essity, it
is, I am sure you will agree with me, right and necessary that the
owners and creditors of the railways, the holders of their stocks and
bonds, should receive from the Government an unqualified guarantee
that their properties will be maintained throughout the period of
Federal control in as good repair and as complete equipment as at
present, and that the several roads will receive, under Federal
management, such compensation as is equitable and just alike to their
owners and to the general public. I would suggest the average net
railway operating income of the three years ending June 30, 1917. I
earnestly recommend that these guarantees be given by appropriate
legislation, and given as promptly as circumstances permit.

I need not point out the essential justice of such guarantees and
their great influence and significance as elements in the present
financial and industrial situation of the country. Indeed, one of the
strong arguments for assuming control of the railroads at this time
is the financial argument. It is necessary that the values of railway
securities should be justly and fairly protected, and that the
largest financial operations every year necessary in connection with
the maintenance, operation and development of the roads should,
during the period of the war, be wisely related to the financial
operations of the Government.

Our first duty is, of course, to conserve the common interest and the
common safety, and to make certain that nothing stands in the way of
the successful prosecution of the great war for liberty and justice;
but it is an obligation of public conscience and of public honor that
the private interests we disturb should be kept safe from unjust
injury, and it is of the utmost consequence to the Government itself
that all great financial operations should be stabilized and
co-ordinated with the financial operations of the Government. No
borrowing should run athwart the borrowings of the Federal Treasury,
and no fundamental industrial values should anywhere be unnecessarily
impaired. In the hands of many thousands of small investors in the
country, as well as in national banks, in insurance companies, in
savings banks, in trust companies, in financial agencies of every
kind, railway securities--the sum total of which runs up to some ten
or eleven thousand millions, constitute a vital part of the structure
of credit, and the unquestioned solidity of that structure must be
main