3. The security of decent homes.

I am now ready to submit to the Congress a broad program designed

ultimately to establish all three of these factors of security--a program

which because of many lost years will take many future years to fulfill.

A study of our national resources, more comprehensive than any previously

made, shows the vast amount of necessary and practicable work which needs

to be done for the development and preservation of our natural wealth for

the enjoyment and advantage of our people in generations to come. The sound

use of land and water is far more comprehensive than the mere planting of

trees, building of dams, distributing of electricity or retirement of

sub-marginal land. It recognizes that stranded populations, either in the

country or the city, cannot have security under the conditions that now

surround them.

To this end we are ready to begin to meet this problem--the intelligent care

of population throughout our Nation, in accordance with an intelligent

distribution of the means of livelihood for that population. A definite

program for putting people to work, of which I shall speak in a moment, is

a component part of this greater program of security of livelihood through

the better use of our national resources.

Closely related to the broad problem of livelihood is that of security

against the major hazards of life. Here also, a comprehensive survey of

what has been attempted or accomplished in many Nations and in many States

proves to me that the time has come for action by the national Government.

I shall send to you, in a few days, definite recommendations based on these

studies. These recommendations will cover the broad subjects of

unemployment insurance and old age insurance, of benefits for children,

form others, for the handicapped, for maternity care and for other aspects

of dependency and illness where a beginning can now be made.

The third factor--better homes for our people--has also been the subject of

experimentation and study. Here, too, the first practical steps can be made

through the proposals which I shall suggest in relation to giving work to

the unemployed.

Whatever we plan and whatever we do should be in the light of these three

clear objectives of security. We cannot afford to lose valuable time in

haphazard public policies which cannot find a place in the broad outlines

of these major purposes. In that spirit I come to an immediate issue made

for us by hard and inescapable circumstance--the task of putting people to

work. In the spring of 1933 the issue of destitution seemed to stand apart;

today, in the light of our experience and our new national policy, we find

we can put people to work in ways which conform to, initiate and carry

forward the broad principles of that policy.

The first objectives of emergency legislation of 1933 were to relieve

destitution, to make it possible for industry to operate in a more rational

and orderly fashion, and to put behind industrial recovery the impulse of

large expenditures in Government undertakings. The purpose of the National

Industrial Recovery Act to provide work for more people succeeded in a

substantial manner within the first few months of its life, and the Act has

continued to maintain employment gains and greatly improved working

conditions in industry.

The program of public works provided for in the Recovery Act launched the

Federal Government into a task for which there was little time to make

preparation and little American experience to follow. Great employment has

been given and is being given by these works.

More than two billions of dollars have also been expended in direct relief

to the destitute. Local agencies of necessity determined the recipients of

this form of relief. With inevitable exceptions the funds were spent by

them with reasonable efficiency and as a result actual want of food and

clothing in the great majority of cases has been overcome.

But the stark fact before us is that great numbers still remain

unemployed.

A large proportion of these unemployed and their dependents have been

forced on the relief rolls. The burden on the Federal Government has grown

with great rapidity. We have here a human as well as an economic problem.

When humane considerations are concerned, Americans give them precedence.

The lessons of history, confirmed by the evidence immediately before me,

show conclusively that continued dependence upon relief induces a spiritual

and moral disintegration fundamentally destructive to the national fibre.

To dole out relief in this way is to administer a narcotic, a subtle

destroyer of the human spirit. It is inimical to the dictates of sound

policy. It is in violation of the traditions of America. Work must be found

for able-bodied but destitute workers.

The Federal Government must and shall quit this business of relief.

I am not willing that the vitality of our people be further sapped by the

giving of cash, of market baskets, of a few hours of weekly work cutting

grass, raking leaves or picking up .papers in the public parks. We must

preserve not only the bodies of the unemployed from destitution but also

their self-respect, their self-reliance and courage and determination. This

decision brings me to the problem of what the Government should do with

approximately five million unemployed now on the relief rolls.

About one million and a half of these belong to the group which in the past

was dependent upon local welfare efforts. Most of them are unable for one

reason or another to maintain themselves independently--for the most part,

through no fault of their own. Such people, in the days before the great

depression, were cared for by local efforts--by States, by counties, by

towns, by cities, by churches and by private welfare agencies. It is my

thought that in the future they must be cared for as they were before. I

stand ready through my own personal efforts, and through the public

influence of the office that I hold, to help these local agencies to get

the means necessary to assume this burden.

The security legislation which I shall propose to the Congress will, I am

confident, be of assistance to local effort in the care of this type of

cases. Local responsibility can and will be resumed, for, after all, common

sense tells us that the wealth necessary for this task existed and still

exists in the local community, and the dictates of sound administration

require that this responsibility be in the first instance a local one.

There are, however, an additional three and one half million employable

people who are on relief. With them the problem is different and the

responsibility is different. This group was the victim of a nation-wide

depression caused by conditions which were not local but national. The

Federal Government is the only governmental agency with sufficient power

and credit to meet this situation. We have assumed this task and we shall

not shrink from it in the future. It is a duty dictated by every

intelligent consideration of national policy to ask you to make it possible

for the United States to give employment to all of these three and one half

million employable people now on relief, pending their absorption in a

rising tide of private employment.

It is my thought that with the exception of certain of the normal public

building operations of the Government, all emergency public works shall be

united in a single new and greatly enlarged plan.

With the establishment of this new system we can supersede the Federal

Emergency Relief Administration with a coordinated authority which will be

charged with the orderly liquidation of our present relief activities and

the substitution of a national chart for the giving of work.

This new program of emergency public employment should be governed by a

number of practical principles.

(1) All work undertaken should be useful--not just for a day, or a year,

but useful in the sense that it affords permanent improvement in living

conditions or that it creates future new wealth for the Nation.

(2) Compensation on emergency public projects should be in the form of

security payments which should be larger than the amount now received as a

relief dole, but at the same time not so large as to encourage the

rejection of opportunities for private employment or the leaving of private

employment to engage in Government work.

(3) Projects should be undertaken on which a large percentage of direct

labor can be used.

(4) Preference should be given to those projects which will be

self-liquidating in the sense that there is a reasonable expectation that

the Government will get its money back at some future time.

(5) The projects undertaken should be selected and planned so as to compete

as little as possible with private enterprises. This suggests that if it

were not for the necessity of giving useful work to the unemployed now on

relief, these projects in most instances would not now be undertaken.

(6) The planning of projects would seek to assure work during the coming

fiscal year to the individuals now on relief, or until such time as private

employment is available. In order to make adjustment to increasing private

employment, work should be planned with a view to tapering it off in

proportion to the speed with which the emergency workers are offered

positions with private employers.

(7) Effort should be made to locate projects where they will serve the

greatest unemployment needs as shown by present relief rolls, and the broad

program of the National Resources Board should be freely used for guidance

in selection. Our ultimate objective being the enrichment of human lives,

the Government has the primary duty to use its emergency expenditures as

much as possible to serve those who cannot secure the advantages of private

capital.

Ever since the adjournment of the 73d Congress, the Administration has been

studying from every angle the possibility and the practicability of new

forms of employment. As a result of these studies I have arrived at certain

very definite convictions as to the amount of money that will be necessary

for the sort of public projects that I have described. I shall submit these

figures in my budget message. I assure you now they will be within the

sound credit of the Government.

The work itself will cover a wide field including clearance of slums, which

for adequate reasons cannot be undertaken by private capital; in rural

housing of several kinds, where, again, private capital is unable to

function; in rural electrification; in the reforestation of the great

watersheds of the Nation; in an intensified program to prevent soil erosion

and to reclaim blighted areas; in improving existing road systems and in

constructing national highways designed to handle modern traffic; in the

elimination of grade crossings; in the extension and enlargement of the

successful work of the Civilian Conservation Corps; in non-Federal works,

mostly self-liquidating and highly useful to local divisions of Government;

and on many other projects which the Nation needs and cannot afford to

neglect.

This is the method which I propose to you in order that we may better meet

this present-day problem of unemployment. Its greatest advantage is that it

fits logically and usefully into the long-range permanent policy of

providing the three types of security which constitute as a whole an

American plan for the betterment of the future of the American people.

I shall consult with you from time to time concerning other measures of

national importance. Among the subjects that lie immediately before us are

the consolidation of Federal regulatory administration over all forms of

transportation, the renewal and clarification of the general purposes of

the National Industrial Recovery Act, the strengthening of our facilities

for the prevention, detection and treatment of crime and criminals, the

restoration of sound conditions in the public utilities field through

abolition of the evil features of holding companies, the gradual tapering

off of the emergency credit activities of Government, and improvement in

our taxation forms and methods.

We have already begun to feel the bracing effect upon our economic system

of a restored agriculture. The hundreds of millions of additional income

that farmers are receiving are finding their way into the channels of

trade. The farmers' share of the national income is slowly rising. The

economic facts justify the widespread opinion of those engaged in

agriculture that our provisions for maintaining a balanced production give

at this time the most adequate remedy for an old and vexing problem. For

the present, and especially in view of abnormal world conditions,

agricultural adjustment with certain necessary improvements in methods

should continue.

It seems appropriate to call attention at this time to the fine spirit

shown during the past year by our public servants. I cannot praise too

highly the cheerful work of the Civil Service employees, and of those

temporarily working for the Government. As for those thousands in our

various public agencies spread throughout the country who, without

compensation, agreed to take over heavy responsibilities in connection with

our various loan agencies and particularly in direct relief work, I cannot

say too much. I do not think any country could show a higher average of

cheerful and even enthusiastic team-work than has been shown by these men

and women.

I cannot with candor tell you that general international relationships

outside the borders of the United States are improved. On the surface of

things many old jealousies are resurrected, old passions aroused; new

strivings for armament and power, in more than one land, rear their ugly

heads. I hope that calm counsel and constructive leadership will provide

the steadying influence and the time necessary for the coming of new and

more practical forms of representative government throughout the world

wherein privilege and power will occupy a lesser place and world welfare a

greater.

I believe, however, that our own peaceful and neighborly attitude toward

other Nations is coming to be understood and appreciated. The maintenance

of international peace is a matter in which we are deeply and unselfishly

concerned. Evidence of our persistent and undeniable desire to prevent

armed conflict has recently been more than once afforded.

There is no ground for apprehension that our relations with any Nation will

be otherwise than peaceful. Nor is there ground for doubt that the people

of most Nations seek relief from the threat and burden attaching to the

false theory that extravagant armament cannot be reduced and limited by

international accord.

The ledger of the past year shows many more gains than losses. Let us not

forget that, in addition to saving millions from utter destitution, child

labor has been for the moment outlawed, thousands of homes saved to their

owners and most important of all, the morale of the Nation has been

restored. Viewing the year 1934 as a whole, you and I can agree that we

have a generous measure of reasons for giving thanks.

It is not empty optimism that moves me to a strong hope in the coming year.

We can, if we will, make 1935 a genuine period of good feeling, sustained

by a sense of purposeful progress. Beyond the material recovery, I sense a

spiritual recovery as well. The people of America are turning as never

before to those permanent values that are not limited to the physical

objectives of life. There are growing signs of this on every hand. In the

face of these spiritual impulses we are sensible of the Divine Providence

to which Nations turn now, as always, for guidance and fostering care.

***

State of the Union Address

Franklin D. Roosevelt

January 3, 1936

Mr. President, Mr. Speaker, Members of the Senate and of the House of

Representatives:

We are about to enter upon another year of the responsibility which the

electorate of the United States has placed in our hands. Having come so

far, it is fitting that we should pause to survey the ground which we have

covered and the path which lies ahead.

On the fourth day of March, 1933, on the occasion of taking the oath of

office as President of the United States, I addressed the people of our

country. Need I recall either the scene or the national circumstances

attending the occasion? The crisis of that moment was almost exclusively a

national one. In recognition of that fact, so obvious to the millions in

the streets and in the homes of America, I devoted by far the greater part

of that address to what I called, and the Nation called, critical days

within our own borders.

You will remember that on that fourth of March, 1933, the world picture was

an image of substantial peace. International consultation and widespread

hope for the bettering of relations between the Nations gave to all of us a

reasonable expectation that the barriers to mutual confidence, to increased

trade, and to the peaceful settlement of disputes could be progressively

removed. In fact, my only reference to the field of world policy in that

address was in these words: "I would dedicate this Nation to the policy of

the good neighbor--the neighbor who resolutely respects himself and, because

he does so, respects the rights of others--a neighbor who respects his

obligations and respects the sanctity of his agreements in and with a world

of neighbors."

In the years that have followed, that sentiment has remained the dedication

of this Nation. Among the Nations of the great Western Hemisphere the

policy of the good neighbor has happily prevailed. At no time in the four

and a half centuries of modern civilization in the Americas has there

existed--in any year, in any decade, in any generation in all that time--a

greater spirit of mutual understanding, of common helpfulness, and of

devotion to the ideals of serf-government than exists today in the

twenty-one American Republics and their neighbor, the Dominion of Canada.

This policy of the good neighbor among the Americas is no longer a hope, no

longer an objective remaining to be accomplished. It is a fact, active,

present, pertinent and effective. In this achievement, every American

Nation takes an understanding part. There is neither war, nor rumor of war,

nor desire for war. The inhabitants of this vast area, two hundred and

fifty million strong, spreading more than eight thousand miles from the

Arctic to the Antarctic, believe in, and propose to follow, the policy of

the good neighbor. They wish with all their heart that the rest of the

world might do likewise.

The rest of the world--Ah! there is the rub.

Were I today to deliver an Inaugural Address to the people of the United

States, I could not limit my comments on world affairs to one paragraph.

With much regret I should be compelled to devote the greater part to world

affairs. Since the summer of that same year of 1933, the temper and the

purposes of the rulers of many of the great populations in Europe and in

Asia have not pointed the way either to peace or to good-will among men.

Not only have peace and good-will among men grown more remote in those

areas of the earth during this period, but a point has been reached where

the people of the Americas must take cognizance of growing ill-will, of

marked trends toward aggression, of increasing armaments, of shortening

tempers--a situation which has in it many of the elements that lead to the

tragedy of general war.

On those other continents many Nations, principally the smaller peoples, if

left to themselves, would be content with their boundaries and willing to

solve within themselves and in cooperation with their neighbors their

individual problems, both economic and social. The rulers of those Nations,

deep in their hearts, follow these peaceful and reasonable aspirations of

their peoples. These rulers must remain ever vigilant against the

possibility today or tomorrow of invasion or attack by the rulers of other

peoples who fail to subscribe to the principles of bettering the human race

by peaceful means.

Within those other Nations--those which today must bear the primary,

definite responsibility for jeopardizing world peace--what hope lies? To

say the least, there are grounds for pessimism. It is idle for us or for

others to preach that the masses of the people who constitute those Nations

which are dominated by the twin spirits of autocracy and aggression, are

out of sympathy with their rulers, that they are allowed no opportunity to

express themselves, that they would change things if they could.

That, unfortunately, is not so clear. It might be true that the masses of

the people in those Nations would change the policies of their Governments

if they could be allowed full freedom and full access to the processes of

democratic government as we understand them. But they do not have that

access; lacking it they follow blindly and fervently the lead of those who

seek autocratic power.

Nations seeking expansion, seeking the rectification of injustices

springing from former wars, or seeking outlets for trade, for population or

even for their own peaceful contributions to the progress of civilization,

fail to demonstrate that patience necessary to attain reasonable and

legitimate objectives by peaceful negotiation or by an appeal to the finer

instincts of world justice.

They have therefore impatiently reverted to the old belief in the law of

the sword, or to the fantastic conception that they, and they alone, are

chosen to fulfill a mission and that all the others among the billion and a

half of human beings in the world must and shall learn from and be subject

to them.

I recognize and you will recognize that these words which I have chosen

with deliberation will not prove popular in any Nation that chooses to fit

this shoe to its foot. Such sentiments, however, will find sympathy and

understanding in those Nations where the people themselves are honestly

desirous of peace but must constantly align themselves on one side or the

other in the kaleidoscopic jockeying for position which is characteristic

of European and Asiatic relations today. For the peace-loving Nations, and

there are many of them, find that their very identity depends on their

moving and moving again on the chess board of international politics.

I suggested in the spring of 1933 that 85 or 90 percent of all the people

in the world were content with the territorial limits of their respective

Nations and were willing further to reduce their armed forces if every

other Nation in the world would agree to do likewise.

That is equally true today, and it is even more true today that world peace

and world good-will are blocked by only 10 or 15 percent of the world's

population. That is why efforts to reduce armies have thus far not only

failed, but have been met by vastly increased armaments on land and in the

air. That is why even efforts to continue the existing limits on naval

armaments into the years to come show such little current success.

But the policy of the United States has been clear and consistent. We have

sought with earnestness in every possible way to limit world armaments and

to attain the peaceful solution of disputes among all Nations.

We have sought by every legitimate means to exert our moral influence

against repression, against intolerance, against autocracy and in favor of

freedom of expression, equality before the law, religious tolerance and

popular rule.

In the field of commerce we have undertaken to encourage a more reasonable

interchange of the world's goods. In the field of international finance we

have, so far as we are concerned, put an end to dollar diplomacy, to money

grabbing, to speculation for the benefit of the powerful and the rich, at

the expense of the small and the poor.

As a consistent part of a clear policy, the United States is following a

twofold neutrality toward any and all Nations which engage in wars that are

not of immediate concern to the Americas. First, we decline to encourage

the prosecution of war by permitting belligerents to obtain arms,

ammunition or implements of war from the United States. Second, we seek to

discourage the use by belligerent Nations of any and all American products

calculated to facilitate the prosecution of a war in quantities over and

above our normal exports of them in time of peace.

I trust that these objectives thus clearly and unequivocally stated will be

carried forward by cooperation between this Congress and the President.

I realize that I have emphasized to you the gravity of the situation which

confronts the people of the world. This emphasis is justified because of

its importance to civilization and therefore to the United States. Peace is

jeopardized by the few and not by the many. Peace is threatened by those

who seek selfish power. The world has witnessed similar eras--as in the

days when petty kings and feudal barons were changing the map of Europe

every fortnight, or when great emperors and great kings were engaged in a

mad scramble for colonial empire. We hope that we are not again at the

threshold of such an era. But if face it we must, then the United States

and the rest of the Americas can play but one role: through a well-ordered

neutrality to do naught to encourage the contest, through adequate defense

to save ourselves from embroilment and attack, and through example and all

legitimate encouragement and assistance to persuade other Nations to return

to the ways of peace and good-will.

The evidence before us clearly proves that autocracy in world affairs

endangers peace and that such threats do not spring from those Nations

devoted to the democratic ideal. If this be true in world affairs, it

should have the greatest weight in the determination of domestic policies.

Within democratic Nations the chief concern of the people is to prevent the

continuance or the rise of autocratic institutions that beget slavery at

home and aggression abroad. Within our borders, as in the world at large,

popular opinion is at war with a power-seeking minority.

That is no new thing. It was fought out in the Constitutional Convention of

1787. From time to time since then, the battle has been continued, under

Thomas Jefferson, Andrew Jackson, Theodore Roosevelt and Woodrow Wilson.

In these latter years we have witnessed the domination of government by

financial and industrial groups, numerically small but politically dominant

in the twelve years that succeeded the World War. The present group of

which I speak is indeed numerically small and, while it exercises a large

influence and has much to say in the world of business, it does not, I am

confident, speak the true sentiments of the less articulate but more

important elements that constitute real American business.

In March, 1933, I appealed to the Congress of the United States and to the

people of the United States in a new effort to restore power to those to

whom it rightfully belonged. The response to that appeal resulted in the

writing of a new chapter in the history of popular government. You, the

members of the Legislative branch, and I, the Executive, contended for and

established a new relationship between Government and people.

What were the terms of that new relationship? They were an appeal from the

clamor of many private and selfish interests, yes, an appeal from the

clamor of partisan interest, to the ideal of the public interest.

Government became the representative and the trustee of the public

interest. Our aim was to build upon essentially democratic institutions,

seeking all the while the adjustment of burdens, the help of the needy, the

protection of the weak, the liberation of the exploited and the genuine

protection of the people's property.

It goes without saying that to create such an economic constitutional

order, more than a single legislative enactment was called for. We, you in

the Congress and I as the Executive, had to build upon a broad base. Now,

after thirty-four months of work, we contemplate a fairly rounded whole. We

have returned the control of the Federal Government to the City of

Washington.

To be sure, in so doing, we have invited battle. We have earned the hatred

of entrenched greed. The very nature of the problem that we faced made it

necessary to drive some people from power and strictly to regulate others.

I made that plain when I took the oath of office in March, 1933. I spoke of

the practices of the unscrupulous money-changers who stood indicted in the

court of public opinion. I spoke of the rulers of the exchanges of

mankind's goods, who failed through their own stubbornness and their own

incompetence. I said that they had admitted their failure and had

abdicated.

Abdicated? Yes, in 1933, but now with the passing of danger they forget

their damaging admissions and withdraw their abdication.

They seek the restoration of their selfish power. They offer to lead us

back round the same old corner into the same old dreary street.

Yes, there are still determined groups that are intent upon that very

thing. Rigorously held up to popular examination, their true character

presents itself. They steal the livery of great national constitutional

ideals to serve discredited special interests. As guardians and trustees

for great groups of individual stockholders they wrongfully seek to carry

the property and the interests entrusted to them into the arena of partisan

politics. They seek--this minority in business and industry--to control and

often do control and use for their own purposes legitimate and highly

honored business associations; they engage in vast propaganda to spread

fear and discord among the people--they would "gang up" against the people's

liberties.

The principle that they would instill into government if they succeed in

seizing power is well shown by the principles which many of them have

instilled into their own affairs: autocracy toward labor, toward

stockholders, toward consumers, toward public sentiment. Autocrats in

smaller things, they seek autocracy in bigger things. "By their fruits ye

shall know them."

If these gentlemen believe, as they say they believe, that the measures

adopted by this Congress and its predecessor, and carried out by this

Administration, have hindered rather than promoted recovery, let them be

consistent. Let them propose to this Congress the complete repeal of these

measures. The way is open to such a proposal.

Let action be positive and not negative. The way is open in the Congress of

the United States for an expression of opinion by yeas and nays. Shall we

say that values are restored and that the Congress will, therefore, repeal

the laws under which we have been bringing them back? Shall we say that

because national income has grown with rising prosperity, we shall repeal

existing taxes and thereby put off the day of approaching a balanced budget

and of starting to reduce the national debt? Shall we abandon the

reasonable support and regulation of banking? Shall we restore the dollar

to its former gold content?

Shall we say to the farmer, "The prices for your products are in part

restored. Now go and hoe your own row?"

Shall we say to the home owners, "We have reduced your rates of interest.

We have no further concern with how you keep your home or what you pay for

your money. That is your affair?"

Shall we say to the several millions of unemployed citizens who face the

very problem of existence, of getting enough to eat, "We will withdraw from

giving you work. We will turn you back to the charity of your communities

and those men of selfish power who tell you that perhaps they will employ

you if the Government leaves them strictly alone?"

Shall we say to the needy unemployed, "Your problem is a local one except

that perhaps the Federal Government, as an act of mere generosity, will be

willing to pay to your city or to your county a few grudging dollars to

help maintain your soup kitchens?"

Shall we say to the children who have worked all day in the factories,

"Child labor is a local issue and so are your starvation wages; something

to be solved or left unsolved by the jurisdiction of forty-eight States?"

Shall we say to the laborer, "Your right to organize, your relations with

your employer have nothing to do with the public interest; if your employer

will not even meet with you to discuss your problems and his, that is none

of our affair?"

Shall we say to the unemployed and the aged, "Social security lies not

within the province of the Federal Government; you must seek relief

elsewhere?"

Shall we say to the men and women who live in conditions of squalor in

country and in city, "The health and the happiness of you and your children

are no concern of ours?"

Shall we expose our population once more by the repeal of laws which

protect them against the loss of their honest investments and against the

manipulations of dishonest speculators? Shall we abandon the splendid

efforts of the Federal Government to raise the health standards of the

Nation and to give youth a decent opportunity through such means as the

Civilian Conservation Corps?

Members of the Congress, let these challenges be met. If this is what these

gentlemen want, let them say so to the Congress of the United States. Let

them no longer hide their dissent in a cowardly cloak of generality. Let

them define the issue. We have been specific in our affirmative action. Let

them be specific in their negative attack.

But the challenge faced by this Congress is more menacing than merely a

return to the past--bad as that would be. Our resplendent economic autocracy

does not want to return to that individualism of which they prate, even

though the advantages under that system went to the ruthless and the

strong. They realize that in thirty-four months we have built up new

instruments of public power. In the hands of a people's Government this

power is wholesome and proper. But in the hands of political puppets of an

economic autocracy such power would provide shackles for the liberties of

the people. Give them their way and they will take the course of every

autocracy of the past--power for themselves, enslavement for the public.

Their weapon is the weapon of fear. I have said, "The only thing we have to

fear is fear itself." That is as true today as it was in 1933. But such

fear as they instill today is not a natural fear, a normal fear; it is a

synthetic, manufactured, poisonous fear that is being spread subtly,

expensively and cleverly by the same people who cried in those other days,

"Save us, save us, lest we perish."

I am confident that the Congress of the United States well understands the

facts and is ready to wage unceasing warfare against those who seek a

continuation of that spirit of fear. The carrying out of the laws of the

land as enacted by the Congress requires protection until final

adjudication by the highest tribunal of the land. The Congress has the

right and can find the means to protect its own prerogatives.

We are justified in our present confidence. Restoration of national income,

which shows continuing gains for the third successive year, supports the

normal and logical policies under which agriculture and industry are

returning to full activity. Under these policies we approach a balance of

the national budget. National income increases; tax receipts, based on that

income, increase without the levying of new taxes. That is why I am able to

say to this, the Second Session of the 74th Congress, that it is my belief

based on existing laws that no new taxes, over and above the present taxes,

are either advisable or necessary.

National income increases; employment increases. Therefore, we can look

forward to a reduction in the number of those citizens who are in need.

Therefore, also, we can anticipate a reduction in our appropriations for

relief.

In the light of our substantial material progress, in the light of the

increasing effectiveness of the restoration of popular rule, I recommend to

the Congress that we advance; that we do not retreat. I have confidence

that you will not fail the people of the Nation whose mandate you have

already so faithfully fulfilled.

I repeat, with the same faith and the same determination, my words of March

4, 1933: "We face the arduous days that lie before us in the warm courage

of national unity; with a clear consciousness of seeking old and precious

moral values; with a clean satisfaction that comes from the stern

performance of duty by old and young alike. We aim at the assurance of a

rounded and permanent national life. We do not distrust the future of

essential democracy."

I cannot better end this message on the state of the Union than by

repeating the words of a wise philosopher at whose feet I sat many, many

years ago.

"What great crises teach all men whom the example and counsel of the brave

inspire is the lesson: Fear not, view all the tasks of life as sacred, have

faith in the triumph of the ideal, give daily all that you have to give, be

loyal and rejoice whenever you find yourselves part of a great ideal

enterprise. You, at this moment, have the honor to belong to a generation

whose lips are touched by fire. You live in a land that now enjoys the

blessings of peace. But let nothing human be wholly alien to you. The human

race now passes through one of its great crises. New ideas, new issues--a

new call for men to carry on the work of righteousness, of charity, of

courage, of patience, and of loyalty. . . . However memory bring back this

moment to your minds, let it be able to say to you: That was a great

moment. It was the beginning of a new era. . . . This world in its crisis

called for volunteers, for men of faith in life, of patience in service, of

charity and of insight. I responded to the call however I could. I

volunteered to give myself to my Master--the cause of humane and brave

living. I studied, I loved, I labored, unsparingly and hopefully, to be

worthy of my generation."

***

State of the Union Address

Franklin D. Roosevelt

January 6, 1937

Mr. President, Mr. Speaker, Members of the Congress of the United States:

For the first time in our national history a President delivers his Annual

Message to a new Congress within a fortnight of the expiration of his term

of office. While there is no change in the Presidency this year, change

will occur in future years. It is my belief that under this new

constitutional practice, the President should in every fourth year, in so

far as seems reasonable, review the existing state of our national affairs

and outline broad future problems, leaving specific recommendations for

future legislation to be made by the President about to be inaugurated.

At this time, however, circumstances of the moment compel me to ask your

immediate consideration of: First, measures extending the life of certain

authorizations and powers which, under present statutes, expire within a

few weeks; second, an addition to the existing Neutrality Act to cover

specific points raised by the unfortunate civil strife in Spain; and,

third, a deficiency appropriation bill for which I shall submit estimates

this week.

In March, 1933, the problems which faced our Nation and which only our

national Government had the resources to meet were more serious even than

appeared on the surface.

It was not only that the visible mechanism of economic life had broken

down. More disturbing was the fact that long neglect of the needs of the

underprivileged had brought too many of our people to the verge of doubt as

to the successful adaptation of our historic traditions to the complex

modern world. In that lay a challenge to our democratic form of Government

itself.

Ours was the task to prove that democracy could be made to function in the

world of today as effectively as in the simpler world of a hundred years

ago. Ours was the task to do more than to argue a theory. The times

required the confident answer of performance to those whose instinctive

faith in humanity made them want to believe that in the long run democracy

would prove superior to more extreme forms of Government as a process of

getting action when action was wisdom, without the spiritual sacrifices

which those other forms of Government exact.

That challenge we met. To meet it required unprecedented activities under

Federal leadership to end abuses, to restore a large measure of material

prosperity, to give new faith to millions of our citizens who had been

traditionally taught to expect that democracy would provide continuously

wider opportunity and continuously greater security in a world where

science was continuously making material riches more available to man.

In the many methods of attack with which we met these problems, you and I,

by mutual understanding and by determination to cooperate, helped to make

democracy succeed by refusing to permit unnecessary disagreement to arise

between two of our branches of Government. That spirit of cooperation was

able to solve difficulties of extraordinary magnitude and ramification with

few important errors, and at a cost cheap when measured by the immediate

necessities and the eventual results.

I look forward to a continuance of that cooperation in the next four years.

I look forward also to a continuance of the basis of that cooperation--

mutual respect for each other's proper sphere of functioning in a democracy

which is working well, and a common-sense realization of the need for play

in the joints of the machine.

On that basis, it is within the right of the Congress to determine which of

the many new activities shall be continued or abandoned, increased or

curtailed.

On that same basis, the President alone has the responsibility for their

administration. I find that this task of Executive management has reached

the point where our administrative machinery needs comprehensive

overhauling. I shall, therefore, shortly address the Congress more fully in

regard to modernizing and improving the Executive branch of the

Government.

That cooperation of the past four years between the Congress and the

President has aimed at the fulfillment of a twofold policy: first, economic

recovery through many kinds of assistance to agriculture, industry and

banking; and, second, deliberate improvement in the personal security and

opportunity of the great mass of our people.

The recovery we sought was not to be merely temporary. It was to be a

recovery protected from the causes of previous disasters. With that aim in

view--to prevent a future similar crisis--you and I joined in a series of

enactments--safe banking and sound currency, the guarantee of bank deposits,

protection for the investor in securities, the removal of the threat of

agricultural surpluses, insistence on collective bargaining, the outlawing

of sweat shops, child labor and unfair trade practices, and the beginnings

of security for the aged and the worker.

Nor was the recovery we sought merely a purposeless whirring of machinery.

It is important, of course, that every man and woman in the country be able

to find work, that every factory run, that business and farming as a whole

earn profits. But Government in a democratic Nation does not exist solely,

or even primarily, for that purpose.

It is not enough that the wheels turn. They must carry us in the direction

of a greater satisfaction in life for the average man. The deeper purpose

of democratic government is to assist as many of its citizens as possible,

especially those who need it most, to improve their conditions of life, to

retain all personal liberty which does not adversely affect their

neighbors, and to pursue the happiness which comes with security and an

opportunity for recreation and culture.

Even with our present recovery we are far from the goal of that deeper

purpose. There are far-reaching problems still with us for which democracy

must find solutions if it is to consider itself successful.

For example, many millions of Americans still live in habitations which not

only fail to provide the physical benefits of modern civilization but breed

disease and impair the health of future generations. The menace exists not

only in the slum areas of the very large cities, but in many smaller cities

as well. It exists on tens of thousands of farms, in varying degrees, in

every part of the country.

Another example is the prevalence of an un-American type of tenant farming.

I do not suggest that every farm family has the capacity to earn a

satisfactory living on its own farm. But many thousands of tenant farmers,

indeed most of them, with some financial assistance and with some advice

and training, can be made self-supporting on land which can eventually

belong to them. The Nation would be wise to offer them that chance instead

of permitting them to go along as they do now, year after year, with

neither future security as tenants nor hope of ownership of their homes nor

expectation of bettering the lot of their children.

Another national problem is the intelligent development of our social

security system, the broadening of the services it renders, and practical

improvement in its operation. In many Nations where such laws are in

effect, success in meeting the expectations of the community has come

through frequent amendment of the original statute.

And, of course, the most far-reaching and the most inclusive problem of all

is that of unemployment and the lack of economic balance of which

unemployment is at once the result and the symptom. The immediate question

of adequate relief for the needy unemployed who are capable of performing

useful work, I shall discuss with the Congress during the coming months.

The broader task of preventing unemployment is a matter of long-range

evolutionary policy. To that we must continue to give our best thought and

effort. We cannot assume that immediate industrial and commercial activity

which mitigates present pressures justifies the national Government at this

time in placing the unemployment problem in a filing cabinet of finished

business.

Fluctuations in employment are tied to all other wasteful fluctuations in

our mechanism of production and distribution. One of these wastes is

speculation. In securities or commodities, the larger the volume of

speculation, the wider become the upward and downward swings and the more

certain the result that in the long run there will be more losses than

gains in the underlying wealth of the community.

And, as is now well known to all of us, the same net loss to society comes

from reckless overproduction and monopolistic underproduction of natural

and manufactured commodities.

Overproduction, underproduction and speculation are three evil sisters who

distill the troubles of unsound inflation and disastrous deflation. It is

to the interest of the Nation to have Government help private enterprise to

gain sound general price levels and to protect those levels from wide

perilous fluctuations. We know now that if early in 1931 Government had

taken the steps which were taken two and three years later, the depression

would never have reached the depths of the beginning of 1933.

Sober second thought confirms most of us in the belief that the broad

objectives of the National Recovery Act were sound. We know now that its

difficulties arose from the fact that it tried to do too much. For example,

it was unwise to expect the same agency to regulate the length of working

hours, minimum wages, child labor and collective bargaining on the one hand

and the complicated questions of unfair trade practices and business

controls on the other.

The statute of N.R.A. has been outlawed. The problems have not. They are

still with us.

That decent conditions and adequate pay for labor, and just return for

agriculture, can be secured through parallel and simultaneous action by

forty-eight States is a proven impossibility. It is equally impossible to

obtain curbs on monopoly, unfair trade practices and speculation by State

action alone. There are those who, sincerely or insincerely, still cling to

State action as a theoretical hope. But experience with actualities makes

it clear that Federal laws supplementing State laws are needed to help

solve the problems which result from modern invention applied in an

industrialized Nation which conducts its business with scant regard to

State lines.

During the past year there has been a growing belief that there is little

fault to be found with the Constitution of the United States as it stands

today. The vital need is not an alteration of our fundamental law, but an

increasingly enlightened view with reference to it. Difficulties have grown

out of its interpretation; but rightly considered, it can be used as an

instrument of progress, and not as a device for prevention of action.

It is worth our while to read and reread the preamble of the Constitution,

and Article I thereof which confers the legislative powers upon the

Congress of the United States. It is also worth our while to read again the

debates in the Constitutional Convention of one hundred and fifty years

ago. From such reading, I obtain the very definite thought that the members

of that Convention were fully aware that civilization would raise problems

for the proposed new Federal Government, which they themselves could not

even surmise; and that it was their definite intent and expectation that a

liberal interpretation in the years to come would give to the Congress the

same relative powers over new national problems as they themselves gave to

the Congress over the national problems of their day.

In presenting to the Convention the first basic draft of the Constitution,

Edmund Randolph explained that it was the purpose "to insert essential

principles only, lest the operation of government should be clogged by

rendering those provisions permanent and unalterable which ought to be

accommodated to times and events."

With a better understanding of our purposes, and a more intelligent

recognition of our needs as a Nation, it is not to be assumed that there

will be prolonged failure to bring legislative and judicial action into

closer harmony. Means must be found to adapt our legal forms and our

judicial interpretation to the actual present national needs of the largest

progressive democracy in the modern world.

That thought leads to a consideration of world problems. To go no further

back than the beginning of this century, men and women everywhere were

seeking conditions of life very different from those which were customary

before modern invention and modern industry and modern communications had

come into being. The World war, for all of its tragedy, encouraged these

demands, and stimulated action to fulfill these new desires.

Many national Governments seemed unable adequately to respond; and, often

with the improvident assent of the masses of the people themselves, new

forms of government were set up with oligarchy taking the place of

democracy. In oligarchies, militarism has leapt forward, while in those

Nations which have retained democracy, militarism has waned.

I have recently visited three of our sister Republics in South America. The

very cordial receptions with which I was greeted were in tribute to

democracy. To me the outstanding observation of that visit was that the

masses of the peoples of all the Americas are convinced that the democratic

form of government can be made to succeed and do not wish to substitute for

it any other form of government. They believe that democracies are best

able to cope with the changing problems of modern civilization within

themselves, and that democracies are best able to maintain peace among

themselves.

The Inter-American Conference, operating on these fundamental principles of

democracy, did much to assure peace in this Hemisphere. Existing peace

machinery was improved. New instruments to maintain peace and eliminate

causes of war were adopted. Wider protection of the interests of the

American Republics in the event of war outside the Western Hemisphere was

provided. Respect for, and observance of, international treaties and

international law were strengthened. Principles of liberal trade policies,

as effective aids to the maintenance of peace, were reaffirmed. The

intellectual and cultural relationships among American Republics were

broadened as a part of the general peace program.

In a world unhappily thinking in terms of war, the representatives of

twenty-one Nations sat around a table, in an atmosphere of complete

confidence and understanding, sincerely discussing measures for maintaining

peace. Here was a great and a permanent achievement directly affecting the

lives and security of the two hundred and fifty million human beings who

dwell in this Western Hemisphere. Here was an example which must have a

wholesome effect upon the rest of the world.

In a very real sense, the Conference in Buenos Aires sent forth a message

on behalf of all the democracies of the world to those Nations which live

otherwise. Because such other Governments are perhaps more spectacular, it

was high time for democracy to assert itself.

Because all of us believe that our democratic form of government can cope

adequately with modern problems as they arise, it is patriotic as well as

logical for us to prove that we can meet new national needs with new laws

consistent with an historic constitutional framework clearly intended to

receive liberal and not narrow interpretation.

The United States of America, within itself, must continue the task of

making democracy succeed.

In that task the Legislative branch of our Government will, I am confident,

continue to meet the demands of democracy whether they relate to the

curbing of abuses, the extension of help to those who need help, or the

better balancing of our interdependent economies.

So, too, the Executive branch of the Government must move forward in this

task, and, at the same time, provide better management for administrative

action of all kinds.

The Judicial branch also is asked by the people to do its part in making

democracy successful. We do not ask the Courts to call non-existent powers

into being, but we have a right to expect that conceded powers or those

legitimately implied shall be made effective instruments for the common

good.

The process of our democracy must not be imperiled by the denial of

essential powers of free government.

Your task and mine is not ending with the end of the depression. The people

of the United States have made it clear that they expect us to continue our

active efforts in behalf of their peaceful advancement.

In that spirit of endeavor and service I greet the 75th Congress at the

beginning of this auspicious New Year.

***

State of the Union Address

Franklin D. Roosevelt

January 3, 1938

Mr. President, Mr. Speaker, Members of the Senate and of the House of

Representatives:

In addressing the Congress on the state of the Union present facts and

future hazards demand that I speak clearly and earnestly of the causes

which underlie events of profound concern to all.

In spite of the determination of this Nation for peace, it has become clear

that acts and policies of nations in other parts of the world have

far-reaching effects not only upon their immediate neighbors but also on

us.

I am thankful that I can tell you that our Nation is at peace. It has been

kept at peace despite provocations which in other days, because of their

seriousness, could well have engendered war. The people of the United

States and the Government of the United States have shown capacity for

restraint and a civilized approach to the purposes of peace, while at the

same time we maintain the integrity inherent in the sovereignty of

130,000,000 people, lest we weaken or destroy our influence for peace and

jeopardize the sovereignty itself.

It is our traditional policy to live at peace with other nations. More than

that, we have been among the leaders in advocating the use of pacific

methods of discussion and conciliation in international differences. We

have striven for the reduction of military forces.

But in a world of high tension and disorder, in a world where stable

civilization is actually threatened, it becomes the responsibility of each

nation which strives for peace at home and peace with and among others to

be strong enough to assure the observance of those fundamentals of peaceful

solution of conflicts which are the only ultimate basis for orderly

existence.

Resolute in our determination to respect the rights of others, and to

command respect for the rights of ourselves, we must keep ourselves

adequately strong in self-defense.

There is a trend in the world away from the observance both of the letter

and the spirit of treaties. We propose to observe, as we have in the past,

our own treaty obligations to the limit; but we cannot be certain of

reciprocity on the part of others.

Disregard for treaty obligations seems to have followed the surface trend

away from the democratic representative form of government. It would seem,

therefore, that world peace through international agreements is most safe

in the hands of democratic representative governments--or, in other words,

peace is most greatly jeopardized in and by those nations where democracy

has been discarded or has never developed.

I have used the words "surface trend," for I still believe that civilized

man increasingly insists and in the long run will insist on genuine

participation in his own government. Our people believe that over the years

democracies of the world will survive, and that democracy will be restored

or established in those nations which today know it not. In that faith lies

the future peace of mankind.

At home, conditions call for my equal candor. Events of recent months are

new proof that we cannot conduct a national government after the practice

of 1787, or 1837 or 1887, for the obvious reason that human needs and human

desires are infinitely greater, infinitely more difficult to meet than in

any previous period in the life of our Republic. Hitherto it has been an

acknowledged duty of government to meet these desires and needs: nothing

has occurred of late to absolve the Congress, the Courts or the President

from that task. It faces us as squarely, as insistently, as in March,

1933.

Much of trouble in our own lifetime has sprung from a long period of

inaction--from ignoring what fundamentally was happening to us, and from a

time-serving unwillingness to face facts as they forced themselves upon

us.

Our national life rests on two nearly equal producing forces, agriculture

and industry, each employing about one-third of our citizens. The other

third transports and distributes the products of the first two, or performs

special services for the whole.

The first great force, agriculture--and with it the production of timber,

minerals and other natural resources--went forward feverishly and

thoughtlessly until nature rebelled and we saw deserts encroach, floods

destroy, trees disappear and soil exhausted.

At the same time we have been discovering that vast numbers of our farming

population live in a poverty more abject than that of many of the farmers

of Europe whom we are wont to call peasants; that the prices of our

products of agriculture are too often dependent on speculation by

non-farming groups; and that foreign nations, eager to become

self-sustaining or ready to put virgin land under the plough are no longer

buying our surpluses of cotton and wheat and lard and tobacco and fruit as

they had before.

Since 1933 we have knowingly faced a choice of three remedies. First, to

cut our cost of farm production below that of other nations--an obvious

impossibility in many crops today unless we revert to human slavery or its

equivalent.

Second, to make the government the guarantor of farm prices and the

underwriter of excess farm production without limit--a course which would

bankrupt the strongest government in the world in a decade.

Third, to place the primary responsibility directly on the farmers

themselves, under the principle of majority rule, so that they may decide,

with full knowledge of the facts of surpluses, scarcities, world markets

and domestic needs, what the planting of each crop should be in order to

maintain a reasonably adequate supply which will assure a minimum adequate

price under the normal processes of the law of supply and demand.

That means adequacy of supply but not glut. It means adequate reserves

against the day of drought. It is shameless misrepresentation to call this

a policy of scarcity. It is in truth insurance before the fact, instead of

government subsidy after the fact.

Any such plan for the control of excessive surpluses and the speculation

they bring has two enemies. There are those well meaning theorists who harp

on the inherent right of every free born American to do with his land what

he wants--to cultivate it well--or badly; to conserve his timber by cutting

only the annual increment thereof--or to strip it clean, let fire burn the

slash, and erosion complete the ruin; to raise only one crop--and if that

crop fails, to look for food and support from his neighbors or his

government.

That, I assert is not an inherent right of citizenship. For if a man farms

his land to the waste of the soil or the trees, he destroys not only his

own assets but the Nation's assets as well. Or if by his methods he makes

himself, year after year, a financial hazard of the community and the

government, he becomes not only a social problem but an economic menace.

The day has gone by when it could be claimed that government has no

interest in such ill-considered practices and no right through

representative methods to stop them.

The other group of enemies is perhaps less well-meaning. It includes those

who for partisan purposes oppose each and every practical effort to help

the situation, and also those who make money from undue fluctuations in

crop prices.

I gladly note that measures which seek to initiate a government program for

a balanced agriculture are now in conference between the two Houses of the

Congress. In their final consideration, I hope for a sound consistent

measure which will keep the cost of its administration within the figure of

current government expenditures in aid of agriculture. The farmers of this

Nation know that a balanced output can be put into effect without excessive

cost and with the cooperation of the great majority of them.

If this balance can be created by an all-weather farm program, our farm

population will soon be assured of relatively constant purchasing power.

From this will flow two other practical results: the consuming public will

be protected against excessive food and textile prices, and the industries

of the Nation and their workers will find a steadier demand for wares sold

to the agricultural third of our people.

To raise the purchasing power of the farmer is, however, not enough. It

will not stay raised if we do not also raise the purchasing power of that

third of the Nation which receives its income from industrial employment.

Millions of industrial workers receive pay so low that they have little

buying power. Aside from the undoubted fact that they thereby suffer great

human hardship, they are unable to buy adequate food and shelter, to

maintain health or to buy their share of manufactured goods.

We have not only seen minimum wage and maximum hour provisions prove their

worth economically and socially under government auspices in 1933, 1934 and

1935, but the people of this country, by an overwhelming vote, are in favor

of having the Congress--this Congress--put a floor below which industrial

wages shall not fall, and a ceiling beyond which the hours of industrial

labor shall not rise.

Here again let us analyze the opposition. A part of it is sincere in

believing that an effort thus to raise the purchasing power of lowest paid

industrial workers is not the business of the Federal Government. Others

give "lip service" to a general objective, but do not like any specific

measure that is proposed. In both cases it is worth our while to wonder

whether some of these opponents are not at heart opposed to any program for

raising the wages of the underpaid or reducing the hours of the

overworked.

Another group opposes legislation of this type on the ground that cheap

labor will help their locality to acquire industries and outside capital,

or to retain industries which today are surviving only because of existing

low wages and long hours. It has been my thought that, especially during

these past five years, this Nation has grown away from local or sectional

selfishness and toward national patriotism and unity. I am disappointed by

some recent actions and by some recent utterances which sound like the

philosophy of half a century ago.

There are many communities in the United States where the average family

income is pitifully low. It is in those communities that we find the

poorest educational facilities and the worst conditions of health. Why? It

is not because they are satisfied to live as they do. It is because those

communities have the lowest per capita wealth and income; therefore, the

lowest ability to pay taxes; and, therefore, inadequate functioning of

local government.

Such communities exist in the East, in the Middle West, in the Far West,

and in the South. Those who represent such areas in every part of the

country do their constituents ill service by blocking efforts to raise

their incomes, their property values and, therefore, their whole scale of

living. In the long run, the profits from Child labor, low pay and overwork

enure not to the locality or region where they exist but to the absentee

owners who have sent their capital into these exploited communities to

gather larger profits for themselves. Indeed, new enterprises and new

industries which bring permanent wealth will come more readily to those

communities which insist on good pay and reasonable hours, for the simple

reason that there they will find a greater industrial efficiency and

happier workers.

No reasonable person seeks a complete uniformity in wages in every part of

the United States; nor does any reasonable person seek an immediate and

drastic change from the lowest pay to the highest pay. We are seeking, of

course, only legislation to end starvation wages and intolerable hours;

more desirable wages are and should continue to be the product of

collective bargaining.

Many of those who represent great cities have shown their understanding of

the necessity of helping the agricultural third of the Nation. I hope that

those who represent constituencies primarily agricultural will not

underestimate the importance of extending like aid to the industrial

third.

Wage and hour legislation, therefore, is a problem which is definitely

before this Congress for action. It is an essential part of economic

recovery. It has the support of an overwhelming majority of our people in

every walk of life. They have expressed themselves through the ballot box.

Again I revert to the increase of national purchasing power as an

underlying necessity of the day. If you increase that purchasing power for

the farmers and for the industrial workers, especially for those in both

groups who have least of it today, you will increase the purchasing power

of the final third of our population--those who transport and distribute the

products of farm and factory, and those of the professions who serve all

groups. I have tried to make clear to you, and through you to the people of

the United States, that this is an urgency which must be met by complete

and not by partial action.

If it is met, if the purchasing power of the Nation as a whole--in other

words, the total of the Nation's income--can be still further increased,

other happy results will flow from such increase.

We have raised the Nation's income from thirty-eight billion dollars in the

year 1932 to about sixty-eight billion dollars in the year 1937. Our goal,

our objective is to raise it to ninety or one hundred billion dollars.

We have heard much about a balanced budget, and it is interesting to note

that many of those who have pleaded for a balanced budget as the sole need

now come to me to plead for additional government expenditures at the

expense of unbalancing the budget. As the Congress is fully aware, the

annual deficit, large for several years, has been declining the last fiscal

year and this. The proposed budget for 1939, which I shall shortly send to

the Congress, will exhibit a further decrease in the deficit, though not a

balance between income and outgo.

To many who have pleaded with me for an immediate balancing of the budget,

by a sharp curtailment or even elimination of government functions, I have

asked the question: "What present expenditures would you reduce or

eliminate?" And the invariable answer has been "that is not my business--I

know nothing of the details, but I am sure that it could be done." That is

not what you or I would call helpful citizenship.

On only one point do most of them have a suggestion. They think that relief

for the unemployed by the giving of work is wasteful, and when I pin them

down I discover that at heart they are actually in favor of substituting a

dole in place of useful work. To that neither I nor, I am confident, the

Senators and Representatives in the Congress will ever consent.

I am as anxious as any banker or industrialist or business man or investor

or economist that the budget of the United States Government be brought

into balance as quickly as possible. But I lay down certain conditions

which seem reasonable and which I believe all should accept.

The first condition is that we continue the policy of not permitting any

needy American who can and is willing to work to starve because the Federal

Government does not provide the work.

The second is that the Congress and the Executive join hands in eliminating

or curtailing any Federal activity which can be eliminated or curtailed or

even postponed without harming necessary government functions or the safety

of the Nation from a national point of view.

The third is to raise the purchasing power of the Nation to the point that

the taxes on this purchasing power--or, in other words, on the Nation's

income--will be sufficient to meet the necessary expenditures of the

national government.

I have hitherto stated that, in my judgment, the expenditures of the

national government cannot be cut much below seven billion dollars a year

without destroying essential functions or letting people starve. That sum

can be raised and will be cheerfully provided by the American people, if we

can increase the Nation's income to a point well beyond the present level.

This does not mean that as the Nation's income goes up the Federal

expenditures should rise in proportion. On the contrary, the Congress and

the Executive should use every effort to hold the normal Federal

expenditures to approximately the present level, thus making it possible,

with an increase in the Nation's income and the resulting increase in tax

receipts, not only to balance future budgets but to reduce the debt.

In line with this policy fall my former recommendations for the

reorganization and improvement of the administrative structure of the

government, both for immediate Executive needs and for the planning of

future national needs. I renew those recommendations.

In relation to tax changes, three things should be kept in mind. First, the

total sum to be derived by the Federal Treasury must not be decreased as a

result of any changes in schedules. Second, abuses by individuals or

corporations designed to escape tax-paying by using various methods of

doing business, corporate and otherwise--abuses which we have sought, with

great success, to end--must not be restored. Third, we should rightly change

certain provisions where they are proven to work definite hardship,

especially on the small business men of the Nation. But, speculative income

should not be favored over earned income.

It is human nature to argue that this or that tax is responsible for every

ill. It is human nature on the part of those who pay graduated taxes to

attack all taxes based on the principle of ability to pay. These are the

same complainants who for a generation blocked the imposition of a

graduated income tax. They are the same complainants who would impose the

type of flat sales tax which places the burden of government more on those

least able to pay and less on those most able to pay.

Our conclusion must be that while proven hardships should be corrected,

they should not be corrected in such a way as to restore abuses already

terminated or to shift a greater burden to the less fortunate.

This subject leads naturally into the wider field of the public attitude

toward business. The objective of increasing the purchasing power of the

farming third, the industrial third and the service third of our population

presupposes the cooperation of what we call capital and labor.

Capital is essential; reasonable earnings on capital are essential; but

misuse of the powers of capital or selfish suspension of the employment of

capital must be ended, or the capitalistic system will destroy itself

through its own abuses.

The overwhelming majority of business men and bankers intend to be good

citizens. Only a small minority have displayed poor citizenship by engaging

in practices which are dishonest or definitely harmful to society. This

statement is straightforward and true. No person in any responsible place

in the Government of the United States today has ever taken any position

contrary to it.

But, unfortunately for the country, when attention is called to, or attack

is made on specific misuses of capital, there has been a deliberate purpose

on the part of the condemned minority to distort the criticism into an

attack on all capital. That is wilful deception but it does not long

deceive.

If attention is called to, or attack made on, certain wrongful business

practices, there are those who are eager to call it "an attack on all

business." That, too, is wilful deception that will not long deceive. Let

us consider certain facts:

There are practices today which most people believe should be ended. They

include tax avoidance through corporate and other methods, which I have

previously mentioned; excessive capitalization, investment write-ups and

security manipulations; price rigging and collusive bidding in defiance of

the spirit of the antitrust laws by methods which baffle prosecution under

the present statutes. They include high-pressure salesmanship which creates

cycles of overproduction within given industries and consequent recessions

in production until such time as the surplus is consumed; the use of patent

laws to enable larger corporations to maintain high prices and withhold

from the public the advantages of the progress of science; unfair

competition which drives the smaller producer out of business locally,

regionally or even on a national scale; intimidation of local or state

government to prevent the enactment of laws for the protection of labor by

threatening to move elsewhere; the shifting of actual production from one

locality or region to another in pursuit of the cheapest wage scale.

The enumeration of these abuses does not mean that business as a whole is

guilty of them. Again, it is deception that will not long deceive to tell

the country that an attack on these abuses is an attack on business.

Another group of problems affecting business, which cannot be termed

specific abuses, gives us food for grave thought about the future.

Generically such problems arise out of the concentration of economic

control to the detriment of the body politic--control of other people's

money, other people's labor, other people's lives.

In many instances such concentrations cannot be justified on the ground of

operating efficiency, but have been created for the sake of securities

profits, financial control, the suppression of competition and the ambition

for power over others. In some lines of industry a very small numerical

group is in such a position of influence that its actions are of necessity

followed by the other units operating in the same field.

That such influences operate to control banking and finance is equally

true, in spite of the many efforts, through Federal legislation, to take

such control out of the hands of a small group. We have but to talk with

hundreds of small bankers throughout the United States to realize that

irrespective of local conditions, they are compelled in practice to accept

the policies laid down by a small number of the larger banks in the Nation.

The work undertaken by Andrew Jackson and Woodrow Wilson is not finished

yet.

The ownership of vast properties or the organization of thousands of

workers creates a heavy obligation of public service. The power should not

be sought or sanctioned unless the responsibility is accepted as well. The

man who seeks freedom from such responsibility in the name of individual

liberty is either fooling himself or trying to cheat his fellow men. He

wants to eat the fruits of orderly society without paying for them.

As a Nation we have rejected any radical revolutionary program. For a

permanent correction of grave weaknesses in our economic system we have

relied on new applications of old democratic processes. It is not necessary

to recount what has been accomplished in preserving the homes and

livelihood of millions of workers on farms and in cities, in reconstructing

a sound banking and credit system, in reviving trade and industry, in

reestablishing security of life and property. All we need today is to look

upon the fundamental, sound economic conditions to know that this business

recession causes more perplexity than fear on the part of most people and

to contrast our prevailing mental attitude with the terror and despair of

five years ago.

Furthermore, we have a new moral climate in America. That means that we ask

business and finance to recognize that fact, to cure such inequalities as

they can cure without legislation but to join their government in the

enactment of legislation where the ending of abuses and the steady

functioning of our economic system calls for government assistance. The

Nation has no obligation to make America safe either for incompetent

business men or for business men who fail to note the trend of the times

and continue the use of machinery of economics and practices of finance as

outworn as the cotton spindle of 1870.

Government can be expected to cooperate in every way with the business of

the Nation provided the component parts of business abandon practices which

do not belong to this day and age, and adopt price and production policies

appropriate to the times.

In regard to the relationship of government to certain processes of

business, to which I have referred, it seems clear to me that existing laws

undoubtedly require reconstruction. I expect, therefore, to address the

Congress in a special message on this subject, and I hope to have the help

of business in the efforts of government to help business.

I have spoken of labor as another essential in the three great groups of

the population in raising the Nation's income. Definite strides in

collective bargaining have been made and the right of labor to organize has

been nationally accepted. Nevertheless in the evolution of the process

difficult situations have arisen in localities and among groups.

Unfortunate divisions relating to jurisdiction among the workers themselves

have retarded production within given industries and have, therefore,

affected related industries. The construction of homes and other buildings

has been hindered in some localities not only by unnecessarily high prices

for materials but also by certain hourly wage scales.

For economic and social reasons our principal interest for the near future

lies along two lines: first, the immediate desirability of increasing the

wages of the lowest paid groups in all industry; and, second, in thinking

in terms of regularizing the work of the individual worker more greatly

through the year--in other words, in thinking more in terms of the worker's

total pay for a period of a whole year rather than in terms of his

remuneration by the hour or by the day.

In the case of labor as in the case of capital, misrepresentation of the

policy of the government of the United States is deception which will not

long deceive. In both cases we seek cooperation. In every case power and

responsibility must go hand in hand.

I have spoken of economic causes which throw the Nation's income out of

balance; I have spoken of practices and abuses which demand correction

through the cooperation of capital and labor with the government. But no

government can help the destinies of people who insist in putting sectional

and class consciousness ahead of general weal. There must be proof that

sectional and class interests are prepared more greatly than they are today

to be national in outlook.

A government can punish specific acts of spoliation; but no government can

conscript cooperation. We have improved some matters by way of remedial

legislation. But where in some particulars that legislation has failed we

cannot be sure whether it fails because some of its details are unwise or

because it is being sabotaged. At any rate, we hold our objectives and our

principles to be sound. We will never go back on them.

Government has a final responsibility for the well-being of its

citizenship. If private cooperative endeavor fails to provide work for

willing hands and relief for the unfortunate, those suffering hardship from

no fault of their own have a right to call upon the Government for aid; and

a government worthy of its name must make fitting response.

It is the opportunity and the duty of all those who have faith in

democratic methods as applied in industry, in agriculture and in business,

as well as in the field of politics, to do their utmost to cooperate with

government--without regard to political affiliation, special interests or

economic prejudices--in whatever program may be sanctioned by the chosen

representatives of the people.

That presupposes on the part of the representatives of the people, a

program, its enactment and its administration.

Not because of the pledges of party programs alone, not because of the

clear policies of the past five years, but chiefly because of the need of

national unity in ending mistakes of the past and meeting the necessities

of today, we must carry on. I do not propose to let the people down.