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4/13/38 - Radio Address - White House • t h i s progr&n w i l l require it coapmraxivel^ aaell of sew fia&&el&g &nd heaee only a mmll ioerefese In the national debt. Moreover, I an confident that only in t h i s my ear* we qaickly restore a condition undar w&leh the budget will oaee >tor» be balanced. Tnat coadiUon i s 4«p«n4e»t upas restoration of a&ti^x^X income, Inborn® tu th» saa total of sages* salaries ead ii«sma«3 of a l l of th« p^KJple* Snlefts ih« f&rs«r reesivea eui &d«quat# return upoaa hl» crops, ual«0s the eork«r receives his f a i r slsara of «&ge«y tml«»s th« l&bor &34d. • • r r i e w of th# people KS a *hole are sufficlfesit^y «aplo^redf unless th«nt I s & flow of iiiooa* &»cmf «11 group* of <mr p®opl*9 th« entire nation i# th« losar, aational ixwoae i» bmuad to f a l l and an na- b&leaced budget* to permit »u€h ©oaditiose to persist &i«l beeotse »ors© would b« latol«rtt.UL«i in anj d«aocrfecy. It would \m unsound fpoa <w«ry social and eeonossie tttnadpoint* Unless prlvata bueinasa Is a^l© to give adjust* «aployawmtf tml«*a it is able to disperse end aalataiA a flo* of lne@jB«# it is the primary duty of th» to «nk« decent provision for those uasbl« to ftsd ©isploy«ad to exert all of its powers to bring about a restoration of aetlTlty. Th&t is the purpose of this progr&»—to bring about the restoratlom essential to bringing about a b&laneed budget. For the federal tfawrwmnt to attempt to achieve a balaaeed laudget at this tlfte IBQT <mttiag dona expenditures while industry is retreoehing would aaly lover the national laeoae and the federal revenues mod thus increase the deficit. There h&8 been widaapre&d s&suiuSerstaadiag of Hid situation* It is iaportant to be&r in ai&d that for nearly * the goveraaimt has aot baen required to raia© any additional fluids frogs the public In order to «**t expeaditurse. la other words, It Is l»port*mt to rmmsto&r the* th© e&sh l^idget ha» beeu tlmt os«b T9vmw& bev© exceeded e&»h outgo for the p*at aia« If tilt prograa i* adopted in Its eatiraty, it Is **U»ated tljat tfea f«d«zml book deficit for the next fiscal y»«r * i U naouat to > plus an indeterai&atc essount for mtk li«f ia the last five aoaths of the ft**al yeer. This Is & lot of 8@&«yf but it is vitally iaporteat to und«ratand ttoe s^ania^ of figure. It does aot me«ua that the pufello debt « U 1 be inor«aaed by this aaouat. Mor does it »eaa that th« ague? sarket will be called upon to absorb this asamtt of &dkiitldiiel govera»ent securities. Lot lie explain*, In the first place, It is proposed to utilise the funds la the inaotive gold acccmat, to the amount of $1,400,030,000, whieh t ^ frm>suxy has slreatl^ borrowed aoaey to porches©. To this extent so further laere&ge In the public debt is called for* The expeaditare of these idle funds will oreete ftdditiomsl deposits and axiditionul excess reserves in banks? the public w i n h&ve sore aon«y to spend ®nd ^b» b&nka aor© money to loan. Deducting this aaamat froa the estimated deficit this figure of _ _ _ _ _ _ _ _ will represent the increase la the public debt, except for work relief expenditures froa February to Juae of next year* Xt does aot represent, however, the amount of money to be raised la %im Qpm market* froa collections, wfcich the goveraasat receives froa employers and ployeos o»a accouat of old-age aad unemployment l&mir&aee, la excess of o«t'pay«esatt far these ^rpos«« ft mm of .. for t&vestoeat la special »«carlti#s of the * the lnv»8taeat of this ^aaej la slaUUr to the iavestaeat inmr&zxo® eomiwni&a of part of their pre*lua* in y there are the funds ftoomlag from %hm sale of Waited States Savlaga Bonds - Ifebgr bond*. ?h«s« are Garrently running around half a billion a year end represent the current of aillioas of our cltisana, H I in all, therefore, the public debt will not be 1 B ia t^e aejrt fiscal year lay isore thaa e eas- elusive of m*& relief «xptnditures ia the lm% five aoatlm of the fise&l jrear* the asouat of new securities that irill h» issmed la the opea market »ill be i pirns the additional amount for work relief, to ^hi«h I h&ve just referred. Considering the mmXln»$a of thi* aaouat ia oospariftoa with the sttas ml»e4 la reeeat M H M b a^i coasidertn^ also the dearth of private borrowing in ralfttloa %® to* large voliias of ©starrest sayiag, so difficulty i» fi«MMiag the isrogmm will ariss* Th# agraaas raservss alott« of th# beaks will ^ortljr «s«mat to m^re ttam 2-1/2 billicm dollars* L«i as look at the ©ther nide of tfe& pietore. l a the absentee of this p*0gr«a b i l l t&&$ of dollars of the ®iXft»it ssvings of ®m natloa <!«rlir©d froa production ^oul<i l i s Idl®. I poroposa tfast la tfe# abs®s®# ©f prlT&ts borrovlng th« f&T®Kiaant borrew aons of thass oth«rwlse jUUa a^d atKgaaat pools of ouplt^l iosd turn thas b^-ek into the aamjy str«aa where tbsy 'will iwrfora «orlc imd oraata daoands for the psroduets of • I la the seeood category, the Msdniatrstion to a&ke additioa&l beak resources avallabl* for the credit needs of tb© country* This e»n txs done without leglsXft.ti.oa* It will be done through ti» deeterilissatioa of approximately one &ad <me-^iu»rt«ir blllloa dollsx* of Treasury golci aeooapanimi toy action on the part of the Federal Reserve Board to reduce reserve r«viuires«*ntt ty about three-quarter© of & billion doll&ra* these aeaaures will tmke sore ebiaidafit the supply of funds for eo^Bercef industry &od agriculture. By tlieaselves, however9 aoaetfery aesaures are insufficient to start us on & sustained upward laovesent* As & part of this progrta I expect the federal bsaking supervisorj authorities to coordinate nz&t liberalise tfeeir extusdJj&tion policies with reference both to loans and inveat.5«iita sud to their regulations governing iavest&eats which bmkt cen buy* la addition, X aa requesting that the Securities Exchange Coaaissioa consider such liberalisation of regulations «s will assist and expedite the financing particularly of small business r * In the second category the Adminstratik)n 0 additional banking-credits. f-iis can be dode without legislamonf It be done through a gradual desterilization W If- billion of Treasury gold f accompanied by iaeasures on the p a r t of the Federal ^e^ervey-ooa^d vmich w i l l reduce the -exiu^a reserve requirementfy, II Tnis monetary measurez/vixj/ iuaice borrowing for business enterprises more fluid than it is today, but standing alone by themselves tue increase in credit facilities is insufficient definitely to support prosperity on trie upgrade.
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