REPORT OF IOWA FARM BUREAU FEDERATION 419 



return on their property. Have you got it? That is the true basis. "Oh," 

 but somebody says, and I have had it said to me a good many times, 

 "how do you arrive at what a fair compensation is?" "Well," I said, in 

 answer to one question, "it is one thing that is certain, that if it cost a 

 man 80c a bushel to raise a bushel of corn in Iowa, it is not worth 15c a 

 bushel to haul it to Chicago, when you only get 28c for it down there." 

 (Laughter.) It is not worth it! At the present time I believe the rate 

 on that particular commodity has been reduced so that it is 18%c in this 

 particular division on 100 pounds, or a little over lie a bushel to haul it 

 to Chicago. It doesn't take a philosopher to tell you that! 



There is a basis for that; the Supreme Court decided it, and they set 

 forth the elements to be taken into consideration. I want to make this 

 plain to you, because I want to show you that the basis of rate-making 

 in this country has been changed and that if you will get rid of all this 

 and reinstall the old one, you will immediately get a reduction in rates. 

 Somebody says, "Hovvt are you going to do that? The Interstate Com- 

 merce Commission now is under oath; we are law-abiding citizens and 

 under their oath they- have got to fix a rate that will produce a certain 

 return." And my reply is, "We will take away that method of rate- 

 fixing and install another one, and they will perform their duty, and down 

 goes the rate." It is all moonshine to talk that, and I am going to point 

 it out to you. Here are the specifications: 



"In order to ascertain the value of this service, you will take into con- 

 sideration the original cost of construction of these railroads." 



That is one thing you will take. 



"The amount expended in permanent improvements, the amount of 

 market value of its bonds and stocks, the present as compared with the 

 original cost of construction, the probable earning capacity of the prop- 

 erty under the particular rates prescribed by statute, the sum required 

 to meet operating expenses, and all others are to be given such weight 

 as may be just and right in detennining what is the fair value of the 

 service." 



That is specific enough for anybody! You cannot measure this like you 

 would add two and two and two together and get the result. You have 

 got to use your best judgment and find these things and all others that 

 belong to it — many other things. You have got to take into consideration 

 the value of the products you are going to haul. A man said to me just 

 yesterday, "I was offered coal at the mines in Illinois for a dollar a ton, 

 but it costs $4.05 for freight to get it to its destination." Don't you see? 

 It wasn't worth that to haul that coal. It may be worth more to haul 

 other things than they are getting, but it wasn't worth that to haul that 

 particular item. 



It has been put forth with great stress that this law that we have is 

 a permissive proposition — that it permits the commission to fix a com- 

 pensation to produce 5^/^ or 6 per cent. I want to say to you that it is not 

 a permissive law, it is compulsory upon the commission. I want to read 

 it to you, because somebody may say that that is not correct. This is 

 section (c) on page 36 of the original act: 



"In the exercise of its power to prescribe just and reasonable rates, the 

 Commission shall initiate, modify, establish or adjust such rates so that 



