602 IOWA DEPARTMENT OF AGRICULTURE 



exhibit proved that the railroads every year for the preceding fifteen 

 years as a class had borrowed money at a better rate than other indus- 

 tries generally. 



I can give volume and page for every one of these statements, and 

 we challenge any man here or hereafter to question their accuracy, and 

 that was at a time when you were making your test period your basis 

 for your government guarantee. 



Even at the last hearing, in 1920, Mr. Strauss, from New York, was 

 on the stand, the only witness who attempted to testify as to railroad 

 credit specifically as a whole, and he was asked if he knew about cer- 

 tain figures that had been testified to about the rate representative 

 railroads had to pay for money, and he was asked to name any other 

 company in any other business that had been able to borrow money at 

 such rates, and he said, "Yes, I can name several if you will give me 

 time, and will do it before I leave the stand." I paused and waited, and 

 then said, "I would like to have you do it." He didn't do so. 



There were some exceptions, but as a class that is the situation. 



I take this very seriously. I do sincerely believe that while we suc- 

 ceeded on the other sections of the bill, a person ought not to object too 

 strenuously on the particular section we did get defeated on, but I still 

 think we were right. 



Live Stock Rate Cases. 



During the course of the year we have had several live stock cases. 

 There is the liability clause case. The railroads got the National Indus- 

 trial Traffic League to agree to a revision of the industrial track agree- 

 ment for the future, so that the railroads were relieved of all liability 

 for loss by fire occasioned by engines serving their industry, altho the 

 engine was owned by the railroad, and altho the railroad was negligent. 

 The National Industrial Traffic League consented to that form. 



Second is the valuation matter. The commission has called for valu- 

 ation data for only two roads. At the present moment the Interstate 

 Commerce Commission is framing a valuation that will be the basis of 

 all of the rates during this generation and for generations to come. If it 

 is excessive, you and your children will pay the tax, and your children's 

 children, whether you have government ownership or private ownership. 



The Interstate Commerce Commission held that the railroads were 

 not entitled to the land multiple; that it was not necessary to find the 

 «ost of acquiring land today. Do you know what the land multiple is? 

 Today a railroad, when it acquires land, has to pay two and one-fourth 

 times the cost of the adjoining land; not the cost of the adjoining land, 

 but two and one-fourth times the value of the adjoining land. There- 

 fore, they should multiply the present value of the land by a multiple, 

 and that is what is contemplated by the act, which requires them to 

 find the present cost of reconstruction. 



The Interstate Commerce Commission turned them down on that 

 proposition, and the Kansas City Southern case was appealed to the 

 supreme court of the United States, and the supreme court reversed the 

 Interstate Commerce Commission. In the Minnesota rate case the su- 

 preme court had previously held that the railroads ought to be satisfied 

 if they got the present value of adjoining land. 



