income. But the funds thus pumped into the
economy were overshadowed by the stringent
credit policies followed by the banks, paradoxically
because they were better supervised and receiving
financial support. The net result was that from
1929 to 1934 the American money supply con-
tracted by nearly a third, inevitably deepening the
depression and increasing unemployment.
Roosevelt had no basic understanding of the
overall management of the economy and, in the
election campaign of 1932, attacked President
Hoover for his unbalanced budgets, promising as
one of his remedies for the depression to cut
federal spending by a quarter! Roosevelt’s electri-
fying inaugural address of 4 March 1933 reveals
the other, psychological side of his mixture of
ideas together making up the promised New
Deal. He cautioned against unnecessary fear,
attacked the ‘unscrupulous money changers’ and
vigorously promised action: ‘our greatest primary
task is to put people to work’. He was now deter-
mined to put into practice what a year earlier he
had called ‘bold persistent experimentation’. If
something fails, he declared, admit it frankly and
try something else, but ‘above all try something.
The millions who are in want will not stand by
silently forever while the things to satisfy their
needs are within easy reach.’
Roosevelt spoke to the ordinary people and
they were at last convinced that the new president
was not prepared to capitulate to seemingly
uncontrollable economic forces, to the inexor-
able workings of the business cycle. Roosevelt
exuded confidence, charm and sincerity. There
1
THE DEPRESSION, 1929–39 165
The Great Communicator. President Franklin D. Roosevelt in 1937; one of his ‘fireside chats’. © Bettmann/
Corbis
