When Franklin D. Roosevelt was inaugurated on March 4, 1933, the United States was entering the fourth year of the Great Depression, the worst economic slowdown in the history of the country.
The stock market had fallen 75% from 1929 levels, and one in four workers was unemployed. In the weeks before Roosevelt took office, things had gotten worse. Some 4,000 banks had to close, which cost millions of people their savings. As depositors panicked and rushed to withdraw their money from the remaining banks, the crisis threatened to bring down the entire financial system of the country
“The only thing we have to fear is fear itself,” said Roosevelt famous on this cold and cloudy inauguration day. But stirring words would not be enough, and Roosevelt knew it: “This nation requires action, and action now.”
Two days later, it declared a “public holiday” across the country, temporarily shutting down the entire banking system in the country. Called for a special session, Congress passed the Emergency Banking Law on March 9. The bill gave the federal government the power to investigate the finances of each bank. Those who were deemed sufficiently healthy and stable would reopen on March 13.
The first “fireside conversation”
Franklin D. Roosevelt preparing for his first fireside conversation in 1933. In his speech, he explained the steps he was taking to reform the country’s banking system.
Corbis / Getty Images
But on March 12, 1933, the day before the banks reopened, it was not certain that these emergency measures had done enough to allay public fears. That evening, at 10 p.m. EST, Roosevelt addressed the nation by radio, directly from the White House diplomatic reception hall. (Yes, he was actually sitting next to a fireplace.)
“My friends, I want to talk for a few minutes with the American people at the bank”, he started. For about 13 minutes, over 60 million Americans listened to Roosevelt explain – in simple language designed “for the average citizen” – what the federal government had done in recent days to deal with the banking crisis, why they had done so and what will be the next steps.
After explaining how the bank worked, Roosevelt explained what had happened at the origin of the current crisis. He said the government’s emergency measures would allow an investigation into the country’s banks and allow the reopening of stable banks. After that, he said, people can feel safe when they return their money to banks rather than hoarding it at home for fear. “I can assure you,” he said, “that it is safer to keep your money in an open bank than under the mattress.”
Finally, Roosevelt called on the American people to renew their “confidence and their courage” and to have “faith” rather than being “marked by rumors or assumptions”.
“Let us unite to banish fear,” he concluded. “Together, we cannot fail.”
Effect of the words of the FDR
WATCH: FDR Fireside Conversation on Drought and the Dust Bowl
The effect was powerful: on March 13, when healthy banks reopened, people lined up en masse to give back their money. More than half of the funds that the Americans had withdrawn during the crisis were return to the bank within two weeks. On March 15, the first day the shares were traded after the bank holiday, the market experienced the largest overnight price increase on the market, reflecting a new wave of confidence among US investors.
Prior to Roosevelt’s second radio address, broadcast on May 7, 1933, CBS station manager Harold Butcher dubbed the speeches “fireside conversations”. Thousands of letters have started pouring into Roosevelt’s White House every day, many expressing gratitude for the president’s words. One cat by the fire could generate more than 450,000 cards, letters and telegrams.
However, it was a long and hard task before the country recovered. After a period of gradual recovery, a strong recession hit in 1937. Then a second severe contraction in 1938 canceled out many gains in production and employment and prolonged the effects of the Great Depression until the end of the decade. Through it all, FDR continued to speak directly to the American people through its radio addresses.
Roosevelt then spoke about thirty fireside conversations during his long presidency, as the country began an economic recovery, to be propelled head down in the Second World War. Fireside conversations have allowed Roosevelt to connect with the Americans in an unprecedented way – a skill that likely contributed to his four historic presidential victories.
