Remarkable AMS in pencil as president, eleven pages, 5.25 x 8, no date but circa July 1921. Harding’s draft for a message to Congress on July 26, 1921, urging the extension of the War Finance Corporation’s powers to provide assistance in the economic crisis afflicting American railroads. In part: “To the Senate and House of Representatives: It is necessary to call the attention of congress to the obligations of the government to the railroads, and ask your cooperation…These obligations have already been recognized by the congress, in the passage of the transportation act restoring the railroads to their owners, but previous negotiations were made in the contract under which the railroads were operated by the government for the period of the world war….The government admittedly owes the railway company large sums on account of under maintenance…The railway administration though possessing assets, does not command the funds necessary to meet what will be its admitted obligations. There is no thought to ask Congress for additional funds. Perhaps $500,000,000 will be necessary. The railroad administration has, or will have…ample securities to meet all requirements, if Congress only will grant the authority to negotiate these securities and provide the agency for their negotiation. With this in view you are asked to extend the authority of the War Finance Corporation so that it may purchase these railway funding securities accepted by the Director General of Railroads. No added expense, no added investment is required on the part of the government; there is no added liability, no added tax burden. It is merely the grant of authority necessary…the avoidance of added appropriation or liability will appeal to Congress and the public alike. The after-war distresses of two great and fundamental activities have been riveting the anxious attention of the country. One is the readjustment and restoration of agriculture, the other is the distress of our railway transportation system…Railway solvency and efficiency are essential to our healthful industrial, commercial and agricultural life. Everything hinges on transportation….The railways need only the financial aid which the fulfillment of our obligations will bestow, to inaugurate their far-reaching revival. Its effects will…banish to a large degree the depression which, though inevitable in war's aftermath, we are all so anxious to see ended.” In fine condition. Handwritten material from Harding’s tenure in the White House is scarce, especially at such great length.
Harding’s proposition of a half-billion-dollar railroad bailout was met with significant opposition, especially as railway worker wages were being significantly cut at the same time. His opponents argued that the bill would effectively loot the public treasury for private profit and the government would undoubtedly lose hundreds of millions of dollars. The crisis came to a head the following year with the Great Railroad Strike of 1922, which became the largest railway work stoppage since the infamous Pullman Strike of 1894. While President Harding made some efforts to resolve the conflict, his solutions stood firmly beneficial to capital rather than labor. Order was not restored until September 1922, when a federal judge issued an obviously unconstitutional injunction that banned workers from assembling, picketing, or advocating for the strike. While the corruption that came hand-in-hand with the Harding administration was largely unknown until after his death, this controversial early episode certainly foreshadows his dubious legacy.
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