my report; in the same spirit and by the same means to tell you
about what we have been doing and what we are planning to do.

Two months ago we were facing serious problems. The country was
dying by inches. It was dying because trade and commerce had
declined to dangerously low levels; prices for basic commodities
were such as to destroy the value of the assets of national
institutions such as banks, savings banks, insurance companies, and
others. These institutions, because of their great needs, were
foreclosing mortgages, calling loans, refusing credit. Thus there
was actually in process of destruction the property of millions of
people who had borrowed money on that property in terms of dollars
which had had an entirely different value from the level of March,
1933. That situation in that crisis did not call for any
complicated consideration of economic panaceas or fancy plans. We
were faced by a condition and not a theory.

There were just two alternatives: The first was to allow the
foreclosures to continue, credit to be withheld and money to go
into hiding, and thus forcing liquidation and bankruptcy of banks,
railroads and insurance companies and a recapitalizing of all
business and all property on a lower level. This alternative meant
a continuation of what is loosely called "deflation", the net
result of which would have been extraordinary hardships on all
property owners and, incidentally, extraordinary hardships on all
persons working for wages through an increase in unemployment and a
further reduction of the wage scale.

It is easy to see that the result of this course would have not
only economic effects of a very serious nature but social results