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It's hard to imagine a greater theft from the
American people than their personal gold savings. This stolen gold was then exchanged
to foreign bankers for irredeemable paper dollars. The continuing thievery by
the Federal Reserve of American's productivity by debt and inflation
continues unabated to impoverish and enslave us.
Charleston Voice
FDR:
THE GREAT GOLD CONFISCATOR
Advancing
Tyranny under a cover of "patriotism" and "sacrifice".
Using the theme of a "caring government" when it's really
"Them" vs. "Us".
Listen
to Audio: Audio mp3 of Address
Followed by the Coup de grâce one month later - the outright theft of the
people's gold
Read the text of FDR's Executive Order: FDR Issues Executive Order 6102
Banning Gold Ownership
President
Franklin D. Roosevelt: My friends, I want to talk for a few minutes with
the people of the United States about banking—to talk with the comparatively
few who understand the mechanics of banking, but more particularly with the
overwhelming majority of you 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, and why it was done, and what the next steps are going to be. I
recognize that the many proclamations from the state capitals and from
Washington, the legislation, the Treasury regulations and so forth, couched
for the most part in banking and legal terms, ought to be explained for the
benefit of the average citizen. I owe this in particular because of the
fortitude and the good temper with which everybody has accepted the
inconvenience and the hardships of the banking holiday. And 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 your 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—in bonds, in commercial
paper, in mortgages, and in many other kinds of loans. In other words, the
bank puts your money to work to keep the wheels of industry and of agriculture
turning round. A comparatively small part of the money that you put into the
bank is kept in currency—an amount which 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 comparatively
small proportion of the total deposits in all the banks of the country.
What, then, happened during the last few days of February and the first few
days of March? Because of 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
couldn’t 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 3, a week ago last Friday,
scarcely a bank in the country was open to do business. Proclamations closing
them in whole or in part had been issued by the governors in almost all of
the states.
It was then that I issued the proclamation providing for the national bank
holiday, and this was the first step in the government’s reconstruction
of our financial and economic fabric.
The second step, last Thursday, 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 that holiday gradually in the
days to come. This law also gave authority to develop a program of
rehabilitation of our banking facilities, and 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 it is
difficult to match in all our history.
The third stage has been the 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. Remember that no sound bank is a dollar worse off than it was when
it closed its doors last week. Neither is any bank which may turn out not to
be in a position for immediate opening. The new law allows the twelve federal
reserve banks to issue additional currency on good assets and thus banks that
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.
Another question that you will ask is this: why are all the banks not to be
reopened at the same time? The answer is simple, and I know you will
understand it. 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 banks in the
twelve federal reserve bank cities—those banks which on first
examination by the Treasury have already been found to be all right. That
will be followed on Tuesday by the resumption of all other 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. In other words, we
are moving as fast as the mechanics of the situation will allow us.
On Wednesday and succeeding days banks in smaller places all through the
country will resume business, subject, of course, to the government’s
physical 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 the necessary loans, to obtain currency needed to meet their
requirements, and to enable the government to make
commonsense checkups.
Please 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
that opens on one of the subsequent days is in exactly the same status as the
bank that opens tomorrow.
I know that many people are worrying about state banks that are not members
of the Federal Reserve System. There is no occasion for that worry. These
banks can and will receive assistance from member banks and from the
Reconstruction Finance Corporation and of course they are under the immediate
control of the state banking authorities. 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. And so I am confident that the state
banking departments will be as careful as the national government in the
policy relating to the opening of banks and will follow the same broad
theory.
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
to you that the banks will take care of all needs except of course the
hysterical demands of hoarders—and it is my belief that hoarding during
the past week has become an exceedingly unfashionable pastime in every part
of our nation.
It needs no prophet 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, my friends, that it is
safer to keep your money in a reopened bank than it is to keep it under the
mattress.
The success of our whole national program depends, of course, on the
cooperation of the public—on its intelligent support and its use of a
reliable system.
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 the security of these good assets. This
currency is not fiat 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 any new capital that may be
required.
I hope you can see, my friends, from this essential recital of what your
government is doing that there is nothing complex, nothing 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 the 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 of the United States 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. And so it became the government’s
job to straighten out this situation and to do it as quickly as possible. And
that 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 more sound banks through reorganization.
It has been wonderful to 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 that they have given me in their acceptance of the judgment that has
dictated our course, even though all our processes 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 themselves. 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 banishing
fear. We have provided the machinery to restore our financial system; and it
is up to you to support and make it work.
It is your problem, my friends, your problem no less than it is mine.
Together we cannot fail.
Prison for Gold Hoarders Edition
of NY Times, March, 1933
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