The President said:
In consequence of the fall in prices of railway bonds, I have a large number of telegrams from different parts of the country and inquiries from the press as to the status of various agencies which are proposed to assist those railways which are not earning their fixed charges across the trough of the depression without further consequential defaults on bonds or receiverships. These inquiries are natural, because the standing of railway bonds is a fundamental matter to thousands of publicly owned institutions. As shown by the Interstate Commerce Commission, excluding those roads already in receivership, the number of railways earning less than fixed charges is only about 16% or 17% of the whole. This, however, includes some roads that are parts of larger systems able to look after them. It will be remembered that the carriers have now organized the Railway Credit Corporation on the plan provided between them and the Interstate Commerce Commission for assisting railways with deficient earnings from the special income authorized by the Commission. This income is estimated at something over $100,000,000. The Railway Credit Corporation has been approved by the Railway Executives and the Commission, and is now in course of confirmation by the boards of different railway companies. Proposals are in progress by which financial assistance can be provided by the Railway Credit corporation in anticipation of the collection of the increased rates assigned for this purpose.
Beyond this, the Reconstruction Finance Corporation which I have proposed to the Congress, aside from its purposes to aid agricultural credit associations and the export of agricultural commodities and other stiffening of the credit situation, will under those recommendations be able to give emergency aid in that situation also if it should be necessary. I, of course, regard the enactment of the authority to create this corporation as a most urgent matter.
It is my understanding that progress is being made on the proposal from the Conference of Railway Brotherhoods at Chicago that they should appoint a committee with power to act with the railway executives on wage questions, subject to confirmation of their locals, and that the railway executives are likewise appointing a committee with power to act on their behalf.
Altogether this problem is receiving most serious attention.