Franklin D. Roosevelt Quotes
Our dollar is now altogether too greatly influenced by the accidents of international trade, by the internal policies of other nations and by political disturbance in other continents. Therefore the United States must take firmly in its own hands the control of the gold value of our dollar. This is necessary in order to prevent dollar disturbances from swinging us away from our ultimate goal.
This objective finally reached its peak in the Nixon administration when the U. S. went off the gold standard. 75 Years after FDR tried to make the U. S. dollar more resilient, America had been so successful that many foreign governments having the same problem of little or no control over their currency, have pegged their currency to the U. S. dollar, thus gaining our stability.
Franklin Delano Roosevelt, 1882-1945, 32nd President of the United States (Democrat, NY), Radio Address to the Nation, October 22,1933
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President Richard Nixon, a conservative Republican did not agree with this view as it was he who led America to abandon the gold standard to back its money.
At the time, there was no United States currency. Private banks in some of the states issued their own money. A dollar from Georgia might only be worth 75 cents in New York.
FDR was then a candidate for the Democratic Vice Presidential Nomination. This statement shocked some of the conservative French and British delegates and officials such as Ramsay MacDonald, Georges Bonnet, and Neville Chamberlain, but economist John Maynard Keynes strongly approved of Roosevelt Roosevelt’s statements. At issue was whether or not the major currency powers should confer frequently and set the international currency exchange rates or should the rates float and be determined at any point by the free market in currency. FDR held the latter view which was opposed to the positions of the conservative banker-oriented delegates from the European counties, However Roosevelt’s statement was considered “harsh” and “vituperative” by the conservatives and the entire conference collapsed over them. FDR admitted that perhaps he had been too strong and blunt in his language. An irony of this quotation is that 80 years later the positions of liberals and conservatives had both flip-flopped. It became the conservatives who adopted the FDR free market for currency exchange while many liberals called for government intervention and agreement on exchange rates to prevent instability.
There has always been a fear of inflation and currency debasement by governments. Since ancient times, rulers issued coins and when they were made of cheap metals like copper or iron, the ruler could mint as much as he wanted and when he did so the value went down. By using only precious metals, gold and silver, for coins, there would be a natural restraint on government. Garfield was one of those who believed that we should always have money of gold and silver. The United States would use that principle for the next century even backing its paper money with gold and silver. In the Nixon administration the United States abandoned the gold standard. Today, it is the ability of a country to produce things that maintains value of paper money which has been supplanted in many cases by electronic money.
The assumption was that money would always be backed by gold or silver. In effect, raising or allaying the money was to change the amount of gold or silver that a particular denomination of money would be able to be exchanged for. This is one of the interesting proofs that these processes did nothing economically—for if they could, no one would want the money. This has always been a weakness or a strength—depending on one’s political point of view—of a gold standard.
This is the first major history of banks written in the United States.
Roosevelt saw to it that the contents of the telegram was shown to the press. Then this statement was seen by the foreign delegates who viewed themselves as ‘international bankers”. They were outraged and the conference blew up with no significant action taken. Roosevelt was desperately trying to lead America out of the Great Depression which Herbert Hoover had left him with. The dollar had been falling in value since the 1929 crash and one of the likely outcomes of the conference was European and other nations putting a plan together to stop the fall of the dollar. FDR however, wanted the dollar to continue to fall. This would make it harder for Americans by buy imported products, but easier to employ more Americans making products for export. The people hurt most by The Depression did not buy any imported products, and what they needed was food, housing, clothing, education and medical care, none of which would be affected by a weaker dollar and more expensive imports. However, he did not want a political argument with the wealthy and upper middle class who wanted cheaper imports, so some people believe that he made it seem that he had committed a diplomatic blunder and that caused the conference to collapse.
Franklin Delano Roosevelt, often referred to by his initials FDR, was an American politician who served as the 32nd president of the United States from 1933 until his death in 1945. A member of the Democratic Party, he won a record four presidential elections and became a central figure in world events during the first half of the 20th century. Roosevelt directed the federal government during most of the Great Depression, implementing his New Deal domestic agenda in response to the worst economic crisis in U.S. history. As a dominant leader of his party, he built the New Deal Coalition, which defined modern liberalism in the United States throughout the middle third of the 20th century. His third and fourth terms were dominated by World War II, which ended shortly after he died in office.
