168 - IOWA DEPARTMENT OF AGRICULTURE 



crystallized into public policy, and will be established by our com- 

 missions and legislative bodies. That is why we must consider 

 these matters. They are not merely technical, legal questions for 

 these judicial tribunals to determine; they are matters for the 

 great thinking public of the United States to decide. 



One other question of public policy; I said there were two. 

 This second one relates to the weaker line of argument. You 

 men know that here and there there is a road which is not mak- 

 ing decent profits; they are serving the public; we can't afford 

 to have them closed 'down. The question immediately comes up : 

 If they are not making reasonable profits, should we raise rates 

 everywhere in order to make it possible for them to do a more 

 profitable business? Coincident with that there occurs to your 

 mind: Can you and I afford to let these companies saddle upon 

 the public the mistakes, mismanagement, wrong erection of rail- 

 roads here and there over the country? Can we afford to let those 

 managers saddle these mistakes upon the public and make you and 

 me pay for it? These are questions that must be determined by 

 logic and reason rather than cold facts. 



* * * Where should a person go to find out whether railroad secur- 

 ities are attractive investments and whether railroad credit is seriously 

 impaired? Unquestionably there is just one place above all others where 

 this information can be obtained — that is the market place for such se- 

 curities. For the purpose of this investigation, I took a recent month, 

 that of October, and secured the market prices of the bonds of all the 

 railroad companies making an appearance in this case, and also the bonds 

 of all gas, electric light, telegraph, telephone, street railway, manufactur- 

 ing and industrial companies, whose bonds were sold on the New York 

 Stock Exchange during the month of October, 1910, according to the pub- 

 lished reports in the New York Commercial and Financial Chronicle, 

 omitting the following classes only — income and convertible bonds and 

 bonds maturing prior to 1931 — my effort being to find the market quota- 

 tions for ordinary typical securities of a somewhat similar character, is- 

 sued by a representative list of the various classes of industrial and rail- 

 road companies. 



I find as a matter of fact that, with only one exception, the average 

 market prices of all railroad bonds sold during the said month were higher 

 than the average market prices of any other class of 4 per cent, 4^ per 

 cent, 5 per cent or 6 per cent securities. I also find that, with three ex- 

 ceptions, the average market prices of the railroad bonds were higher 

 than the highest market prices of any of the street railway, gas, electric 

 light, telegraph, telephone, manufacturing or indutsrial companies. 



One claim advanced by the companies has been that their credit has 

 gone, because they can no longer market 4 per cent bonds at par. I made 

 two long lists of representative public service corporations, one including 



