original source: http://www.mhric.org/fdr/chat12.html

Five years ago we faced a very serious problem of economic and social recovery. For four and a half years that recovery proceeded apace. It is only in the past seven months that it has received a visible setback.

And it is only within the past two months, as we have waited patiently to see whether the forces of business itself would counteract it, that it has become apparent that government itself can no longer safely fail to take aggressive government steps to meet it.

This recession has not returned to us (to) the disasters and suffering of the beginning of 1933. Your money in the bank is safe; farmers are no longer in deep distress and have greater purchasing power; dangers of security speculation have been minimized; national income is almost 50% higher than it was in 1932; and government has an established and accepted responsibility for relief.

But I know that many of you have lost your jobs or have seen your friends or members of your families lose their jobs, and I do not propose that the Government shall pretend not to see these things. I know that the effect of our present difficulties has been uneven; that they have affected some groups and some localities seriously but that they have been scarcely felt in others. But I conceive the first duty of government is to protect the economic welfare of all the people in all sections and in all groups. I said in my Message opening the last session of the Congress that if private enterprise did not provide jobs this spring, government would take up the slack -- that I would not let the people down. We have all learned the lesson that government cannot afford to wait until it has lost the power to act.

Therefore, my friends, I have sent a Message of far-reaching importance to the Congress. I want to read to you tonight certain passages from that Message, and to talk with you about them....

Today I pointed out to the Congress that the national income -- not the Government's income but the total of the income of all the individual citizens and families of the United States -- every farmer, every worker, every banker, every professional man and every person who lived on income derived from investments -- that national income had amounted, in the year 1929, to eighty-one billion dollars. By 1932 this had fallen to thirty-eight billion dollars. Gradually, and up to a few months ago, it had risen to a total, an annual total; of sixty-eight billion dollars -- a pretty good come- back from the low point....Production in many important lines of goods outran the ability of the public to purchase them, as I have said. For example, through the winter and spring of 1937 cotton factories in hundreds of cases were running on a three-shift basis, piling up cotton goods in the factory, (and) goods in the hands of middle men and retailers. For example, also, automobile manufacturers not only turned out a normal increase of finished cars, but encouraged the normal increase to run into abnormal figures, using every known method to push their sales. This meant, of course, that the steel mills of the Nation ran on a twenty-four hour basis, and the tire companies and cotton factories and glass factories and others speeded up to meet the same type of abnormally stimulated demand. Yes, the buying power of the Nation lagged behind.

"Thus by the autumn of 1937, last autumn, the Nation again had stocks on hand which the consuming public could not buy because the purchasing power of the consuming public had not kept pace with the production.

"During the same period ... the prices of many vital products had risen faster than was warranted. (....) For example, copper -- which undoubtedly can be produced at a profit in this country for from ten to twelve cents a pound -- was pushed up and up to seventeen cents a pound. The price of steel products of many kinds was increased far more than was justified by the increased wages of steel workers. In the case of many commodities the price to the consumer was raised well above the inflationary boom prices of 1929. In many lines of goods and materials, prices got so high in the summer of 1937 that buyers and builders ceased to buy or to build.

"... the economic process of getting out the raw materials, putting them through the manufacturing and finishing processes, selling them to the retailers, selling them to the consumer, and finally using them, got completely out of balance....

I came to the conclusion that the present-day problem calls for action both by the Government and by the people, that we suffer primarily from a failure of consumer demand because of lack of buying power. Therefore it is up to us to create an economic upturn.... [My] third proposal is to make definite additions to the purchasing power of the Nation by providing new work over and above the continuing of the old work. First, to enable the United States Housing Authority to undertake the immediate construction of about three hundred million dollars worth of additional slum clearance projects.

Second, to renew a public works program by starting as quickly as possible about one billion dollars worth of needed permanent public improvements in our states, and their counties and cities.

Third, to add one hundred million dollars to the estimate for Federal aid highways in excess of the amount that I recommended in January.

Fourth, to add thirty-seven million dollars over and above the former estimate of sixty-three million for flood control and reclamation.

Fifth, to add twenty-five million dollars additional for Federal buildings in various parts of the country.

In recommending this program I am thinking not only of the immediate economic needs of the people of the Nation, but also of their personal liberties --the most precious possession of all Americans. I am thinking of our democracy. I am thinking of the recent trend in other parts of the world away from the democratic ideal.

Democracy has disappeared in several other great nations -- disappeared not because the people of those nations disliked democracy, but because they had grown tired of unemployment and insecurity, of seeing their children hungry while they sat helpless in the face of government confusion, government weakness, -- weakness through lack of leadership in government. Finally, in desperation, they chose to sacrifice liberty in the hope of getting something to eat. We in America know that our own democratic institutions can be preserved and made to work. But in order to preserve them we need to act together, to meet the problems of the Nation boldly, and to prove that the practical operation of democratic government is equal to the task of protecting the security of the people....

It is going to cost something to get out of this recession this way but the profit of getting out of it will pay for the cost several times over. Lost working time is lost money. Every day that a workman is unemployed, or a machine is unused, or a business organization is marking time, it is a loss to the Nation. Because of idle men and idle machines this Nation lost one hundred billion dollars between 1929 and the Spring of 1933, in less than four years. This year you, the people of this country, are making about twelve billion dollars less than you were last year.

It is worthwhile to remember that the annual national people's income was thirty billion dollars more last year in 1937 than it was in 1932. It is true that the national debt increased sixteen billion dollars, but remember that in that increase must be included several billion dollars worth of assets which eventually will reduce that debt and that many billion dollars of permanent public improvements -- schools, roads, bridges, tunnels, public buildings, parks and a host of other things meet your eye in every one of the thirty-one hundred counties in the United States.

No doubt you will be told that the Government spending program of the past five years did not cause the increase in our national income. They will tell you that business revived because of private spending and investment. That is true in part, for the Government spent only a small part of the total. But that Government spending acted as a trigger, a trigger to set off private activity.

I always try to remember that reconciling differences cannot satisfy everyone completely. Because I do not expect too much, I am not disappointed. But I know that I must never give up -- that I must never let the greater interest of all the people down, merely because that might be for the moment the easiest personal way out.

I believe that we have been right in the course we have charted. To abandon our purpose of building a greater, a more stable and a more tolerant America would be to miss the tide and perhaps to miss the port. I propose to sail ahead. I feel sure that your hopes and I feel sure that your help are with me. For to reach a port, we must sail -- sail, not lie at anchor, sail, not drift.