422 TWENTY-SECOND ANNUAL YEAR BOOK— PART V 



into the roads. In other words, you know, if you invest one dollar and 

 that earns some interest, and that is kept in, that is called surplus. Now, 

 that surplus is two billion dollars, more or less, but I am going to call 

 it two billion dollars; your bonds are 11 billion, and your total therefore 

 is 13 billion dollars. That is the total of all of the railroads of the United 

 States, and yet the Interstate Commerce Commission has fixed it at 

 nearly 19 billion dollars, and you, the producers of this country, are pay- 

 ing 6 per cent on this six billion dollars that never went into those roads. 

 That is done under this law. Is it fair? Is it right? Why, my friends, 

 6 per cent on that six billion dollars is 360 million dollars, and that is 2 

 per cent on the amount that they are asking for. You see it, don't you? 

 It is perfectly plain. 



It is being said that these roads are not earning this money. Well, now, 

 I have before me the sworn statement of the railroads as published by 

 the Wall Street Journal and I am taking the railroads' own statement 

 for it. I am taking eleven months only, because that is all that is in — 

 they have not given December yet, but I have figured that December will 

 produce as much as November, so as to get twelve months. They earned 

 66 million dollars, net, in November, and I have called it 66 million for 

 December. The total net railway operating income after deducting every- 

 thing was 630 million dollars. 



Some time ago I joined a little organization down in New York City. 

 1 didn't know just what it was when I joined it, but wanting information 

 I would join pretty nearly anything that comes along. It is called the 

 American Railway Statistics and Economic Department, and they point 

 out this fact — let me show you what they do: There are a large number 

 of these railroads, you know, that are leased by the operating company. 

 That is to say, the operating company leases it from the owning com- 

 pany and they pay a rental for it. Now, when they get 6 per cent on 

 the value of that road, if they do earn it, is it fair to charge up what they 

 pay out for rental? But that is just what they do. And of railroads in 

 the United States so operated, it amounted to 129 million 900 thousand 

 dollars. I'll call it 130 million dollars. It is like renting your farm to me 

 and I pay you $5 an acre for it; then you go to the government and say, 

 "I want 6 per cent on the value of that farm," and the government says, 

 "All right, I'll give you 6 per cent on it," and 6 per cent on $200 an acre 

 is $12 per acre, but you don't give the government credit for the $5 that 

 I pay you. You are getting that $5 twice. That is what they have done 

 to the extent of 120 million dollars, according to this report. You add 

 that to the other amounts, and you have 790 million dollars. 



Here is another simple little thing. They get 6 per cent on this value 

 of 11 billion dollars represented by their bonds — they get it on all their 

 property. They pay 4 per cent on their bonds and get 6 per cent, and 

 that is 2 per cent more. 



Now, if you reduce them down to their original value, what the value 

 ought to be, they are getting way in excess of what they should. I am 

 going to show to you what a road or two has done, and then I will quit. 

 Are you interested in the Burlington railroad, or the Rock Island, to 

 know what they are doing? Let me tell you what they are doing, — I 

 have got figures right here. 



