REPORT OF IOWA FARM BUREAU FEDERATION 423 



The Rock Island has 180 million dollars of bonds; 55 million dollars of 

 7 per cent preferred stock. The bonds, as I have said, are largely pro- 

 portionately 4 per cent, but to be fair I have figured on the basis of 5 per 

 cent. The common stock is 75 million, figured at par. The net operating 

 income of the Rock Island in twenty months was 20 million 897 thousand 

 dollars. So this broken down Rock Island, after deducting 10 million 129 

 thousand dollars, leaves a net income for eleven months of 10 million 768 

 thousand dollars, or a little better than 14 per cent. Pretty good piece 

 of property! 



I just want at this point to tell you this story: They say to you, and 

 I have heard it said, that today railroad stocks and bonds have gone down 

 just the same as farm lands — aren't the holders of these securities losing 

 just as much as you are losing? That sounds, at first flush, that the 

 other fellow is getting it just as we are. Remember, the stocks and bonds 

 of the railroads amount at par only to 17 billion, but they are getting 

 6 per cent — they are getting less than 6 per cent by the returns that are 

 here, they are getting probably a little over 5 per cent now, after taking 

 out working* capital and all these funds I have told you about, or more 

 than their par value. Now, I want to know, if you farmers are getting 

 6 per cent on more than the value of your ground, if you care very much 

 how they quote it? If you were paying $250 an acre for land and were 

 getting 6 per cent on $300 an acre valuation, you wouldn't care what 

 they quoted it at, would you? That is the situation, and it is the result 

 of the transportation act. 



But it is more than that. Let me tell you what it does. It is the first 

 time in the history of the United States of America where the legislative 

 body of the country has classified property and made one property have 

 preference over another. They have set aside these (I concede) 13 bil- 

 lion dollars worth of railroad property — they say 19 billion; they have 

 set that off in a class against all the other property in the United States 

 and say that that property shall have an income whether any other prop- 

 erty shall have an income or not, or whether every other piece of prop- 

 erty goes into bankruptcy or not. Do you see what it has done? That 

 is the first time that that has been done. The Sherman anti-trust act 

 was for the purpose of getting rid of it where it was done covertly, but 

 this is the first time that the law has validated such a thing. Here is the 

 cement trust, here is the steel trust — they fix a price where they get a 

 return whether anybody else gets one or not, but they do it, and there 

 may be some grumble that it was in violation of the law. They maintain 

 a price because they have control of the market. Don't you see? 



That, however, wouldn't be true of the railroads, but the legislature 

 steps in and says, "As to this property, it shall have a return whether 

 anyone else does or not." The assessed valuation of all the property 

 in Iowa is about 19 billion dollars. Now, let us assume, for illustration, 

 that the congress of the United States should pass a law tomorrow pro- 

 viding that all the property in the State of Iowa should have a net return 

 of 6 per cent, and that everybody else must contribute to the things that 

 we produce so that we will get our 6 per cent net. How many people do 

 you think would stand it? Do you think the people of Minnesota or 



