Address in St. Louis, Missouri

My fellow citizens:

From the congressional elections in 1930 down to the present moment the strategy of the Democratic Party has been an effort to implant in the unthinking mind through deliberate misrepresentation the colossal falsehood that the Republican Party is responsible for this worldwide catastrophe. They appealed then to distress, hardship, and radicalism by nebular and inconsistent promises. These are the reasons they give why the Republicans of the country should desert their party, and why the Nation should abandon a constructive program with its accomplishment already demonstrated in overcoming this crisis. Theirs is not a campaign of issues; it is a campaign of avoidances. I propose tonight to discuss the nature of their campaign, its false premises, its vague promises, its shifts of position, and I shall also touch upon their destructive actions which have delayed recovery of this country for months.

Despite the fact that Democratic leaders announced after the congressional elections 2 years ago that they would have a real program to end this depression, they produced no program, then as now, although the crisis at one time rose to a degree which endangered the whole Republic. Instead of a constructive program, the Democratic leaders passed a number of bills through the Democratic House of Representatives designed to appeal to discontent and sectional cupidity and indeed of the type that would have destroyed the very foundations of our American system. Its threats to confidence set recovery backward. Their candidates have sought constantly to distort the facts as to the depression; they have sought to minimize the measures by which the administration saved the United States from a generation of chaos. They fail ever to mention the effect that these measures are having day by day in the steady recuperation of our economic life. Their leaders have taken no patriotic satisfaction in the fact that a million men have returned to work since the malign influence of the Democratic House and their allies was removed by adjournment of Congress, and the Republican measures and policies had an opportunity to act. No one of them has mentioned that men are returning to work at the rate of half a million a month.

The whole campaign has many aspects parallel with a campaign which took place in a former depression, of which I will read you a short description from a journal published in Washington during that time. That journal said more than half a century ago, and I quote:

"The circumstances on which the Democratic Party base their hope of success in the present campaign is unquestionably the hardness of the times. Their expectation is that Republican voters will quit their party or at least remain at home on election day because they find themselves in straitened circumstances. Even the ravages of the grasshoppers, damages to the crops by drought in some sections and excessive moisture in others are to be traced by some mysterious process to the maladministration of the Republican Party."

Later on that journal reviews the discussion of expenditures of the Republican administration during the period of depression and pointed out that the House of Representatives was Democratic at that time as it has been during the last year. It stated:

"There had rarely been such ignorance joined with a stubbornness more mulish than that which characterized the action of some of the leaders of that body."

And it continues:

"Their economy was of the brilliant description which consists in saving at the spigot and losing at the bung."

They likewise today repeat their promises of economy in the face of the attempts of the Democratic House last winter to fasten $3,400 million of added expenditures upon the Federal Government. The country wisely supported the Republican Party in that election of over a half a century ago, and it promptly made progress.

A circular placed in my hands since coming to this State, issued by the Democratic National Committee, says this depression was manmade. I agree with that, but they say the man who made it was myself personally. They express no gratitude that in my manufacture of this world crisis I have let this country off easier than Russia or Western Europe or South America.

In this campaign of 1932, also despite overwhelming proof to the contrary, but in order to make unceasing appeal to discontent, the present Democratic candidate and his corps of orators repeat down to the last 24 hours their unceasing statement that the Republicans made this depression and all that has happened in it.

Now, in the earlier part of this campaign the Democratic candidate held up the horrors of the Hawley-Smoot tariff act and of the stock market boom as being the sole causes of this world catastrophe. At Des Moines and at Detroit and Indianapolis I frequently established the complete absurdity of his tariff bill argument, and the Governor has since, at Wheeling, Baltimore, and Boston, uttered such confused thoughts in his tariff views that he can no longer consistently or conscientiously state that the tariff had anything to do with the worldwide catastrophe. If he would make his contradictory statements on the tariff consistent, it will have the disastrous political effect of requiring the deletion, so my statisticians tell me, of over 10,000 eloquent words from what has been said during this campaign. In order to continue the false premise on which the Democratic campaign continues to be based-that is, that the Republican Party brought on the depression--he is now thrust back, as his sole remaining explanation, to the boom of 1928. He argues now that if there had never been a boom there never would have been a slump, and if there never had been a slump in the United States, there would never have been a depression in the world.

Now, if by maintaining the prosperity of this country over a long period of years the people did become so overconfident of the future and thus overoptimistic, the Republican Party might be praised at least for that long period of prosperity. It was a bad outbreak of overoptimism and overconfidence. The collapse of the boom brought about great losses and great suffering, but I submit that some of the greatest leaders amongst the boom promoters of that period belonged to the Democratic Party, and the Democratic candidate himself assisted actually in promotions during that period which he now so warmly denounces. I do not criticize his acts. They were honest formations of concern. He was merely participating in the prevailing mood, like the former Democratic candidate who undertook the construction of the tallest building in the world in the same boomtown.

Of more importance, the Governor in his speeches conveys the impression that as President I should have stopped the boom. He does not describe the method by which I should have stopped it. Of course there is no constitutional nor statutory authority to Presidents to stop booms. If the President had attempted to stop that boom, one of the persons that he would have needed to warn is the present Democratic candidate.

Now, the only way I can see that a President could even tilt with a boom would be to turn himself personally into a blue sky law and go on the stump analyzing balance sheets and stock market prices and proving to the people that their investments were wrong. Now, I have little taste for this proposal that the White House should be turned into a stock tipster's office. I earnestly object to the idea that such a form of dictatorship should ever be set up over the American people, even if they do get overoptimistic. It may lead in directions for which this Republic would be mighty sorry. Even the Democratic platform does not seem to accord with the Governor, for it says: "We condemn the actions of high public officials designed to influence stock market prices."

Now, this same sort of reasoning led the Governor to propose in this city that the Presidential influence should be used in municipal finance. He said: "If necessary they must be compelled to walk in the way of municipal honesty and efficiency," and he added: "This is what I propose to do toward the credit represented by the 17 billions of municipal bonds." It occurs to me that we should need to revise our whole form of government and the Constitution of the United States in a dozen places if the President of the United States is to supervise municipalities and mayors.

The Governor seems law to prevent booms to have some idea of creating a Federal blue sky and control the issue of all sorts of securities. I am not disputing that many securities are issued which are dishonest and over which there should be a control. But, the full constitutional authority for that sort of action rests, of course, in the States, and I am advised that this is not within the constitutional authority of the Federal Government. In any event, even if it were, I doubt whether the people in any State in the Union would like to have another board in Washington, distant from their own close inspection and understanding, dealing out certificates as to issue of securities and thus controlling the industries of their States. In any event, his plan would be centralization of government beyond anything we have hitherto witnessed and does not seem to accord with the forgotten Democratic theory of State rights. All this has been within the power of the State of New York not only to protect its own citizens but the citizens of other States, and the Governor seems to have forgotten it until this campaign.

Many years ago the Democratic Party undertook to remedy this whole question of booms and slumps by the creation of the Federal Reserve System. We have been afflicted with 15 of them in a century. They do bring disaster and hardship, and they ought to be remedied. But their new discovery was that, far from wanting the President to do this job, they should set up an agency and in it stipulate that the board alone should have powers entirely independent of the President, and they further made the board entirely bipartisan.

Now, it was indeed promised by Democratic leaders at the time the Federal Reserve System was created that they had found the solution to prevent booms, slumps, and panics. I could quote from a multitude of speeches of the day of the passage of the act, and further from: the assurance given in political campaigns as to this enormous accomplishment of their party.

I find in speeches of President Wilson, Secretary McAdoo, Senator Carter Glass, and other leaders, the recurrent idea that through the control of interest rates and other authorities the Federal Reserve System could prevent booms and consequently slumps and panics.

A few of their expressions ought to be of interest. Among them they said:

"We shall have no more financial panics."

"Panics are impossible."

"Businessmen can now proceed in perfect confidence that they will no longer put their property in peril ."

"Now the businessman may work out his destiny without living in terror of panic and hard times."

"Panics in the future are unthinkable."

"Never again can panic come to the American people."

And I will not weary you with more quotations.

The whole country went along for years with much confidence in these statements and, although no one can say with certainty, it is likely that this confidence contributed to the building up of the boom which led to the crash.

The Governor will discover his errors in connection with the responsibilities for this boom if he will examine its relation to the Federal Reserve System. That System did loyally endeavor to restrain speculation. Many months before the collapse, it issued warnings to the banks about loaning money for speculative purposes, and it gave these warnings to the public. It placed restrictions on rediscounts, and they did force up the interest rate for speculative money to 15 and even to 20 percent. But that did not stop the mania for speculation. I do not criticize the Federal Reserve System. I believe in it. All the point I make is that using its utmost powers it failed in the face of a great mass movement-public psychology. Now the blame is to be transferred to the Republican Party for having failed to do the job which they promised would be done by the panacea of their own institution.

I could go further with this argument of futility by pointing out that the leading Democrats did not discover the Republican responsibility for this depression until it reached the vote-getting stage. Governor Smith, 2 years ago, implied that neither he nor any man takes the position of placing the responsibility for the business depression on either the President or the Republican Party. And Governor Roosevelt, before he was nominated, made a characteristically vague statement of much the same character.

The Democratic candidate, in a recent speech defending his boom argument, said that when our boom collapsed all but 20 percent of the people of the world were in a state of high prosperity. If he will examine carefully a statement of the National Bureau of Economic Research, whose authority no one denies, he will find that the booms of the following nations had already collapsed: Germany, Australia, Japan, Mexico, Turkey, Rumania, Bolivia, Brazil, India, Poland, and Bulgaria, embracing 600 million people, and that coincidently 11 other nations had been affected by the collapses I have mentioned--that is, the United States, the United Kingdom, Canada, Hungary, Italy, Argentina, South Africa, Czechoslovakia, Austria, Peru, Belgium, the Netherlands, and Spain, had all declined. If he will check up the portion of the world included in these nations, he will find he has been misinformed about 300 percent.

As a matter of fact, if the Democratic candidate actually wants to make a point of the boom question and if he wants to put the true causes of this situation before the American people, he should with draw all this multitude of conflicting, confusing, and misleading statements and disclose to the American people that the most tremendous fact in modern history was the Great War and its aftermath. It would be only fair to point out that the difficulties we are now struggling with even within the United States consist to a large degree in the tremendous increase of our public debt, our foreign war debts, the liquidation of war inflation, the necessity to maintain a larger army and navy to protect ourselves in a greatly disturbed world. This war having come on during a Democratic administration, and they having spent the money, they should not have forgotten that the undertakings of that period are what create a multitude of the difficulties of this country today. If they would find the foundations of statesmanship, they ought to frankly recognize the problem with which the American people are faced. They should not be appealing to discontent on a basis of ignorance and of their full participation in the real causes. If they wish to find solutions for the guidance of the American people through these times, they should not continue to ignore these great burdens imposed upon the United States nor the effect on the world, ourselves included, by the enormous blotting out of lives in foreign nations by the World War, the fabulous waste of their property, the fabulous increase of their debts, the fabulous increase of armaments, the continued friction and hate that have arisen among them out of harsh treaties.

The Democratic candidate should not continue to ignore the panics which overtook these nations when their citizens recognized the fact that all property and material wealth must be readjusted in values from the consequences of the war. He should not overlook the frantic attempts of their governments to reduce the expenditures of their people by reducing the import of goods; the scramble of their citizens to turn what property they could into gold; the ultimate results in dictatorships and upsets in governments. He should not continue to ignore the effect of these things upon the United States and the dangers which so accumulated that we became the last fortress of world economic stability, and at one moment we held even that by the narrowest of margins. He should recognize the effect of the stoppage of the import of goods by these governments, not out of tariff reprisals to the Hawley Smoot bill, but out of their public necessity.

He should recognize the effect upon our credit system of the foreign withdrawal of $2,400 million in credit and gold from the United States in less than 14 months. He should recognize the fears which these events produced in our own citizens, causing them to draw out $1,600 million and put it into hoarding. And he should cease to ignore the fact that we were faced with a crisis of such dimensions that unless strong action had been taken in the passage of a bill for which Democratic Members of Congress voted, with the full knowledge of the facts, we could not have held the gold standard in the United States. And he should recognize that unless we had taken other strong and unprecedented measures we could not have prevented the collapse of our insurance companies, our banks, the foreclosures on millions of homes and farms, the strangulation of credit which would have brought about almost total unemployment.

It is true the Democratic Members voted for these measures of giving increased authority to the Federal Reserve System, of creating the Reconstruction Corporation, of support of mortgage banks. I admire their patriotism, and I have expressed it always. But if they did it without a knowledge of the facts of which they now appear to be so innocent, they are an easier group to persuade into legislation than I have hitherto met. They now fail to admit that these measures which we have put into motion have begun to bring about stability and prosperity in the United States, of which there is need of but one word more of proof. That is that since the adjournment of the Democratic House of Representatives and their allies last July down to this moment, over 1 million men have gone back to their normal jobs. They are going back at the rate of 500,000 a month unless they are interrupted by a change in these policies.

Now all of this statement that I have given to you has importance in four respects: first, because it proves the falsity of the foundation of their campaign; second, because it shows their utter confusion of mind, and either their insincerity or their utter lack of grasp of the forces loose in the world, and consequently the danger of placing men who have such a lack of penetration into the control of the Government of 120 million American people; third, because the continuous broadcasting of misinformation, although it is daily of conflicting character, as to where this calamity came from, indicates an irresponsibility which does not promise well for the Government of these same 120 million people; fourth, because they, as a responsible political party, should cease to appeal to unthinking people for votes based upon their suffering by misleading them as to its causes.

Having again disposed of the futile misrepresentations and evasions of the origins of this depression and the false basis of their appeal, I shall now consider some of their other evasions which have developed in the campaign. The Democratic candidate in his speech of acceptance says he will leave no doubt or ambiguity as to where he stands on any question of moment now before the country.

Notwithstanding this disarming promise, the people are still unable to find the method by which he will execute his six-point program for farm relief. It is one of the great mysteries of this campaign. It is a certainty that there will be six doors of exit from this attractive house, although he refuses to disclose the other specifications, and the walls have not yet been built.

The people have yet to learn what he proposes to do in respect to the soldiers' bonus. He seems to think that a cash sum of $2,300 million to be paid 13 years hence is no different from cash today, but he says that he intends it should be paid when there is a surplus in the Treasury with which to pay it. That means a surplus of $2,300 million. I assure the veterans of the World War that so long as there is a Democratic Congress there never will be a surplus of $2,300 million.

The people deserve to know more of his promise to take $1 billion off the expenditures of Federal Government, and before they can even start figuring on this question they must know whether he repudiates the Democratic proposals for $3 1/2 million additional expenditures which were passed by the House of Representatives in the last session of Congress. Does he repudiate the pork barrel and other expenditure bills ?

Now, the people deserve to know why, even at this late date, the Democratic candidate has not disavowed the bill passed by the Democratic House of Representatives to issue more than $2 billion of greenback currency, which bill, so far as Mr. Garner is concerned, remains upon the calendar as unfinished business of the Democratic House.

The people deserve to know why he has not yet stated his position on the proposal to put the Government into personal banking, as Provided in the bill passed by the last House of Representatives and in fact by the entire Congress under Mr. Garner's leadership, which I vetoed.

The people deserve to know his views on the rubber dollar provided for in the last session and passed by the last House of Representatives.

The people deserve to know what all his phrases and reservations about the Hawley-Smoot protective tariff really mean. He condemns it on every occasion. He gives 100 percent support to the competitive tariff for revenue. He gives nebular implications in such speeches as those at Wheeling, Baltimore, and Boston, that he will protect certain groups. Now the tariff is composed of different schedules. If he is sufficiently informed on the tariff law to debate its merits, he must be sufficiently informed to say at once which schedules are too high and which are too low. If he will do so, we will at once have them examined by the Tariff Commission as to the truth of his assertions, and we can afford quick remedy if his facts are correct. His only answer seems to be that he would do away with the Tariff Commission.

Now, the people deserve to know whether, as he has proposed to negotiate reciprocal tariffs, he will omit the agricultural commodities from these agreements.

The people deserve to know whether the Democratic State Committee of Oklahoma has the authority of the Democratic leaders for their promise to the people of that State to secure Federal legislation which will pour into that State $150 million for liquidation of long since repudiated Indian claims at the expense of the Federal taxpayer.

The American farmer deserves to know whether he is going to withdraw the Shearon letter 1--that is the proposal circulated amongst our unemployed to vastly expand reclamation land and thereby increase their surpluses despite the assurances given in another public statement that these surpluses must be reduced.

¹ See Item 347, page 588.

The people deserve to know whether he will support or repudiate Messrs. Wheeler, Norris, Huey Long, W. R. Hearst, and others, in their long-continued efforts to put the Government into large business undertakings.

The people deserve to know more details on the promise set out in the Shearon letter that the whole of the unemployed in the United States will be at once given jobs by the Government.

Are the people to assume that he does or does not endorse the system of national doles advocated in Congress by his present supporter, Senator La Follette of Wisconsin ?

The people deserve to know whether he has accepted the proposal of his supporter, William R. Hearst, for a $5 billion bond issue for nonproductive public works to be paid for out of the Public Treasury by the taxpayer.

They deserve to know if he joins with the same William Randolph Hearst in his opposition to the Disarmament Conference now in progress. Does he join with Mr. Hearst in his opposition to the promotion of peace by the Kellogg Pact?

The people ought to know if he still holds to his promise to solve the foreign debt problem by permitting foreign nations to sell goods in this country with which to pay sums owed our Government. In other words, are we, by giving up part of our market at the expense of our own workmen and our farmers, to furnish our debtors with profits necessary to make payments to us ?

He has been very emphatic on the provision of distress relief. That is also perfectly safe because the Government has provided for loans to the States in need of help to provide them with such relief.

Now, the evasions and misleading character of the campaign of the Democratic Party are not less evident in their program for dealing with the 18th amendment than in the other questions they have discussed. They know that their own Democratic strongholds in the South, if no other, will not accept the proposal for outright repeal of the 18th amendment, with the consequent return of the saloon, and its resultant lack of protection of the dry States.

I have stated in my acceptance speech what I believe is the only practical common ground with adequate protection on which this whole question can reach solution. That statement was the result of 3 years of intensive study and the responsibility of experience with the problem. It was delivered to probably the largest audience of the radio and press ever gathered together in the United States. It is known to you. It is a matter of public record.

Our Democratic opponents are trying to make another false issue over supposed coercion of voters by employers. In the first place, the ballot in the United States is secret, and no one can coerce a voter-except a political machine. In the second place, the interest of employer and employee is identical in securing business on which they mutually live. The Republican employer has the same right to publicly express his opinion on this election as has the Democratic employer and the Democratic orator.

Now, it is with sadness that I see attempts to mislead the people and avoid the real issues of the hour which demands a campaign of the most serious order.

I do not have the time tonight to present the whole great constructive measures of the administration by which we defended the American people from acute danger of a generation of chaos out of this world disaster. These measures are now placing us upon the road to recovery. They are vast and complicated. I think perhaps I can best illustrate the working of two of them--two out of scores--by short examples.

I would like to have you picture a group of gentlemen sitting in the board room of the Federal Reserve bank in one of our important cities 1,000 miles from Washington. Another similar group is seated in the board room of another Federal Reserve bank in a city some 200 miles from Washington. A group of advisers is seated with the President of the United States. Both of the city groups included Governors of the Federal Reserve banks, Directors of the Reconstruction Corporation, together with the leading bankers and merchants of those two cities, embracing men of both political parties. It was Sunday afternoon, and all had been summoned on a few moments' notice to meet a grave emergency. These three groups were continuously in communication by long distance telephone.

During the preceding week there had been a general run upon the banks in one of these important cities. Through Saturday evening and Sunday, panic increased and began to spread like a contagion to the whole district.

The banks were under heavy pressure because of the frightened depositors and the inability of the banks in the midst of the crisis to make a quick sale of their long-term securities without such tremendous sacrifice as to imperil all of their depositors or in turn to force the payment of notes of an army of borrowers without in turn forcing them to sell their homes and business at half price. It was found that one of the banks in one of these great cities had been weakened more than the others by these panic-stricken depositors. Without assistance, that bank would be unable to open on the following Monday morning. The failure of that bank to continue business would have added to the panic which threatened to bring down other banks in that city and spread in turn to other cities and involve many trust and insurance companies. The immediate problem was to provide before Monday morning a sufficient sum of money to quiet unreasoning fear and give absolute assurance that funds were available to pay every depositor in full without question.

In the course of inquiry upon the condition of the bank, it was found that they had ample securities which in normal times could have paid out their depositors with wide margins. But the securities could not be instantly sold at any price or at least at a price which would produce sufficient to pay all depositors, and they could not collect instantly from the note holders. In the inquiry into the condition of that bank, it developed they had 122,000 depositors, of whom 105,000 were savings depositors; that the average of the savings deposits was only $140 each; that many of them were workingmen and even children; that the safety of these depositors could not be separated from the other depositors of the bank.

It was found that there were 17,000 commercial depositors, most of whom were men and women engaged in small businesses, whose deposits represented the money necessary to meet their payrolls, the purchasing of their materials, and the discharge of obligations to others incurred in the course of their business. Jeopardy to them meant that many thousands of men and women in factories and stores would be discharged into untold hardship.

But these were not all of those that were dependent upon the maintenance of this bank. It was found that among the 17,000 commercial deposits 755 were country banks, the great majority of them in towns of less than 5,000 people. If this bank should fail, many of these country banks must also fall.

In the complex system of our economic life, things that on the surface seem unrelated are in fact under the surface inextricably tied together. A farmer in a small town in an agricultural State might feel no concern for the safety of this important bank in a great city. The widow with a small deposit in a small bank of a town of another State might know of no relationship between her bank and that city bank. But the farmer in one State and the widow in another, even though they did not know it, had a direct financial stake in the fate of that city bank. For the country banks must conduct business with the city banks in the ordinary course of trade, and they must carry their reserves with the city banks in order that they may draw interest upon them which they in turn pay to their depositors.

Now, it was found on examination that these 755 depositing banks had 60 million depositors scattered over 15 States, and that was not all. There were 21,000 other banks scattered through the country, which had deposits in the 755 banks depositing with this particular city bank, and in these 21,000 banks were over 20 million depositors, and they involved widows, orphans, workers, insurance companies, and merchants and manufacturers.

And in addition to all this, there was the position of the borrowers from all this mass of banks. If this city bank should fail, there must be immediate demand for the payment of the money due from its borrowers. If any of the banks dependent upon it should fail, their borrowers must in turn be compelled to make immediate payment of money due as it was due and to realize upon their property at a time when property could not be turned into cash at anything like its real value. Now, I will not tire you with these statistics, but they are important that our country should understand.

In this city bank and in the 755 banks which carried their reserve deposits in this city bank, there were 695,000 men and women and institutions owing money on their notes. They were scattered throughout the length and breadth of the land. They were on the farms, in the cities, the villages and hamlets. Most of all these groups of people were unaware of their danger. They were in their homes and in their churches, concerned with their own affairs, but they were not being forgotten.

The men who had conducted this bank over great numbers of years were men of high esteem in the whole community. To their credit be it said that their chief concern was the preservation of these hundreds of thousands or millions of people from disaster. They were asking nothing for themselves.

The investigations and the conversations occupied many hours of continuous communication from these two cities to Washington and back again. Remember this was a Sunday, when the normal processes of business were difficult to conduct. Countless difficulties were encountered and solutions worked out. They were working against time.

Finally, at 3 hours after Sunday midnight, that task was completed. The assets had been valued by the examiners of the Reconstruction Corporation. The banks of the two cities joined in lending assistance, and the Reconstruction Corporation agreed to furnish a sufficient sum to assure that this bank could open without fear and meet every demand of its depositors.

At 10 o'clock on Monday all these banks opened for business as usual. Public announcement was made that ample funds were on hand to pay every depositor. As had been anticipated, immediately excitement and panic subsided and confidence was restored. The crowds melted away, and the deposits began to return. The situation was saved, not only in this bank, but in all of the other banks which had been subject to heavy withdrawals.

The loans offered by the cooperating banks and the Reconstruction Corporation were never fully called for and have since been largely repaid, and they will all be repaid. Every danger in connection with that episode is now over.

The central human figure of that bank was a man, known to you in St. Louis, who had served his country for 40 years in many high capacities--both in peace and in war--who in recent years had been absent from the country in a position of first importance to the American people.

That is the story of the Dawes bank in Chicago.

You know the use our political opponents have made of this dent all through the Midwest. They ignore the fact that General Dawes resigned from the Reconstruction Corporation 3 weeks before, on his first news that attacks were being made on the bank with which his name had long been associated. He resigned to try to save that bank without a call on the Reconstruction Corporation of which he had been a Director. He knew and appreciated the use that would be made in this campaign of such a calumny. He sought to avoid it. And you should know that when that Sunday morning meeting started, General Dawes stated that he could not bring himself to ask for assistance from the Corporation in which he had so lately been a Director and thus involve the President of the United States in criticism. But it was upon the insistence of the Democratic members of the Reconstruction Board, sitting in the Federal Reserve bank meeting at Chicago, and upon the insistence of the leading Democratic banker of Chicago, who was then mentioned as a candidate for the Presidency of the United States, and upon the insistence in New York City of the leading Democratic banker and a leading Democratic manufacturer, also mentioned for the Presidency; upon insistence of the other Democratic members of the Reconstruction Corporation as well as the Republicans that this was no case of personal feelings for General Dawes or the effect upon the campaign or this administration; that this was solely a case of national necessity, and those men then and there joined and offered to take the full responsibility for that action.

These men acted not because they were Democrats or Republicans but because they were loyal citizens of the United States. That situation required broad vision and comprehensive understanding of the problem, instant decision, bold and courageous action, and a human heart. Only by this was a major disaster averted. And I may tell you that not only were these loans adequately secured, but in the ordinary course of business they are being largely paid off.

The constant misrepresentation of this episode for political purposes by Democratic politicians is a slander upon men of their own party as well as a cruel injustice to General Dawes. It is a characteristic example of the character of this campaign. It is an insult to the American people to substitute this sort of political agitation for competent discussion of the grave issues which lay today before our country.

And I may tell you that this is but one of six similar episodes in great financial centers in the United States, the direct result of the shocks and fears which we received from the collapse of Europe. But such action by our Government agencies has not been limited to great financial centers. In over 5,000 towns of populations under 25,000 the Reconstruction Corporation has had to intervene to save their banks under similar circumstances and thank God that day has gone by. At the height of this crisis they had to make loans to insurance companies with 15 million policyholders. They made loans to 736 building and loan associations with over 10 million members. They made loans to several hundred farm and home mortgage companies, agricultural credit associations, livestock credit corporations--all of them for the purpose of preventing the loss of hundreds of thousands of homes and farms and the destruction of family life. The totals today aggregate millions of men and women who were not forgotten.

I have gone into this matter at such length to illustrate to you by actual example what the operation of the Reconstruction Corporation has meant. This is an example of the meaning of my oft-repeated phrase about the use by the Federal Government of the full power of its credit in time of great national emergency for the protection of millions of families and firesides.

The Democratic candidate for President has since the beginning of the campaign been going up and down the country characterizing the Reconstruction Corporation and maintaining that its actions have been for the benefit of large corporations and not for the benefit of the ordinary citizen. Can he honestly believe that in the incident I have described to you and in the countless similar cases, the action was taken for the benefit of the bank and not for the depositors and borrowers? When these loans have been repaid, there has been no benefit to the banks. There has been the preservation of the lives of millions of people.

[At this point, the transcript taken from a sound recording of the President's address ends. The following text is taken from the President's reading copy.]

If he does not so believe, then I say in all solemnity that his action in fostering a spirit of discontent in a political campaign by the use of erroneous information merits just condemnation.

One of his first utterances to this effect was immediately challenged by a prominent citizen of his own State, a former superintendent of banks, who addressed a letter to him setting forth the real facts and requesting a retraction. Weeks have now elapsed, and that request has been met only by silence upon the part of the candidate.

Now I wish to picture to you another episode in this supreme battle to protect the American people, the last fortress of stability in the world, but at the same time to extend a helping arm of assistance to another great nation.

In the latter part of May a year ago Ambassador Sackett made an emergency journey from Berlin to see me to present to me the desperate situation of the German people. His evidence showed that under the burden of unbearable debts and the cost of war, that great nation was rapidly disintegrating and the people desperately discouraged. They had made a courageous effort to meet these obligations, but their discharge was inexorably undermining their whole economic and social structure. In desperation, those who had fought manfully to comply with the obligations imposed upon them had lost all heart for the future and were steadily coming to the conclusion that nothing short of a revolution such as that which had taken place in Russia offered them any hope of deliverance.

Moved by the Ambassador's picture of what was happening to the common run of men and women in that country, I took up that problem, not alone from the interest of this great mass of humanity, but knowing that, if that nation should fall, the reactions upon the rest of the world and the United States would be irreparable. President von Hindenburg, knowing of Mr. Sackett's visit, sent me an appeal of a character between heads of nations without precedent in diplomatic history. That appeal was for preservation of a great people that I should use the good offices and prestige of the United States for their rescue.

In order to give a year in which the world, particularly European nations, could come to a comprehension of what this disintegration was doing to civilization itself, I proposed the postponement of all international debts for 1 year.

This was not easy to accomplish. The bitterness of war hates and nationalism, still rampant in Europe, made its acceptance doubtful. In order to make sure that it would be accepted in our country I interviewed the leaders of both Republican and Democratic parties, and upon display to them of what was transpiring, secured their approval in sufficient number to assure that we could complete the measure on our side. I then resolved upon a bold course. I published the proposal within 24 hours after communications to the other countries in order that politicians of the world might not thwart it through processes of diplomacy.

Immediately after this act, for the first time in the history of the world, I made personal, hourly use of the newly installed transatlantic telephone and talked with our ambassadors in the presence of the leaders of the nations. I received wholehearted and immediate response from Signor Mussolini of Italy; the same sympathetic response from the Prime Minister of Great Britain. Furthermore, the Governments of Belgium and Poland, which you might think would have retained more bitterness from the war than any other nations, responded instantly.

The arrangements were not easy, as existing contracts were complicated in their relationships between many nations, and they involved unequal sacrifices. Day after day, night after night, I was in communication with first one ambassador and then another, proposing methods to meet difficulties which arose, building up adjustments among different nations, until finally that year of postponement w-as secured.

And it was not merely a postponement of a year in the payments on debts for which I was seeking. I was seeking for a year in which Europe could solemnly consider the situation into which she was drifting. I was seeking to remove from the mind of the world the fears of debacle in civilization which were breaking down all security of credit, and to bring to their attention the healing powers of international cooperation.

You yourselves are familiar with the history of the year which followed. I know that the proposal of the moratorium diverted the entire current of thought and changed the history of what otherwise would have been a tragedy to the whole of civilization. It brought to new understanding the realization of the burdens under which Germany has been laboring.

Under the impulses of these agreements and the recognition at least of the peril in which they stood, there came out of this agreement a great measure of redemption to the German people, a sense of greater security to the world from the agreements at Lausanne.

That agreement and the human sympathies which were evoked by that new understanding of the postwar difficulties in the world have served greatly in the healing of the wounds of the Great War.

There lie in many events of the last 3 years great dramas, great tragedies. I have told of but two of them. But, overriding all these incidents, the world has witnessed the courage of men and the willingness to place their fate and their political future at stake for the world's progress. No man can go through these episodes without belief that there is a great regeneration in the courage, confidence, and intelligence of men for the guidance of this world back toward stability and common interest in the development of human welfare.