Evening star., 1933-03-13
BY the Associated Press.
TINE text Of President Rocsevelt's
radio address last night follows:

BY the Associated Press.
TINE text of President Roosevelt.
radio address last night follows
I want to talk for q few
i minutes with the people Of the
United States about banking
with the comparatively few who
understand the mechanics of bank
ing, but more particularly with the
overwhelming majority who use banks
for the making Of deposits and the
drawing Of checks. I want to tell you
what has been done In the last few
days, why 1t was done, and what the
next steps are going to be. I recognize
that the ms.y proclamAtions from
State capitals and from Washington
the legislation, the Treasury regula-
tions, ETC., couched for the most part In
banking and legal terms, should be ex-
planned for the benefit Of the average
citizen.
owe this in particular because OF
the fortitude and good temper with
which everybody has accepted the in
convenience and hardships of the
banking holiday. I know that when
you understand what we in Washing
ton have been about I shall continue
to have your cooperation as fully as ]
have had your sympathy and help dur
ing the past week.
What Becomes Of Deposits.
First of all let me state the simple
fact that when you deposit money in
bank the bank does not put the
money into . safe deposit vault It In
vests your money in many different
forms OF credit-bonds, commercial
paper. mortgages and many other kinds
OF loans. In other words, the bank puts
your money to work to keep the wheels
Of industry and of agriculture turning
around. A comparatively small part Of
the money you put into the bank is
kept in currency-an amount which in
normal times IS wholly sufficient tc
cover the cash needs Of the average
citizen. In other words the total amount
Of all the currency in the country is
only q small fraction Of the total de-
posits In all Of the banks.
What, then. happened during the last
few days Of February and the first few
days Of March? Because Of under
mined confidence on the part of the
public, there was a general rush by a
large portion Of our population to turn
bank deposits into currency or gold-a
rush so great that the soundest banks
could not get enough currency to meet
the demand. The reason for this was
that on the spur of the moment it was.
OF course, impossible to sell perfectly
sound assets Of bank and convert
them into cash except at panic prices
far below their real value.
BY the afternoon of March 3 scarcely
a bank in the country was open to do
business. Proclamations, temporarily
closing them In whole or in part. had
been issued by the Governors in almost
all the States.
Nationwide Holiday Ordered.
1t was then that issued the proc
lamation providing for the Nation wide
bank holiday, and this was the first step
in the Governments reconstruction of
our financial and economic fabric.
The second step was the legislation
promptly and patriotically passed by
the Congress confirming my proclama-
tion and broadening my powers so that
it became possible, in view of the re-
quirement of time, to extend the holi-
day and lift the ban of that holiday
gradually. This law also gave author
ity to develop a program of rehabilita-
e4O2A "a O4A bdAAhA41S 4dC1kltlcS- WALL
to tell our citizens in every part Of the
Nation that the National Congress -
Republicans and Democrats alike
showed by this action a devotion to
public welfare and q realization of the
and the necessity for speed
that it is difficult to match in our his
tory.
The third stage has been the series
Nf raO1Y1o fiOy,c r,oryoitf:rn the hov Lc fo
continue their functions to take care
of the distribution of food and house.
hold necessities and the payment of
pay rolls.
This bank holiday, while resulting in
many cases in great inconvenience, is
ahording lis the opportunity to supply
the currency necessary to meet the stu
alton. No sound bank is q dollar worse
off than 1t was when it closed its doors
last Monday. Neither is any bank
which may turn out not to be in a po-
Sition for immediate opening. The new
law allows the IL 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.
Guards Against Failures.
A question you will ask is this: Why
are all the banks not to be reopened
at the same time? The answer Is SIM
pie. Your Government does not in
tend that the history of the past few
years shall be repeated. We do not
want, and will not have, another epi-
dsmic Of bank failures.
As q result we start tomorrow, Mon
day, with the opening Of banks in the
IL Federal Reserve bank cities-those
banks which on first examination by