REPORT OF IOWA FARM BUREAU FEDERATION 421 



by that that I am trying to tell you the last dollar — but in round numbers, 

 11 billion dollars. Ten billion dollars of that draws 4 per cent interest, 

 and the other is refunding debt and draws 7 per cent. Some of it is 

 refunding debt and draws 7 per cent, but it is 11 billion dollars, anyway. 

 Now, you know and I know that those bonds were never sold for par — 

 100 cents on the dollar — were they? The railroads never got into the 

 treasury of their companies 100 cents on the dollar for those bonds. Some 

 estimates compute that it is 85 cents on the dollar; but I am going to call 

 it 100 cents on the dollar in my argument, for two reasons: First, for 

 the reason that a billion or two doesn't cut much figure in these days, 

 and, second, that these bonds are largely in the hands of men and women 

 and children as trust estates all over the country — people we call innocent 

 purchasers. The government has permitted it, and we will stand for it. 



The outstanding stocks of the railroads prior to the present exploita- 

 tion 1919 aggregated six billion 314 million dollars. You know and I 

 know that they never sold for par — 100 cents on the dollar. They never 

 sold for 50 cents on the dollar. My friend, John Cownie, down here re- 

 members when the stock of the Rock Island was multiplied four times in 

 one year, and no money has gone into it since. The Lackawanna in 1920 

 doubled its capital stock from 45 million to 90 million without a dollar 

 of money going into the treasury. The Burlington raised its capital 

 stock from 110 million to 170 million in 1920 without putting a dollar into 

 the treasury. That is what I call exploiting the public. What do you call 

 it? What I want to get rid of, my friends, is another forty years of ex- 

 ploitation of the public by the transportation systems of this country, and 

 isn't that the right thing to do? 



We had six billion 314 million dollars worth of stocks. Let's call it six 

 billion dollars, in round numbers. If we figure 50 cents on the dollar, we 

 are very liberal, aren't we? No one will contend that they ever got 50 

 cents on the dollar for that stock. That would leave their stock at three 

 billion dollars, wouldn't it? Now, let's see what that represents. The 

 three billion dollars worth of stock represents the property owned by 

 the railroads, first, that is kept for and used in transportation, and, sec- 

 ond, that is owned by the railroads but not kept for or used in trans- 

 portation. There are two kinds of property. The Interstate Commerce 

 Commission has valued only the property that is kept for and used in 

 transportation. In other words, you on your farm have your horses and 

 your cattle, and all that, and you keep that for use in your farming in- 

 dustry. You have stocks and bonds that are not kept for or used in your 

 business. Don't you see the distinction? All right! Now, the railroads 

 have that property. It is estimated — and the vice president of one of 

 the railroads who challenged the statements .1 made doesn't dispute the 

 estimate — that that property is worth three billion dollars. That three 

 billion dollars has been gathered by these railroads from rates. If you 

 take that three billion dollars from the earnings of the stock, don't you 

 see, their stock is retired, and you have the 11 billion dollars of bonds 

 representing the value of those railroads. 



I want to be more than fair, and for this argument only I am going to 

 concede that the surplus that has been built up from year to year during 

 all the years that these railroads have been running has been put back 



