Early 1933, when Franklin Delano Roosevelt gave his first inaugural address, was one of the most terrifying times in United States history. More than 10,000 banks had failed, credit had dried up, businesses had gone bankrupt, and the jobless rate was 25 percent, with another 25 percent underemployed and underpaid.
After telling Americans that “the only thing we have to fear is fear itself,” FDR went on to describe the causes of the devastating financial crisis, in terms that sound all too familiar today:
“Only a foolish optimist can deny the dark realities of the moment.
“Yet our distress comes from no failure of substance. We are stricken by no plague of locusts…. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.
“True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.
The money-changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit….”
Read the full speech here.
Among FDR’s first responses to the crisis were the Securities Act of 1933, which instituted comprehensive regulation of the securities industry, followed by the creation of the FDIC and the Glass-Steagall Act—whose undoing is now helping history repeat itself.