TWENTIETH ANNUAL YEAR BOOK— PART VII 611 



Sixteenth, track scales. That is a matter that has very recently come 

 up. In the past it has been customary for us to consider the roads re- 

 sponsible for furnishing track scales. However, lately there has been a 

 movement on the part of the railroads to sell those to individual ship- 

 pers and let those individuals charge for the use of them. This presents 

 a very important issue, gentlemen, because the supreme court of the 

 United States has held that the order of a railroad commissioner requir- 

 ing the railroad to furnish track scales, in order to remedy discrimina- 

 tion, was not valid under the circumstances presented in the case de- 

 cided. The supreme court declined to uphold an order made by the 

 Minnesota Railroad and Warehouse Commission. You must show a justi- 

 fication, a public necessity for the track scale, and the mere removal 

 of discrimination is not sufficient. It may be that we will have to organ- 

 ize and build track scales for our own use, if they go too far. We have 

 taken up that matter with the officials in Washington. 



Seventeenth, train service. You remember last year we invited Mr. 

 Harris here, and Mr. Sykes has Invited him again this year. He has done 

 some splendid work in that connection, but there is still more to do. 



Eighteenth, relation between live stock and packing house products 

 rates. The whole subject must be gone over again. That subject has 

 been assigned for investigation. That may mean an upsetting of all our 

 live stock rates unless we are thoroughly prepared to prevent that de- 

 velopment. 



Nineteenth, the coming advance in rates, to which I have already 

 made reference. We speak of two things, property investment account 

 and return on present value. Don't misunderstand me, the law pending 

 in congress doesn't use this phrase as the basis. The law provides that 

 property investment shall be used so far as the commission should law- 

 fully do so. The facts are that in almost all recent decisions property 

 investment has been the principal factor they did consider as a basis. 

 The other alternative is the present value. The supreme court of the 

 United States has declared that that is one of the controlling, if not the 

 controlling factor. That is why we used those two alternative phrases, 

 but neither the commission nor the supreme court has ever said that six 

 per cent must be granted. What is reasonable varies with the different 

 industries. In some, six per cent is adequate; in others, it is inadequate. 

 What is reasonable varies with the season, varies with the year, varies 

 with the industry. I wouldn't put that amount of money into a gold mine 

 without 100 per cent or more being pretty well assured, but I would be 

 willing to put money in a government bond at less than five per cent, and 

 so would you. The question of what shall constitute the basis upon 

 which to apply this percentage is going to be an issue in the advance 

 rate case upon which will hang the determination of a question involving 

 several hundred million dollars. The last case in 1917 involved over 

 $400,000,000, and this will involve a billion — not one billion dollars in 

 one bunch, but a billion dollars every year, year in and year out. That 

 is what we have before us in the return of the railroads to their owners. 

 We cannot tell what they are going to try to do when they get their 

 properties back. We already have been advised that the Great North- 



