Excerpts from the Press Conference. Hyde Park, New York
February 5, 1940
PRESIDENT: Good morning; how is everybody?
THE PRESIDENT: It is a lovely day. It isn't cold and everything is all well.
I want to call attention, through the Press, to a story on the financial page this morning, a report on the FDIC. Now, the reason for my doing so is that a very, very small percentage of the population ever reads the financial pages of the paper--we all know that. But a very, very large percentage of the population have deposits in banks of various kinds, and therefore the only way of bringing it to their attention is for the President to say something about it in his Press Conference.
There isn't any use going into any details. You can find them in all the papers this morning. The significant fact is that from the beginning of deposit insurance, in 1933, 315 insured banks were closed. There were 877,000 depositors who had a total of deposits of $294,000,000, and those depositors with less than $5,000 in those banks were paid in full. Those deposits of under $5,000 were 97.9 per cent of the total deposits. Now, that is "going some."
Finally, there should be the suggestion that they were paid off right away quick, without having to wait for a long period of several years of liquidation. They got their money out right off.
As I say, the reason for my calling it to the attention of the public via you good people is that most people would not know it otherwise. It is a good line. In other words, there is a way you can get certain facts affecting the pocketbooks of nearly a million people before all the depositors of all the banks.
Q. As I recall
it, there are a couple of proposals pending on the Hill by Steagall,
Chairman of the Banking Committee, to insure deposits fully up to $10,000.
THE PRESIDENT: That has been a proposal for a long time, but I have always opposed it.
Q. On what grounds, Mr. President?
THE PRESIDENT: On the ground that we are trying to protect 97.9 per cent of the depositors, and that people who have more money in the banks than $5,000 are quite capable of taking care of themselves. . . .
Q. [MR. HARKNESS] Before you get to the figures, let me ask you this question: On Saturday, the Democratic State Committee of Pennsylvania, meeting at Harrisburg, (a) declined to endorse Mr. Guffey specifically, and (b) unanimously endorsed you for a third term. Have you any comment on that?
THE PRESIDENT: No, there is no news. No use asking questions;we are all tired of it.
Q. [MR. TROHAN] To give you a little aid: Illinois did a little thing too; a small matter.
Q. You said,
"all tired of it." Did you mean the question or of what is going
THE PRESIDENT: I think all of you are tired- that you agree with me. Put it that way. Your desks are very, very silly because, very obviously, when anything is said, it will be at a time of my choosing and not of their choosing.
Q. It will be a good story too.
THE PRESIDENT: Perfectly fair. And we are awfully tired. We have had some grand wisecracks on the part of the Press and on the part of the President; awfully amusing but, after all, you can drive a willing horse to death, both the Press and the President.
Q. We will keep on trying, Mr. President.
THE PRESIDENT: I wouldn't because--just tell your office that you don't want to be put in a ridiculous or immature position.
Q. We can't tell when we might hit your timing.
THE PRESIDENT: Well, these figures are quite interesting and there is no implication in them, one way or the other. About two weeks ago they came in from one of the statistical bureaus, and I was so much interested in them that I had them rechecked. They are comparisons between the calendar year 1932 and the calendar year 1939 and also between the month of December, 1932, and the month of December, 1939. They are tremendously interesting. The first--
Q. Are we
going to get copies of this?
THE PRESIDENT: Yes. I don't know that it is even necessary to make copies. It is just this one page and I will give it to Kannee and he will show it to you afterwards.
The national income was 40 billions in 1932 and 68 billions in 1939. That is up 71 per cent.
The next is a December-December figure. Wages and Salaries: in December, 1932, $2,403,000,000; and for December, 1939, $3,888,000,000, up 62 per cent.
Then, even more significant, again for December, weekly payrolls of factory workers, 80 million for the month of December, 1932, and 197 million for December, 1939.
Cash farm income--for the calendar year 1932, $4,682,000,000; for 1939, $7,712,000,000 plus $807,000,000 farm benefit payments, or a total of $8,519,000,000, or 82 per cent up.
Then there are two things in here that are very interesting and need analysis. In the calendar year 1932, the interest received by individuals was 9 per cent greater than in 1939. Mind you, this is interest; it is not dividends and it is not profits from corporations; it is just interest on loans, mortgages, bank deposits, etc. The first reason that the interest in 1939 is 9 per cent lower than it was in 1932 is that the interest rate has gone down and people are therefore able to borrow money at a much lower rate than they did then. The second reason is that the total debt, the burden of debt of the country, has gone down and, as was pointed out--I think it was in my Budget Message or the Annual Message--the total of all Government debt, the debt owed by Government plus the debts owed by individuals and corporations, is a great deal less than it was then. Those are the two reasons that interest paid or interest received is 9 per cent less now than it was then.
Now--this is going to be an awful shock to some editorial desks--dividends received by individuals, that is out of the profits of corporations, have gone up 55 per cent, from $2,745,000,000 to $4,253,000,000. So it does not look as if everybody in business has been doing so badly.
Then your next figure is between the two years 1932 and 1939; and the comparison relates to non-agricultural employment. That does not mean, of course, just industrial employment, but means also the small storekeeper and the gasoline station people and services of all kinds--transportation, light and power, etc. It has gone up 28 per cent, from 27,245,000 to 34,940,000 people. That is 28 per cent up. That includes all forms of employment except direct agricultural employment.
Then, bearing a little bit on the reciprocal trade agreements: as between 1932 and 1939, the 1939 figure shows that our exports are up 97 per cent. That is a tough one to get around -- from $1,611,000,000 to $3,179,000,000.
Then, the final figure--I am loading you down with this stuff; of course, you will carry all you can, but God knows what the desk will do to you--as a comparison between 1932 and 1939, the Federal Reserve Board index of production has gone up from an average of 64 in the calendar year 1932, to an average of 105 for the calendar year 1939.
Q. Is that all
industry, or manufacturing?
THE PRESIDENT: I think all industry, all production.
On that figure of non-agricultural employment that went up 28 per cent, from 27 million to 34 or 35 million people, it does not include nearly 3 million people who had worked on WPA, CCC and NYA. It does not include them.
Now, those are pretty formidable figures to take up and try to show that the country is "bust"--
[interposing] For the benefit of my editorial desk, if not several others,
can you elaborate on your statement that Government debt today is no higher
than it was in 1932?
THE PRESIDENT: It is not. In other words, local debt, state debt, county debt, city debt, have gone down the full extent that Federal debt has gone up. And private debt has gone down, therefore the total debt has gone down.
Q. Do your
figures argue a connection between city and state and local debt and the
increase in Federal debt?
THE PRESIDENT: The deduction is that the Federal Government has taken on a great many things that were formerly carried by the municipalities and the States. Well, the best example I know of, for instance, for New York, is that in 1930, 1931 and 1932, the State of New York, when I was Governor, had to bear 100 per cent of all relief work--all 'of it. We got nothing from Washington. Of course, since that time, a varying amount, depending on the year, a very large portion of that cost has been taken away from the State Governments and borne by the Federal Government, thereby reducing the expenditures of the State for relief.
Q. Your goal
for income is 90 billion dollars, as I recall it?
THE PRESIDENT: What?
Q. Your goal for national income-didn't you set it at 90 billions?
THE PRESIDENT: I set it at eighty, first. We have to go to that mark and then shoot for the ninety.
We are up to 70 billions, running that average at the present time. Of course, if we can get it up to eighty by everybody putting as many people to work as he possibly can, it means that the Federal expenditures for relief will necessarily go down--that is obvious--and, at the same time, by keeping approximately our present taxes, the income of the Federal Government will go up, obviously.
There seems absolutely no question at all that, if we can get up to an eighty billion dollars a year income level for the nation, we would have a little better than a balanced budget. Of course a lot of people don't want to do it that way. They want immediately to cut Government expenditures down in a drastic way. If we did that we might have a repetition of what happened in 1937 when we cut Government expenditures so drastically and so fast, that purchasing power was immediately affected and we had a recession--of course it wasn't a depression--a recession in the fall of that year that made itself felt from the fall of 1937 until the spring of 1939.
President, do you have any kind of a peep at what 1940 holds in store-any
prediction? Will we come near the eighty billion?
THE PRESIDENT: I don't think we want to predict. Nobody knows. There are too many coefficients in this present situation, internationally.
Q. The reason I ask is that I have seen predictions that business is going to fall off during the first quarter, but the hope is--
THE PRESIDENT: [interposing] Yes, you will get that from the statistical agencies in Washington. There is a new one every week or so.
Q. You spoke of some bureau having prepared these figures. Can you tell which one?
THE PRESIDENT: Various ones. They are listed down here at the bottom as "sources." [Reading] "1, 2, 5, 6, 8, Department of Commerce. 3, 7, Department of Labor. 4, Department of Agriculture. 9, Board of Governors of the Federal Reserve system." And then, of course, the Statistical Division, Lubin's division, tying in, and Lauch Currie working with them. . . .
estimates of the length of time that an eighty billion dollar national
income would have to be sustained in order to arrive at a balanced budget?
About a year, offhand. There is a lag you know. In other words, say on the
year 1940, to give you an illustration, the great bulk of the taxes on
production does not begin to come in until March, 1941, and the great bulk
of them is payable in four installments, through 1941. That is why I say
there is probably a full year's lag before the Federal Treasury actually
receives the benefit of it. . . .