Regular readers of TBP know that I spend some time rooting around in the excellent American Presidency Project, a remarkable resource.  Sometimes I’m looking for something specific, other times I’m just getting a feel, a flavor, for the message coming from our leadership, specifically the president.  The latter was the case when I undertook a search to see how the phrase “home ownership” has been used by presidents over time.

Herewith, FDR’s Message to Congress, April 13, 1933.  Spooky stuff.

To the Congress:

As further and urgently necessary step in the program to promote economic recovery, I ask the Congress for legislation to protect small home owners from foreclosure and to relieve them of a portion of the burden of excessive interest and principal payments incurred during the period of higher values and higher earning power.

Implicit in the legislation which I am suggesting to you is a declaration of national policy. This policy is that the broad interests of the Nation require that special safeguards should be thrown around home ownership as a guarantee of social and economic stability, and that to protect home owners from inequitable enforced liquidation in a time of general distress is a proper concern of the Government.

The legislation I propose follows the general lines of the farm mortgage refinancing bill. The terms are such as to impose the least possible charge upon the National Treasury consistent with the objects sought. It provides machinery through which existing mortgage debts on small homes may be adjusted to a sound basis of values without injustice to investors, at substantially lower interest rates and with provision for postponing both interest and principal payments in cases of extreme need. The resources to be made available through a bond issue to be guaranteed as to interest only by the Treasury, will, it is thought, be sufficient to meet the needs of those to whom other methods of financing are not available. At the same time the plan of settlement will provide a standard which should put an end to present uncertain and chaotic conditions that create fear and despair among both home owners and investors.

Legislation of this character is a subject that demands our most earnest, thoughtful and prompt consideration.

Source:
Franklin D. Roosevelt: Message to Congress on Small Home Mortgage Foreclosures.
40 – Message to Congress on Small Home Mortgage Foreclosures.
American Presidency Project, April 13, 1933

http://www.presidency.ucsb.edu/ws/index.php?pid=14618

Adding: Did not know when BR was going to run this piece, but since he slated it for Thanksgiving, I’ll take this opportunity to wish everyone a happy, healthy and safe holiday.  Enjoy friends and family.

Category: Foreclosures, Politics, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “Time Machine: FDR, 1933”

  1. michael-D says:

    iirc the twilight zone marathon runs on new years day, not thanksgiving day … and that was pretty ‘zone, if you ask me.

    happy thanksgiving, mr. ritholtz.

  2. Bill Wilson says:

    It sounds like extend and pretend circa 1933.

    Although I don’t believe that GSEs and the CRA caused the financial crisis, I’m not a believer that the government should promote home ownership. I think the government should promote affordable housing. That means lower cost housing, not a policy of lax lending standards.

  3. wunsacon says:

    Happy Turkey Day, Invictus, Barry.

  4. Bill Wilson says:

    One more thing, I like how people used to use the word machinery. Thanksgiving will provide the machinery though which I will stuff myself with food and veg-out in front of football all day.

    Happy Thanksgiving

  5. beaufou says:

    Happy Thanksgiving BR and Invictus…and all

    PS: why “spooky”?
    If it wasn’t for all the garbage (MBS) attached to mortgages, a similar solution could have been imagined, rather than bailing out bankers.

  6. Winston Munn says:

    Interesting take. FDR acknowledged deflation and declining home values and called on Congress to help bail out homeowners, while Bush, Obama, et al, all tried their best to help the banksters avoid losses by reworking the loans in order to maintain artificially elevated home prices.

    Broken bubble economy? No, way…it’s just a little air-challenged at the moment.

  7. 873450 says:

    Message updated 2011 for President Obama

    As further and urgently necessary step in the program to promote economic recovery, I ask the Congress for legislation to protect [lenders and investors] from [legal technicalities hindering] foreclosure and to relieve them of a portion of the burden of [proof] and [production of original documents and good faith affidavits] incurred during the period of [lower] values and [lower] earning power.

    Implicit in the legislation which I am suggesting to you is a declaration of national policy. This policy is that the broad interests of the Nation require that special safeguards should be thrown around home [foreclosure and repossession] as a guarantee of [corporate and finance industry] stability, and that to protect [lenders and investors] from [legislation and regulation all the] time is a proper concern of the Government.

  8. wunsacon says:

    Nice work, 873450! Cute.

  9. Julia Chestnut says:

    Happy Thanksgiving, Invictus!

  10. McMike says:

    And I thought the massive reduction in capital gains taxes on residential real estate brought on by the Tax Act of ’98 were made to help home ownership. Happy Thanksgiving.

  11. lalaland says:

    Such a bill would be filibustered without the blink of an eye today. Happy Thanksgiving all!

  12. stonedwino says:

    FDR had it nailed back in 1933 and even though we are in the same exact spot today, when it comes to housing, it seems our politicians cannot see the forest through the trees ( as in, you know…”The Big Picture”…).

    Great post as always Invictus…

  13. Great Caesars Ghost says:

    So glad that you are discussing FDR, I would like to bring to everyone’s attention one of the master mines of the new deal Marriner Eccles whose testimony to the Senate Finance Committee in early 1933 was later rewarded by President Roosevelt by bringing Eccles to Washington to help write or draft several seminal laws that essentially saved US capitalism from itself. This particular passage from Eccles’ testimony:

    It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they cannot save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying. It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment.

    Where are people such as Marriner Eccles today?

    http://londonbanker.blogspot.com/2011/09/testimony-of-marriner-eccles-to.html

    By the way he was made Fed Chairman by FDR….