FDR’s 1932 Pittsburgh Speech: A Masterful Deception

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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 states 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.

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October 19, 2012

Gary North [send him mail] is the author of Mises on Money. Visit He is also the author of a free 31-volume series, An Economic Commentary on the Bible.

Copyright © 2012 Gary North