170 IOWA DEPARTMENT OF AGRICULTURE 



age bond and stock rates paid by all railway corporations operat- 

 ing in England, Wales. Ireland and Scotland. I found that in 

 over ninety per cent of the companies in that extensive list of 

 public service corporations no such margin existed between the 

 bond rate and the stock rate. So I wanted to find out what had 

 happened to the market price of stocks that would indicate that 

 they could sell their securities of that kind in place of their bonds, 

 and I took all the companies that made any appearance in this 

 case, and I found that while their bond market price had been 

 going down, the market price of stocks had been going up. For 

 instance, I found that if you had bought 1,000 shares of Michigan 

 Central bonds in 1900 at the mean price (that is, half way between 

 the highest and lowest prices at which their bonds sold during 

 that year) — and I took a typical long-term bond of that com- 

 pany — and if you had sold out at the mean price in 1909, you 

 would have lost $5,000 on your bonds ; but if you had invested 

 the same amount of money in stocks of the Michigan Central at 

 the mean price of 1900, and sold them out at the mean price of 

 1909, you would have gained over $40,000. That is a typical il- 

 lustration of the entire situation. I took all the companies who 

 had made any appearance in the case, and I found out that if 

 you had made the same investment in all of them, you would 

 have lost about $300,000 on your bonds and you would have 

 gained over $2,000,000 on your stocks; or for every dollar you had 

 lost on your bonds you would have gained about eight on your 

 stocks. Every well-managed company that hasn't made stock 

 dividends or stock allotments during the past ten years has sub- 

 stantially that same history which I have just stated to you. 



I further wanted to find out if it was not true that the market 

 value of these stocks of railway companies had not been increasing 

 more rapidly than the market prices of other things. It wouldn't 

 do any good to take a concrete illustration here and there ; I couldn 't 

 prove anything by that method; but I went to a disinterested 

 tribunal. 



The Bureau of Labor of the Department of Commerce and Labor has 

 computed the average market prices of about two hundred staple com- 

 modities during the past twenty years. This series of representative 

 prices shows a general trend from year to year. Following precisely the 

 same method, W. C. Mitchell, of Berkeley, California, has computed the av- 

 erage market prices of forty representative transportation companies, in- 

 cluding five telegraph, steamship and express companies. Neither of these 

 computations were prepared with the idea of their having any effect 



