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During the Great Depression, President FDR addressed the nation through fireside chats. In one chat, he explained the banking crisis and the steps taken to address it. Banks were closed due to people rushing to withdraw their money, causing a shortage of currency. To restore confidence, a nationwide bank holiday was declared, followed by legislation to reopen banks gradually. The government ensured that sound banks had enough currency to meet demands. The reopening process was extended to allow banks to apply for loans and for the government to assess their status. State banks followed a similar schedule. FDR emphasized the safety of keeping money in reopened banks and the importance of public cooperation. The new legislation allowed banks to convert assets into cash more easily. Reorganizations and government assistance were provided for banks that needed it. FDR urged the public to have faith, not be swayed by fear, and support the government's efforts to restore the financial system Welcome back, guys. What I want you guys to do today is break into groups and analyze different fireside chats from the FDR presidency. Then I want one of you from each group to record yourself using Audacity and read out the fireside chat your group chose. I want you guys to really put yourself into FDR's shoes and visualize what Americans were going through during the Great Depression. In this podcast, I'll demonstrate how your podcast should sound. Let's start. March 12, 1933. I want to talk for a few minutes with the people of the United States about banking. With the comparatively few who understand the mechanics of banking, but more particularly with the overwhelming majority who use banks for the making of deposits and the drawing of checks, I want to tell you what has been done in the last few days, why it was done, and what the next steps are going to be. I recognize that the many proclamations from state capitals and from Washington, the legislation, the Treasury regulations, et cetera, et cetera, couch for the most part in banking and legal terms, should be explained, for the benefit of the average citizen. I owe this in particular because of the fortitude and good temper with which everybody has accepted the inconvenience and hardships of the banking holiday. I know that when you understand what we in Washington have been about, I shall continue to have your cooperation as fully as I have had your sympathy and help during the past week. First of all, let me state the simple fact that when you deposit money in a bank, the bank does not put the money into a safe deposit vault. It invests your money in many different forms of credit, aka bonds, commercial paper, mortgages, and many other kinds of loans. In other words, the bank puts your money to work to keep the wheels of the industry and of agriculture turning around. A comparatively small part of the money you put into the bank is kept in currency. An amount which is in normal times is wholly sufficient to cover the cash needs of the average citizen. In other words, the total amount of all the currency in the country is only a small fraction of the total deposits in all of the banks. What then happened during the last few days of February and the first few days of March? Because of the undermined confidence on the part of the public, there was a general rush by a large portion of our population to turn bank deposits into currency or gold. A rush so great that the soundest banks could not get enough currency to meet the demand. The reason for this was that on the spur of the moment, it was of course impossible to sell perfectly sound assets of a bank and convert them into cash except at panic prices far below their real value. By the afternoon of March 3rd, scarcely a bank in the country was open to do business. Proclamations temporarily closing them in whole or in part had been issued by the governors in almost all the states. It was then that I issued the proclamation providing for the nationwide bank holiday and this was the first step in the government's reconstruction of our financial and economic fabric. The second step was the legislation promptly and patriotically passed by the Congress confirming my proclamation and broadening my powers so that it became possible in view of the requirement of time to extend the holiday and lift the ban of the holiday gradually. This law also gave authority to develop a program of rehabilitation of our banking facilities. I want to tell our citizens in every part of the nation that the National Congress, Republicans and Democrats alike showed by this action a devotion to public welfare and a realization of the emergency and the necessity for speed that is difficult to match in our history. The third stage has been a series of regulations permitting the banks to continue their functions to take care of the distribution of food and household necessities and the payment of payrolls. This bank holiday, while resulting in many cases in great inconvenience, is affording us the opportunity to supply the currency necessary to meet the situation. No sound bank is a dollar worse off than it was when it closed its last doors last Monday. Neither is any bank which may turn out not to be in a position for immediate opening. The new law allows the 12 Federal Reserve Banks to issue additional currency on good assets and thus the banks which reopen will be able to meet every legitimate call. The new currency is being sent out by the Bureau of Engraving and Printing in large volume to every part of the country. It is sound currency because it is backed by actual good assets. A question you will ask is this, why are all the banks not to be reopened at the same time? The answer is simple. Your government does not intend that the history of the past few years shall be repeated. We do not want and will not have another epidemic of bank failures. As a result, we start tomorrow, Monday, with the opening of the banks in the 12 Federal Reserve Bank cities. Those banks which on first examination by the Treasury have already been found to be alright. This will be followed on Tuesday by the resumption of all the functions by banks already found to be sound in cities where there are recognized clearing houses. That means about 250 cities of the United States. On Wednesday and succeeding days, banks in smaller places all through the country will resume business subject of course to the government's fiscal ability to complete its survey. It is necessary that the reopening of banks be extended over a period in order to permit the banks to make applications for necessary loans, to obtain currency needed to meet the requirements and to enable the government to make common sense checkups. Let me make it clear to you that if your bank does not open the first day, you are by no means justified in believing that it will not open. A bank opens on one of the subsequent days. Is it exactly the same status as the bank that opens tomorrow? I know that many people are worrying about state banks, not members of the Federal Reserve System. These banks can and will receive assistance from members, banks and from the Reconstruction Finance Corporation. These state banks are following the same course as the national banks except that they get their licenses to resume business from the state authorities and these authorities have been asked by the Secretary of the Treasury to permit their good banks to open up on the same schedule as the national banks. I am confident that the state banking departments will be as careful as the national government in the policy relating to the opening of the banks and will follow the same broad policy. It is possible that when the banks resume, a very few people who have not recovered from their fear may again begin withdrawals. Let me make it clear that the banks will take care of all needs and it is my belief that hoarding during the past week has become an exceedingly unfashionable pastime. It needs no profit to tell you that when the people find that they can get their money, that they can get it when they want it for all legitimate purposes. The phantom of fear will soon be laid. People will again be glad to have their money where it will be safely taken care of and where they can use it conveniently at any time. I can assure you that it is safer to keep your money in a reopened bank than under the mattress. The success of our whole great national program depends of course upon the cooperation of the public, honest intelligence support and use of reliable systems. Remember that the essential accomplishment of the new legislation is that it makes it possible for banks more readily to convert their assets into cash than was the case before. More liberal provision has been made for banks to borrow on these assets at the reserve banks and more liberal provision has also been made for issuing currency on security of those good assets. This currency is not flat currency. It is issued only on adequate security and every good bank has an abundance of such security. One more point before I close. There will be of course some banks unable to reopen without being reorganized. The new law allows the government to assist in making these reorganizations quickly and effectively and even allows the government to subscribe to at least a part of a new capital which may be required. I hope you could see from this elemental recital of what your government is doing and that there is nothing complex or radical in the process. We had a bad banking situation. Some of our bankers had shown themselves either incompetent or dishonest in their handling of people's funds. They had used the money entrusted to them in speculations and unwise loans. This was of course not true in the vast majority of our banks but it was true in enough of them to shock the people for a time into a sense of insecurity and to put them into a frame of mind where they did not differentiate but seemed to assume that the acts of a comparative few had tainted them all. It was the government's job to straighten out the situation and do it as quickly as possible and the job is being performed. I do not promise you that every bank will be reopened or that individual losses will not be suffered but there will be no losses that possibly could be avoided and there would have been more and greater losses had we continued to drift. I can even promise you salvation for some, at least of the sorely pressed banks. We shall be engaged not merely in reopening sound banks but in the creation of sound banks through reorganization. It has been wonderful for me to catch the note of confidence from all over the country. I can never be sufficiently grateful to the people for the loyal support they have given me and their acceptance of the judgment that has dictated our course even though all our process may not have seemed clear to them. After all, there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith. You must not be stampeded by rumors or guesses. Let us unite in bashing fear. We have provided the machinery to restore our financial system. It is up to you to support and make it work. It is your problem, no less than it is mine. Together, we cannot fail. Thank you.