Franklin D. Roosevelt, "Commonwealth Club Speech" (September 23, 1932)
(Given to the Commonwealth Club of San Francisco).

In this speech given amidst the Great Depression, President Roosevelt sought to explain why "new terms" should be added to the "old social contract" of the United States. Notice how Roosevelt explains that circumstances have changed since the founding of the United States, which now require an active national government to protect individual liberty and opportunity from the abuses of industry and the unequal distribution of resources.


.... [During the 19th century] on the western frontier land was substantially free. No one who did not shirk the task of earning a living was entirely without opportunity.... Starvation and dislocation were practically impossible. At the very worst there was always the possibility of climbing into a covered wagon and moving West, where the untilled prairies afforded a haven for men to whom the East did not provide a place. So great were our national resources that we could offer this relief not only to our own people but to the distressed of the world.  We could invite immigration from Europe and welcome it with open arms. Traditionally when a depression came a new section of land was opened in the West.  And even our temporary misfortune served our manifest destiny.

It was in the middle of the nineteenth century that a new force was released and a new dream created.  The force was what is called the Industrial Revolution, the advance of steam and machinery and the rise of the forerunners of the modern industrial plant. The dream was the dream of an economic machine, able to raise the standard of living for everyone; to bring luxury within the reach of the humblest; to annihilate distance by steam power and later by electricity, and to release everyone from the drudgery of the heaviest manual toil. It was expected tht this would necessarily affect government. Heretofore government had merely been called upon to produce conditions within which people could live happily, labor peacefully and rest secure.  Now [during the industrial revolution] it was called upon to aid in the consummation of this new dream.. . .

It was thought that no price was too high to pay for the advantages which we could draw from a finished industrial system.

The history of the last half century is accordingly a large measure a history of a group of financial titans, whose methods were not scrutinized with too much care and who were honored... irrespective of the means they used.

As long as we had free land, as long as population was growing by leaps and bounds, as long as our industrial plants were insufficient to supply our own needs, society chose to give the ambitious man free play and unlimited reward provided only that he produce the economic plant so much desired.

During this period of expansion there was equal opportunity for all, and the business of government was not to interfere, but to assist in the development of industry.

In retrospect we can no see that the turn of the tide came with the turn of the century.  We were reaching our last frontier; there was no more free land and our industrial combinations had become great uncontrolled and irresponsible units of power within the State. Clear-sighted men saw with fear the danger that opportunity would no longer be equal; that the growing corporation, like the feudal baron of old, might threaten the economic freedom of individuals to earn a living. In that hour our antitrust laws were born. The cry was raised against the great corporations. . . .

A glance at the situation today only too clearly indicates that equality of opportunity as we have known it no longer exists.  Our industrial plant is built.  The problem is now whether, under existing conditions, it is not overbuilt. Our last frontier has long since been reached, and there is practically no more free land. More than half of our people do not live on the farms or on lands and cannot derive a living by cultivating their own property. There is no safety valve in the form of a Western prairie to which those thrown out of work by the Eastern economic machines can go for a new start. We are not able to invite immigration from Europe to enjoy our endless plenty. We are now providing a drab living for our own people....

Recently a careful study was made of the concentration of business in the United States. It showed that our economic life was dominated by some 600-odd corporations who controlled two-thirds of American industry. Ten million small business men divided the other third. More striking, it appeared that if the process of concentration goes on at the same rate, at the end of another century we shall have all American industry controlled by a dozen corporations and run perhaps by a hundred men. Put plainly, we are steering a steady course towards economic oligarchy, if we are not there already. Clearly this calls for a reappraisal of values....

The day of the great promoter or the financial titan, to whom we granted anything if only he would build or develop, is over.... [Our task] is the soberer, less dramatic business of administering resources and plants already in hand... of meeting the problem of under-consumption, of adjusting production to consumption, of distributing wealth and products more equitably, of adapting existing economic organizations to the service of the people. The day of enlightened administration has come.

Just as in older times the central government was first a haven of refuge and then a threat, so now in a closer economic system the... ambitious financial [corporation] is no longer a servant of national desire but a danger. . . .

As I see it, the task of government in its relation to business is to assist the development of an economic declaration of rights, an economic constitutional order. This is the common task of statesman and business man. It is the minimum requirement of more permanently safe order of things....

The Declaration of Independence discusses the problem in terms of a contract. Government is a relation of give and take, a contract . . . Under such a contract, rulers were accorded power, and the people consented to that power on consideration that they be accorded certain rights. The task of statesmanship has always been the redefinition of these rights in terms of a changing and growing social order. New conditions impose new requirements upon government and those who conduct government . . .

Every man has a right to life, and this means that he also has a right to make a comfortable living. He may by sloth or crime decline to exercise that right, but it may not be denied to him. We have no actual famine or dearth; our industrial and agricultural mechanism can produce enough to spare. Our government formal and informal, political and economic, owes to every one an avenue to possess himself a portion of that plenty sufficient for his needs through his own work....

If, in accord with this principle, we must restrict the operations of the speculator, the manipulator, even the financier, I believe we must accept the restriction as needful not to hamper individualism but to protect it....

The final term of the high contract was for liberty and the pursuit of happiness. We have learned a great deal about both in the past century. We know that individual liberty and individual happiness mean nothing unless both are ordered in the sense that one man's meat is not another man's poison. . . .[T]he right to read, to think, to speak, to choose and live a mode of life must be respected at all hazards. We know that the liberty to do anything which deprives others of those elemental rights is outside the protection of any compact, and that the government in this regard is the maintenance of a balance within every individual may have a place if he will take it, in which every individual may find safety if he wishes it, in which every individual may attain such power as his ability permits, consistent with his assuming the accompanying responsibility....

Faith in America, faith in our tradition of personal responsibility, faith in our institutions, faith in ourselves demands the we recognize the new terms of the old social contract. We shall fulfill them, as we fulfilled the obligation of the apparent utopia which Jefferson imagined for us in 1776 and which Jefferson, [and others] sought to bring to realization.

We must do so, lest a rising tide of misery, engendered by our common failure engulf us all. But failure is not an American habit, and in the strength of great hope we must all shoulder our common load.