President Roosevelt: Fireside Chat Outlining the New Deal Summary

  • Last updated on November 10, 2022

When President Franklin Delano Roosevelt took office in March 1933, the United States was in the midst of the worst financial crisis the country had ever experienced. During Roosevelt's first one hundred days in office, he worked with the Congress to create social and economic programs, collectively known as the New Deal, which were designed to stabilize the economy and provide work for the unemployed. The New Deal also included efforts to guarantee bank deposits and prevent future bank runs, to slow the rate of farm foreclosures by providing farmers with lower interest rates on their mortgages, and to provide employment to millions of Americans. In this radio address, Roosevelt outlined the main provisions of the New Deal to the American people and explained the causes of the economic crisis. He called for cooperation between individuals, private companies, government bodies, and global leaders to reverse the crisis and rebuild the economy.

Summary Overview

When President Franklin Delano Roosevelt took office in March 1933, the United States was in the midst of the worst financial crisis the country had ever experienced. During Roosevelt's first one hundred days in office, he worked with the Congress to create social and economic programs, collectively known as the New Deal, which were designed to stabilize the economy and provide work for the unemployed. The New Deal also included efforts to guarantee bank deposits and prevent future bank runs, to slow the rate of farm foreclosures by providing farmers with lower interest rates on their mortgages, and to provide employment to millions of Americans. In this radio address, Roosevelt outlined the main provisions of the New Deal to the American people and explained the causes of the economic crisis. He called for cooperation between individuals, private companies, government bodies, and global leaders to reverse the crisis and rebuild the economy.

Defining Moment

The United States economy boomed throughout most of the 1920s, in part due to the country's strong position relative to European countries still recovering from the financial and infrastructural damage of World War I. Abundant raw materials and technological advances in manufacturing gave US bankers investment funds, which they used to help finance some of Europe's postwar recovery efforts.

However, many European economies remained weak for years after the war, and most of Europe's financial progress during the 1920s came from trade and investments outside the continent. Furthermore, US stock values were much higher relative to the actual health of the economy. As the US economy softened toward the end of the 1920s, its investments in Europe slowed, further weakening the European economies and jeopardizing their ability to repay their loans to US creditors. On October 29, 1929, following a slight drop in stock values, investors rapidly lost confidence and the US stock market crashed. The value of publicly-traded US companies fell by $30 billion in less than one month, marking the onset of the Great Depression.

Additionally, overproduction in the agricultural and manufacturing sectors had led to a surplus of goods on the domestic US market. With supply exceeding demand, the cost of goods declined significantly, leaving farmers and manufacturers unable to recover costs or make a profit. Farmers faced foreclosure of their property, and factories laid off industrial workers in droves.

By the time Franklin Delano Roosevelt began his presidential campaign in 1932, nearly one-quarter of Americans were out of work, and many were losing their homes and even starving. The stock market had declined to about 20 percent of its 1929 value, and more than one-third of US banks had collapsed, evaporating the savings of millions of Americans. Farmers and industrial workers were frustrated by the federal government's actions under President Herbert Hoover, believing that his efforts focused too strongly on using public funds to subsidize large companies, rather than helping the people directly. As a result of the public's discontent, Roosevelt won the election by a large margin, and he immediately set out to reverse the downward economic spiral.

Within his first one hundred days in office, Roosevelt declared a multiday bank holiday, which kept the nation's banks closed (and thus in business), while he worked with the legislature to develop a plan to maintain their solvency and prevent bank runs. Once the immediate crisis passed, he worked again with Congress to establish a series of government programs designed to provide immediate relief and federally-funded jobs that would put people back to work on public-works initiatives. These programs became collectively known as the New Deal and formed the cornerstone of Roosevelt's domestic policy during his years in office.

Author Biography

Franklin Delano Roosevelt was born on January 30, 1882, in Hyde Park, New York. He was a distant cousin of President Theodore Roosevelt. He attended the prestigious Groton School in Massachusetts and received his bachelor's degree in history from Harvard University in 1903. He studied law at Columbia Law School in New York but left the school without completing his degree after he passed the state bar examination in 1907. He practiced law in New York City before being elected to the New York State Senate in 1910.

President Woodrow Wilson appointed Roosevelt assistant secretary of the Navy in 1913, a position he held until 1920. Following an unsuccessful campaign for US vice president under Democratic candidate James M. Cox in 1920, Roosevelt briefly withdrew from politics. After making a partial recovery from polio, which he contracted in 1921, Roosevelt was elected governor of New York in 1928. In 1932, Roosevelt was elected president of the United States. He was inaugurated during the nadir of the Great Depression and saw the country through World War II. Roosevelt died in office on April 12, 1945.

Document Analysis

Roosevelt begins his radio address by reminding the audience of the message he delivered eight weeks prior about the ongoing economic crisis. He observes that overproduction in both the agricultural and manufacturing sectors had led to greatly diminished prices for basic commodities, and as a result, businesses were unable to turn a profit and financial institutions began foreclosing on mortgages, recalling loans, and restricting credit access. Roosevelt notes that the federal government has only two possible courses of action under the circumstances: to allow the foreclosures and credit freezes to continue, thus causing the value of property, raw materials, manufactured goods, and commodities to continue to deflate, or to intervene with a plan to support these institutions while the private sector rights itself.

Roosevelt emphasizes that the social consequences of allowing deflation to continue unchecked could bring “incalculable harm” to American society, arguing that such a course of action would permanently damage people's confidence in the US economy and further hamper economic recovery. He argues that it is better for the federal government to intervene on the people's behalf and emphasizes that the plan he is about to outline received bipartisan support in the legislature.

The remainder of Roosevelt's address gives a rough outline of the social and economic programs to be established and funded by the federal government, which collectively became known as the New Deal. These initiatives include establishing the Civilian Conservation Corps to employ young men in public environmental projects, funding additional development in the Tennessee Valley region, providing federal subsidies to small banks to ease the burden of mortgage debt on farmers and homeowners, offering funds to states and counties to spend on immediate relief for their residents in need, and authorizing the sale of beer in the midst of Prohibition in order to create jobs and generate revenue through the sale and taxation of alcohol.

For the longer-term future, Roosevelt notes that it is necessary to improve farmers' returns on crops and to control the problem of overproduction in both farming and industrial manufacturing. He believes that a significant cause of the current economic crisis is that overproduction eroded the value of goods, and he criticizes the false notion that there will be an infinite demand for the increasing amount of food and manufactured goods produced in the United States. He addresses concerns that the government is seizing control over farming and business and says the New Deal and its programs are meant to be a partnership designed to ensure fair competition and promote a quick economic recovery. He asserts that it is well within the US government's rightful authority to prevent unfair businesses practices when the government has the support and assistance of the majority of that industry.

On the global front, Roosevelt says that he is working with other nations' leaders on four objectives: to reduce military armaments, remove trade barriers, stabilize currency, and reestablish friendly relations between nations. He is hopeful that these other nations recognize the interconnectedness of their economies and that they will be able to work together to bring an end to their collective economic difficulties as swiftly as possible.

Essential Themes

A significant theme throughout Roosevelt's campaign and presidency was his attention to the plight of everyday Americans. His bottom-up approach to economic recovery is considered to be a major factor in his sweeping victory over Herbert Hoover in the 1932 election. Contrary to Hoover's less interventionist approach at the onset of the Great Depression, Roosevelt believed that restoring financial security to farmers and workers first would increase spending and ultimately strengthen corporate financial positions. To this end, he proposed significant government spending on programs that put people back to work, and many Americans took government-sponsored jobs working on environmental conservation and other projects to improve public infrastructure. But Roosevelt acknowledged that government intervention alone could not provide lasting improvement to the economy; he believed that permanent change required the participation and cooperation of private companies as well, and he hoped that the New Deal programs would provide the push needed to jump-start that process.

Additionally, as a result of weakening economies across the globe, many countries tried to protect domestic production by raising tariffs on imported goods. This had the unintended effect of reducing the total value of world trade by more than half by 1932, and the increased restrictions only led to a deepening of the economic crisis. Without viable external markets, the overproduction of farm products and manufactured goods in the United States created domestic surpluses that dramatically drove down prices, harming profits and leading to reductions in the workforce and wages. Roosevelt sought to work with foreign governments to reopen international trade, hoping this would raise overseas demand for US products and ultimately put people back to work.

Roosevelt's New Deal programs brought many changes to American society and seemed to ease the burdens of the Great Depression. However, despite the new programs and financial investment from the federal government, the economic recovery was slow. The employment rate and the stock market steadily improved from 1933 through 1937. But an economic recession hit in 1937, resulting in rising unemployment, and the US economy did not fully recover from the Great Depression until the country entered World War II in December 1941.

Bibliography and Additional Reading
  • Katznelson, Ira. Fear Itself: The New Deal and the Origins of Our Time. New York: Liveright, 2013. Print.
  • McElvaine, Robert S. The Great Depression: America, 1929–1941. 25th anniv. ed. New York: Three Rivers, 2009. Print.
  • Smith, Jean Edward. FDR. New York: Random, 2008. Print.
  • “Timeline of the Great Depression.” American Experience. WGBH Educational Foundation, n.d. Web. 11 June 2014.
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