490 TWENTY-THIRD ANNUAL YEAR BOOK— PART VII 



tive agency for meeting shipping conditions and reducing costs. That 

 is the first. 



The second one is, after examining that situation and finding that 

 you are not entirely satisfied with it, to put the whole weight of that 

 $50,000,000 co-operative shipping group, plus the other $50,000,000 or 

 $100,000,000 or $200,000,000 that are represented by the other live stock 

 shippers of the state, back of a demand for a reform where reform is 

 really justified, and I think that the same map I presented here to show 

 those local peculiarities illustrates that second class of service. 



You probably know that the live stock rates of this state are based 

 on the Mississippi river rate and the Missouri river rate, the Mississippi 

 river rate being 25 and the Missouri river rate being 36 cents. For com- 

 petitive reasons, those two basing points have been established, regard- 

 less of whether we think that is too much or too little, as a general 

 level of rates. Is the rate structure built around those two basic points 

 in a way which is equitable to the Iowa live stock producer? I think 

 not. What has happened? 



Competitive conditions have meant that the railroads could not get 

 more than 36 cents from live stock shipped from the Missouri river 

 points. They could not get more than 25 cents for live stock shipped 

 here. (Indicating.) All right. How shall the rates in between be estab- 

 lished? Normally, equitably, in the interest of the producer, they would 

 be established by stepping up your rates from 25 to 36 cents across the 

 state approximately in proportion to the distance, because that is our 

 general principle of law making, that the longer haul should bear the 

 higher charge and the shorter haul the lower charge; and you and I 

 would start from the Mississippi river and would establish those rates by 

 additions to that, distributing the whole 11 cents across the state on 

 that equitable sort of basis. The railroads are not interested from the 

 same point of view that we are, hence what did they do? They start 

 from the Missouri river and take and apply their 36-cent rate just as far 

 back as they can — in other words, until they get to the point where 

 the local rate to the Mississippi river plus your 25 cents from the Mis- 

 sissippi river to Chicago makes 36 cents. 



They push this 36-cent zone clear over to the middle of the state 

 instead of having it apply to about fifty or sixty along the western 

 side. That means pushing all the rest of the rates over here. Starting 

 across the state, with approximately 300 miles, we find that an advance 

 of 7V 2 cents is made in the first hundred miles, leaving only 3V 2 cents, 

 the remainder of that 11 cents, to apply to all the rest of the 200 miles, 

 and in that 200 miles the maximum rate is applied to 120 miles, which 

 means every producer in these zones is bearing more than a proportionate 

 part of that freight burden. 



That is a little bit like telling an old story to the Corn Belt Meat 

 Producers, because they knew all that twelve or fourteen years ago. 

 They knew that sufficiently so that they went before the Interstate Com- 

 merce Commission with a case asking them for an equitable zoning of 

 live stock rates across the state of Iowa, and they had quite a case. They 

 put up a pretty good fight, and when they got through, they had that kind 

 of a map— approximately that. There are some changes. This is the 



