Franklin D. Roosevelt

Excerpts from the Press Conference

March 04, 1938

Q. Mr. President, I suppose some of these gentlemen will ask you about the tax bill. I was talking to Bumgardner [Clerk of House Ways & Means Committee] and he told me that something had been left out of that bill which was in the former bill, and that is the publication of the salaries of corporation executives. That is not in the bill. Do you approve of that?

THE PRESIDENT: I did not know that, until I read it in the paper yesterday morning and I am very, very sorry that that has been left out. I think it is a question of simple morality. I think I stated, once upon a time, that in addition to public office being a public trust, private office is also a public trust.

There are two types of corporation executives. One is the executive of a company that has a large number of public shareholders. Its stock is owned by thousands and tens of thousands of people. It is traded in, and new people buy it from day to day.

Theoretically, a stockholder has the right to go to a meeting of the corporation in some small town in Kentucky or in Wilmington, Delaware, and say, "How much did the President and the Vice President, et cetera, get last year by way of salary and bonus?" Practically, he does not. Practically, the purchaser of the stock of that company does not know and has no way of finding out, unless he goes to particular pains to find out, what the corporation's salaries are.

Again, private office is a public trust. Why should not the public know what the executives of these corporations get? Let us use some examples: Did the public know for years, until it was brought out in an investigation, what Mr. Grace of Bethlehem Steel was getting by way of salary and bonus? They did not; and there was a wave of public indignation that went over the country when it was discovered that one man was getting a million dollars a year.

Why should not the public know the salaries of the executives of General Motors Corporation? There is no reason why they should not know it. It is a private office with a public trust.

Take the other type of corporation, the closely held, family-owned corporation. There it is a slightly different matter because it is owned by one man or one family. But we know of not just a few sporadic cases but of a great many cases where the family-owned company has, on the public record, made at the end of the year no profit at all. That is, the published record—the books-show no profit, show the company barely in the black or perhaps even with a loss. At the same time, it is perfectly possible for the owners, the members of the family, to be paying themselves the profits of the company by way of very large salaries. Actually, the company may be making a large profit which, because of the hidden character of the proceedings, is not known to the general public.

A corporation of that kind is able to say, "No, we cannot afford to improve the conditions of the people who work for us because we are not making any money. See our books." Actually the family may be drawing down the kind of salary that is so large that the public as a whole, the Government and competing companies have a right to know about it. That is another phase of it.

In other words, private office is a public trust. And there is absolutely no valid reason why, in my judgment, that clause, the present clause for publicity with respect to corporation executives' salaries, should be repealed. It is a question of morals, public morals.

Q. Mr. President, you said there was no other way. The S.E.C. does have these figures. These are for the tax bill. Is there any reason for the duplication?

THE PRESIDENT: I don't care, as long as the public knows all about it. How it is done is perfectly immaterial. As long as every newspaper in the United States, in pursuance of the policy of freedom of the press, has the right to publish them.

Q. Mr. President, would you make any distinction between corporations whose stock is on the market and those that are not?


Q. This being the anniversary season, perhaps you have an anniversary message of some sort for us?

THE PRESIDENT: That is pretty difficult. Of course it has so many ramifications.

I think possibly the significant thing is that, after five years, the old Ship of State is on the same course. It is a course which is aimed at the same things which I described, offhand, one day in a press conference when my friend from the Vancouver Sun asked a question. You might get that out. It was not very long, about two paragraphs. We have the same objectives and the same ideals.

Along that line, I think again it is worth while to draw the distinction between objectives and policies towards those objectives, as the broad subject on one side, and what we call methods on the other side. I was talking yesterday, to illustrate, about the fiscal policy of the Government, which includes a great many things. It includes the problem of foreign exchange. It includes the problem of the price level. It includes the problem of public finance. A great many people are prone to mix methods with objectives. If you will remember a year ago, April, we were afraid that the objective of the Government towards the stabilization of the price level, or values, which is a better word, would be threatened by inflation, a boom, and therefore we put the helm of the ship hard a-starboard to prevent the ship, because of the fluctuation of the wind, from leaving her course. A year later, less than a year later, last autumn, the wind shifted and we were threatened with deflation. Therefore, we shifted the helm of the ship hard a-port, in order to keep the ship on the course. Well, that is illustrative of maintaining an objective and it is illustrative also of the fact that so many people, when you shift the helm in order to maintain the same course, call it a change in policy. Most of you good people are guilty of it, and a lot of other people are, too. You do not see the big thing. You see the thing of immediate moment.

This is not a complaint, because it is a perfectly natural, human thing to do. It makes a story. But on the general objective we have gone a long way and of course we are going further.

One of the objectives is increased purchasing power for the people. I can illustrate that by a story I have told to a number of people. Some of my friends, who are in special lines of business, fine people, honest people, have come in to me and talked to me. They are people I have known by their first names for years, and I say to them, "By the way, what is your thought on the problem of the sharecropper and the tenant-farmer? I am sort of stumped by that but I think we ought to do something. What do you think we ought to do?" Well, I have tried that on a good many people and the invariable answer from these perfectly fine business men I have talked to has been this: "What do you mean, Mr. President? What do you mean by the sharecropper problem?"

Well, I have explained it to them, and repeated, "What do you think we ought to do?" The invariable answer has been, "I don't know anything about it. I have never thought of it." And then I have said to them, "We have fifteen or twenty million Americans in this country who today have no purchasing power. There are fifteen or twenty million Americans falling into that category. They are farm tenants, sharecroppers. You fellows are making things, all kinds of things, automobiles, hardware, clothing, all the things that you see in a country store. Aren't you interested in giving those prospective, possible customers some purchasing power for the things you make?" And then they have said to me, "Why, Mr. President, I have never thought of that. I never thought of that."

Today people are beginning to think of that. And that is the most hopeful thing at the present time. The most hopeful thing at the present time is that we are getting people to think about the rounded problem of Government and of all the people of the country, instead of just thinking along their own special line of business.

In that way, also, I am encouraged to think that we will get away, more and more, from what we call the pressure groups in the country, small groups coming down here with great vociferation, and very often putting through legislation which is beneficial only to one particular group.

Just to explain it a little bit further, on the question of the big objectives we have accomplished an enormous amount. There are some things we have failed to accomplish. We think, for instance, that through a system of the control of crop surpluses we are going to maintain to a great extent the purchasing power of the fifty million people who are directly or indirectly dependent on agricultural prices. Of course, that is all to the good for the industrial side of things, not only for the owners of industrial corporations but for the workers in industrial corporations. And it has only been lately that I have been able to get business men to say to me, "Why, sure we are in favor of that policy, that crop policy, Mr. President." And I have said to so many of them—I think I told you this before—"Will you come out and say that out loud?" And I think some of them will, as the days go by, say, "Yes, we are in favor of that sort of thing."

On the question of wages and hours, we are working still in fact, that was your question—we are working still to try to put a floor under wages in the United States and a ceiling over hours. Well, maybe we won't get it at this session of the Congress—I hope we will—but it is one of those things which is related to national economy. People have different ideas about it. Some people say that the minimum wage phase of it is the most important. Other people say that the maximum hour part of it is the most important. But the general objective is just the same on wages and hours as it is with crops and as it is with finance. The whole thing is a rounded picture, and, taking it by and large, we have gone a long way on that.

And then the final phase is that we are not discontinuing our efforts to end—Oh, I suppose the simplest term to be understood is "special privilege." We still believe that it is for the good of the country, for the economic good of the country, for the value of stocks and bonds and everything else, to end special privilege. There is still a great deal of special privilege. The tax bill of two years ago was intended to end certain forms of special privilege. The bill of last year was intended to end other forms of special privilege, such as incorporating yachts and starting insurance companies in the Bahamas. Taking it by and large, the country sympathizes with the point of view of ending special privileges.

I do not know that there is anything more. These things occur to me out of my mind at the present moment. I have not prepared anything on this. We are going along toward the same objectives; we have gone a long way on the road and we are going further. . . .

Franklin D. Roosevelt, Excerpts from the Press Conference Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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