0 McKenzie Hello, I am Robert McKenzie and welcome again to the University of Chicago campus, where we're about to see Part 3 of Milton Friedman's major television series "Free to Choose."
We are back at the University of Chicago campus. Robert McKenzie tells us his name and says that he is happy too see us back at the University of Chicago. He welcomes us back, or again, to the University of Chicago campus. We have returned to see another part of Milton Friedman's major, or very important, television series, "Free to Choose." We are going to see Part 3 soon. We are about to see Part 3.

Welcome again = Welcome back

University of Chicago campus American university usually have a piece of land called "campus" that has academic buildings, dormitories, libraries, concert halls, religious buildings, places to eat, to do sports, to meet and socialize.

we are about to see = We will very soon see.

9.91542288557214 What has emerged so far is that Dr. Friedman believes passionately that when people pursue their own economic self-interest then in the long run everyone is better off. That's why also he has so strongly opposed the government controls.
At this point in the series, it has become clear that Dr. Friedman passionately believes in certain ideas. He believes that people should be free to pursue their economic self-interest. They should be allowed to make money in any way they want. If they are allowed to do so, everybody benefits. Everybody is better off. This is why Dr. Friedman opposes government controls. Those controls interfere with people's pursuit of their self-interest. They make it more difficult for people to pursue their self-interest.

has emerged, has opposed Present Perfect

What has emerged so far is A clause as the subject of the sentence.

in the long run = Over a long period of time.

better off = In a better condition.

22.858706467661694 Indeed he believes America is hardly a free country because of the extent of government intervention in the economic lives of the people. Now in this program he traces how all this developed from the crash of 1929, the Great Depression of the 1930s, and the legacy they both left.
He even believes that American is almost not a free country any more. He believes that it is hardly a free country because the government intervenes with the economic lives of the people. It intervenes very much. It intervenes to a great extent. America is hardly a free country because of the extent of government intervention in the economic lives of the people. In this program he shows how this started and how it developed. It developed from the economic crash of 1929 and the Great Depression of the 1930s. The crash and the depression had consequences. They left a legacy. They and their legacy led to government intervention in the economic lives of the people.

hardly X is hardly Y X is almost not Y

intervention From the verb intervene

1930s = Some or all of the years between 1930 and 1939

39.66965174129354 Friedman Delancy Street in New York's lower east side, hardly one of the city's best known sites, yet what happened in this street nearly 50 years ago continues to effect all of us today.

This is Delancy street in New York. It is in the South-East part of the Manhattan island. It is part of the East side of the island. It is called "lower east side." In this phrase, "lower" means "more to the south."

Delancy street is not well-known. It is not a well-known site. It is certainly not one of the best-known sites of New York. However, an important event happened here. It happened almost 50 years ago. That event continues had important consequences. It had a great effect on American history. It affected American history greatly. It continues to have an effect on us. It continues to affect all of us today.

lower east side lower may mean "more to the south" and upper may mean "more to the north." These words are used in the names of parts of Manhattan.

what happened in this street ... continues a clause as the subject of the sentence

continues to affect effect is a noun, affect is a verb They are pronounced very similarly, and many americans spell them the same. It is a common mistake..

55.05771144278607 Wall Street. Most of us know what happened here 50 years ago.
This is Wall Street. Something important happened here 50 years ago. Most of us know what happened here.
what happened here A clause as the direct object of the verb
70.30547263681592 Inside the Stock Exchange on October 29, 1929, the market collapsed. It came to be known as Black Thursday. The Wall Street crash was followed by the worst depression in American history. That depression has been blamed on the failure of capitalism. It was no such thing but the myth lives on. What really happened was very different.
Number 11 on Wall Street is the place where people buy and sell stocks of companies. This building is called the Stock Exchange. On October 29, prices of most stocks on the Stock Exchange fell sharply. When people say "The stock market collapsed" or "the stock market crashed" they mean that the prices of most stocks fell sharply. October 29, 1929 has been called Black Thursday. After the stock market crashed there was a severe depression. A depression is when economic activity goes down for a long time. The depression of 1929 was the worse depression in American history. It is called The Great Depression. Some people think that this depression showed that the capitalist system did not work well. They think the capitalist system failed. They think it was a failure of capitalism. This idea is not true. It is a myth. However, may people still believe it. The myth is still alive. The myth lives on. The Great Depression was not a failure of capitalism. What really happened was very different.

the market collapsed If we were talking a building (a fish market), this would mean that the roof and the walls of the building fell down. Since we are talking about a stock market, it means that the prices fell down. Other abstract things can collapse: The discipline in the army has collapsed. In 1991, the Soviet Union collapsed.

It came to be known as X = People started calling it X.

The Wall Street crash = The collapse of the Wall Street

was followed by, has been blamed on Past Passive, Present Perfect Passive

depression In economics, a period of time when the economy of a country gets smaller.

It was no such thing = It wasn't anything of the sort; it was not a failure of capitalism at all.

myth Here, something that is not true but many people believe. Friedman means the belief that the Great Depression resulted from a failure of the capitalist system of a free market.

98.65771144278608 Although things looked healthy on the surface, business had begun to turn down in mid-1929. The crash intensified the recession. So did continuing bank failures in the south and Midwest. But the recession only became a crisis when these failures spread to New York and in particular to this building, then the headquarters of the Bank of United States. The failure of this bank had far-reaching effects and need never have happened.
American economic activity seemed in good condition in 1929. It looked healthy on the surface. However, this was not really true. By the middle of 1929, business had begun to to turn down. This was the beginning of the recession. The stock market crash made the recession worse. It made the recession more intense. It intensified the recession. Also, banks continued to fail in the South and Midwest. These bank failures, like the market crash, helped to make the recession worse. However, the recession did not become a crisis until bank failures also occurred in New York. Bank failures spread to New York, and especially to this building. This building once was the headquarters, or the man building, of the Bank of United States. When this bank, the Bank of United States, failed, there were far-reaching effects. The failure of this bank produced widespread consequences. This failure need not have happened. This bank did not have to fail.

on the surface The opposition between surface and "under the surface" or "in depth" often describes the difference between appearance and the real truth. A surface or superficial analysis results in errors; a deep or in-depth analysis results in understanding. This is one of many spatial metaphors: special notions are used to describe abstract notions.

had begun to turn down Past Perfect tense to indication an even that happened before some other event or moment of time.

turn down Another special metaphor: business had become less active; the level of economic activity had become low.

South and Midwest The US is divided into five regions: Northeast, Southeast, Midwest, Southwest, and the West. Instead of Southeast, people frequently say simply South.

the recession only became a crisis when = The recession had not become a crisis until... The recession became a crisis only when...

need never have happened = It should not have happened. Perfect Infinitive after a modal verb indicates an event in the past.

130.17711442786072 Only a few blocks away is the Federal Reserve Bank of New York. It was here that the Bank of United States could have been saved. Indeed, the Federal Reserve System had been set up 17 years earlier precisely to prevent the worst consequences of bank failures.

Not very far from Delancy street is the Federal Reserve Bank (FRB) of New York. The distance from the FRB to where the Bank of United States used to be is only a few blocks. It was in the FRB that the Bank of United States could have been saved. The Federal Reserve System had been created 17 years earlier, in 1913. It had been set up to help with bank failures, such as the failure of the Bank of United States in 1930. It was set up precisely for situations like the failure of the Bank of United States. It was set up to prevent the worst consequences of bank failures.

a few blocks away A city block is a rectangle of buildings surrounded by streets. In American English it is often used as a measure of distance, probably because American cities are often laid out on a rectangular grid.

The Federal Reserve Bank of New York This is one of twelve Federal Reserve Banks (FRBs) that together form the Federal Reserve System of the United States. It is a complex system. FRBs are not commercial banks. Their shares are owned by commercial banks, but those banks cannot sell those shares, they simply must own them. Read about it in Wikipedia or other sources.

could have been saved = It was possible to save it but it was not saved. Perfect Infinitive after could, should, would describes an action or event that did not take place. It should have been saved (but wasn't). It would have been saved if the Federal Reserve Bank gave it some help.

Indeed, Here, this word simply means that there is a strong connection between the preceding sentence and the new one.
149.25174129353235 The Federal Reserve Bank of New York, whose directors today meet in this room, devised a plan in cooperation with the superintendent of banking of the State of New York to save the Bank of United States. Their plan called for merging the Bank of United States with several other banks and also providing a guarantee fund to be subscribed to by still other bankers to assure the depositors that the assets of the Bank of United States were safe and sound.
Every FRB has a board of directors. The directors of the FRB of New York today meet in this room, where Friedman is. In 1930, the directors of the FRB of New York put together a plan to save the Bank of United States. They devised that plan together with the Superintendent of Banking of the State of New York. They worked together, in cooperation, to devise the plan. The plan proposed to merge the Bank of United States with several other banks. It called for merging several banks together. It also proposed to create a fund of money. The money would come from several still other banks, not the banks that would merge with the Bank of United States. Those banks would subscribe to the fund. The purpose of the fund would be to guarantee the obligations of the Bank of United States. If a depositor wanted to withdraw money from it and the bank didn't have enough money, then the money would come from the fund. This would make it clear to depositors that their deposits are safe, and they would keep their deposits in the bank instead of withdrawing them. The depositors would be assured that the assets of the Bank of United States are safe.

today = In the present time, currently. If Friedman meant literally today (on this day when I'm recording this film) he would use the Progressive tense: "whose directors are meeting today in this room."

in cooperation with = Working together with; jointly with.

their plan called for = The authors of the plan called for... . The plan is a document and cannot "call" or "speak" or "say." However, it is common to use verbs of saying with documents: The letter from the bank says that your deposits are safe.

called for merging this ban with other banks The word "merging" is a Gerund: it follows a preposition, the way nouns do, and it has a direct object, the way verbs do.

a guarantee fund A fund is an organization that manages a sum of money. A guarantee fund is a fund that provides guarantees.

subscribe to a fund = Put money in a fund in exchange for a number of shares in the fund.

safe and sound = Very safe

180.2258706467662 The Reserve Bank called meeting after meeting to try to put the plan into effect. It was on again, off again. But finally, after an all night meeting on December 10, 1930, the other bankers, including in particular John Pierpont Morgan, refused to subscribe to the guarantee fund and the plan was off.
The FRB of New York called many meetings. It called one meeting after another. They wanted the plan to start working. They wanted to put the plan into effect. The last meeting was on December 10, 1930. It lasted all night. In the end, the other bankers refused to subscribe to the guarantee fund. (Those other bankers included people from the JPMorgan & Co. It was the bank created by John Pierpont Morgan (1837-1913), the most famous banker in American history.) After the bankers refused to subscribe to the fund, the plan was canceled. The plan was dead. It was off.

put the plan into effect = Here, convince the participants to do the actions that the plan called for.

on again, off again = Sometimes it seemed that people would agree to the plan, sometimes it seemed that they wouldn't. This is often said of discussions or negotiations. The negotiations to merge the two companies have been on again, off again for more than a year.

203.6129353233831 The next day the Bank of United States closed its doors, never again to open for business. For its depositors who saw their savings tied up and their businesses destroyed, the closing was tragic. Yet when the bank was finally liquidated, in the worst years of the depression, it paid back 92.5 cents on the dollar. Had the other banks cooperated to save it, no one would have lost a penny.
The next day the Bank of United States closed. It closed its doors. It never opened for business again. Its depositors could not withdraw their savings. Their savings were tied up. This destroyed their businesses. The closing of the bank was a tragedy for them. Some time later, everything that the bank had owned was sold, and all the money paid back to investors. The bank was liquidated. It was a difficult time, the worst years of the depression. Even so, the bank paid back 92.5% of what people invested. It paid 92.5 cents on the dollar. If somebody had $1,000 in the bank, he got back $925. This shows that the bank was not in bad shape at all. If the other banks had worked together to save it, no one would have lost any money. No one would have lost a cent. No one would have lost a penny.

closed its doors = Here, closed its operation; went out of business.

It was never again to open for business = It was not going to open for business ever again. The construction to be + Infinitive makes a statement about the future relative to the time of the sentence.

They saw their savings tied up and their businesses destroyed. The verb to see can be followed by a direct object and modifier. The modifier is often an infinitive (They saw their savings grow tenfold), but it can also be a Passive Participle, as in this sentence.

liquidate a business = Sell everything that the business owns and pay all the money to creditors

Had the other banks cooperated ... = If the other banks had cooperated ... . This is a contrary-to-fact conditional in the Past. The main clause shows would + Perfect Infinitive (would have lost).

penny = one cent; one-cent coin. When talking about a coin, not money value, you have to use the word "penny."

229.92935323383088 For the other New York banks, they thought closing the Bank of United States would have purely local effects. They were wrong. Partly because it had so many depositors, partly because so many of the depositors were small businessmen, partly because it was the largest bank that had ever been permitted to fail in the United States up to this time, the effects were far-reaching.
The other New York banks who refused to save the Bank of United States made a big mistake. They thought it will be a local New York effect. They thought the failure of the Bank will have no effect outside New York. They were wrong. The effects spread far. They reached places far away from New York. They were far-reaching, for three reasons. First, the bank had many depositors. Second, many of the depositors were small businessmen. When their businesses failed, people who worked for them lost their jobs. Third, it was a fairly big bank. It was at that time the biggest American bank that had ever failed. It was the largest bank that had ever been permitted to fail up to that time.

For the other New York banks This sentence is in two parts. The first part repeats the start of an earlier sentence (For its depositors ... the closing was tragic.) The second part starts a new sentence.

local effects They thought they would simply get rid of a competitor with a pretentious name.

they thought the closing would What they were thinking was: "The closing of this bank will have purely local effects." When he reports what they thought in the past, Friedman changes will to would. This rule of English grammar is called Sequence of Tenses. He said: "I will meet you in the park." He said he would meet us in the park.

it was the largest bank that had ever been permitted to fail up to this time Past Perfect, Passive form.

far-reaching

255.4089552238806 Depositors all over the country were frightened about the safety of their funds and rushed to withdraw them. There were runs. There were failures of banks by the droves. And all the time the Federal Reserve System stood idly by when it had the power and the duty and the responsibility to provide the cash that would have enabled the banks to meet the insistent demands of their depositors without closing their doors.
Depositors all over the country were frightened. They were afraid that their deposits were not safe. They rushed to withdraw their funds. There were runs on banks. Many banks failed because they didn't have enough money to pay all depositors. There were many bank failures. And all the time the Federal Reserve System did nothing. It was a passive observer. It stood idly by. It had the power and the duty to provide cash to the banks. That cash would have enabled the banks to give the depositors what they demanded. The depositors' insistent demand was to get their money back. With cash from the Federal Reserve, the banks would have been able to meet the demands of the depositors. They would not have closed their doors. It was the responsibility of the Federal Reserve to provide the necessary funds.

funds = money. In the plural, this word may mean simply "money." This is different from a fund that is an organization that manages a sum of money

There were runs. A run on a bank is when many depositors try to withdraw their money at the same time.

by the droves = In droves; in big numbers: "droves of banks failed." A drove is a herd of animals or a crowd of people; here used as a unit of counting. The phrase "by + a unit of measure or count" is used to indicate how many or how much. They arrested people by the dozen. = The arrested dozens of people. It is more common to use the singular than the plural "by the dozens."

stood idly by = Watched the events passively and did nothing.

meet the demand = To do or provide what is demanded.

284.6845771144279 The way runs on banks can spread and can be stopped is a consequence of the way our bank system works. You may think that when you take some cash to a bank and deposit it, the bank takes that money and sticks it in a vault somewhere to wait until you need it again to turn it back over to you.
Runs on banks can spread to other banks, but they can also be stopped. In order to understand how this happens, we need to understand how the bank system works. You probably think that when you take some money to a bank and deposit it, the bank just puts it in a safe place. The bank takes the money and sticks it somewhere, maybe in a vault, and the money remains in the vault until you ask for it. The bank just waits until you nee the money again, and then it gives it back to you. The bank turns it back over to you.

You may think that = It is possible that you think that

sticks it somewhere = Puts it somewhere, not very carefully; without much thought.

vault A locked place in banks where valuable papers and money are kept.

307.77313432835825 Bank teller: Okay, how would you like this? Customer: Two tens, one five and five ones. Teller: Okay. Friedman: The bank does no such thing with it. It immediately takes a large part of what you put in and lends it out to somebody else. How do you suppose it earns interest to pay its expenses, or pay you something for the use of your money?

The customer has asked for $30 in cash. The teller asks her what kind of bills or banknotes she would like. She says she would like two 10-dollar bills, one 5-dollar bill, and five one-dollar bills or singles.

The bank does not do what some people may think. It takes your deposit and immediately lends a large part of it to somebody else. Remember that when you put money in the bank, you earn interest. The bank has expenses: it has to pay for the building, and it has to pay to people who work in it. The bank has to earn money. It earns money by lending your money to somebody else. This way the bank earns interest. The interest it pay you is a payment for the use of your money.

How would you like this? There are no specific words in this sentence. If this were a conversation between a customer and a waiter in a restaurant, and the customer has asked for a cup of coffee, the same question would mean "How do you like your coffee - black or with cream; with or without sugar?"

no such thing See above, "it was no such thing."

How do you suppose it earns interest? This is not really a question. Friedman wants to remind us that the bank has to pay its expenses. Such questions that do not expect an answer are called "rhetorical questions."

326.3970149253732 The result is that if all depositors in all the banks tried all at once to convert their deposits into cash, there wouldn't be anything like enough cash in the banks of the country to meet their demands.
The result is that the sum of all deposits is much greater than the sum of all the money in the banks. If all depositors in all the banks tried to withdraw their deposits all at once, there wouldn't be enough cash to pay them. There wouldn't be even close to enough cash. There wouldn't be anything like enough cash to meet the depositors' demands.

tried A conditional form again.

all at once = All at the same time.

there wouldn't be anything like enough cash = The cash in the banks wouldn't come close to being enough.

to meet their demands See above.

339.59004975124384 In order to prevent such an outcome, in order to cut short a run, it's necessary to have some way either to stop people from asking for it, or to have some additional source from which cash can be obtained.
If all the depositors of a bank ask for their deposits all at once, we say that there is "a run on that bank." The bank cannot meet all the demands for cash and has to close. How do we prevent such an outcome? There are two ways. We either have to find a way to stop people from asking for cash, or we need some additional source of cash. We need a source from which cash can be obtained.

such an outcome In the preceding sentence, Friedman was talking about a theoretical situation, in which all depositors in all banks ask for money at the same time. Here he is talking about a real situation of a run on a single bank.

it's necessary to have some way either to stop people ..., or to have some additional source The word "either" should be earlier in the sentence: it's necessary either to have some way ..., or to have some additional source

355.823880597015 That was intended to be the purpose of the Federal Reserve System. It was to provide the additional cash to meet the demands of the depositors when a run arose.
This is what the Federal Reserve System is for. This is its purpose. When it was created, the intent was that it will provide additional cash when there is a run on a bank. This was intended to be its purpose: to provide additional cash to meet the demands of depositors.

That was intended to be = That was the intent of the law that created the Federal Reserve System.

when a run arose = When a run happened; when there was a run.