Address at the Lincoln Day Dinner in New York City.

Mr. Chairman, members of the National Republican Club, and your guests:

I am deeply grateful for the generosity of your reception this evening. I have long had the haunting obligation to meet with you as fellow members of a quarter of a century in this association. And it is a pleasure for me to address you on the day when this club and our countrymen of all faiths throughout the land are paying tribute to the memory of Abraham Lincoln. The inspiration of his character, his service to mankind, have become heritages of the world. His invisible presence dominates the halls of action in the Capital of the Nation. His kindliness and sympathy have become the possession of every American heart.

And we tonight also pay tribute to him as founder of the Republican Party and the inspirer of its ideals. He, more than any other man, created the living, virile organization which has given responsible interpretation of these ideals to our people in each succeeding generation. The party has brought these ideals to realization in the government and the development of a great Nation. An organization which can show more than 15 millions of adherents after 70 years--an irreducible minimum in the reaction from the worst depression the world has ever seen--is indeed testimony to the virility of the principles which Lincoln enunciated.

Those principles, the fiber and the determination of the party, assure that it will be recalled to power by the American people. One of the sure guaranties that this will be so was the extraordinary support of the youth of our country during the last campaign. There has never been a time in the history of the party when it received such a large adherence of young men and young women, when they exerted themselves with such capable organization, and such devotion, and effort as they did in this last campaign. It is to them that the party looks forward. It is to their idealism, their energy, and their vitality that the Republican Party can take assured hope for the future.

The people determined this election. Those of us who believe in the most basic principle insisted upon by Abraham Lincoln--the transcendent importance of popular government--have no complaint. We accept and, as Americans, will continue wholeheartedly to do our part in promoting the well-being of our country. Our party can truly feel that we have held the faith; that we shall do so in the future is our solemn responsibility of this hour.

The Republican Party has ever been the party of constructive action. It will support the new administration in every measure which will promote public welfare. It must and will be vigilant in opposing those which are harmful.

My purpose at this time is not to speak upon divided issues, but rather to discuss matters concerning which there should be no partisanship. That leads me at once into economic questions and into the economic field. For there continues to hang over our Nation the economic cloud, the thought of which dominates the mind of every serious person in our country. I realize that economic analyses and economic exposition are not usual after dinner fare. But I realize more pertinent the serious purpose of this club, the seriousness of the times, the serious desire of your members to participate in the problems of national life.

Further steps toward economic recovery is the urgent problem before the entire world. Ceaseless effort must be directed to the restoration of confidence, the vanquishing of fear and of apprehension, and thus the release of the recuperative spirit of the world.

It is, therefore, my purpose to discuss some of those measures which confront us in reaching further to the roots of this tragic disturbance, particularly in the field of foreign relations. While we have many concerns in the domestic field we must realize that so long as we engage in the export and the import of goods, in financial activities abroad, so long as our citizens travel afield, then our price levels and our credit system, our employment, and above all, our fears will be greatly affected by foreign influences. We cannot isolate ourselves. During the past 2 years the crash of one foreign nation after another under direct and indirect war inheritances has dominated the whole economic life of our country.

The time has now come when nations must accept, in self-interest no less than in altruism, the obligation to cooperate in achieving world stability so mankind may again resume the march of progress. Daily it becomes more certain that the next great possible constructive step in remedy of the illimitable human suffering from this depression lies in the international field. It is in that field where the tide of prices can be most surely and quickly turned, the tragic despair of unemployment, agriculture, and business transformed into hope and into confidence.

Now economic degeneration is always a series of vicious cycles of cause and effect. Whatever the causes may be, we must grasp these cycles at some segment and deal with them. Perhaps it would add clarity to the position which I wish to make later if I should shortly follow through a cycle of financial failure which has at least in part taken place in a score of countries abroad.

Many countries, in addition to the other pressures of the depression, overburdened with debt and obligations from the World War or excessive borrowing from abroad for rehabilitation or expansion, created or added to their difficulties by unbalanced budgets with social programs and armaments, and finally reached the point where collapse in governmental credit was inevitable. Foreigners in fear of their deposits and investments in such countries withdrew. Citizens in fright exported their capital.

The result was a great movement of gold from each country followed by the immediate undermining of confidence in its currency and its credit system. Runs on its banks ensued. Restrictions were imposed upon exchange to stop the flight of capital. Barriers were erected against the import of commodities in endeavor to reduce the spending of their citizens for foreign goods and in an effort to establish an equilibrium in exchange and a retention of their gold reserves. Failure in such efforts resulted in many cases in the abandonment of gold standards followed by the currency depreciation, stagnations of industries, increase in unemployment, and further shrinkage in the consumption of goods, and again and again affecting all other nations.

These depreciated currencies gave some nations the hope to manufacture goods more cheaply than their neighbors and thus to rehabilitate their financial position by the invasion of markets of others. Those nations in turn have sought to protect themselves by erecting barriers higher and higher, until today as the result of such financial breakdown we are in the presence of an incipient outbreak of economic war in the world with the weapons of depreciated currencies, artificial barriers to trade by quotas, reciprocal trade agreements, discriminations, nationalistic campaigns to consume homemade goods, and a score of other tactics each of which may be justified for the moment, but each of which adds to the world confusion and the world dangers.

Out of the storm center of Europe this devastation has spread until, if we were to survey the world at the present moment, we find some 44 countries that have placed restrictions upon the movement of gold and exchange or are otherwise definitely off the gold standard. In practically all of them these actions have within the past 12 months been accompanied by new restrictions upon imports in an endeavor to hold or attract gold or to give some stability to their currencies.

These depreciations in currency and the regulation of exchange and the restriction of imports originated not in offense but as defensive measures by nations to meet their own domestic financial difficulties. But a new phase is now developing amongst these nations that is rapidly degenerating into economic war which threatens to engulf the entire world. And the imperative call to the world today is to prevent that war.

Ever since the storm began in Europe, the United States has stood staunchly to the gold standard. In the present setting of depreciated currencies and in the light of differences in costs of production at home and abroad our tariffs are at this moment below those of most other countries in the world; we have held free from quotas, preferences, discriminations amongst nations. We have thereby maintained one Gibraltar of stability in the world and contributed to check the movement of chaos.

But we are now ourselves confronted with an unnatural movement of goods from lowered costs and standards of countries of depreciated currencies, which daily increase the unemployment in our land and our difficulties. We are confronted with discriminatory actions and barriers that stifle our agricultural and other markets. We will be ourselves forced to defensive action to protect ourselves unless this mad race is stopped. We must not be the major victim of it all.

Now, in all this competition of degeneration, these beginnings of economic war between scores of nations, we see a gradual shrinkage in the demand for international goods throughout the world, and a continuing fall of prices in terms of gold. From falling prices and unemployment we have at once the inability of debtors to meet obligations to their creditors, the dispossession of people from their farms and their homes and their businesses.

If the world is to secure economic peace, if it is to turn the tide of degeneration, if it is to restore the functioning of production and distribution systems of the world, it must start somewhere to break these vicious fiscal and financial cycles. I am convinced that the first point of attack is to secure assured greater stability in the currencies of the important commercial nations. Without such stability the continued results of uncertainty, the destruction of confidence by currency fluctuations, exchange controls, and artificial import restrictions cannot be overcome but will continue to increase. With effective stability of currencies these dangers can at once be relaxed. I am not unaware that currency instability is both a cause and an effect in this vicious cycle-but we must start somewhere.

This brings me to a phase which has gradually developed during the past months, and that is the reactions and the relation of gold itself upon this situation. For independent of other causes of degeneration, I am convinced that the circumstances which surround this commodity now are contributing to drive nations to these interferences with free commerce and to other destructive artificialities.

Now, outside the minor use of gold in the arts there are two dominant purposes. First, the important commercial nations have builded their domestic currency and credit systems upon a foundation of convertibility into gold. Second, gold is the most acceptable of all commodities in international payments. Even the nations that have abandoned the gold standard must still depend upon gold for purposes of international exchange. It is true that nations must in the long run balance their international trade by goods, services, or investments, but in the intermediate ebb and flow, balances must still be settled by the use of gold.

In all the welter of discussion over these problems we find some who are maintaining that the world has outgrown the use of gold as a basis of currency and of exchange. We can all agree that gold as a commodity of universal exchange has not worked perfectly in the face of this great economic eruption. But we have to remember that it is a commodity the value of which is enshrined in human instincts for over 10,000 years. The time may come when the world can safely abandon its use altogether for these purposes, but it has not reached that point. It may be that by theoretically managed currencies some form of stability may be found a score or two years hence, but we have no time to wait. Such currencies are subject to great human fallibilities. Sooner or later political pressure of special groups and interests will direct and dominate their use and purpose. But in any event it will take many years of demonstration to convince men that a nongold currency would certainly a year hence be worth what he paid for it today.

It is noticeable that most of the nations off of the gold standard are even today seeking to increase their gold reserves. In the view of many economists these measures and the restrictions which have been placed on the movement of gold or exchange by these two score of nations have created the same practical effect as if there was a scarcity of gold in the world at this moment. While there has been in the past few years a very large increase in the quantity of visible gold in the possession of institutions and governments the world over, the effect of all these regulatory actions by governments attempting to protect their gold reserves from runs and flights of capital, their attempts to increase their supply, have been to divide the gold of the world into a score of pockets and in many of them to freeze it from full freedom of action. In other words, this view holds that we are today not dealing with a shortage of the commodity; we are dealing with its being partially immobilized in function.

If this view proves right--and I associate myself with it--some large and important part of the steady fall in the prices of commodities is due to this particular reason, and it can only be remedied by international action.

To add to the confusion, another phenomenon of the gold situation has increased disturbance and wrought havoc. That is the effect of waves of fear and emotion. We have a parallel in nations to an unreasoning panic run upon a bank. The fears and apprehensions directed in turn to the stability of first one nation and then another have caused the withdrawal of foreign balances from that particular nation, followed by flights of capital, and through the purchases of exchange by its own citizens seeking refuge and security for their property. These movements are followed by large flows of gold to meet exchange demands, thus undermining the domestic currency and credit system of the victim nation and leading to an unnatural piling up of gold in some nation temporarily considered safe. These movements, themselves in large degree unwarranted, have forced some nations off the gold standard that could otherwise have maintained their position. We ourselves a year ago suffered from the effect of such a violent movement. And thus a mass of gold dashing hither and yon from one nation to another, seeking maximum safety, has acted like a cannon loose on the deck of the world in a storm.

In the meantime the currencies of the world are fluctuating spasmodically. Countries off the gold standard are in reality suffering from their managed paper currencies by reason of the fact that men are unable to make contracts for the future with security, and that insecurity again dries up enterprise, business, employment, consumption of goods, and further causes reductions of price. Other nations to hold their own are attempting to compete in this destruction. And it is followed by a million of human tragedies.

Broadly, the solution lies in the reestablishment of confidence. But that confidence in the world cannot be reestablished by the abandonment of gold as the standard of the world. So far as the human race has yet developed and established its methods and systems of stable exchange, that solution can only be found now and found quickly through the reestablishment of gold standards amongst the important nations. The huge gold reserves of the world can be made to function in relation to currencies, standards of value, and exchange. And I wish to say with emphasis that I am not proposing this as a favor to the United States. It is the need of the whole world. The United States is so situated that it can protect itself better than almost any other country on the Earth.

Nor is it necessary from an international point of view that those nations who have been forced off the gold standard shall again restore their former gold values. It will suffice if it is only fixed. From this source there are principal hopes for restoring world confidence, of reversing the growing barriers to the movement of goods, making possible the security in trade which will again revive a demand for our exports. It is the solution of our farmer's difficulties. But to do all this it is necessary to have strong and courageous action on the part of the leading commercial nations. If some sort of international financial action is necessary in order to enable the central banks of the world to cooperate for the purpose of stabilizing currencies, nations should have no hesitation in joining such an operation under proper safeguards. If some part of the debt payments to us could be set aside for temporary use for this purpose, we should not hesitate to do so. At the same time the world should endeavor to find some place for silver, at least in an enlarged subsidiary coinage.

Now if the major nations of the world will enter the road leading to the early reestablishment of the gold standard, then and then only can we begin the taking down of the abnormal barriers to trade--the quotas, preferences, discriminatory agreements, and tariffs which exceed the differences in costs of production between nations--uniform trade privileges may be restored and the threat of economic war may be averted. A reasonable period of comparative stability in the world's currencies would repay the cost of such an effort a hundred times over in the increase of consumption, in the increase of employment, in the lessening of the difficulties of debtors throughout the land, with the avoidance of these millions and millions of human tragedies. The world would quickly see a renewed movement of commerce and of goods, would have an immediate rise in prices, thereby bringing that relief to the whole economic system that is so imperative at this moment.

Now I do not underestimate the difficulties nor the vast fiscal and financial problems which lie behind the restoration of stability and economic peace. Bold action alone can succeed. The alternative to such constructive action is a condition too grave to be contemplated in any passive acceptance.

The American people will soon be at the fork of three roads. The first is the highway of cooperation amongst nations, thereby to remove the obstructions to world consumption and the rise of prices. This road leads to real stability, to the expanded standards of living, to a resumption of the march of progress by all peoples. It is today the immediate road of relief to agriculture and unemployment, not alone for us but the entire world.

The second road is to rely upon our high degree of national self-containment, to increase our tariffs, to create quotas and discriminations, and to engage in definite methods of curtailment of production of agricultural and other products and thus to secure for us a larger measure of economic isolation and freedom from vicious world influences. It would be a long road of readjustment into unknown and uncertain fields. But it may be necessary if the first way out is closed to us. Some measures may be necessary pending cooperative conclusions with other nations.

The third road is that we should inflate our currency, abandon the gold standard, and with our depreciated currency attempt to enter a world economic war, with the certainty that it leads to complete destruction, both at home and abroad.

Now the first road can only be undertaken in cooperation with all important nations. Last April, in conjunction with the leaders of Europe, our Government developed the idea of a World Economic Conference to deal with these questions. It is unfortunate that the delay of events in Europe and the election in the United States necessarily postponed the convening of that Conference. It has necessarily been further delayed by the change of administrations. It will yet be held.

The question naturally arises whether other nations will cooperate to restore world confidence, stability, and economic peace. In this connection, I trust the American people will not be misled or influenced by the ceaseless stream of foreign propaganda that cancellation of the war debts would give this international relief and remedy. That is not true. These debts are but a segment of the problem that confronts the world. Their world trade importance is hugely exaggerated. The total payments to us comprise less than one percent of the total movement of goods and services between nations in the world. In this respect I stated some months ago that the American people can well contend that most of the debtor countries have the capacity to raise these annual payments from their taxpayers, as witness the fact that in most cases the payments to us amount to less than one-third of the military expenditures of that country.

But at the same time we can well realize that in some instances the transfer of these sums gravely disturbs their currency and international exchange. But if we are asked for sacrifices because of such injury, we should have assurances of cooperation that will positively result in monetary stability and the restoration of world prosperity. If we are asked for sacrifices because of incapacity to pay, we should have tangible compensations in the restoration of at least our proportion of their agricultural and other imports. The world should have relief from the sore burden of armaments. If they are unwilling to meet us upon this field, this Nation, whether you or I like it or not, will be driven by our own internal forces more and more to its own self-containment and isolation, as harmful to the world and as little satisfactory to us as this course may be.

But that would be the counsel of despair. The full need of prosperity amongst nations cannot be builded upon mutual impoverishment. It is the interest of the world to join in bold and courageous action which will bring about economic peace--in which the benefits to the rest of the world are as great as those to us--and we should cooperate in the full. Any other course in the world today endangers civilization itself. Unless the world takes heed it will find that it has lost its standards of living and culture, not for a few years of depression but for generations.

Now, despite many discouragements, the world has shown an increasing ability in the establishment of effective agencies in the solution of many controversies which might have led to war. When we compare the attitude of nations and their ability to cooperate with each other with that which existed 20 years ago, we can say that there has been developed both the spirit and the method of cooperation in the prevention of war which gives a profound hope for the future.

In its broad light the problem before the world today is to work together to prevent the dangers of a developing economic conflict-to secure economic peace. That is a field in which the world can cooperate even more easily than in the field of the prevention of war, because there is involved in it no background of century-old controversies, injustices, or hates. The problems in the economic field contain less of the imponderables and more of the concrete. There is involved in it the most important and appealing self-interest of every nation. Through such cooperation the world can mitigate the forces which are destroying the systems of production and distribution upon which the maintenance of these gigantic populations are today dependent. There is a driving force before the eyes of every statesman in the misery and suffering which have infected every nation. Throughout the world the people are distraught with unemployment; the decline of prices have plunged the farmers into despair, the loss of homes, of savings, and provisions of old age. And therefore, just as there is an obligation amongst nations to engage in every possible step for the prevention of war itself, there is before us today the necessity for world cooperation for the prevention of economic warfare. And who can say that the greatest act in the prevention of war is not to allay economic friction.

On our side this problem is not to be solved by partisan action but by national unity. Whatever our differences of view may be on domestic policies, the welfare of the American people rests upon solidarity before the world, not merely in resisting proposals which would weaken the United States and the world with it but solidarity in cooperation with other nations in strengthening the whole economic fabric of the world itself. These problems are not insoluble. There is a latent, earnest, and underlying purpose on the part of all nations to find their solution. Of our determination there should be no question.

The problem before the world is to restore confidence and hope by the release of the strong, natural forces of recovery which are inherent in its very civilization. Civilization is the history of surmounted difficulties. We of this world are today of the same strain as our fathers who builded this civilization. They passed through terrible conflicts. They met many great depressions. They created a state of human well-being in normal times such as the world has never seen. The next forward step is as great as any of that history. It is that we perpetuate the welfare of mankind through the immense objectives of world recovery and world peace. That is in spirit with Abraham Lincoln.