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FDR's 1932 Pittsburgh Speech: A Masterful Deception

Gary North
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Reality Check (Oct. 19, 2012)

Today marks the 80th anniversary of the most deceptive speech in American political history. Nothing else comes close. Of all the flip-flops in American political history, this was the premier flip. The flop was his inaugural address on March 4, 1933.

The setting was an industrial city where unemployment was astronomical. The steel town of the world was effectively shuttered. There was little demand for American steel in 1932. Industrial production had collapsed.

It was less than two weeks before the national election. Everyone knew that this was the most momentous election since 1860. The stakes were high: control over the national government in the middle of the worst depression in world history. Yet no widely read commentator at the time gave any indication of just how high these political stakes were. The federal government in 1932 was not the center of gravity economically that it became over the next four years, let alone four decades.

Walter Lippman, the premier political columnist of the day -- a very long day, from 1913 until his death in 1974 -- infamously wrote in 1932, "Franklin Roosevelt is no crusader. He is no tribune of the people. He is no enemy of entrenched privilege. He is a pleasant man who, without any important qualifications for office, would very much like to be President."

How could Lippmann have believed this? From the evidence available in 1932. In his years out of politics, beginning in 1921 after his failed attempt to be elected Vice President in 1921, until his election as Governor of New York in 1928, FDR was a corporate bond salesman. This is rarely mentioned and never discussed by his biographers. Only one scholar has told the story in detail, Antony Sutton, in "Wall Street and FDR" (1975). That book went down the memory hole in both conservative and liberal academia, as did all of his books. Sutton began his book with this observation.

This book portrays Franklin Delano Roosevelt as a Wall Street financier who, during his first term as President of the United States, reflected the objectives of financial elements concentrated in the New York business establishment. Given the long historical association -- since the late 18th century -- of the Roosevelt and Delano families with New York finance and FDR's own career from 1921 to 1928 as banker and speculator at 120 Broadway and 55 Liberty Street, such a theme should not come as a surprise to the reader. On the other hand, FDR biographers Schlesinger, Davis, Freidel, and otherwise accurate Roosevelt commentators appear to avoid penetrating very far into the recorded and documented links between New York bankers and FDR. (

The Pittsburgh speech was part of a grand deception -- a deception that is unparalleled in modern history. FDR had three major stages in this deception: (1) as a lifetime Wall Street agent, (2) as the "voice of the common man" in a truly revolutionary take-over of the American government, and (3) as an agent of the British empire who in fact self-consciously destroyed that empire, 1941-45. You are not told this story in any biography of FDR. It is the supreme mark of the failure of the American conservative movement that there is not a single volume that tells this story. FDR remains the textbooks' man of the twentieth century, rivaled only by Winston Churchill, that other master of career flip-flops and hidden financing.

The 1932 election was crucial. Sutton shows why in his book. "So we shall find it not surprising that the Wall Street groups that supported Al Smith and Herbert Hoover, both with strong ties to the financial community, also supported Franklin D. Roosevelt. In fact, at the political crossroads in 1932, when the choice was between Herbert Hoover and FDR, Wall Street chose Roosevelt and dropped Hoover."

This is not the textbook version of the New Deal.

Neither is his 1932 speech in Pittsburgh.


He began his speech with an attack on what he called "the gospel of fear" and "panic breeders."

This policy of seeking to win by fear of ruin is selfish in its motive, brutal in its method and false in its promise. It is a policy that will be resented as such by men and women of all parties in every section of the country on November eighth.

The Republicans had campaigned in 1928 on the slogan "the full dinner pail." (That sounds truly archaic today.) Well, he said, the dinner pail is empty today, and the threat is that this will continue.

He promised good relations from now on. No more mean rhetoric.

What is the normal and sensible thing to do when your neighbor gets all excited and starts calling you and your family bad names over the back fence? I take it that nothing is gained by your calling your neighbor worse names or by losing your own temper. As a matter of fact, the peace of the community is best served by sitting down and quietly discussing the problems without raising one's voice. That is why I decline to answer vituperation merely by more vituperation.

This sounded so reasonable. It sounded so conciliatory. It did not sound like a man who, five months later, would cry out against the bankers as money-changers in the temple.

Then he warned his listeners about what was to come.

Sometime, somewhere in this campaign, I have to talk about dollars and cents. It is a terrible thing to ask you people to listen for forty-five minutes to the story of the Federal budget, but I am going to ask you to do it; and I am going to talk to you about "dollars and cents" in terms that I think not only public accountants, but everybody else can understand.

He said he would discuss the problem facing American families, "the problem of making both ends meet." He then told them that he would tell them the truth, the whole truth, and nothing but the truth. "I want to discuss this problem with you tonight. To do so sincerely I must tell the facts as they are and conceal nothing from you." He assured them that they had nothing to fear. "It is not a pretty picture, but if we know that picture and face it we have nothing to fear." Why not? Because political salvation was imminent. Leadership was at hand. An election was coming.

This country is the richest and most resourceful Nation in the world. It can and will meet successfully every problem which it faces; but it can do so only through intelligent leadership working unselfishly for the good of all people.

That was a political message for all seasons, or at least every four years in the fall.


A speaker needs mental images for listeners to connect with. A favorite image is the family.

We all know that our own family credit depends in large part on the stability of the credit of the United States. And here, at least, is one field in which all business -- big business and little business and family business and the individual's business -- is at the mercy of our big Government down at Washington, D. C. What I should like to do is to reduce, in so far as possible, the problem of our national finances to the terms of a family budget.

It's all so easy. It's inflow and outflow. It's the need for balance. It's just like a household. (A household that can print money.)

The credit of the family depends chiefly on whether that family is living within its income. And that is equally true of the Nation. If the Nation is living within its income, its credit is good. If, in some crises, it lives beyond its income for a year or two, it can usually borrow temporarily at reasonable rates. But if, like a spendthrift, it throws discretion to the winds, and is willing to make no sacrifice at all in spending; if it extends its taxing to the limit of the people's power to pay and continues to pile up deficits, then it is on the road to bankruptcy.

But was America on the road to bankruptcy in 1932? Yes, he said. It was a Republican road to bankruptcy. (The Democrats had controlled both houses of Congress since March 1931.)


The problem was taxes. There were too many taxes.

For over two years our Federal Government has experienced unprecedented deficits, in spite of increased taxes. We must not forget that there are three separate governmental spending and taxing agencies in the United States the national Government in Washington, the State Government and the local government. Perhaps because the apparent national income seemed to have spiraled upward from about 35 billions a year in 1913, the year before the outbreak of the World War, to about 90 billions in 1928, four years ago, all three of our governmental units became reckless; and, consequently, the total spending in all three classes, national, State and local, rose in the same period from about three billions to nearly thirteen billions, or from 8 1/2 percent of income to 14 1/2 percent of income.

The problem was, he insisted, that high taxes cannot boost the economy.

"Come-easy-go-easy" was the rule. It was all very merry while it lasted. We did not greatly worry. We thought we were getting rich. But when the Crash came, we were shocked to find that while income melted away like snow in the spring, governmental expense did not drop at all.

Then, like an incipient Arthur Laffer with no curve drawn on a napkin, he launched into stupefying numbers.

It is estimated that in 1932 our total national income will not much exceed 45 billions, or half of what it used to be, while our total cost of Government will likely be considerably in excess of 15 billions. This simply means that the 14 percent that Government cost has risen to has now become 33 1/3 percent of our national income. Take it in terms of human beings: It means that we are paying for the cost of our three kinds of Government $125 a year for every man, woman and child in the United States, or $625 a year for the average family of five people.

Everywhere FDR looked, there was a branch of government demanding more taxes.

Can we stand that? I do not believe it. That is a perfectly impossible economic condition. Quite apart from every man's own tax assessment, that burden is a brake on any return to normal business activity. Taxes are paid in the sweat of every man who labors because they are a burden on production and are paid through production. If those taxes are excessive, they are reflected in idle factories, in tax-sold farms, and in hordes of hungry people, tramping the streets and seeking jobs in vain. Our workers may never see a tax bill, but they pay. They pay in deductions from wages, in increased cost of what they buy, or -- as now -- in broad unemployment throughout the land. There is not an unemployed man, there is not a struggling farmer, whose interest in this subject is not direct and vital. It comes home to every one of us!

Of course, we must not be stingy with the truly afflicted. We must not close our wallets entirely. The government can and should feed the hungry.

Let me make it perfectly clear, however, that if men or women or children are starving in the United States -- anywhere -- I regard it as a positive duty of the Government -- of the national Government if local and State Governments have not the cash -- to raise by taxes whatever sums may be necessary to keep them from starvation.

But let's ignore that obligation for now. Let's not dwell on it at all. Let's kick that can down the road.

What I am talking about are the taxes which go to the ordinary costs of conducting Government year in and year out. That is where the question of extravagance comes in. There can be no extravagance when starvation is in question; but extravagance does apply to the mounting budget of the Federal Government in Washington during these past four years.

This expansion of federal spending, he warned prophetically, was a threat to the stability of America's economic order.

The most obvious effect of extravagant Government spending is its burden on farm and industrial activity, and, for that nearly every Government unit in the United States is to blame. But when we come to consider prodigality and extravagance in the Federal Government, as distinguished from State or local government, we are talking about something even more dangerous. For upon the financial stability of the United States Government depends the stability of trade and employment, and of the entire banking, savings and insurance system of the Nation.

The Administration was spinning a fairy tale. This fairy tale involved a huge error, namely, that federal spending can increase national wealth.

To make things clear, to explain the exact nature of the present condition of the Federal pocketbook, I must go back to 1929. Many people throughout the land -- rich and poor -- have believed the fairy story which has been painstakingly circulated by this Administration, that the routine spending of our Federal Government has been kept on a fairly even keel during these past five years. It was perhaps easy to give this impression because the total outlay each year up to the emergency appropriations of this year did not increase alarmingly. But the joker in this is that the total outlay includes interest and sinking fund on the public debt; and those charges were going down steadily, right up to this year.


The debt! Keep your eyes on the debt! Do not be misled. Do not fall for the joker in the deck. Never lose sight of the debt.

Let's look at the numbers, he said. Consider the magnitude of these numbers. How can any nation survive, let alone prosper, in the face of these numbers. We are talking over three billion dollars. That's $3,000,000,000. Can you imagine such profligacy?

On the plain question of frugality of management, if we want to compare routine Government outlay for 1927 with that for 1931 for example -- four years later -- we must subtract this so-called "debt service charge" from the total budget in each year. If we do this, we find that the expenditure for the business of Government in 1927 was $2,187,000,000, and in 1931, $3,168,000,000.

That represents an increase of actual administrative spending in those four years of approximately one billion dollars, or roughly, 50 percent; and that, I may add, is the most reckless and extravagant past that I have been able to discover in the statistical record of any peacetime Government anywhere, any time.

Reckless. Extravagant. The candidate was just getting warmed up.

Let me repeat those figures so that the whole country can get them clearly in mind. Leaving out "debt service charges" in both instances, the cost of carrying on the usual business of the United States was $2,187,000,000 in 1927, $3,168,000,000 in 1931 -- an increase in four years of one billion dollars!

Incredible, isn't it? But that isn't the half of it, he told his audience. Not by a long shot. There is something else. What is that, you may ask? This: the deficit.


We must stop the deficit, he warned. This is crucial to prosperity.

But it is less than half of the whole appalling story. And I am telling the Nation that on the income side of our ledger, the record is worse. Unlike other taxing agencies, the Federal Government does not levy a direct tax on property. Therefore, you do not have to be an expert to know that when anything happens that violently contracts sales and incomes and the prices of securities and commodities, there is sure to be a similar violent contraction of Federal income and that a Government charged with maintaining the financial stability not only of the United States itself, but of the whole American Nation under all conditions, is under a very solemn duty, in such an event, to take immediate steps to avoid a deficit.

Anyone should be able to see this, he assured his audience. But the Administration was blind. Once again, FDR cited figures. The Administration in 1930 proposed to cut taxes. But receipts fell.

He began a summary of the numbers. On and on he went. It was a green eye shade performance that in retrospect amazes the historian of political rhetoric. Was anyone still awake to hear this?

Debtor Nations, no longer sustained by our improvident loans and no longer able to export goods, were drained of gold for debts and, one by one, were forced to abandon specie payments.

Yet he was not halfway through! You are probably wondering, "When will this summary end?" I feel your pain!

Then, not even halfway through, he announced, "Let me not waste words. I now quote from the daily Treasury statement, made three weeks ago, on the result of the first three months of operation under the new budget this year, the statement covering the months of July, August and September, the first quarter of the fiscal year. Here is what it says. . . ."

I can take no more. You can take no more. We must fast-forward to get the main point.

That little example, my friends, may explain the 50 percent increase in Government overhead in four years, 1927-1931, and I am sure that the whole group of quotations reveal why you can never expect any important economy from this Administration. It is committed to the idea that we ought to center control of everything in Washington as rapidly as possible Federal control. That was the idea that increased the cost of Government by a billion dollars in four years. Ever since the days of Thomas Jefferson, that has been the exact reverse of the democratic concept, which is to permit Washington to take from the States nothing more than is necessary to keep abreast of the march of our changing economic situation.


The solution was cost-cutting. Big government had to be put on a diet.

In the latter philosophy, and not in the philosophy of Mr. Hoover -- which I think is responsible for so much of our trouble -- I shall approach the problem of carrying out the plain precept of our Party, which is to reduce the cost of current Federal Government operations by 25 percent.

It is clear what this will mean. There must be a reduction of bureaucracy. "Of course that means a complete realignment of the unprecedented bureaucracy that has assembled in Washington in the past four years."

So, he offered hope. There is hope. Our hope runneth over. It begins here.

Now, I am going to disclose to you a definite personal conclusion which I reached the day after I was nominated in Chicago. Here it is: Before any man enters my Cabinet he must give me a two-fold pledge:

1. Absolute loyalty to the Democratic platform and especially to its economy plank.

2. Complete cooperation with me, looking to economy and reorganization in his Department.

I regard reduction in Federal spending as one of the most important issues of this campaign. In my opinion it is the most direct and effective contribution that Government can make to business.

In accordance with this fundamental policy it is equally necessary to eliminate from Federal budget-making during this emergency all new items except such as relate to direct relief of unemployment.

He then quoted himself: a speech he gave the previous April. "I do not see how, as a matter of practical sense, a Government running behind two billion dollars annually can consider the anticipation of bonus payment until it has a balanced budget, not only on paper, but with a surplus of cash in the treasury." Then he added this: "No one, for political purposes or otherwise, has the right in the absence of explicit statement from me to assume that my views have changed. They have not. So much for another effort by Republican leaders to preach an unwarranted gospel of fear and panic to the American electorate."


A new day was about to dawn. A new deal.

I have sought to make two things clear: First, that we can make savings by reorganization of existing departments, by eliminating functions, by abolishing many of those innumerable boards and those commissions which, over a long period of years, have grown up as a fungus growth on American Government. These savings can properly be made to total many hundreds and thousands of dollars a year.

And then he ended, as every politician always does in the days leading up to an election, with an offer of hope.

To that contribution I here pledge the utmost of my faith and my ability. I am as certain as mortal man can be certain of anything in the future, that from the moment that you and I set our hands openly and frankly and courageously to that problem, we shall have reached the end of our long, hard, downward road. We shall have started on the upward trail. We shall have built for economic recovery a firm footing, on a path that is broad, true and straight. Join me, and "let's go!" (


Whenever we hear a Presidential candidate promise us anything, recall the ditty sung by a trio (or maybe quartet) at the Democratic National Convention in 1952. It is the first political jingle I can recall. It lives in my mind.

They promise you the sky.
They promise you the earth.
But what's a Republican promise worth?

It is worth every bit as much as a Democrat promise.

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