Evening star., 1932-09-18
Text of Roosevelt's Salt Lake City Speech

the mileage over which one manager
can be effective Is limited to small
fraction Of our national mileage.
But it Is necessary that a single
railroad should have a recognized field
of operation and a definite part to play
In the entire national scheme Of trans
portation. It is necessary that each
rail service should fit into and be Co
ordinated with other rail services, and
with other forms Of transportation.
Let 1t be noted that our postal service
uses every variety Of transport: Rail,
automobile. steamship and airplane;
but it controls few of these vehicles:
We might well approach the railroad
problem from a similar point Of view
survey all our national transportation
needs-determin the most efficient.
economical means of distribution and
substitute national policy for national
lack Of planning and encourage that
growth and expansion most healthful
to the general welfare.
Wisdom of the Many.
In common counsel and common pur-
poses we shall find the corrective Of a
present unhappy tendency to look for
dictators. The wisdom OF many men
may save us from the errors Of sup
posed supermen.
To those who may shrink from any
suggestion OF a more vigorous and
coherent public program. I venture to
point out that 1t has not been the
existence but the lack of public policy
which has caused just criticism Of rail-
road regulation.
The definite programs Of the past
to stop rate wars, to prevent rebates
and determinations. to improve safety
these have all produced great public
benefits and have saved the railroads
from themselves But In the postwar
era Of political drift and private mastery
we have too often fumbled rather than
grappled with railroad problems.
I do not share the view that Gov
eminent regulation per Sc is responsible
for any great amount OF the present
difficulties. Had this been true. we
should have known it long before the
depression came.
In the words Of one Of the railway
presidents: There is no question what
ever that the regulation of the rail-
roads Of the country has been in the
public interest" Regulation, In fact.
has protected investors as well as
patrons and I think no enlightened
one would care to go back to the old
days when unregulated railroad opera.
tion landed one-third OF the railroad
mileage in receivership.
When the depression came, with its
great loss of tonnage, the combined
effect OF uneconomic competition. un-
productive and overextended mileage,
imprudent financial adventures and fre.
quently ill-advised management resulted
in a situation where many railroads
literally we're unable to earn their in
terest charges.
The Government then, through the
Reconstruction Finance Corporation
undertook to tide over the emergency
by freely lending money to the rail-
roads. with a view to keeping them
afioat.
Policy In Broader Sense.
am glad to approve this policy
as an emergency measure-though 40
not 60 along with many Of the methods.
AS far as it goes, the policy-and ]
speak in the broader sense-is good.
We had far too great a stake In the
situation to allow general smash-up
II elected, I shall continue the policy
Of trying to prevent receiverships. But
stop-gap. Lending money is all right
if-and only if-you put your bor-
rover in a position so that he can
pay you back.
The criticism is, I think well founded
that the Government did not follow
through with a we'll considered program
of putting the railroads back on Their
feet. And certainly when the rail-
roads applied to the Government for
cash. the Government was entitled to
make at least the kind of requirement
which private banker would make
under similar circumstances to protect
his interest. The Government in lend
ing public money is entitled and should
make sure to protect the public in
terest.
Further, where mere loans cannot
clean up the situation, the necessary
readjustments ought to be provided as
a part Of the plan OF lending. In It's
railroad relief. as elsewhere. the Re.
publican administration has lent money
not in accordance with q plan for re-
lieving fundamental difficulties. but
only with the hope that within year
or so the depression would end-a
policy I have criticized elsewhere. and
shall continue to criticize.
Facing the facts squarely. We may
as well realize first rather than last
the fundamental issues.
Railroad securities in general must
not be allowed to drift into default. The
damage done to savings banks, insur-
ance companies and fiduciary institu-
tions generally would be too great.
But let me make it clear that the
extension Of Government credit will be
largely wasted unless with it there are
adopted the constructive measures re-
quired to clean house. In individual
railroads these turn on the financial
conditions peculiar to each case. In
certain situations, where fixed charges
impose an unsound overstrain, they
must be reduced.
Sounder Financial Structure.
In general, corrective measures must
be adopted making for a sounder finan-
cial structure along the lines l nov
propose to set out. Unless the under
lying conditions are recognized, we are
wasting our time and our money.
Concretely, I advocate:
First. That the Government annouce
its intention to stand back of the rail-
roads for a specified period; its help
being definitely conditioned upon ac-
ceptance by the railroads of such re-
quirements as may in individual cases
be found necessary to readjust top
heavy financial structures through .ap-
propriate scaling down Of fixed charges
I propose the preliminary development
of a national transportation policy with
the aid Of legislative and administra-
tive officials and representatives Of all
interests most deeply concerned with
the welfare and service of the railroads
including investors, labors, shippers ano
passengers. I propose that in the ap-
phcation of this policy to the railroads
the Reconstruction Finance Corpora