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Difficulty: EasyThe New Deal: Policies, Reforms, and Debates

President Franklin D. Roosevelt, Radio Address (Fireside Chat), March 12, 1933:

"I want to talk for a few minutes with the people of the United States about banking... First of all, let me state the simple fact that when you deposit money in a bank the bank does not put the money into a safe deposit vault. It invests your money in many different forms of credit—bonds, commercial paper, mortgages and many other kinds of loans... I can assure you that it is safer to keep your money in a reopened bank than under the mattress."

Based on the excerpt and your knowledge of the 1930s, which of the following was a primary goal of the Roosevelt administration's early banking reforms, such as the bank holiday and the Emergency Banking Act?

  1. To restore public confidence in the nation's financial institutionsAnswer
  2. B
    To immediately end the Great Depression and achieve full economic recovery
  3. C
    To establish federal health insurance programs such as Medicare
  4. D
    To return the United States to a strict laissez-faire economic system

Answer

To restore public confidence in the nation's financial institutions
The correct answer is correct because Franklin D. Roosevelt's address was intended to explain how banks function and to reassure a panicked public that reopened financial institutions were secure. By declaring a bank holiday and passing the Emergency Banking Act, the administration sought to stop bank runs and restore public confidence, which was essential for restarting the credit and banking systems.

Step-by-Step Solution

1
Analyze the historical source context
The source is Franklin D. Roosevelt's first Fireside Chat in March 1933, addressing the public directly about banking operations and the safety of reopened banks.
Understanding the source's historical context helps identify the immediate problems the administration was trying to solve.
2
Evaluate the stated message of the president
Roosevelt explains that banks invest deposits rather than letting them sit in vaults, and assures the public that reopened banks are safe.
This shows he is addressing the panic and bank runs that characterized the start of the Great Depression.
3
Connect the message to the primary goal of the legislation
The primary goal of the bank holiday and the Emergency Banking Act was to halt runs on banks and restore public confidence so that the financial system could resume functioning.
Identifying the link between the rhetoric and the policy leads to the correct answer choice.

Key Concept

Restoration of financial confidence during the First New Deal
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Topics

The New Deal: Policies, Reforms, and Debates

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