PROCEEDINGS STATE AGRICULTURAL CONVENTION 147 



upon the program adopted in the state of South Dakota. You know what 

 their rural credits plan there is. They amended their constitution pro- 

 viding that the state should borrow money on bonds at five per cent inter- 

 est and reloan that direct to the farmers on long time paper at six per 

 cent, and now they have loaned in that state nearly sixty millions of 

 dollars directly made by the state to the farmer himself without any in- 

 tervening agency that has the effect of absorbing in some measure the 

 relief that ought to go direct to the farmer. When Governor McMasters 

 was here a couple of months ago at the conference that was held of execu- 

 tives of this section of the country he told me that out of eight thousand 

 loans which are now in effect in South Dakota at the end of the fiscal year 

 June 30, 1921, only two borrowers had defaulted in principal and interest. 

 We have got in this state to come, in my opinion, to the adoption of some 

 such resource as that for direct immediate relief to the men who make 

 our prosperity possible. I think that is one thing we can do in the future. 



The immediate necessity for us is the radical reduction of freight 

 rates in this whole Mississippi valley. We have fallen into the obsession, 

 which is a fallacious one to apply, no matter how prosperous agriculture 

 is, no matter how stagnant business is, no matter how perilous manufac- 

 turing is, no matter how universal unemployment is, the railroads are to 

 be guaranteed a fixed return upon their capital. We must get away from 

 that idea because it is an economic fallacy. The railroad companies are 

 entitled to a fair return but that fair return is to be measured by the 

 conditions that prevail in all other lines of industry throughout the coun- 

 try. If our farmers were prosperous during the war look at the prices they 

 received. While the prices of farm products during the war measured by 

 money were high, but measured by the things that the farmer had to 

 buy with what he produced they were not relatively high. What would be 

 said if they said now every farmer in the Mississippi valley shall be in- 

 sured a certain return upon his property investment; the very proposition 

 itself would fall to the ground of its own absurdity. But I insist that the 

 same valuation which attaches to the farm should be applied to the rail- 

 road and it should receive a fair return considering the conditions of 

 business which exist in the country at large. Don't get the idea that the 

 railroads cannot afford to make a reduction in freight rates. I undertake 

 to say that no man can examine returns that have been filed by them for 

 the month ending October and not be entirely convinced that they can 

 stand a reduction of twenty-five per cent, every trunk line that operates 

 in Iowa and still earn a return equal to that provided for the standard 

 railroad under the transportation act. I hope this convention here, I do 

 not mean by formal resolution, but I hope you may go away from here 

 determined to let the men at Washington know your feelings on this 

 important subject. These men are down there thirteen hundred miles 

 away from Iowa. The environments are different there, the surroundings 

 are altogether different. There is a different atmosphere in Washington 

 to that which prevails in Iowa. You go down there and remain a month 

 and you will be glad to escape the miasma of that atmosphere and breathe 

 again the pure ozone of the Iowa prairies. Keep in close touch with the 

 men you have elected congressmen, that you have elected to official posl- 



