L38^-?73
Threats of Further Restrictions
a Peril to Railway Expansion
Address by
C. H. MARKHAM
President, Illinois Central System
Before the
KIWANIS CLUB OF SIOUX CITY, IOWA
September 20, 1923
Threats of Further Restrictions
a Peril to Railway Expansion
OUR nation, I like to feel, is not
yet grown up. Out here, where
not so long ago Indians kindled
their council-fires on the bluffs of the
winding river, that feeling is particu¬
larly impressed upon me. Within the
memory of men still living these vast,
far-stretching prairies have been
placed in cultivation, cities have
sprung up to serve the needs of a
countryside once desolate, and rail¬
roads have supplanted the primitive
transportation afforded by the prairie
schooner and slow-moving river
craft. Our growth has been rapid; in
a few short years we have outstripped
the centuries-old civilizations of Eu¬
rope and Asia in the development of
agriculture, industry, transportation ;
but, notwithstanding this marvelous
growth, our nation, especially this
Middle Western country, is not yet
full grown. We are still growing,
learning, every day. The transforma¬
tion of the last half-century will
doubtless be far eclipsed by the
changes of the next.
I believe in the future of our coun¬
try, and that faith gives me a distinct
feeling of optimism in regard to the
future of the business in which I am
engaged. If I thought the develop¬
ment of the United States had reached
the limit of its capacity, that the ex¬
pansion of agriculture, industry and
transportation had ceased for all time,
that a settled policy of repression and
restriction was likely to be maintained
toward tjie railroads, chief carriers of
the nation's commerce, I would not
have the heart to address you on this
subject today.
Our railroads are not yet a hundred
years old. The first steam locomotive
to be seen in the western hemisphere
was brought to this country from
England in January, 1829. In 1851,
when construction was begun on the
Illinois Central Railroad, there were
only 10,982 miles of railroad in opera¬
tion in the entire United States, not
much more than the present railway
mileage in Iowa alone. Today the
railroads of the United States could
encircle the earth ten times ! Our na¬
tion, youthful as it is in comparison
with the countries of the eastern
hemisphere, has one-third of all the
railway mileage in the world.
CAPABLE OF CIREAT THINGS
IN keeping with the youthfulness of
our nation, our railroads are
young and growing, capable of
achievements far greater than those
already attained. Given freedom
from unsound restrictions, they will
be able to serve the future transporta¬
tion needs of the country adequately.
It is already certain that 1923 will es¬
tablish new transportation records.
In the first six months of the year the
railroads carried a greater amount of
freight than during any corresponding
period in history, and since mid-year
freight traffic has been increasing.
Since the middle of May the railroads
have been loading and moving more
than a million cars a week, with the
exception of weeks in which there
have been national holidays. In the
week ending September 1, all previous
car-loading records were broken by
the loading of 1,092,567 cars with
revenue freight.
The significant fact about the im¬
mense increase in the volume of busi¬
ness carried on is that the railroads
have handled it so efficiently that there
has been practically no shortage of
transportation, such as we have had
with increased traffic in other years ;
in fact, week by week throughout this
period of unprecedented traffic, the
supply of certain classes of cars avail¬
able and uncalled for by shippers has
exceeded by a substantial majority
the reported shortage of other classes
of cars.
At a previous time when business
was on the increase, the development
of our railroads was arrested through
a loss of credit occasioned by shrunk¬
en earnings and the growth of re¬
strictive regulation. It must be re¬
membered that the railroads are
owned by something like 800,000 per¬
sons, holders of their capital stock.
The number of persons who have lent
money to the stockholders by purchas¬
ing railway bonds and thereby accept¬
ing a prior claim upon the earnings
of the properties owned by the stock¬
holders is approximately as great as
the number of persons owning stock.
This makes something more than one
and one-half million individuals who
have a direct financial interest in rail¬
way earnings. All of us have an in¬
direct financial interest, for we are all
dependent upon the maintenance of
adequate transportation, and adequate
transportation cannot be maintained
without adequate earnings.
now MONEY IS OBTAINED
WHEN money must be had for
expenditures upon extensions
and improvements to the railway
plant, and it is not available from
earnings, it has to be obtained through
the sale of additional securities,
either to present stock- and bondhold¬
ers or to other persons. Until the
passage of the Transportation Act in
1920, owners of railway securities
had not fared very well, and that
made it difficult to raise new capital
for extensions and improvements.
This year, however, railway credit
has been improving materially. This
has been largely because of the opti¬
mistic, forward-looking attitude taken
by the railway managements of the
country in the face of inadequate
earnings. Such an attitude is based
largely upon the Transportation Act,
which pledges the country to give the
railroads a square deal. Thus far
railway earnings, while on the mend,
have not reached the 5^ per cent des¬
ignated by the Interstate Commerce
Commission as a fair return. For the
thirty-five months under the Trans¬
portation Act up to August 1, 1923,
railway earnings have been at the an¬
nual rate of 3.97 per cent upon their
tentative valuation. For the first
seven months of 1923, the railroads
realized a net operating income of
5.51 per cent upon their tentative val¬
uation, as compared with 4.46 per
cent for the first seven months of
1922. With business good and rates
unchanged, there is hope that the
railroads will have a fairly good
year, and that hope has served to re¬
store some of the old-time confidence
in the security of railway investments.
Expenditures upon the railway plant
this year will exceed one billion dol¬
lars, more than twice the average pre¬
vailing in the last several years.
About 60 per cent of the sum is being
spent for new locomotives and cars ;
the other 40 per cent is being spent
for better and more adequate road¬
way facilities and structures.
The progress that the railroads
have made in the improvement of
their properties is something to be
proud of. It proves that there are
men and women in this country who
have enough faith in the future of
the country and the soundness of its
institutions to put up, in one year,
around one billion dollars for railway
investments despite the meager earn-
4
ings that the railroads have been al¬
lowed to realize. With such confi¬
dence as this in the future of the
railroads, many of which only a short
time ago were taking heavy losses and
passing up dividend payments, surely
any business which ma}' be suffering
temporarily ought to take heart and
hold on.
ONLY ONE DANGER FEARED
IF it were not for the constant
threat of radical legislation, I feel
sure that the country could rely upon
a continuance of satisfactory railway
service and upon the likelihood of
constantly increasing investments be¬
ing made in extensions and improve¬
ments to the railroads. The only
thing that can stop the ambitious
plans of the railroads to expand in
keeping with the growth of the coun¬
try and of its commerce is the uncon-
structive agitation of the radicals who
are striving with all their might to
bring about government ownership of
the railroads by making it impossible
for the railroads to be operated suc¬
cessfully under private managements.
Government ownership of our rail¬
roads would be a national disaster.
The very fact that the maintenance of
good railway transportation means so
much to the welfare of the country is
reason enough for us not to give up
the system of private management
that has given us the most efficient,
most economical railway transporta¬
tion in the world.
Our government now has all of the
power of railway regulation needed to
safeguard the interests of the public;
government ownership would add
nothing in protection, and it would
subtract the incentive which now
exists under private management to
operate the railroads efficiently and
economically.
I believe there are a good many-
Americans who do not fully realize
the tremendous dependence that the
United States must place in strong,
efficient railroads to maintain the com¬
mercial supremacy we have attained.
Not until the railroads of other coun¬
tries are compared with ours and we
realize what it means for us to have
the efficient, economical transportation
that has been developed in this coun¬
try under private management do we
see how inextricably the prosperity
of the country is bound up with its
transportation. Our nation has been
extremely fortunate in the develop¬
ment of railway transportation. The
remarkable growth that we have had
in the lifetime of men still living can
be traced directly to the rapidity with
which railroads were built and devel¬
oped, and our prosperity as a nation
today is inseparably linked with the
maintenance of adequate, efficient
transportation.
NATION WELDED FROM STATES
For the most part our railroads
have ignored state lines, and to
that extent they have helped to weld
us into a united nation. In Europe, on
the other hand, most of the railroads
ivere developed as military exigencies
required ; they ended at the borders of
their respective countries, and fre¬
quently they were of varying gauges,
so that the enemy might not readily
use them as a means of invasion. The
result has been the fostering of in¬
tense nationalism within restricted
areas, lack of understanding, com¬
merce of comparatively small propor¬
tions, and much of the economic and
political trouble to which modern
European nations are heir.
In Europe, moreover, there has not
been developed to the extent known
in this country the practice of terri¬
torial specialization in agriculture and
manufacturing. In the United States
hundreds of miles frequently separate
the farm from the packinghouse, fac¬
tory or mill where farm products are
prepared for consumption, and fre¬
quently hundreds of miles separate the
packinghouse, factory or mill from
the consumer who eventually pays for
and uses the manufactured product.
S
Transportation has become such a
common and dependable thing that it
has created a commercial development
unlike that at present obtaining in
Europe. There are few localities in
our country that are self-supporting,
and the reason for that is the quality
and comparative cheapness of Amer¬
ican railway transportation.
ïhi-: railroads and t1ík farmers
Modern transportation is an im¬
portant part of every form of
business. Without it, there could be
no farming on the scale that farming
is practiced nowadays, no manufac¬
turing in great quantities and at low
cost, no distribution of manufactured
goods over great areas and to millions
of people. Destroy the railroads, and
the production of goods would neces¬
sarily be limited to the demand of the
immediately surrounding territory. It
would set the country back nearly one
hundred years, for all the develop¬
ment that has occurred since the
building of railroads began has gone
along with the railroads.
That brings us to the subject of
how the railroads must be treated if
they are to serve the nation adequately
in the future, and I want to discuss
that question especially from the
standpoint of the farmer, since this
is the center of a vast agricultural
territory and the business that is cen¬
tered here is especially concerned with
the welfare and prosperity of the
farmers.
All business is self seeking, or it
would be philanthropy, not business.
The farmer is a business man, and
as such he is interested in making a
living and earning a return upon the
money invested in his farm. The rail¬
roads are also necessarily self seek¬
ing. If they are to carry on they
must make a living and pay their own¬
ers a reasonable return upon the
money invested in their properties.
There is no question as to the essen¬
tial character of the services per¬
formed by both agriculture and trans¬
portation. We refer to agriculture as
a basic industry. It is that. We can¬
not have prosperity in this country
unless our farmers are prosperous.
But, as I have already pointed out,
farming nowadays depends almost
wholly upon railway transportation,
and hence we must classify transpor¬
tation also as a basic industry. Con¬
tinued prosperity likewise depends up¬
on prosperous railroads.
The question arises : Are the aims
of the railroads and of the farmers
in conflict ? Is it necessary for one to
suffer that the other may prosper?
amount of farmers' traffic
The value of alt farm property in
the United States is approxi¬
mately four times the value of all rail¬
way property. The farming {wpulation
is almost three times as great as the
population engaged in railroading. The
farmers are our greatest group of pro¬
ducers. About IS per cent of the
freight traffic carried by the railroads
comes under the heads of "Products
of Agriculture" and "Animals and
Their Products," which may be
roughly termed farm shipping. On
the other hand, the farmers also are
our greatest group of consumers, and
a considerable portion of railway traf¬
fic is used by the farmers as consum¬
ers. In the 1920 census the farmers
comprised 30 per cent of the entire
population of the country. The farm¬
ers themselves, however, produce a
great deal that they consume, and it
would be a liberal estimate to say that
the farmers consume products repre¬
senting at least 20 per cent of the
freight traffic of the railroads.
One fallacy connected with this
subject of the relation between the
farmers and the railroads is the idea
that the farmers have to pay freight
charges both coming and going—on
the 15 per cent of freight traffic that
they originate and the 20 per cent of
which they are the consumers. The
evidence usually cited in support of
this idea is that the prices farmers re-
ceive for their products are central
market prices less the cost of trans¬
portation, while the prices they pay
for manufactured products are fac¬
tory prices plus the cost of transpor¬
tation.
A FALLACY SIMPLY EXPLAINFD
Asimple case win illustrate the
fallacy of this idea. A farmer is
often the consumer of a manufactured
product for which he has himself fur¬
nished the raw material, as, for exam¬
ple, flour made from his wheat. The
price the farmer or anyone else pays
for flour is a composite of the cost
of the grain, the cost of transporting
it to the mill, the cost of milling, the
cost of transporting the flour back
to him, and the cost of distribution.
As a consumer of flour, he pays all
of those costs. He indirectly pays
himself for the grain he produced, the
miller for turning the grain into flour,
the merchant for carrying a stock, of
flour on hand to supply his needs and
the railroad for hauling the grain to
the mill and the flour back to him.
If the cost of transportation could be
reduced, would the farmer profit as
a producer or as a consumer ? Would
he net more for his grain or would he
pay less for his flour? It must be
apparent that the farmer could not
profit in the full amount both as a
producer and as a consumer. If he
succeeded in increasing the net price
of his grain by the amount of the
freight rate reduction, he could not
at the same time reduce the price of
his flour a like amount.
All goods are produced, manufac¬
tured and distributed for consumption.
The old saying that the ultimate con¬
sumer pays the bill is founded upon
fact. He does pay it, necessarily.
The cost of transportation is not paid
by the producers of the country, but
by the consumers, just as the cost of
manufacturing and distribution is paid
by the consumers. To argue that the
farmer as a producer pays the freight
on his wheat to the mill would be
the equivalent to arguing that he pays
for the milling of the wheat or any
other service connected with the pro¬
duction and distribution of flour,
which in this case is the form in
which the raw material is consumed.
Prices are responsive to constant
bargaining. Let us suppose that the
freight rate were to be reduced or
wiped out altogether. Bargaining
would be stimulated. One man here,
anxious to get his crop moving, would
accept a price lower by perhaps about
half of the freight rate reduction; an¬
other would counter by taking off an¬
other fraction, and before the farmer
fully realized the fact the effect of the
freight rate reduction would already
be on its way to its destination, the
ultimate consumer.
THE EFFECT OF COMPETITION
SUCH is the effect of competition.
If competition were to be wiped
out, however, the farmer's general
situation would be but little improved.
By withholding his crop from the
market, he might artificially and tem¬
porarily stimulate prices, but the mar¬
ket would be ruined when the surplus
would be released, and the artificial
maintenance of a price unjustified by
supply and demand would tend to
keep the acreage of such artificially
profitable crops high and to accentu¬
ate the inevitable crash when at last it
would come. Falling or rising prices
are the weights which balance the
scales of supply and demand and as
such serve a useful purpose.
We hear it said sometimes that the
farmers of the Middle West are suf¬
fering because of the present freight
rates and that, regardless of the disas¬
trous effect a reduction in their reve¬
nues would have upon the railroads, it
is necessary to reduce the rates on
farm products in order to put the
farmers on their feet financially. Of
course, as I have just pointed out, the
farmer does not pay the freight rate
to market, but it may be interesting to
consider what a small item it would
be if he did. Let us consider a few
7
facts regarding the relationship of
freight rates to the prices of some of
the principal farm products of Iowa.
I am going to take Remsen, Iowa, as
a representative shipping point in the
Sioux City trade territory.
TRICES OF CORN INCREASED
IN 1913, before the war, the rate per
bushel on corn from Remsen to
Chicago, a distance of 475 miles, was
9.2 cents, and it is now 12.6 cents, the
increase being 3.4 cents a bushel. The
price of No. 2 white corn in Chicago
in the first week of September, 1913,
was between 71^4 and 78^4 cents, and
in the first week of September, 1923,
it was between 89^ and 90 cents a
bushel. Therefore, the farmer at
Remsen this year can pay the freight
rate on corn from Remsen to Chicago
and have left about 8 to 15 cents a
bushel more of the price he receives
than he could ten years ago. During
the last year, in fact, while there has
been no change whatever in the
freight rate on corn, there has been
an even greater change in the corn
price than in the ten years from 1913
to 1923. In the first week of Septem¬
ber, 1922, No. 2 white corn sold at
Chicago for between 61^ and 66%
cents a bushel. The farmer this year
has 28 cents a bushel more left after
selling his corn and paying the freight
rate than he had a year ago.
In 1913 the rate on cattle from
Remsen to Sioux City was 7.6 cents
a hundred pounds. It is now 11.5
cents, an increase of 3.9 cents. In the
first week of September, 1913, steers
sold on the Sioux City market for
around $9 per 100 pounds, and in the
first week of September, 1923, they
sold for around $12.65 per 10Ó
pounds. Here is an increase in price
of $3.65 per 100 pounds as against an
increase in the freight rate of only
3.9 cents per 100 pounds. The farmer
in this case is therefore immensely
better off, as far as the relation be¬
tween prices and rates is concerned,
than he was before the war. In this
case, too, it may be pointed out that
there has been no change in the
freight rate within the last year, and
yet because of market conditions
steers in the first week of September
this year brought around 1 cent a
pound more on the Sioux City mar¬
ket than they did in the first week of
September, 1922. Other grades of
cattle also show a difference in favor
of the farmer. Average prices for
the first week in September, 1913, and
the first week in September, 1923,
show a gain of $2.50 per 100 pounds
on heifers, $1.75 pier 100 pounds on
veal, and $1.15 per 100 pounds on
feeders—all as compared with an in¬
crease in the freight rate of only 3.9
cents per 100 pounds.
CONCERNING HOGS AND WHEAT
Although it is well known that
.prices on hogs are off because of
market conditions, take hogs as an¬
other example of the relation between
freight rates and market prices. The
present rate on hogs from Remsen
to Sioux City is 12 cents per 100
pounds, as against 8 cents in 1913, an
increase of 4 cents. However, in the
first week of September, 1913, hogs
sold at Sioux City for around $7.80
per 100 pounds, while in the first week
of September, 1923, they sold for
$8.10 per 100 pounds, an increase of
30 cents as against a rate increase of
4 cents. Without any change in the
rate within the last year, the 1923
price of hogs exceeded the 1922 price
hy around 24 cents per 100 pounds.
A good deal is being said about the
low price of wheat. Just to show that
the railroads are not responsible for
the losses which the wheat growers
are taking, let us look at the figures
on prices and rates. The freight rate
on wheat from Remsen to Chicago
was 10.2 cents a bushel in September,
1913, and it is now 15 cents a bushel,
an increase of 4.8 cents. In the first
week of September, 1913, No. 2 wheat
sold on the Chicago market at 87%
to 94% cents a bushel, while in the
first week of September this year it
sold at $1.07 to $1.09 a bushel. The
farmer, therefore, could pay the 4.8
cents increase in the rate and still
have around 10 to 15 cents a bushel
more than he could ten years ago.
During the last year there has been
no change in the rate on wheat from
Remsen to Chicago, but prices have
fluctuated considerably, the average
remaining about the same. In the
first week of September last year the
range was from $1 to $1.11%; this
year the range was from $1.07 to
$1.09.
All of us know that most wheat
farmers are losing money, but in view
of these facts it must be apparent that
something other than rates is the
cause, since the farmer can sell his
wheat this year and pay the small rate
increase and still have from 10 to 15
cents a bushel more left over than he
could ten years ago. The same rea¬
soning holds true with respect to
rates and prices on other farm prod¬
ucts.
SAME W0UI.D BE TRUE OF ALL
WHY is it that the farmer is
singled out as the one who is
said to pay the freight both ways and
all other classes of business men
escape that burden ? Of course, it is
not true, and it is inimical to the pub¬
lic welfare to have the farmer take
this erroneous position. If it were
true that the farmer paid the freight
both ways, the same would also be
true of the manufacturer, the whole¬
saler, the retailer and all other classes
of business men.
There has been a lot of discussion
of the alleged impoverished condition
of agriculture. The truth of the mat¬
ter is that the farmers of the country
as a whole are considerably better off
than they were a year ago. The
American Farm Bureau Federation
estimates that the income of the farm¬
ers from sales for the crop year 1923-
24 will be about $200,000,000 more
than last year. Not all parts of the
country are affected alike. Wheat will
bring in less than last year; hogs,
probably likewise. On the other hand,
the corn crop will bring in more cash,
as will also cotton, dairy products and
poultry. Cattle and tobacco will bring
about the same.
The forecast for the 1923-24 crop
year is a farm income of around
$8,710,000,000. There has been a
good deal of agitation about the wheat
situation, but of the total prospective
income wheat accounts for only about
$620,000,000, or 7 per cent. The cot¬
ton crop will bring in more than twice
that sum, cattle nearly twice as much
and hogs something like $850,000,000.
Receipts from dairy products alone
will exceed receipts from wheat sales
by $430,000,000.
DIVERSIFICATION IS NEEDED
UNLIKE the railroads, the farm¬
ers have retained their freedom
of management, and that should be
their surest defense against loss. They
can plant what they choose, withhold
their crops from the market and sell
them when they please, and no gov¬
ernment agency tells them how much
they shall pay for labor and what
they shall take for their crops. They
do not have to render an accounting
of any kind. With such freedom
from outside restrictions, American
farmers should be generally prosper¬
ous, although many of them are not.
In the last three years a good many
farmers have gone bankrupt. For
the sake of our country's prosperity,
all unnecessary hazards must be re¬
moved from farm management. One
of these is the vicious one-crop system
that up until a few years ago was a
menace to the cotton-producing sec¬
tions of the South and which this
year has been a menace to the wheat-
growing sections of the Northwest. I
believe firmly that diversification is
the hope of the farmer in all sections
of the country. Alternate years of
feast and famine are unhealthy and
should be avoided. The fanner who
9
cloesn t put all of his eggs in one bas¬
ket is pretty likely to get to market
without all of them broken. If he
loses on hogs, he can retrieve his
losses on cattle. If wheat is unprofit¬
able, corn may be profitable.
Railway prosperity and farm pros¬
perity are not antagonistic. The
sooner that idea is exploded, the bet¬
ter it will be for all concerned. The
farmer, as a producer, would not be
likely to profit by a reduction of
freight rates. As a consumer, he
might, but the benefit would not be
great, and it wquld eventually be much
more than offset by the decline in
railway efficiency which would de¬
velop as a result of curtailed earnings.
If transportation entered as much as
a tenth into the ultimate cost of a
product the farmer buys and if freight
rates were to be reduced radically, saj'
as much as 30 per cent, the benefit
to the farmer would be but 3 cents on
the dollar, which certainly would not
compensate him for the rum of the
railroads which it would cause.
now TO REDUCE FREIGHT RATES
The logical way, the only safe
way, to reduce transportation
charges is to reduce the costs of pro¬
ducing transportation. In ten years
railway freight rates have increased
about 54 per cent and passenger fares
have increased about 55 per cent. In
the same period the railway payroll
has gone up 100 per cent; fuel, 200
per cent; taxes, 150 per cent; loco¬
motives, at least 125 per cent; cars,
more than 100 per cent, merely to
mention the larger items. If these
costs can be reduced and traffic can
be maintained at a high level, then
freight and passenger charges can be
reduced—but I want to warn expect¬
ant railway patrons that the likelibood
of a large reduction at any time in
the near future is not great. For one
thing, it is exceedingly difficult to
force a reduction of the costs to which
I have referred, and the wisdom of it,
particularly in the case of labor, is
doubtful ; and, in the second place,
earnings should not be cut, since some
prosperity is needed by the railroads
to enable them to make good on their
program of construction and general
improvement now in progress.
Some of the critics of the railroads
advocate that freight rates should be
adjusted to the ability of the shipper
to pay, regardless of the cost of trans¬
portation. The present law provides
that rates shall be adjusted so as to
provide revenues sufficient to pay all
costs and leave a reasonable margin
of profit. These two theories may
come into sharp conflict when the
Congress meets this winter, and now
is a good time to ask which is correct.
A rate-making theory that takes no
thought of the cost of transportation
is wrong. Transportation must be
maintained whatever its cost. We
should have good transportation at the
lowest possible cost, it is true, and the
present rate-making theory provides
that rates shall be no greater than is
necessary to assure that satisfactory
transportation will be maintained. The
railroads are prevented by economic
conditions and restrictions imposed
upon them by the public from adjust¬
ing their costs to meet a reduced in¬
come, but agriculture, industry and
trade, on the other hand, can adjust
themselves to the conditions which
govern the cost of transportation.
Almost half of every dollar the
farmer pays the railroads is de¬
voted by the railroads to the pay of
their employes. The railway payroll
is thus responsible for about half the
rates the farmer pays. Labor also en¬
ters largely into the cost of railway
supplies. In this connection, it is ex¬
tremely difficult to understand the
mental processes of those who go
about the country promising the
farmer lower rates and at the same
time promising the laboring men of
the country higher wages.
When I figure that the farmer may
contribute as much as 20 per cent to
the freight receipts of the railroads.
10
that makes it necessary to regard him
as one j)erson out of five to whom the
railroad is indebted for the bulk of its
financial support. On the other hand,
I do not believe that the farmer can
figure that railway freight service con¬
tributes only a fifth to the value of his
crops. We must go back to funda¬
mentals. Efficient transportation has
made our country what it is today.
Without it, the commercial structure
of our country could not exist. With¬
out the railroads, markets for crops
would be limited in a way we can
scarcely conceive, but which were
painfully evident to our grandfathers
and great-grandfathers.
POLITICS vs. ECONOMICS
I LIKE to feel that the American
farmer has a fundamental sense of
justice which always stands him in
good stead and which has always
brought him safely out of his occa¬
sional ventures into radical politics.
I like to feel that he is capable, in the
long run, of seeing through quack
nostrums that are offered him in the
guise of political action to cure his
purely economic ills. I like to feel
that he places a much more substan¬
tial reliance upon good judgment in
his farming operations than upon at¬
tempts to regulate in his own favor
matters outside of his sphere. I like
to feel that he can rely upon himself
instead of upon Congress to pull him¬
self out of the occasional holes into
which he gets.
The railroads have come to see the
wisdom of placing more reliance in
their own good judgment and hard
work than in governmental attempts
to improve their condition. All that
they are asking at present is to be
permitted to make the showing of
which they are capable. They do not
feel that they have ideal regulatory
conditions under which to work, since
even the operation of the present
Transportation Act has allowed them
to go for years without a return that
could be called anywhere near com¬
pensatory. However, you will find in
the conduct of every railroad of any
consequence in this country today a
determination to show the public what
service means and to plan ahead for
the future in generous measure, in the
belief that the American people will
not let such efforts go unrecognized
and unrewarded.
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