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Statement on Railroad Reconstruction.

March 19, 1932

THE PRESIDENT said:

"I have held a number of conferences for survey of the railway situation and for determination of general policies in respect to the railroads. The elements in these conferences are the Directors and heads of staff of the Reconstruction Finance Corporation, members of the Interstate Commerce Commission dealing with these problems, and representatives of the Railway Credit Corporation.

"Examination of the financial problem confronting the railroads shows that it is of smaller dimensions than has been generally believed or reported. It is estimated that the financial necessities of the important railways of the country which are likely to require aid in meeting the interest and .renewal of their maturing securities, and in meeting their other obligations during 1932, will be from $300 million to $400 million. Of this amount the Railway Credit Corporation will provide a minimum of from $50 million to $60 million, and it is assumed that many bank loans will be continued in the normal way. Therefore, recourse to the Reconstruction Corporation by the railroads will be much less than was originally thought, and even the mentioned amounts would be diminished by revival of the bond market and the placing of bond renewals in normal fashion.

"The problem is to handle the situation as a whole so as to lay the foundations for restored employment on the railways and through their purchases of supplies, and at the same time to establish confidence in the security of the bonds which are the reliance of great trustee institutions of the United States which are in fact the property of the entire people. The end to be attained is, therefore, one of increased employment on one hand and stability in the financial structure of the country on the other.

"The coordination of programs and policies has been arrived at by the Government and the railway agencies to effect these results."

Herbert Hoover, Statement on Railroad Reconstruction. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/208563

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