earnings from crops for which, unbelievably, there was no market, faced foreclosure and the loss of their lands. Between 1929 and the end of 1932 more than 11,000 of the country’s nearly 25,000 banks went belly up. Housing construction fell by 95%. Money spent by people to repair their houses fell from $50 million to $500,000.
By early 1933, the country appeared to be headed for dissolution.
What had happened was that the international monetary arrangements organized in 1919 at the Versailles Peace conference had collapsed. Germany and Austria, the Central Powers, had been compelled to take on payment of reparations to Britain and France, to make up what those two had borrowed to pay for the war. Britain and France were supposed to pay back the US the funding they had borrowed. America’s farmers were supposed to provide the food that would supply European countries in the aftermath of the war to end all wars.
No one thought it would be a virtuous, self-promoting cycle, war ravaged Germany could not pay; France and Britain could not pay. Conferences were organized one after other, plans put forward, none dealt with the basic problem that the reparations based,the gold-linked international monetary system was non-functional, only working to benefit speculators betting on which currency was going to be the next to be devalued.
On March 27th 1933, Barron’s magazine profiled the reparations regime as it then was supposed to be. (Scroll down to the article referenced.) Payments of war reparations, plus other indebtedness amounted to $52,741,500,000 which, would have to cross the frontiers of nations for the next 55-56 years, down to 1987 or 1988. This amount of international indebtedness was more than 2½ times all the gold that had been produced in the world from 1492 down to 1930. It was more than five times the contemporary stock of gold. "Smart money" took flight into gold and out of stock certificates, bonds and bank deposits. Banks came crashing down.
The data for this chart is on page 11 of the link reference above.
Faced with all this Hoover and the Republicans gave up and fell back on their magic of the market place mantras, repeating the phrases which can be summarized as follows "recovery is just around the corner, if it wasn’t for the fear mongering of the Democrats, recovery would be already here." Repeatedly, during the months between the election on November 8th 1932, and FDR’s Inauguration March 4th 1933, Hoover actually attempted to mousetrap FDR into agreeing to continue to support his policies.
Hoover’s main Depression-fighting claim to fame was the Reconstruction Finance Corp. (RFC) a bail-out slush fund for the President’s Republican cronies. When Samuel Insull’s utility empire collapsed in the summer of 1932 and Chicago’s banks were shaken, the $90 million that was authorized for Insull’s single largest bank creditor by Hoover personally was three times more than all the money allocated nationally for unemployment relief in that year.
Roosevelt took a totally different approach. In the San Francisco Commonwealth Club speech, he affirmed that "The issue of government has always been whether individual men and women will have to serve some system of government of economics, or whether a system of government and economics exists to serve individual men and women."
By the standards referenced here, we are, in some ways, a far bigger basket case than was the Versailles reparations system in 1929. We are smarter, we’ve disconnected the dollar from gold, but we’ve tied the dollar to oil, and thereby encouraged the spread of the dollar as everyone else’s currency. Our speculators have learnt not to pull money out of banks, they hedge and use derivatives, which have pyramided unlike anything else has in human history over the last 20 or so years. It may be that, as smart as we have become, we are headed for a fall — but Roosevelt could point the way back to the basics we may all soon be looking for.
For a sneak preview, the next installment is Part II: The Money Changers Have Fled. In it, White looks at how FDR beat the banking crisis, launching the New Deal. The entire series is on the ePluribus Media Journal in the FDR and the Unfinished Agenda feature.
Key Research by: AvaHome
ePluribus Media editors and fact checkers for this article: JeninRI, Aaron Barlow, Cache, standingup, cho, stoy, Roxy, and Vivian.
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Crossposted at DailyKos.