President Roosevelt: Fireside Chat on “The Forgotten Man” Summary

  • Last updated on November 10, 2022

In 1932, New York governor and presidential candidate Franklin D. Roosevelt delivered a radio address to the American people regarding the economic crisis. Following the stock market crash in 1929, the Great Depression hit the United States, leading to widespread unemployment, home and farm foreclosures, and financial loss. In his address, Roosevelt stated that any permanent solution must be built from the “bottom up,” and he outlined three steps he believed were necessary to secure economic recovery: first, purchasing power had to be restored to American farmers; second, the federal government had to provide financial relief to small banks in order to prevent further foreclosures; and third, tariff policies had to be revised to ensure that the United States could sell its excess consumer goods on the global market.

Summary Overview

In 1932, New York governor and presidential candidate Franklin D. Roosevelt delivered a radio address to the American people regarding the economic crisis. Following the stock market crash in 1929, the Great Depression hit the United States, leading to widespread unemployment, home and farm foreclosures, and financial loss. In his address, Roosevelt stated that any permanent solution must be built from the “bottom up,” and he outlined three steps he believed were necessary to secure economic recovery: first, purchasing power had to be restored to American farmers; second, the federal government had to provide financial relief to small banks in order to prevent further foreclosures; and third, tariff policies had to be revised to ensure that the United States could sell its excess consumer goods on the global market.

Defining Moment

The United States experienced an economic boom during the 1920s. Europe had suffered significant infrastructure damage during World War I, placing the United States in a relatively strong financial position with its abundant raw materials and available investment funds. Technological developments such as mass-production assembly lines allowed more goods to be manufactured quickly and cheaply. Newly imposed import tariffs encouraged citizens to buy American-made goods, and favorable tax laws encouraged businessmen to invest in the manufacturing sector.

This changed abruptly on October 24, 1929, when the US stock market began a rapid, steady decline. By the following week, panic was in full swing as stock prices across all economic sectors plummeted. Banks of all sizes were in danger of closing their doors, and many demanded immediate repayment of loans and mortgages in an attempt to save their businesses. However, few borrowers–either personal or corporate–had cash available for immediate repayment. By November 1929, the value of the stock market decreased by $30 billion; many companies closed, leading to widespread unemployment.

By the end of the 1920s, numerous countries around the world with free-market economies experienced similar financial decline. Some were hit harder than others, and the situation was especially dire in the United States. By 1932, the stock market had dropped to about 20 percent of its 1929 value. By the time the Great Depression reached its official peak in 1933, 25 percent of workers were unemployed, and thousands of US banks had collapsed. The increased unemployment led to decreased spending and lower demand for consumer goods, which led to fewer manufacturing jobs and ultimately even more unemployment. The failure of so many banks–including many large ones–led to further foreclosures and restricted access to the credit many believed was necessary to boost the depressed economy.

In the immediate aftermath of the 1929 crash, President Herbert Hoover and his administration established or expanded several government programs designed to help destitute Americans. However, the public criticized his approach as spending too heavily on corporate subsidies while ordinary Americans literally starved. For example, Hoover established the Reconstruction Finance Corporation, which lent $2 billion in government funds to banks, insurance companies, building and loan associations, agricultural credit organizations, and railroads. By contrast, Hoover declined to support a bill that would have provided additional payments to World War I veterans for their time in the service, claiming the $4 billion price tag was too high.

By 1932, Roosevelt, then the New York state governor, was campaigning in earnest to become the next president of the United States. His platform focused on establishing federal programs designed to provide immediate relief to the starving and homeless and to put Americans back to work through government-funded works projects such as environmental conservation initiatives and improvements to government buildings and other public infrastructure.

Author Biography

Franklin D. Roosevelt was born on January 30, 1882, in Hyde Park, New York. He attended Groton School in Massachusetts and received his bachelor's degree in history from Harvard University. He studied law at Columbia University in New York, but, upon passing the bar examination, left school without completing his degree in 1907. He practiced law in New York City for three years, before being elected to the New York State Senate in 1910.

President Woodrow Wilson appointed Roosevelt assistant secretary of the Navy from 1913 until 1920. Following an unsuccessful run for US vice president as the running mate of James M. Cox, Roosevelt briefly withdrew from politics. After a partial recovery from polio he contracted in 1921, Roosevelt was elected governor of New York State in 1928. In 1932, Roosevelt was elected president of the United States. He was inaugurated during the height of the Great Depression and saw the country through World War II. He died while still in office on April 12, 1945.

Document Analysis

Roosevelt begins his radio address by recounting the Allied forces' success in World War I. He observes that success came from a “bottom-up” approach that rallied support, from not only trained military personnel, but also from more than 100 million ordinary people across the globe. He offers this story to demonstrate his position that building from the “bottom up” is the best approach to resolving the economic crisis.

Many factors contributed to the Great Depression, but Roosevelt says the main cause is relatively straightforward: Farmers–nearly half of the country's population–lost a significant amount of purchasing power when prices dropped because of overproduction. Because of this loss, families could no longer afford to purchase manufactured goods, which led to job loss in the industrial sectors. In turn, this further eroded the purchasing power of the American public and created a cycle of economic loss.

Roosevelt believes that the country must once again use a bottom-up approach in order to improve the economy. He says that large expenditures of public funds for creating government works-related jobs are only a stopgap measure, and it is necessary to address the root of the problem. The federal government must provide financial assistance to smaller banks to help them maintain solvency and prevent them from foreclosing on houses and farms. Additionally, the 1930 Hawley-Smoot Tariff Act compounds the overproduction problem: with the decline of the American consumer's purchasing power, too many excess goods exist in the domestic market, thus driving down prices. But with the high tariff rates and the prohibition on international exchange of goods in favor of cash-only transactions, companies have no viable way of selling these excesses on the global market.

Roosevelt concludes by identifying three steps necessary to bring the economy back into balance: farmers' purchasing power must be restored; the federal government must provide financial relief to small banks and homeowners; and the tariff policy must be revised to give American goods an outlet in the global market. Roosevelt closes by saying that “it is high time to get back to fundamentals,” and encourages the American public to mobilize to meet the challenges presented by the state of the economy.

Essential Themes

A significant theme throughout Roosevelt's campaign and presidency was his attention to the plight of everyday Americans. Many believe that his bottom-up approach to economic recovery was a major contributing factor to his victory over Herbert Hoover in the 1932 election. Contrary to Hoover's approach, Roosevelt believed that first restoring financial security to the farmers and workers would lead to increased spending and ultimately strengthen corporate financial positions.

Additionally, Roosevelt frequently addressed the impact of global trade barriers on the domestic economy. He explained how the European and US economies were interconnected, especially in light of American investments in Europe's post–World War I rebuilding efforts. As economies softened across the globe in the early 1930s, the United States and many other countries enacted or raised tariffs to protect their domestic production from global competition. But the combination of overproduction and high export barriers created a surplus of goods that drove down prices across the manufacturing sector, thus decreasing the purchasing power of both industrial workers and farmers. Restoring a proper balance of international trade, Roosevelt believed, was another key factor to economic recovery.

Despite Roosevelt's new ideas and significant financial investment from the federal government, recovery from the Great Depression was slow. The economy showed signs of improving in 1933, but it stalled during 1934 and 1935 before picking up again between 1935 and 1937. A second wave of economic depression hit in 1937, however, from which the United States did not fully recover until entering World War II in 1941.

Bibliography and Additional Reading
  • “The Great Depression (1929–1939).” Eleanor Roosevelt Papers Project. George Washington U, n.d. Web. 18 May 2014.
  • McElvaine, Robert S. The Great Depression: America, 1929–1941. 25th anniversary ed. New York: Three Rivers, 2009. Print.
  • Smith, Jean Edward. FDR. New York: Random, 2007. Print.
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