The Fireside Chats of Franklin Delano Roosevelt | Page 2

part of the nation
that the national Congress-- Republicans and Democrats alike--showed
by this action a devotion to public welfare and a realization of the
emergency and the necessity for speed that it is difficult to match in our
history.
The third stage has been the series of regulations permitting the banks
to continue their functions to take care of the distribution of food and

household necessities and the payment of payrolls.
This bank holiday, while resulting in many cases in great
inconvenience, is affording us the opportunity to supply the currency
necessary to meet the situation. No sound bank is a dollar worse off
than it was when it closed its doors last Monday. Neither is any bank
which may turn out not to be in a position for immediate opening. The
new law allows the twelve Federal Reserve Banks to issue additional
currency on good assets and thus the banks which reopen will be able
to meet every legitimate call. The new currency is being sent out by the
Bureau of Engraving and Printing in large volume to every part of the
country. It is sound currency because it is backed by actual, good
assets.
A question you will ask is this: why are all the banks not to be
reopened at the same time? The answer is simple. Your government
does not intend that the history of the past few years shall be repeated.
We do not want and will not have another epidemic of bank failures.
As a result, we start tomorrow, Monday, with the opening of banks in
the twelve Federal Reserve Bank cities--those banks which on first
examination by the treasury have already been found to be all right.
This will be followed on Tuesday by the resumption of all their
functions by banks already found to be sound in cities where there are
recognized clearing houses. That means about 250 cities of the United
states.
On Wednesday and succeeding days banks in smaller places all through
the country will resume business, subject, of course, to the
government's physical ability to complete its survey. It is necessary that
the reopening of banks be extended over a period in order to permit the
banks to make applications for necessary loans, to obtain currency
needed to meet their requirements and to enable the government to
make common sense checkups.
Let me make it clear to you that if your bank does not open the first day
you are by no means justified in believing that it will not open. A bank
that opens on one of the subsequent days is in exactly the same status
as the bank that opens tomorrow.
I know that many people are worrying about state banks not members
of the Federal Reserve System. These banks can and will receive
assistance from members banks and from the Reconstruction Finance

Corporation. These state banks are following the same course as the
national banks except that they get their licenses to resume business
from the state authorities, and these authorities have been asked by the
Secretary of the Treasury to permit their good banks to open up on the
same schedule as the national banks. I am confident that the state
banking departments will be as careful as the national government in
the policy relating to the opening of banks and will follow the same
broad policy.
It is possible that when the banks resume a very few people who have
not recovered from their fear may again begin withdrawals. Let me
make it clear that the banks will take care of all needs--and it is my
belief that hoarding during the past week has become an exceedingly
unfashionable pastime. It needs no prophet to tell you that when the
people find that they can get their money--that they can get it when
they want it for all legitimate purposes--the phantom of fear will soon
be laid. People will again be glad to have their money where it will be
safely taken care of and where they can use it conveniently at any time.
I can assure you that it is safer to keep your money in a reopened bank
than under the mattress.
The success of our whole great national program depends, of course,
upon the cooperation of the public--on its intelligent support and use of
a reliable system.
Remember that the essential accomplishment of the new legislation is
that it makes it possible for banks more readily to convert their assets
into cash than was the case before. More liberal provision has been
made for banks to borrow on these assets at the Reserve Banks and
more liberal provision has also been made for issuing currency on the
security of those good assets. This currency is not fiat currency. It is
issued only on