Address to the Bankers' Convention at Constitution Hall, Washington, D.C.

I am glad to be here tonight at your invitation to speak to you informally about some of our common problems. As many of you know by personal experience, it is not a new thing for me to talk with bankers. I have been seeing many of your number almost daily during the past year and a half, and let me make it quite clear that in these meetings I have not done all the talking. I have been a good listener and I have asked many questions. I am frank in saying to you that I have found that there is the same striking lack of unanimity of opinion among bankers that characterizes many other groups in the country. It has been my purpose to seek out underlying agreement in the opinions that bankers have expressed and to encourage agreement.

You will recognize, I think, that a true function of the head of the Government of the United States is to find among many discordant elements that unity of purpose that is best for the Nation as a whole. This is necessary because government is not merely one of many coordinate groups in the community or the Nation, but government is essentially the outward expression of the unity and the leadership of all groups. Consequently the old fallacious notion of the bankers on one side and the Government on the other side as being more or less equal and independent units, has passed away. Government by the necessity of things must be the leader, must be the judge of the conflicting interests of all groups in the community, including bankers. The Government is the outward expression of the common life of all citizens.

What is a bank and what are its relations with the people? Why do the people through their Governments supervise banks? The people put their money into banks. They do this in order to protect it and in some cases to have it earn a small income. It costs money to provide this service and, therefore, the banks are permitted to invest these deposits in order to pay their expenses and to provide a reasonable profit to their stockholders. The public has no means of knowing whether the bank is safe, whether it is making safe investments, so the public turns to its Government to supervise the bank. Government has accepted this responsibility.

In its relations with bankers, the purpose of government should be threefold: first, to promote the confidence of the people in banks and banking in view of the important service that banks and banking may perform for the people as a whole; second, to make this confidence a real and living thing by assisting banks to render themselves useful, to render themselves worthy of this confidence through wise supervision. A third purpose now offers itself, and I wish with all earnestness to press this point tonight. Government should assert its leadership in encouraging not only the confidence of the people in banks, but the confidence of the banks in the people. In March, 1933, I asked the people of this country to renew their confidence in the banks of the country. They took me at my word. Tonight I ask the bankers of this country to renew their confidence in the people of this country. I hope you will take me at my word. I need not recount the situation of the banks in the spring of 1933. I found that the restoration of banking activity itself was my first responsibility on assuming office. It was necessary that the Government throw itself squarely into the task of bringing back to the banks the deposits of millions of citizens. As a result of my appeal the people responded by restoring their confidence in the banks of the United States.

The primary purpose accomplished, it became necessary that the Congress and the Administration enact measures to build up the banking structure so that it could once more provide support for the economic life of the country. Moreover, it had to be built —and we built it—strong enough so that it could resist future stresses and strains. Government found it necessary to create and get under way new emergency credit agencies and to use to the fullest extent the already existing Reconstruction Finance Corporation. These credit agencies moved with heroic energy, and it was a source of the utmost satisfaction to find that when the Federal Deposit Insurance Corporation went into operation the banking structure had regained a very considerable amount of its strength and its vitality. I think it is only fair to say that never since the formation of our Government has such a task been achieved in so short a time. Happily, the present security of our banks bears witness to the wise course that we pursued.

I find almost universal agreement among bankers that these agencies must continue until such time as the banks and other private credit agencies are themselves able and ready to take over these lending functions; and when that time comes, I shall be only too glad to curtail the activities of these public agencies in proportion to the taking up of the slack by privately owned agencies. I venture to suggest to you that when the history of these years comes to be written, while the closing and the reopening of the banks will occupy a prominent place, even greater interest will be centered in the fact that within a few months not only was the banking structure strengthened but the great governmental lending agencies went into action and also saved from disastrous deflation, liquidation and loss a vast portion of the farms, homes, railroads and corporations of America. That action definitely rescued the security and happiness of millions of our people.

Just as it is to be expected that the banks will resume their responsibility and take up the burden that the Government has assumed through its credit agencies, so I assume and expect that private business generally will be financed by the great credit resources which the present liquidity of banks makes possible. Our traditional system has been built upon this principle, and the recovery of our economic life should be accomplished through the assumption of this responsibility. The present steady and unmistakable revival of public demand for goods and services should provide the assurance necessary to the financing of industrial life. The Government is bending every effort through the Treasury, the Federal Reserve system, the Reconstruction Finance Corporation, the Securities and Exchange Commission and the Federal Housing Administration to facilitate and encourage the revival of private investment. I commend the objectives of the Housing Administration to your immediate consideration, but at the same time I ask you to note that all of these new agencies are seeking consultation and cooperation with you bankers.

While there lies before us still the necessity for large expenditures for the relief of unemployment, I think we should all proceed in the expectation that the revival of business activity will steadily reduce this burden.

I am gratified to know of the expressions of belief, public and private, by your members that the speed that we shall make toward this objective is something that no one has the wisdom or the hardihood to estimate. This recognition reflects a growing appreciation of the problems resting upon a responsible Chief Executive.

With respect to international relationships, I have been glad to note the growing appreciation in other Nations of the desirability of arriving, as quickly as possible, at a point of steadiness of prices and values. This objective of a greater steadiness of prices and values we have constantly kept before us as our own national American policy.

The fact that American business men and bankers are devoting more and more individual study and attention to the wider problems of our Nation, to the wider problems of international affairs, is manifesting itself today in many ways. It seems to me that this is a very important development. Let me make it clear to you that the Government of the United States has daily and even hourly contact with sources of information which cover not only every State and section of our own country, but also every other portion of the habitable globe. This information, my friends, is more complete, more informative and, I believe, more accurate than that possessed by any private agency.

I need not tell you that true wealth is not a static thing. It is a living thing made out of the disposition of men to create and to distribute the good things of life with rising standards of living. Wealth grows when men cooperate; but it stagnates in an atmosphere of misunderstanding and misrepresentation. Here, in America, the material means are at hand for the growth of true wealth. It is in the spirit of American institutions that wealth should come as the reward of hard labor—hard labor, I repeat-of mind and hand. That is a pretty good definition of what we call the profit system. Its real fulfillment comes in the general recognition of the rights of each factor of the community. It is not in the spirit of partisans, but it is in the spirit of partners, that America has progressed. The time is ripe for an alliance of all forces intent upon the business of recovery. In such an alliance will be found business and banking, agriculture and industry, and labor and capital. What an all-America team that would be! The possibilities of such a team kindle the imagination. They encourage our determination. They make easier the tasks of those in your Government who are leading it.

My friends, the Nation does not merely trust or hope that we will always do our duty. No, it is more than that. The Nation is justified in expecting that all of us will do our duty.