President Hoover
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(5,766 words, 14 pages) [Transmitted in written form to Congress,
December 8, 1931]
To the Senate and House of Representatives:
It is my duty under the Constitution to transmit to the
Congress information on the state of the Union and to recommend
for its consideration necessary and expedient measures.
The chief influence affecting the state of the Union during
the past year has been the continued world-wide economic disturbance.
Our national concern has been to meet the emergencies it has created
for us and to lay the foundations for recovery.
If we lift our vision beyond these immediate emergencies we
find fundamental national gains even amid depression. In meeting
the problems of this difficult period, we have witnessed a remarkable
development of the sense of cooperation in the community. For
the first time in the history of our major economic depressions
there has been a notable absence of public disorders and industrial
conflict. Above all there is an enlargement of social and spiritual
responsibility among the people. The strains and stresses upon
business have resulted in closer application, in saner policies,
and in better methods. Public improvements have been carried out
on a larger scale than even in normal times. The country is richer
in physical property, in newly discovered resources, and in productive
capacity than ever before. There has been constant gain in knowledge
and education; there has been continuous advance in science and
invention; there has been distinct gain in public health. Business
depressions have been recurrent in the life of our country and
are but transitory. The Nation has emerged from each of them with
increased strength and virility because of the enlightenment they
have brought, the readjustments and the larger understanding of
the realities and obligations of life and work which come from
them.
Both our Army and Navy have been maintained in a high state
of efficiency. The ability and devotion of both officers and men
sustain the highest traditions of the service. Reductions and
postponements in expenditure of these departments to meet the
present emergency are being made without reducing existing personnel
or impairing the morale of either establishment.
The agreement between the leading naval powers for limitation
of naval armaments and establishment of their relative strength
and thus elimination of competitive building also implies for
ourselves the gradual expansion of the deficient categories in
our Navy to the parities provided in those treaties. However,
none of the other nations, parties to these agreements, is to-day
maintaining the full rate of construction which the treaty size
of fleets would imply.
Although these agreements secured the maximum reduction of
fleets which it was at that time possible to attain, I am hopeful
that the naval powers, party to these agreements, will realize
that establishment of relative strength in itself offers opportunity
for further reduction without injury to any of them. This would
be the more possible if pending negotiations are successful between
France and Italy. If the world is to regain its standards of life,
it must further decrease both naval and other arms. The subject
will come before the General Disarmament Conference which meets
in Geneva on February 2
We are at peace with the world. We have cooperated with other
nations to preserve peace. The rights of our citizens abroad have
been protected.
The economic depression has continued and deepened in every
part of the world during the past year. In many countries political
instability, excessive armaments, debts, governmental expenditures,
and taxes have resulted in revolutions, in unbalanced budgets
and monetary collapse and financial panics, in dumping of goods
upon world markets, and in diminished consumption of commodities.
Within two years there have been revolutions or acute social
disorders in 19 countries, embracing more than half the population
of the world. Ten countries have been unable to meet their external
obligations. In 14 countries, embracing a quarter of the world's
population, former monetary standards have been temporarily abandoned.
In a number of countries there have been acute financial panics
or compulsory restraints upon banking. These disturbances have
many roots in the dislocations from the World War. Every one of
them has reacted upon us. They have sharply affected the markets
and prices of our agricultural and industrial products. They have
increased unemployment and greatly embarrassed our financial and
credit system.
As our difficulties during the past year have plainly originated
in large degree from these sources, any effort to bring about
our own recuperation has dictated the necessity of cooperation
by us with other nations in reasonable effort to restore world
confidence and economic stability.
Cooperation of our Federal reserve system and our banks with
the central banks in foreign countries has contributed to localize
and ameliorate a number of serious financial crises or moderate
the pressures upon us and thus avert disasters which would have
affected us.
The economic crisis in Germany and Central Europe last
June rose to the dimensions of a general panic from which it was
apparent that without assistance these nations must collapse.
Apprehensions of such collapse had demoralized our agricultural
and security markets and so threatened other nations as to impose
further dangers upon us. But of highest importance was the necessity
of cooperation on our part to relieve the people of Germany from
imminent disasters and to maintain their important relations to
progress and stability in the world. Upon the initiative of this
Government a year's postponement of reparations and other intergovernmental
debts was brought about. Upon our further initiative an agreement
was made by Germany's private creditors providing for an extension
of such credits until the German people can develop more permanent
and definite forms of relief.
We have continued our policy of withdrawing our marines from
Haiti and Nicaragua.
The difficulties between China and Japan have given us
great concern, not alone for the maintenance of the spirit of
the Kellogg-Briand Pact, but for the maintenance of the treaties
to which we are a party assuring the territorial integrity of
China. It is our purpose to assist in finding solutions sustaining
the full spirit of those treaties.
I shall deal at greater length with our foreign relations
in a later message.
Many undertakings have been organized and forwarded during
the past year to meet the new and changing emergencies which have
constantly confronted us.
Broadly the community has cooperated to meet the needs of honest
distress, and to take such emergency measures as would sustain
confidence in our financial system and would cushion the violence
of liquidation in industry and commerce, thus giving time for
orderly readjustment of costs, inventories, and credits without
panic and widespread bankruptcy. These measures have served those
purposes and will promote recovery.
In these measures we have striven to mobilize and stimulate
private initiative and local and community responsibility. There
has been the least possible Government entry into the economic
field, and that only in temporary and emergency form. Our citizens
and our local governments have given a magnificent display of
unity and action, initiative and patriotism in solving a multitude
of difficulties and in cooperating with the Federal Government.
For a proper understanding of my recommendations to the Congress
it is desirable very briefly to review such activities during
the past year.
The emergencies of unemployment have been met by action in
many directions. The appropriations for the continued speeding
up of the great Federal construction program have provided direct
and indirect aid to employment upon a large scale. By organized
unity of action, the States and municipalities have also maintained
large programs of public improvement. Many industries have been
prevailed upon to anticipate and intensify construction. Industrial
concerns and other employers have been organized to spread available
work amongst all their employees, instead of discharging a portion
of them. A large majority have maintained wages at as high levels
as the safe conduct of their business would permit. This course
has saved us from industrial conflict and disorder which have
characterized all previous depressions. Immigration has been curtailed
by administrative action. Upon the basis of normal immigration
the decrease amounts to about 300,000 individuals who otherwise
would have been added to our unemployment. The expansion of Federal
employment agencies under appropriations by the Congress has proved
most effective. Through the President's organization for unemployment
relief, public and private agencies were successfully mobilized
last winter to provide employment and other measures against distress.
Similar organization gives assurance against suffering during
the coming winter. Committees of leading citizens are now active
at practically every point of unemployment. In the large majority
they have been assured the funds necessary which, together with
local government aids, will meet the situation. A few exceptional
localities will be further organized. The evidence of the Public
Health Service shows an actual decrease of sickness and infant
and general mortality below normal years. No greater proof could
be adduced that our people have been protected from hunger and
cold and that the sense of social responsibility in the Nation
has responded to the need of the unfortunate.
To meet the emergencies in agriculture the loans authorized
by Congress for rehabilitation in the drought areas have enabled
farmers to produce abundant crops in those districts. The Red
Cross undertook and magnificently administered relief for over
2,500,000 drought sufferers last winter. It has undertaken this
year to administer relief to 100,000 sufferers in the new drought
area of certain Northwest States. The action of the Federal Farm
Board in granting credits to farm cooperatives saved many of them
from bankruptcy and increased their purpose and strength. By enabling
farm cooperatives to cushion the fall in prices of farm products
in 1930 and 1931 the Board secured higher prices to the farmer
than would have been obtained otherwise, although the benefits
of this action were partially defeated by continued world overproduction.
Incident to this action the failure of a large number of farmers
and of country banks was averted which could quite possibly have
spread into a major disaster. The banks in the South have cooperated
with the Farm Board in creation of a pool for the better marketing
of accumulated cotton. Growers have been materially assisted by
this action. Constant effort has been made to reduce overproduction
in relief of agriculture and to promote the foreign buying of
agricultural products by sustaining economic stability abroad.
To meet our domestic emergencies in credit and banking arising
from the reaction to acute crisis abroad the National Credit Association
was set up by the banks with resources of $500,000,000 to support
sound banks against the frightened withdrawals and hoarding. It
is giving aid to reopen solvent banks which have been closed.
Federal officials have brought about many beneficial unions of
banks and have employed other means which have prevented many
bank closings. As a result of these measures the hoarding withdrawals
which had risen to over $250,000,000 per week after the British
crisis have substantially ceased.
The major economic forces and weaknesses at home and abroad
have now been exposed and can be appraised, and the time is ripe
for forward action to expedite our recovery.
Although some of the causes of our depression are due to speculation,
inflation of securities and real estate, unsound foreign investments,
and mismanagement of financial institutions, yet our self-contained
national economy, with its matchless strength and resources, would
have enabled us to recover long since but for the continued dislocations,
shocks, and setbacks from abroad.
Whatever the causes may be, the vast liquidation and readjustments
which have taken place have left us with a large degree of credit
paralysis, which together with the situation in our railways and
the conditions abroad, are now the outstanding obstacles to recuperation.
If we can put our financial resources to work and can ameliorate
the financial situation in the railways, I am confident we can
make a large measure of recovery independent of the rest of the
world. A strong America is the highest contribution to world stability.
One phase of the credit situation is indicated in the banks.
During the past year banks, representing 3 per cent of our total
deposits have been closed. A large part of these failures have
been caused by withdrawals for hoarding, as distinguished from
the failures early in the depression where weakness due to mismanagement
was the larger cause of failure. Despite their closing, many of
them will pay in full. Although such withdrawals have practically
ceased, yet $1,100,000,000 of currency was previously withdrawn
which has still to return to circulation. This represents a large
reduction of the ability of our banks to extend credit which would
otherwise fertilize industry and agriculture. Furthermore, many
of our bankers, in order to prepare themselves to meet possible
withdrawals, have felt compelled to call in loans, to refuse new
credits, and to realize upon securities, which in turn has demoralized
the markets. The paralysis has been further augmented by the steady
increase in recent years of the proportion of bank assets invested
in long-term securities, such as mortgages and bonds. These securities
tend to lose their liquidity in depression or temporarily to fall
in value so that the ability of the banks to meet the shock of
sudden withdrawal is greatly lessened and the restriction of all
kinds of credit is thereby increased. The continuing credit paralysis
has operated to accentuate the deflation and liquidation of commodities,
real estate, and securities below any reasonable basis of values.
All of this tends to stifle business, especially the smaller
units, and finally expresses itself in further depression of prices
and values, in restriction on new enterprise, and in increased
unemployment.
The situation largely arises from an unjustified lack of confidence.
We have enormous volumes of idle money in the banks and in hoarding.
We do not require more money or working capital--we need to put
what we have to work.
The fundamental difficulties which have brought about financial
strains in foreign countries do not exist in the United States.
No external drain on our resources can threaten our position,
because the balance of international payments is in our favor;
we owe less to foreign countries than they owe to us; our industries
are efficiently organized; our currency and bank deposits are
protected by the greatest gold reserve in history.
Our first step toward recovery is to reestablish confidence
and thus restore the flow of credit which is the very basis of
our economic life. We must put some steel beams in the foundations
of our credit structure. It is our duty to apply the full strength
of our Government not only to the immediate phases, but to provide
security against shocks and the repetition of the weaknesses which
have been proven.
The recommendations which I here lay before the Congress are
designed to meet these needs by strengthening financial, industrial,
and agricultural life through the medium of our existing institutions,
and thus to avoid the entry of the Government into competition
with private business.
The first requirement of confidence and of economic recovery
is financial stability of the United States Government. I shall
deal with fiscal questions at greater length in the Budget message.
But I must at this time call attention to the magnitude of the
deficits which have developed and the resulting necessity for
determined and courageous policies. These deficits arise in the
main from the heavy decrease in tax receipts due to the depression
and to the increase in expenditure on construction in aid to unemployment,
aids to agriculture, and upon services to veterans.
During the fiscal year ending June 30 last we incurred a deficit
of about $903,000,000, which included the statutory reduction
of the debt and represented an increase of the national debt by
$616,000,000. Of this, however, $153,000,000 is offset by increased
cash balances.
In comparison with the fiscal year 1928 there is indicated
a fall in Federal receipts for the present fiscal year amounting
to $1,683,000,000, of which $1,034,000,000 is in individual and
corporate income taxes alone. During this fiscal year there will
be an increased expenditure, as compared to 1928, on veterans
of $255,000,000, and an increased expenditure on construction
work which may reach $520,000,000. Despite large economies in
other directions, we have an indicated deficit, including the
statutory retirement of the debt, of $2,123,000,000, and an indicated
net debt increase of about $1,711,000,000.
The Budget for the fiscal year beginning July 1 next, after
allowing for some increase of taxes under the present laws and
after allowing for drastic reduction in expenditures, still indicates
a deficit of $1,417,000,000. After offsetting the statutory debt
retirements this would indicate an increase in the national debt
for the fiscal year 1933 of about $921,000,000.
Several conclusions are inevitable. We must have insistent
and determined reduction in Government expenses. We must face
a temporary increase in taxes. Such increase should not cover
the whole of these deficits or it will retard recovery. We must
partially finance the deficit by borrowing. It is my view that
the amount of taxation should be fixed so as to balance the Budget
for 1933 except for the statutory debt retirement. Such Government
receipts would assure the balance of the following year's budget
including debt retirement. It is my further view that the additional
taxation should be imposed solely as an emergency measure terminating
definitely two years from July 1 next. Such a basis will give
confidence in the determination of the Government to stabilize
its finance and will assure taxpayers of its temporary character.
Even with increased taxation, the Government will reach the utmost
safe limit of its borrowing capacity by the expenditures for which
we are already obligated and the recommendations here proposed.
To go further than these limits in either expenditures, taxes,
or borrowing will destroy confidence, denude commerce and industry
of its resources, jeopardize the financial system, and actually
extend unemployment and demoralize agriculture rather than relieve
it.
I recommend that the Congress authorize the subscription by
the Treasury of further capital to the Federal land banks to be
retired as provided in the original act, or when funds are available,
and that repayments of such capital be treated as a fund available
for further subscriptions in the same manner. It is urgent that
the banks be supported so as to stabilize the market values of
their bonds and thus secure capital for the farmers at low rates,
that they may continue their services to agriculture and that
they may meet the present situation with consideration to the
farmers.
A method should be devised to make available quickly to depositors
some portion of their deposits in closed banks as the assets of
such banks may warrant. Such provision would go far to relieve
distress in a multitude of families, would stabilize values in
many communities, and would liberate working capital to thousands
of concerns. I recommend that measures be enacted promptly to
accomplish these results and I suggest that the Congress should
consider the development of such a plan through the Federal Reserve
Banks.
I recommend the establishment of a system of home-loan
discount banks as the necessary companion in our financial structure
of the Federal Reserve Banks and our Federal Land Banks. Such
action will relieve present distressing pressures against home
and farm property owners. It will relieve pressures upon and give
added strength to building and loan associations, savings banks,
and deposit banks, engaged in extending such credits. Such action
would further decentralize our credit structure. It would revive
residential construction and employment. It would enable such
loaning institutions more effectually to promote home ownership.
I discussed this plan at some length in a statement made public
November 14, last. This plan has been warmly indorsed by the recent
National Conference upon Home Ownership and Housing, whose members
were designated by the governors of the States and the groups
interested.
In order that the public may be absolutely assured and that
the Government may be in position to meet any public necessity,
I recommend that an emergency Reconstruction Corporation of the
nature of the former War Finance Corporation should be established.
It may not be necessary to use such an instrumentality very extensively.
The very existence of such a bulwark will strengthen confidence.
The Treasury should be authorized to subscribe a reasonable capital
to it, and it should be given authority to issue its own debentures.
It should be placed in liquidation at the end of two years. Its
purpose is that by strengthening the weak spots to thus liberate
the full strength of the Nation's resources. It should be in position
to facilitate exports by American agencies; make advances to agricultural
credit agencies where necessary to protect and aid the agricultural
industry; to make temporary advances upon proper securities to
established industries, railways, and financial institutions which
can not otherwise secure credit, and where such advances will
protect the credit structure and stimulate employment. Its functions
would not overlap those of the National Credit Corporation.
On October 6th I issued a statement that I should recommend
to the Congress an extension during emergencies of the eligibility
provisions in the Federal reserve act. This statement was approved
by a representative gathering of the Members of both Houses of
the Congress, including members of the appropriate committees.
It was approved by the officials of the Treasury Department, and
I understand such an extension has been approved by a majority
of the governors of the Federal reserve banks. Nothing should
be done which would lower the safeguards of the system.
The establishment of the mortgage-discount banks herein referred
to will also contribute to further reserve strength in the banks
without inflation.
Our people have a right to a banking system in which their
deposits shall be safeguarded and the flow of credit less subject
to storms. The need of a sounder system is plainly shown by the
extent of bank failures. I recommend the prompt improvement of
the banking laws. Changed financial conditions and commercial
practices must be met. The Congress should investigate the need
for separation between different kinds of banking; an enlargement
of branch banking under proper restrictions; and the methods by
which enlarged membership in the Federal reserve system may be
brought about.
The Postal Savings deposits have increased from about $200,000,000
to about $550,000,000 during the past year. This experience has
raised important practical questions in relation to deposits and
investments which should receive the attention of the Congress.
The railways present one of our immediate and pressing problems.
They are and must remain the backbone of our transportation system.
Their prosperity is interrelated with the prosperity of all industries.
Their fundamental service in transportation, the volume of their
employment, their buying power for supplies from other industries,
the enormous investment in their securities, particularly their
bonds, by insurance companies, savings banks, benevolent and other
trusts, all reflect their partnership in the whole economic fabric.
Through these institutions the railway bonds are in a large sense
the investment of every family. The well-maintained and successful
operation and the stability of railway finances are of primary
importance to economic recovery. They should have more effective
opportunity to reduce operating costs by proper consolidation.
As their rates must be regulated in public interest, so also approximate
regulation should be applied to competing services by some authority.
The methods of their regulation should be revised. The Interstate
Commerce Commission has made important and far-reaching recommendations
upon the whole subject, which I commend to the early consideration
of the Congress.
In my message of a year ago I commented on the necessity of
congressional inquiry into the economic action of the antitrust
laws. There is wide conviction that some change should be made
especially in the procedure under these laws. I do not favor their
repeal. Such action would open wide the door to price fixing,
monopoly, and destruction of healthy competition. Particular attention
should be given to the industries rounded upon natural resources,
especially where destructive competition produces great wastes
of these resources and brings great hardships upon operators,
employees, and the public. In recent years there has been continued
demoralization in the bituminous coal, oil, and lumber industries.
I again commend the matter to the consideration of the Congress.
As an aid to unemployment the Federal Government is engaged
in the greatest program of public-building, harbor, flood-control,
highway, waterway, aviation, merchant and naval ship construction
in all history. Our expenditures on these works during this calendar
year will reach about $780,000,000 compared with $260,000,000
in 1928. Through this increased construction, through the maintenance
of a full complement of Federal employees, and through services
to veterans it is estimated that the Federal taxpayer is now directly
contributing to the livelihood of 10,000,000 of our citizens.
We must avoid burdens upon the Government which will create
more unemployment in private industry than can be gained by further
expansion of employment by the Federal Government. We can now
stimulate employment and agriculture more effectually and speedily
through the voluntary measures in progress, through the thawing
out of credit, through the building up of stability abroad, through
the home loan discount banks, through an emergency finance corporation
and the rehabilitation of the railways and other such directions.
I am opposed to any direct or indirect Government dole. The
breakdown and increased unemployment in Europe is due in part
to such practices. Our people are providing against distress from
unemployment in true American fashion by a magnificent response
to public appeal and by action of the local governments.
There are many other subjects requiring legislative action
at this session of the Congress. I may list the following among
them:
The law enacted last March authorizing loans of 50 per
cent upon adjusted-service certificates has, together with the
loans made under previous laws, resulted in payments of about
$1,260,000,000. Appropriations have been exhausted. The Administrator
of Veterans' Affairs advises that a further appropriation of $200,000,000
is required at once to meet the obligations made necessary by
existing legislation.
There will be demands for further veterans' legislation; there
are inequalities in our system of veterans' relief; it is our
national duty to meet our obligations to those who have served
the Nation. But our present expenditure upon these services now
exceeds $1,000,000,000 per annum. I am opposed to any extension
of these expenditures until the country has recovered from the
present situation.
I have recommended in previous messages the effective regulation
of interstate electrical power as the essential function of the
reorganized Federal Power Commission. I renew the recommendation.
It is urgently needed in public protection.
At my suggestion, the Governors and Legislatures of Alabama
and Tennessee selected three members each for service on a committee
to which I appointed a representative of the farm organizations
and two representatives of the War Department for the purpose
of recommending a plan for the disposal of these properties which
would be in the interest of the people of those States and the
agricultural industry throughout the country. I shall transmit
the recommendations to the Congress.
I have referred in previous messages to the profound need of
further reorganization and consolidation of Federal administrative
functions to eliminate overlap and waste, and to enable coordination
and definition of Government policies now wholly impossible in
scattered and conflicting agencies which deal with parts of the
same major function. I shall lay before the Congress further recommendations
upon this subject, particularly in relation to the Department
of the Interior. There are two directions of such reorganization,
however, which have an important bearing upon the emergency problems
with which we are confronted.
At present the Shipping Board exercises large administrative
functions independent of the Executive. These administrative functions
should be transferred to the Department of Commerce, in keeping
with that single responsibility which has been the basis of our
governmental structure since its foundation. There should be created
in that department a position of Assistant Secretary for Merchant
Marine, under whom this work and the several bureaus having to
do with merchant marine may be grouped.
The Shipping Board should be made a regulatory body acting
also in advisory capacity on loans and policies, in keeping with
its original conception. Its regulatory powers should be amended
to include regulation of coastwise shipping so as to assure stability
and better service. It is also worthy of consideration that the
regulation of rates and services upon the inland waterways should
be assigned to such a reorganized board.
I recommend that all building and construction activities of
the Government now carried on by many departments be consolidated
into an independent establishment under the President to be known
as the "Public Works Administration" directed by a Public
Works Administrator. This agency should undertake all construction
work in service to the different departments of the Government
(except naval and military work). The services of the Corps of
Army Engineers should be delegated in rotation for military duty
to this administration in continuation of their supervision of
river and harbor work. Great economies, sounder policies, more
effective coordination to employment, and expedition in all construction
work would result from this consolidation.
I shall present some recommendations in a special message looking
to the strengthening of criminal-law enforcement and improvement
in judicial procedure connected therewith.
These improvements are now proceeding upon an unprecedented
scale. Some indication of the volume of work in progress is conveyed
by the fact that during the current year over 380,000,000 cubic
yards of material have been moved--an amount equal to the entire
removal in the construction of the Panama Canal. The Mississippi
waterway system, connecting Chicago, Kansas City, Pittsburgh,
and New Orleans, will be in full operation during 1933. Substantial
progress is being made upon the projects of the upper Missouri,
upper Mississippi, etc.
Negotiations are now in progress with Canada for the construction
of the St. Lawrence Waterway.
Wages and standards of living abroad have been materially lowered
during the past year. The temporary abandonment of the gold standard
by certain countries has also reduced their production costs compared
to ours. Fortunately any increases in the tariff which may be
necessary to protect agriculture and industry from these lowered
foreign costs, or decreases in items which may prove to be excessive,
may be undertaken at any time by the Tariff Commission under authority
which it possesses by virtue of the tariff act of 1930. The commission
during the past year has reviewed the rates upon over 254 items
subject to tariff. As a result of vigorous and industrious action,
it is up to date in the consideration of pending references and
is prepared to give prompt attention to any further applications.
This procedure presents an orderly method for correcting inequalities.
I am opposed to any general congressional revision of the tariff.
Such action would disturb industry, business, and agriculture.
It would prolong the depression.
I recommend that immigration restriction now in force under
administrative action be placed upon a more definite basis by
law. The deportation laws should be strengthened. Aliens lawfully
in the country should be protected by the issuance of a certificate
of residence.
I again call attention to my previous recommendations upon
this subject, particularly in its relation to children. The moral
results are of the utmost importance.
It is inevitable that in these times much of the legislation
proposed to the Congress and many of the recommendations of the
Executive must be designed to meet emergencies. In reaching solutions
we must not jeopardize those principles which we have found to
be the basis of the growth of the Nation. The Federal Government
must not encroach upon nor permit local communities to abandon
that precious possession of local initiative and responsibility.
Again, just as the largest measure of responsibility in the government
of the Nation rests upon local self-government, so does the largest
measure of social responsibility in our country rest upon the
individual. If the individual surrenders his own initiative and
responsibilities, he is surrendering his own freedom and his own
liberty. It is the duty of the National Government to insist that
both the local governments and the individual shall assume and
bear these responsibilities as a fundamental of preserving the
very basis of our freedom.
Many vital changes and movements of vast proportions are taking
place in the economic world. The effect of these changes upon
the future can not be seen clearly as yet. Of this, however, we
are sure: Our system, based upon the ideals of individual initiative
and of equality of opportunity, is not an artificial thing. Rather
it is the outgrowth of the experience of America, and expresses
the faith and spirit of our people. It has carried us in a century
and a half to leadership of the economic world. If our economic
system does not match our highest expectations at all times, it
does not require revolutionary action to bring it into accord
with any necessity that experience may prove. It has successfully
adjusted itself to changing conditions in the past. It will do
so again. The mobility of our institutions, the richness of our
resources, and the abilities of our people enable us to meet them
unafraid. It is a distressful time for many of our people, but
they have shown qualities as high in fortitude, courage, and resourcefulness
as ever in our history. With that spirit, I have faith that out
of it will come a sounder life, a truer standard of values, a
greater recognition of the results of honest effort, and a healthier
atmosphere in which to rear our children. Ours must be a country
of such stability and security as can not fail to carry forward
and enlarge among all the people that abundant life of material
and spiritual opportunity which it has represented among all nations
since its beginning.
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