506 TWENTY-SECOND ANNUAL YEAR BOOK— PART VII 



acted against the agricultural and live stock interests than that portion of 

 this bill which requires the commission to fix a valuation upon the rail- 

 roads of this country, and when that is done, makes it the duty of the com- 

 mission to fix rates and charges high enough so that the carriers will earn 

 five and one-half per cent on the fixed valuation. 



As is a well-known fact, the total value of eighteen billion five hundred 

 million dollars was fixed by the commission when everything was at the 

 very zenith of inflation, and the railroads are now trying to pay dividends 

 on from three to four billion dollars worth of fictitious value that never 

 existed. 



And now when we try to secure a reduction in rates we find the rail- 

 roals claiming that they are not earning the amount guaranteed them 

 under the act, and we also find that the commission cannot order the rates 

 reduced because the roads claim they are not earning the five and one-half 

 per cent allowed them under the provisions of the bill^ And so it is the 

 dear public goes on paying these exorbitant rates with little or no hope of 

 relief through congressional action in the way of amending this law and 

 eliminating the pernicious features which make it so distasteful to the 

 shippers of the country. 



In this connection, I would like to say for the benefit of the convention 

 that if the valuations of these railroads had been fixed where they prop- 

 erly belonged, we wouldn't have such serious objectiqn to the guarantee 

 feature of that law; but, to my mind, there was the first great mistake that 

 was made. If there had been something, some provision in that bill which 

 would have limited the valuations which migOit have been placed upon 

 these railroads, then it would have been an entirely different situation, 

 but the trouble was the commission had no time to prepare this valuation. 

 Why, the Interstate Commerce Commission has been working for years 

 trying to secure a valuation of the railroads of this country, and the facts 

 are that the last information I 'had, they had only succeeded in placing the 

 value on one of our big railroads. Now, this work had to be done inside 

 of six months after the bill was passed. The commission had no time to 

 work out and place a proper valuation on these railroads, and how was it 

 placed? Just simply like we place valuations on real estate. We go out 

 and look over a farm and say that farm is worth so much money. Nor- 

 mally, that was a reasonable valuation, and so was this when prices were 

 at their peak. And so they held a conference and the railroads contended 

 for a twenty billion dollar valuation, and brought every pressure to bear 

 to force the commission to place that valuation on our American railroads. 

 Then here were the producers standing and fighting for a seventeen bil- 

 lion dollar valuation, and under existing conditions it should have been 

 fifteen billions — but at that time nobody expected such a defiation of 

 values as immediately took place, and so the commission finally settled 

 on $18,500,000,000, I think, or approximately that amount, and then fixed 

 the rates as they thought they would earn the 5i^ per cent on that valua- 

 tion. 



Well, now, we have got just what we have got in agriculture and every 

 place else, as a result. We have got defiation, and these properties today 

 wouldn't sell within five billion dollars of the value that was placed on 



