BETTER FRUIT 



Page 3 



How Can the Farmer Prosper 

 Unless the Railroads Prosper? 



THE development and prosperity of farming in the United States have in the past gone 

 hand in hand with the growth and development of the railroads. Ahead of or beside the 

 courageous pioneer has gone the railway. 



The railway is dependent on the farmer for the tonnage which enables it to live and con- 

 duct its business. Likewise the farmer is dependent on good and adequate service by the rail- 

 way as the means of getting his products to the markets of this country and the world under 

 conditions which will enable him to prosper. 



Railway Development at a Standstill 



The development of the railways has been prac- 

 tically at a standstill for some years. No industry 

 can grow unless it can get people to put new capi- 

 tal into it. No industry can get people to invest 

 capital unless it can pay a return on this additional 

 capital. 



Stagnation in the railroad industry is a menace 

 to the farmer. The products of the farms are con- 

 stantly increasing. Without increased means of 

 transportation these increased products of the farms 

 cannot be carried to market. 



The Earning Power of the Railroads Was 

 Practically Destroyed During the War 



They are now trying to get it back. They want 

 to get it back so they can provide additional loco- 

 motives and cars to handle the increase in traffic 

 and provide for the future development of the 

 country. They natist raise large amounts of new 

 capital to provide these facilities. 



Not Asking Return on "Watered" Stock 



Every farmer and business man knows it is im- 

 possible at present to borrow large, amounts of 

 money for even 6 per cent. How can the railroads 

 be expected to raise new^ capital for new facilities 

 if they are not allowed to earn at least 6 per cent, 

 which the Interstate Commerce Commission has 

 held they need? 



Is this 6 per cent on "watered" stock? No. It 

 is not based on stock at all, or on bonds either. It 

 is based on the minimum value of the property 

 which the railways devote every day to the public 

 service in transportation — tracks, stations, locomo- 

 tives, cars, shops, and so on. This valuation has 

 been made by the Interstate Commerce Commis- 

 sion under the Valuation Act fathered by Senator 

 LaFollette of Wisconsin eight years ago. 



It is not based on what it would cost to rebuild 

 the railroads at present high prices of materials and 

 wages, but on what it would cost to rebuild them 

 at pre-wjur wages and prices as they stood in 1914. 



A valuation based on present wages and prices 

 would be twice as great. 



Some railroads are "overcapitalized." Many, 

 including most of the big systems, are undercap- 

 italized. But neither in the one case nor the other 

 does this affect the basis on which rates are made. 



What Regulation Can Not Do 



The farmer has just lost a friend and the coun- 

 try a valuable citizen by the death of ex-Judge C. 

 A. Prouty. He was for seventeen years a member 

 of the Interstate Commerce Commission. He was 

 in charge of the valuation of the railroads from the 

 time it was begun until his death. He said: 



"We can regulate the railways. We cannot 

 by legislation force one single dollar of private 

 capital into railway investment against its 

 wiU." 



The farmer, by favoring regulations that will 

 help the railways to regain their reasonable earning 

 power, can help them to attract hundreds of mil- 

 lions of dollars needed for rehabilitation and en- 

 largement of railway facilities and for increased 

 and improved transportation service to the farmer. 



The further development of the country will 

 be arrested and the farmers and all other 

 claisses seriously injured unless the railways 

 are given opportunity to raise the capital 

 needed to enable them to make their service 

 better and more adequate. 



Association of Railway Executives 



61 BROADWAY 

 NEW YORK 



764 TRANSPORTATION BUILDING 

 CHICAGO, ILL. 



Those desiring further information on the railroad situation are requested to address 

 the offices of the Association or the president of any of the individual railroads. 



MUNSEY BUILDING 

 WASHINGTON, D. C. 



