New Deal

NEW DEAL PRIMARY DOCUMENT READER

Questions:

1. Why did FDR establish a bank holiday? For what purpose did this serve the American

public, or is it perceived as a hindrance to businesses and personal needs of the nation's

citizens?

2. What does the president say to reassure faith in the banking system to the public? To

which citizens, considering politics and social/economic motivators, would he appear the

more convincing? Who might his critiques be? Explain.

3. Examining the second source, consider and evaluate the president's words when

discussing his justification for the Public Works Project: "Demoralization caused by vast

unemployment is our greatest extravagance." In relation to his address to the American

public, what issues does he try to address and how does he intend to defend his economic

policies against accusations of fiscal and material waste? What accusations does he make

against his conservative critiques? Evaluate his response, are the dangers he presents to

the public realistic given the state of the economy at that time? Explain.

4. After reading the State of the Union Address from January, 1941, what crisis, according

to FDR, most threatened the security of the nation? From what you have read from the

text, how popular were his words to Congress? Explain the reasons for this and analyze

what strategy had he already established in lieu of the rise of global instability at that

time.

Source:

Fireside Chat, President Franklin D. Roosevelt1

Date: Marc, 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 Capitols and from Washington, the legislation, the Treasury

regulations, etc., couched 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

1 Address of the President by Radio From the White House. www.mhri c.org (acces s ed October 19, 2014).

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-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 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 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 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 3 scarcely a bank in the country was open to do business.

Proclamations temporarily closing them in whose 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 nation-wide 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 entend (sic) the holiday and lift the ban of that 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 it is

difficult to match in 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. No sound bank

is a dollar worse off than it was when it closed its 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 twelve 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.

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. This will be followed on Tuesday by the resumption of

all their 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 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 necessary loans, to obtain

currency needed to meet their 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 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 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 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

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 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 -- on its intelligent support and 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 those 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 new capital which may be required.

I hope you can see from this elemental recital of what your government is doing 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 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

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 this 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 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 they

have given me in their acceptance of the judgment that has dictated our course, even

though all of 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.

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; 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.

Source: Fireside Chat September 30th, 1934

Three months have passed since I talked with you shortly after the adjournment of the

Congress. Tonight I continue that report, though, because of the shortness of time, I

must defer a number of subjects to a later date.

Recently the most notable public questions that have concerned us all have had to do

with industry and labor and with respect to these, certain developments have taken

place which I consider of importance. I am happy to report that after years of

uncertainty, culminating in the collapse of the spring of 1933, we are bringing order out

of the old chaos with a greater certainty of the employment of labor at a reasonable

wage and of more business at a fair profit. These governmental and industrial

developments hold promise of new achievements for the nation.

Men may differ as to the particular form of governmental activity with respect to industry

and business, but nearly all are agreed that private enterprise in times such as these

cannot be left without assistance and without reasonable safeguards lest it destroy not

only itself but also our processes of civilization. The underlying necessity for such

activity is indeed as strong now as it was years ago when Elihu Root said the following

very significant words:

"Instead of the give and take of free individual contract, the tremendous power of

organization has combined great aggregations of capital in enormous industrial

establishments working through vast agencies of commerce and employing great

masses of men in movements of production and transportation and trade, so great in

the mass that each individual concerned in them is quite helpless by himself. The

relations between the employer and the employed, between the owners of aggregated

capital and the units of organized labor, between the small producer, the small trader,

the consumer, and the great transporting and manufacturing and distributing agencies,

all present new questions for the solution of which the old reliance upon the free action

of individual wills appear quite inadequate. And in many directions, the intervention of

that organized control which we call government seems necessary to produce the same

result of justice and right conduct which obtained through the attrition of individuals

before the new conditions arose."

It was in this spirit thus described by Secretary Root that we approached our task of

reviving private enterprise in March, 1933. Our first problem was, of course, the banking

situation because, as you know, the banks had collapsed. Some banks could not be

saved but the great majority of them, either through their own resources or with

government aid, have been restored to complete public confidence. This has given

safety to millions of depositors in these banks. Closely following this great constructive

effort we have, through various Federal agencies, saved debtors and creditors alike in

many other fields of enterprise, such as loans on farm mortgages and home mortgages;

loans to the railroads and insurance companies and, finally, help for home owners and

industry itself. In all of these efforts the government has come to the assistance of

business and with the full expectation that the money used to assist these enterprises

will eventually be repaid. I believe it will be.

The second step we have taken in the restoration of normal business enterprise has

been to clean up thoroughly unwholesome conditions in the field of investment. In this

we have had assistance from many bankers and businessmen, most of whom

recognize the past evils in the banking system, in the sale of securities, in the deliberate

encouragement of stock gambling, in the sale of unsound mortgages and in many other

ways in which the public lost billions of dollars. They saw that without changes in the

policies and methods of investment there could be no recovery of public confidence in

the security of savings. The country now enjoys the safety of bank savings under the

new banking laws, the careful checking of new securities under the Securities Act and

the curtailment of rank stock speculation through the Securities Exchange Act. I

sincerely hope that as a result people will be discouraged in unhappy efforts to get rich

quick by speculating in securities. The average person almost always loses. Only a very

small minority of the people of this country believe in gambling as a substitute for the old

philosophy of Benjamin Franklin that the way to wealth is through work.

In meeting the problems of industrial recovery the chief agency of the government has

been the National Recovery Administration. Under its guidance, trades and industries

covering over ninety percent of all industrial employees have adopted codes of fair

competition, which have been approved by the President. Under these codes, in the

industries covered, child labor has been eliminated. The work day and the work week

have been shortened. Minimum wages have been established and other wages

adjusted toward a rising standard of living. The emergency purpose of the N. R. A. was

to put men to work and since its creation more than four million persons have been re-

employed, in great part through the cooperation of American business brought about

under the codes.

Benefits of the Industrial Recovery Program have come, not only to labor in the form of

new jobs, in relief from over-work and in relief from under-pay, but also to the owners

and managers of industry because, together with a great increase in the payrolls, there

has come a substantial rise in the total of industrial profits - a rise from a deficit figure in

the first quarter of 1933 to a level of sustained profits within one year from the

inauguration of N. R. A.

Now it should not be expected that even employed labor and capital would be

completely satisfied with present conditions. Employed workers have not by any means

all enjoyed a return to the earnings of prosperous times; although millions of hitherto

under- privileged workers are today far better paid than ever before. Also, billions of

dollars of invested capital have today a greater security of present and future earning

power than before. This is because of the establishment of fair, competitive standards

and because of relief from unfair competition in wage cutting which depresses markets

and destroys purchasing power. But it is an undeniable fact that the restoration of other

billions of sound investments to a reasonable earning power could not be brought about

in one year. There is no magic formula, no economic panacea, which could simply

revive over-night the heavy industries and the trades dependent upon them.

Nevertheless the gains of trade and industry, as a whole, have been substantial. In

these gains and in the policies of the Administration there are assurances that hearten

all forward-looking men and women with the confidence that we are definitely rebuilding

our political and economic system on the lines laid down by the New Deal - lines which

as I have so often made clear, are in complete accord with the underlying principles of

orderly popular government which Americans have demanded since the white man first

came to these shores. We count, in the future as in the past, on the driving power of

individual initiative and the incentive of fair private profit, strengthened with the

acceptance of those obligations to the public interest which rest upon us all. We have

the right to expect that this driving power will be given patriotically and whole-heartedly

to our nation.

We have passed through the formative period of code making in the National Recovery

Administration and have effected a reorganization of the N. R. A. suited to the needs of

the next phase, which is, in turn, a period of preparation for legislation which will

determine its permanent form.

In this recent reorganization we have recognized three distinct functions. First, the

legislative or policy making function. Second, the administrative function of code making

and revision and, third, the judicial function, which includes enforcement, consumer

complaints and the settlement of disputes between employers and employees and

between one employer and another.

We are now prepared to move into this second phase, on the basis of our experience in

the first phase under the able and energetic leadership of General Johnson.

We shall watch carefully the working of this new machinery for the second phase of N.

R. A., modifying it where it needs modification and finally making recommendations to

the Congress, in order that the functions of N. R. A. which have proved their worth may

be made a part of the permanent machinery of government.

Let me call your attention to the fact that the National Industrial Recovery Act gave

businessmen the opportunity they had sought for years to improve business conditions

through what has been called self-government in industry. If the codes which have been

written have been too complicated, if they have gone too far in such matters as price

fixing and limitation of production, let it be remembered that so far as possible,

consistent with the immediate public interest of this past year and the vital necessity of

improving labor conditions, the representatives of trade and industry were permitted to

write their ideas into the codes. It is now time to review these actions as a whole to

determine through deliberative means in the light of experience, from the standpoint of

the good of the industries themselves, as well as the general public interest, whether

the methods and policies adopted in the emergency have been best calculated to

promote industrial recovery and a permanent improvement of business and labor

conditions. There may be a serious question as to the wisdom of many of those devices

to control production, or to prevent destructive price cutting which many business

organizations have insisted were necessary, or whether their effect may have been to

prevent that volume of production which would make possible lower prices and

increased employment. Another question arises as to whether in fixing minimum wages

on the basis of an hourly or weekly wage we have reached into the heart of the problem

which is to provide such annual earnings for the lowest paid worker as will meet his

minimum needs. We also question the wisdom of extending code requirements suited to

the great industrial centers and to large employers, to the great number of small

employers in the smaller communities.

During the last twelve months our industrial recovery has been to some extent retarded

by strikes, including a few of major importance. I would not minimize the inevitable

losses to employers and employees and to the general public through such conflicts.

But I would point out that the extent and severity of labor disputes during this period has

been far less than in any previous, comparable period.

When the businessmen of the country were demanding the right to organize themselves

adequately to promote their legitimate interests; when the farmers were demanding

legislation which would give them opportunities and incentives to organize themselves

for a common advance, it was natural that the workers should seek and obtain a

statutory declaration of their constitutional right to organize themselves for collective

bargaining as embodied in Section 7 (a) of the National Industrial Recovery Act.

Machinery set up by the Federal government has provided some new methods of

adjustment. Both employers and employees mast share the blame of not using them as

fully as they should. The employer who turns away from impartial agencies of peace,

who denies freedom of organization to his employees, or fails to make every reasonable

effort at a peaceful solution of their differences, is not fully supporting the recovery effort

of his government. The workers who turn away from these same impartial agencies and

decline to use their good offices to gain their ends are likewise not fully cooperating with

their government.

It is time that we made a clean-cut effort to bring about that united action of

management and labor, which is one of the high purposes of the Recovery Act. We

have passed through more than a year of education. Step by step we have created all

the government agencies necessary to insure, as a general rule, industrial peace, with

justice for all those willing to use these agencies whenever their voluntary bargaining

fails to produce a necessary agreement.

There should be at least a full and fair trial given to these means of ending industrial

warfare; and in such an effort we should be able to secure for employers and

employees and consumers the benefits that all derive from the continuous, peaceful

operation of our essential enterprises.

Accordingly, I propose to confer within the coming month with small groups of those

truly representative of large employers of labor and of large groups of organized labor,

in order to seek their cooperation in establishing what I may describe as a specific trial

period of industrial peace.

From those willing to join in establishing this hoped-for period of peace, I shall seek

assurances of the making and maintenance of agreements, which can be mutually

relied upon, under which wages, hours and working conditions may be determined and

any later adjustments shall be made either by agreement or, in case of disagreement,

through the mediation or arbitration of state or federal agencies. I shall not ask either

employers or employees permanently to lay aside the weapons common to industrial

war. But I shall ask both groups to give a fair trial to peaceful methods of adjusting their

conflicts of opinion and interest, and to experiment for a reasonable time with measures

suitable to civilize our industrial civilization.

Closely allied to the N. R. A. is the program of Public Works provided for in the same

Act and designed to put more men back to work, both directly on the public works

themselves, and indirectly in the industries supplying the materials for these public

works. To those who say that our expenditures for Public Works and other means for

recovery are a waste that we cannot afford, I answer that no country, however rich, can

afford the waste of its human resources. Demoralization caused by vast unemployment

is our greatest extravagance. Morally, it is the greatest menace to our social order.

Some people try to tell me that we must make up our minds that for the future we shall

permanently have millions of unemployed just as other countries have had them for

over a decade. What may be necessary for those countries is not my responsibility to

determine. But as for this country, I stand or fall by my refusal to accept as a necessary

condition of our future a permanent army of unemployed. On the contrary, we must

make it a national principle that we will not tolerate a large army of unemployed and that

we will arrange our national economy to end our present unemployment as soon as we

can and then to take wise measures against its return. I do not want to think that it is the

destiny of any American to remain permanently on relief rolls.

Those, fortunately few in number, who are frightened by boldness and cowed by the

necessity for making decisions, complain that all we have done is unnecessary and

subject to great risks. Now that these people are coming out of their storm cellars, they

forget that there ever was a storm. They point to England. They would have you believe

that England has made progress out of her depression by a do-nothing policy, by letting

nature take her course. England has her pecularities and we have ours but I do not

believe any intelligent observer can accuse England of undue orthodoxy in the present

emergency.

Did England let nature take her course? No. Did England hold to the gold standard

when her reserves were threatened? No. Has England gone back to the gold standard

today? No. Did England hesitate to call in ten billion dollars of her war bonds bearing

5% interest, to issue new bonds therefore bearing only 3 1/2% interest, thereby saving

the British Treasury one hundred and fifty million dollars a year in interest alone? No.

And let it be recorded that the British bankers helped. Is it not a fact that ever since the

year 1909, Great Britain in many ways has advanced further along lines of social

security than the United States? Is it not a fact that relations between capital and labor

on the basis of collective bargaining are much further advanced in Great Britain than in

the United States? It is perhaps not strange that the conservative British press has told

us with pardonable irony that much of our New Deal program is only an attempt to catch

up with English reforms that go back ten years or more.

Nearly all Americans are sensible and calm people. We do not get greatly excited nor is

our peace of mind disturbed, whether we be businessmen or workers or farmers, by

awesome pronouncements concerning the unconstitutionality of some of our measures

of recovery and relief and reform. We are not frightened by reactionary lawyers or

political editors. All of these cries have been heard before. More than twenty years ago,

when Theodore Roosevelt and Woodrow Wilson were attempting to correct abuses in

our national life, the great Chief Justice White said:

"There is great danger it seems to me to arise from the constant habit which prevails

where anything is opposed or objected to, of referring without rhyme or reason to the

Constitution as a means of preventing its accomplishment, thus creating the general

impression that the Constitution is but a barrier to progress instead of being the broad

highway through which alone true progress may be enjoyed."

In our efforts for recovery we have avoided on the one hand the theory that business

should and must be taken over into an all-embracing Government. We have avoided on

the other hand the equally untenable theory that it is an interference with liberty to offer

reasonable help when private enterprise is in need of help. The course we have

followed fits the American practice of Government - a practice of taking action step by

step, of regulating only to meet concrete needs - a practice of courageous recognition of

change. I believe with Abraham Lincoln, that "The legitimate object of Government is to

do for a community of people whatever they need to have done but cannot do at all or

cannot do so well for themselves in their separate and individual capacities."

I still believe in ideals. I am not for a return to that definition of Liberty under which for

many years a free people were being gradually regimented into the service of the

privileged few. I prefer and I am sure you prefer that broader definition of Liberty under

which we are moving forward to greater freedom, to greater security for the average

man than he has ever known before in the history of America. (END)

Source: Franklin Delano Roosevelt State of the Union 1941 - 6 January 1941

Mr. President, Mr. Speaker, Members of the Seventy-seventh Congress:

I address you, the Members of the Seventy-seventh Congress, at a moment unprecedented in the

history of the Union. I use the word "unprecedented," because at no previous time has American

security been as seriously threatened from without as it is today.

Since the permanent formation of our Government under the Constitution, in 1789, most of the

periods of crisis in our history have related to our domestic affairs. Fortunately, only one of

these--the four-year War Between the States--ever threatened our national unity. Today, thank

God, one hundred and thirty million Americans, in forty-eight States, have forgotten points of

the compass in our national unity.

It is true that prior to 1914 the United States often had been disturbed by events in other

Continents. We had even engaged in two wars with European nations and in a number of

undeclared wars in the West Indies, in the Mediterranean and in the Pacific for the maintenance

of American rights and for the principles of peaceful commerce. But in no case had a serious

threat been raised against our national safety or our continued independence.

What I seek to convey is the historic truth that the United States as a nation has at all times

maintained clear, definite opposition, to any attempt to lock us in behind an ancient Chinese wall

while the procession of civilization went past. Today, thinking of our children and of their

children, we oppose enforced isolation for ourselves or for any other part of the Americas.

That determination of ours, extending over all these years, was proved, for example, during the

quarter century of wars following the French Revolution.

While the Napoleonic struggles did threaten interests of the United States because of the French

foothold in the West Indies and in Louisiana, and while we engaged in the War of 1812 to

vindicate our right to peaceful trade, it is nevertheless clear that neither France nor Great Britain,

nor any other nation, was aiming at domination of the whole world.

In like fashion from 1815 to 1914--ninety-nine years--no single war in Europe or in Asia

constituted a real threat against our future or against the future of any other American nation.

Except in the Maximilian interlude in Mexico, no foreign power sought to establish itself in this

Hemisphere; and the strength of the British fleet in the Atlantic has been a friendly strength. It is

still a friendly strength.

Even when the World War broke out in 1914, it seemed to contain only small threat of danger to

our own American future. But, as time went on, the American people began to visualize what the

downfall of democratic nations might mean to our own democracy.

We need not overemphasize imperfections in the Peace of Versailles. We need not harp on

failure of the democracies to deal with problems of world reconstruction. We should remember

that the Peace of 1919 was far less unjust than the kind of "pacification" which began even

before Munich, and which is being carried on under the new order of tyranny that seeks to spread

over every continent today. The American people have unalterably set their faces against that

tyranny.

Every realist knows that the democratic way of life is at this moment being directly assailed in

every part of the world--assailed either by arms, or by secret spreading of poisonous propaganda

by those who seek to destroy unity and promote discord in nations that are still at peace.

During sixteen long months this assault has blotted out the whole pattern of democratic life in an

appalling number of independent nations, great and small. The assailants are still on the march,

threatening other nations, great and small.

Therefore, as your President, performing my constitutional duty to "give to the Congress

information of the state of the Union," I find it, unhappily, necessary to report that the future and

the safety of our country and of our democracy are overwhelmingly involved in events far

beyond our borders.

Armed defense of democratic existence is now being gallantly waged in four continents. If that

defense fails, all the population and all the resources of Europe, Asia, Africa and Australasia will

be dominated by the conquerors. Let us remember that the total of those populations and their

resources in those four continents greatly exceeds the sum total of the population and the

resources of the whole of the Western Hemisphere--many times over.

In times like these it is immature--and incidentally, untrue--for anybody to brag that an

unprepared America, single- handed, and with one hand tied behind its back, can hold off the

whole world.

No realistic American can expect from a dictator's peace international generosity, or return of

true independence, or world disarmament, or freedom of expression, or freedom of religion--or

even good business.

Such a peace would bring no security for us or for our neighbors. "Those, who would give up

essential liberty to purchase a little temporary safety, deserve neither liberty nor safety."

As a nation, we may take pride in the fact that we are softhearted; but we cannot afford to be

soft-headed.

We must always be wary of those who with sounding brass and a tinkling cymbal preach the

"ism" of appeasement.

We must especially beware of that small group of selfish men who would clip the wings of the

American eagle in order to feather their own nests.

I have recently pointed out how quickly the tempo of modern warfare could bring into our very

midst the physical attack which we must eventually expect if the dictator nations win this war.

There is much loose talk of our immunity from immediate and direct invasion from across the

seas. Obviously, as long as the British Navy retains its power, no such danger exists. Even if

there were no British Navy, it is not probable that any enemy would be stupid enough to attack

us by landing troops in the United States from across thousands of miles of ocean, until it had

acquired strategic bases from which to operate.

But we learn much from the lessons of the past years in Europe--particularly the lesson of

Norway, whose essential seaports were captured by treachery and surprise built up over a series

of years.

The first phase of the invasion of this Hemisphere would not be the landing of regular troops.

The necessary strategic points would be occupied by secret agents and their dupes--and great

numbers of them are already here, and in Latin America.

As long as the aggressor nations maintain the offensive, they--not we--will choose the time and

the place and the method of their attack.

That is why the future of all the American Republics is today in serious danger.