Franklin Roosevelt's Credit Principle Transcript Available
December 23, 2013 • 5:28PM

"FDR's Credit Principle," a video lecture by Michael Kirsch given on July 29, 2013, is now available in an edited transcript format in four parts. "FDR's Credit Principle" investigates the needed transformation of the relations between direct lending institutions and government power, and debt and budgeting.

Part I, "FDR Reviews the Crisis and Reforms of 1933," discusses Roosevelt’s own review of the crisis of 1933 and the essential reforms from his own preface to the 1938 Papers of Franklin Roosevelt, and the Hamilton precedent for appropriate government authority.

Part II, “Non-Mechanical Economic Cycles: Generalizing the Principle of Government Credit,” is a conceptual discussion of credit as a more general principle of economy, as expressed in a comparison of Nicholas Biddle’s Bank of the U.S. and the case of FDR's Commodity Credit Corporation. This understanding of government credit is contrasted with the actions of the Andrew Jackson Administration’s attack on the credit system. Part II is the most important part of the lecture, and referenced throughout.

Part III, “Franklin Roosevelt’s Credit Budgeting,” reviews in detail the key parts of Roosevelt’s annual Budget Messages, from 1934-1941, which provide much needed clarification of the correct understanding of of debt, borrowing, and a productivity budget. Jackson’s false view of debt is contrasted as seen through letters at the time.

Part IV, “FDR’s Approximation of the Bank of the United States: RFC Direct Lending and the Twelve Credit Banks for Industry,” takes up the little known origin of the lending powers which made the growth of the 1930s possible, and how the actual intent of FDR was to permanently transform the Federal Reserve System into a direct credit system like Alexander Hamilton’s Bank of the United States. This reviews his legislation for 12 “Credit Banks for Industry,” and the eventual modifications of Section 13 of the Federal Reserve Act, and associate powers of a transformed Reconstruction Finance Corporation.