President Theodore Roosevelt’s “Decoration Day” Speech About the Railroads (May 30, 1907)

In Indianapolis, Indiana, on Decoration Day (May 30, 1907), President Theodore Roosevelt gave a major speech to a crowd of 150,000. He began with a short introduction honoring Indiana’s Major-General Henry W. Lawton, who served in the Civil War and the Spanish-American War and whose statue was dedicated that day, as well as the state’s brave soldiers in the Civil War. (Pp. 1-2)

Roosevelt then spent the rest of the speech discussing U.S. railroads and their regulation by the federal government. He thereby responded to the many comments he had received on this subject over the past several months from prominent people and railroad executives, including William C. Brown, the Executive Vice President of the New York Central Railroad (and my maternal great-great uncle).

With approximately 7,000 words in dense, lengthy paragraphs and with Roosevelt’s style of mixing statements and counter-statements, this part of the speech is not easy to read and analyze. I do not see how any one in the audience that day could have engaged in any such analysis. The following is my deconstruction of that part of the speech into introductory remarks, positive and negative comments about the railroads and comments about their federal regulation.[1]

Introductory Remarks

“Great social and industrial problems confront us, and their solution depends on our . . . unfaltering courage, and yet a wise, good-natured self-restraint . . . . Let us try as a people to show the same qualities . . . that Abraham Lincoln showed when with indomitable resolution, but with a kindliness, patience, and common-sense . . . he faced four weary years of open war . . . .” (P. 2)

We must “preserve the rights of property . . . in jeopardy from . . . the predatory man of wealth . . . .The power of the Nation must be exerted to stop crimes of cunning no less than crimes of violence.” (P. 2)

“There can be no halt in . . . the policy of asserting the right of the Nation . . . to supervise and control the business use of wealth, especially in its corporate form . . . . [The] first and most important feature of this task . . . [is] the control of the common carriers doing an interstate business.” (Pp. 2-3)

Positive Comments About the Railroads

The initial development of railroads in the U.S. “demanded men of the utmost daring and resourcefulness; men like that great gallant soldier and real captain of industry, Granville M. Dodge.” (P. 9)

“The man who builds a great railway and those who invest in it render a great public service; for adequate transportation facilities are a vital necessity to the country.” (P. 5) “We favor full and ample return to such men.” (P. 5)

Our “hearty commendation is due those owners and mangers representing . . . the large majority who have year after year worked faithfully, patiently, and honestly in building up our great system of railways, which has knitted together in close commercial and social intercourse widely removed sections of the country and stands second only to the great business of agriculture itself in contribution to national growth and development.” (P. 7)

The “railroad men of the United States . . . are public servants in the highest and fullest sense. . . . [This includes] those who [make] the determination of railroad policies. These men are entitled to great rewards. . . . [There] is sufficient ingenuity and executive genius in the operating officials of the roads greatly to diminish [their operating] troubles.” (Pp. 12-13)

“We favor the railway man who operates his railway on a straightforward and open business basis, from the standpoint of permanent investment, and who has an interest in its future . . . . We favor the railway manager who keeps in close touch with the people along his line . . ., who operates his line with a view to the advantage he can legitimately can get out of his railway as a permanent investment by giving a fair return to stockholders and to the public good service with reasonable rates.” (Pp. 5-6)

The “bulk of our [railroad] business is honestly done.” (P. 11)

Evidence shows that “as a whole the railroad property of the country is worth as much as the securities representing it” and that “the total value of stocks and bonds is greater than their total face value . . . . [The] great mass of railroad securities rest upon safe and solid foundations.” (P. 6) Such “valuation and supervision cannot be retroactive. Existing securities should be tested, by the laws in existence at the time of their issue.” (P. 8)

”The great need of the hour . . . is the need for better transportation facilities, for additional tracks, additional terminals, and improvements in the actual handling of the railroads. . . . . Ample, safe, and rapid transportation facilities are even more important than cheap transportation. The prime need is for the investment of money which will provide better terminal facilities, additional tracks, and a greater number of cars and locomotives, while at the same time securing, if possible, better wages and shorter hours for the employees.” (P.11)

“There must be just and reasonable regulation of rates, but any arbitrary and unthinking movement to cut them down may be equivalent to putting a complete stop to the effort to provide better transportation.” (P. 11)

Our “railway facilities should be so increased as to meet the imperative demands of our internal commerce. This . . . can be met only by private capital, and the vast expenditure necessary for such purpose will not be incurred unless private capital is afforded reasonable incentive and protection. It is therefore a prime necessity to allow investments in railway properties to earn a liberal return, a return sufficiently liberal to cover all risks.” (P. 12)

“We wish to make it in the interest of the investor to put his money into the honest development of the railroads.” (P. 6) It “is necessary to the enduring prosperity and development of the country that railroads shall yield reasonable profits to investors.” (P. 7)

“[A]ll I ask of [the railroads] is a willingness to comply fully with [the laws’] spirit, and a readiness to move along the lines indicated by those who are charged with administering [the law].” (P. 6)

“It is plainly inadvisable for the Government to undertake to direct the physical operation of the railways, save in exceptional cases . . . . “ (P. 12)

Negative Comments About the Railroads

Only “the men more anxious to manipulate [the railroads’] stocks than to make the management of their roads efficient and honest” will oppose the Government’s laws and policies. (P. 4) Similarly opposed will be “the man who cares nothing about the property after his speculative deal in its securities has been closed.” (P. 5)

There are “isolated instances of unconscionable stock-watering” and of “gross and flagrant stock inflation” and “overcapitalization.” (P. 6)

Comments About Federal Regulation of the Railroads

“Every honestly managed railway will gain and not lose by [federal regulation].” (P. 4)

“Every Federal law dealing with corporations or with railroads . . . [enacted in the last six years] has been a step in . . . the right direction. All action taken by the Administration under these and the preexisting laws has been just and proper. Every [lawsuit in these six years] has been . . .not merely warranted, but required.” (P. 3)

The Hepburn Act of 1906 gave the ICC “absolute control over the accounts of railways,” and the ICC has issued an order, effective July 1^st that all railroads subject to the ICC “must standardize their accounting methods.” (P. 8)

“There must be progressive legislative and administrative action for the correction of the evils which . . . have existed in railroad management in the past. Such additional legislation as that for which I have asked in the past, . . . [especially] in my message at the opening of the last session of Congress, [2] is not merely in the interest of every honest railway manager and of all the investors or would-be investors in railway securities.” (P. 3)

“There must be vested in the Federal Government a full power of supervision and control over the railways doing interstate business . . . . It must possess the power to exercise supervision over the future issuance of stocks and bonds, . . .[including] the frank publicity of everything which would-be investors and the public have a right to know. The Federal Government will thus be able to prevent all overcapitalization in the future . . . [and it should be a criminal offense for anyone to load a railroad] with obligations and pocketing the money instead of spending it on improvements and in legitimate corporate purposes.” (Pp. 3-4)

This is “the new era of the widest publicity, and of fair dealing on the part of railroads with stockholders, passengers, and shippers.” (P. 4)

The Federal Government must have the “power to exercise a jealous care against the inflation of securities.” (P. 5)

“The business of railroad organization and management should be kept entirely distinct from investment or brokerage business especially of the speculative type, and the credit and property of the corporation should be devoted to the extension and betterment of its railroads, and to the development of the country naturally tributary to the lines.”(P. 4)

“Railroads should not be prohibited from acquiring connecting lines, by acquiring stocks, bonds, or other securities of such lines.” (P. 4) (Emphasis added.)

“[R]ailroads [should be] permitted and encouraged to make traffic agreements when these are in the interest of the general public as well as the [railroads].” (P. 4)

“[T]here should be nothing done under the guise of regulating roads to destroy property without just compensation or without due process of law.” The “rights of innocent investors should not be jeopardized by legislation or executive action,” (P. 5) (Emphasis added.)

“There must be no such rigid laws as will prevent the development of the country, and such development can only be had if investors are offered an ample reward for the risk they take.” (P. 5)

Congress should provide funds to the ICC to employ “a sufficient force of experts, to undertake the physical valuation of each and any road in the country.” (P. 7) Such physical valuation will be “an essential instrument in administrative supervision.” It will be used to help determine the “reasonableness of future capitalization” and “equitable rates.” Such valuation will “help to protect the railroads “against the [ICC’s] making of inadequate and unjust rates.” (P. 7)

This “movement for national supervision and control over railways will [not] be for . . . [the] detriment [of investors].” (P. 9) With federal supervision, people will not be afraid to invest in railroad securities, thereby opening “a new reservoir [of] capital now so much needed for the extension and betterment of the railroads.” (P. 9)

Conclusion

Reading and deconstructing this speech forces one to recognize that the means of communication in 1907 were vastly different from 2014. Presidential speeches were not broadcast on television and radio. There were no personal electronic devices for people in the audience to record the words of the speeches or images of the speaker or others. Nor were there pundits to provide immediate commentary and analysis of what was just said.

I also wonder about Theodore Roosevelt’s famous saying that as President he had the “bully pulpit.” For the reasons just noted, he did have the undivided attention of the immediate audience before him, more so than presidents of our time, and this put Roosevelt in the position to be a “bully” forcing the audience to listen only to him. His use of the word “pulpit” obviously refers to the pulpit used by preachers to preach to their congregations. Was Roosevelt’s style of long, dense paragraphs with statements and counter-statements unique or was it one used by preachers or other politicians of the time? I welcome informed comments on this and any other issue raised in this discussion.

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[1] A subsequent post will examine the public reactions to this speech and further developments regarding railroad regulation.

[2] In his Annual Message to Congress on December 2, 1906, the President said there will “ultimately be need of enlarging the powers of the [ICC] . . . to give it a larger and more efficient control over the railroads.” Such enhanced control will “prevent the evils of excessive overcapitalization, and will compel the disclosure by each big corporation of its stockholders and of its properties and business, whether owned directly or through subsidiary or affiliated corporations.”