from the domestic animals of the farm, they should be kept up in high condition. A dairy animal in order to give the best returns must not only be kept the most comfortable possible, but at the same time be most abundantly fed. In other words, every animal on the farm, in order to give the highest returns, must be kept in a constantly thriving condition. Here in Iowa it is now well understood that in order to make farming profitable, not only must there be attention given to stock raising on the farm, but those animals must be in the best possible condition at all times and constantly thriving. The farmer that shelters his cattle in winter under the lee side of a barbed wire fence, and compels them to seek food from the stormswept corn stalks and old straw stacks, is the man whose voice is heard the loudest while sitting on dry-goods boxes in the towns, telling that farming don't pay in Iowa, and that corporations are oppressing the people.

Applying this, all the territory any railway may have, good though it may be, lying along its line, would be utterly worthless for revenue to it, unless it had settlers. The more advanced and the more numerous and prosperous those settlers, the more could they patronize the railway. Any system of rates that takes an undue share of the farmers profits from his year's work must in the end impoverish the man, and make him not only an unprofitable customer of the road, but an enemy as well. If, for example, a railway company takes from a producer in western Iowa $80.00 for hauling a car of grain to Chicago because it may have the power to so do, when fifty to seventy-five per cent of that sum would more fairly divide the profits between producer and carrier, such a company might be well compared to the farmer who shelters his cattle under a barbed wire fence and feeds his dairy cows on straw.

We are not saying that $80.00 is too much, or that $40 or $60 per car is enough. We are using these figures for illustration. There is no smoke unless there be some fire. There is a great deal of general complaint because railways do charge from $60 to $80 from western Iowa, when it is understood that cars from points still further west are taken right by their doors to some eastern point for considerably less. It is a difficult matter to convince the average farmer that has toiled the whole year and has as a result two cars of corn as a surplus which he can spare, that it is on the principle of "live and let live" that he must give one of these cars of corn, which may represent the profit of a years' work, to the transportation companies

and commission men to get the other sold in Chicago. Take a young farmer on the Missouri bottoms for instance. His means are limited so that he is obliged to begin his life as a renter. He raises say 3,000 bushels of corn. One thousand bushels of this he must give to the landlord for rent, and under present prices and rates he must substantially give one thousand bushels of the balance to the carrier to take the remaining one thousand to market. We confess we know of no process of reasoning by which that man can be satisfactorily convinced that this state of affairs is just. He and all like him feel that he is giving to the transportation companies the lions' share of the fruits of his toil. Such a man feels that he gives to others the kernel, while he must be satisfied with the husks.

If there is reasonable ground for these complaints, the result must be disastrous to all parties interested, and in the end the farmer becomes discouraged, the farm neglected and unimproved, the railroads losers, business and general stagnation rules. As these carloads of farm products go, as a rule, across the State line, and so become inter-state commerce, we as Commissioners, under the late rulings of the United States courts and under the continuous ruling of our Supreme Court, however much we may differ from them, we are utterly powerless and so is the legislature of the State. The only thing left for us to do is to make the showing we do, and to suggest to railway managers if it is not an unwise thing to do to thus kill the goose that lays the golden egg? This comparison and illustration with its application may at first blush seem too severe, but we submit this: Is there not too much reason for it? Can railway companies afford to allow, when in their power to prevent it, any community along their lines to become either impoverished, or even stationary in its reach after prosperity? So Intimately and inseparably bound together is the interest of the producer and the carrier, that they never can be antagonistic and prosper for any length of time. For some two years or more past, the farm interest of this State has been greatly depressed. We as a State were turning our attention very rapidly and largely to dairying and stock raising.

The advent of bogus butter cut the value of dairy stock right in two by the middle. The prices of farms were depressed at the very least 25 per cent. The prices of all other neat cattle and hogs fell off in about the same ratio. Everybody was discouraged. Still, under all these discouraging circumstances railway stocks and securities not only held their own, but enhanced in value, and to-day at this

writing it is decided by those who have it in charge to increase the rate from Chicago to tide water five cents a bundred on grain. While it is true this last is being done by lines outside of our State, yet we here in Iowa, as far as we are the raisers of that grain, have to pay this additional charge. This additional five cents is so much off the price here. The present condition of the agricultural class in this State is somewhat abnormal. Owing to the recent unprecedented drouth, some portions of the State have none or very little corn, not enough for home consumption. In other parts where timely rains saved this crop, they have a large surplus. In these places and in parts of Nebraska corn is very low. In the portions of the State where the crop was short farmers want to buy from the west part of the State or in Nebraska, but they complain that they can get no rates from the railways that will justify them in buying. They say the railway companies charge them as much for a car of corn from the western part of the State or from Nebraska, as is charged from those places to Chicago, or so nearly so, as to create in their minds a feeling anything but pleasant toward the transportation companies.

In

The point we wish to make is this: There can never be a permanent peace and good will between the transportation companies and the people they serve, only as rates are made to sympathize in some proper degree with the circumstances and conditions of the people. The objection raised against this by railway managers is that if they reduce rates in times of depression, they never can raise them in times of prosperity; that the people will never consent to higher when they have lower rates. This objection we do not consider well taken. In one and a very important sense too, the people and the stockholders are partners in the ownership of the road. a measure the railway belongs to the public. That public allows the other partners-the stock owners-to run the road and take their pay for what work they do and for what they have invested from the profits of the business. In many instances it is a question who have given the more toward the creation of a road, the public or the stockholders. There is no good reason why these partners should not have an equitable share in the profits and conveniences of the road. The public is willing to take its part of the profit in the facilities the road was designed to give; the stockholders take theirs in the dividends. We have yet to learn of a community that was unwilling to allow a fair per cent on the money actually invested. There have been poor investments both by the public and individuals,

and in such case both the public and individuals generally suffer alike. But on the main trunk lines in this State the causes would in our judgment be rare where a rate that would be in sympathy with the depressed times as they often come, would not pay a fair per cent to stockholders on the investment. If some boards of directors have allowed themselves, as is openly charged in the public prints and by public speakers, to dilute with water their stock as a thin disguise to cover up from the eyes of the other partners-the public-the amount of profits they were making, now find they are reaping difficult harvest from such sowing, the directors and not the people are the ones at fault.

As said by the Hon. Charles Francis Adams before the Senate Investigating Committee-Senator Cullom, Chairman: "I do not for a moment deny that many railroads have been over-capitalized; it is equally clear to me that they will have soon or late to pay the penalty for it."

In this connection we are ready to admit that often, where there is a rate made that comes nearly if not quite up to the line of extortion, the fault may lie back beyond the managers of the road, and in some case's back of the directors themselves. The real trouble has been pointed out in a former report. It is this absenteeism of ownership of railway stocks. Men far from us who know but little of our situation, or, if knowing, may not have much in sympathy with us, provided they get their dividends; men foreign from us and our interests control the election of directors, and these directors, obeying the wish of those who elected them, control managers and lay down rules for their guidance.

While we are willing to make this excuse for railway managers, we would at the same time respectfully ask if the history of railway combinations, or what is commonly called pools in this country, does not go a long way toward destroying public confidence in the integrity of railway management. It would be a very desirable thing if the general public understood more fully the real intent, the true nature and meaning of a railway pool and their effects upon trade and commerce. Competition and equality have already been sufficiently discussed in preceding pages of this report.

The "pool" was primarily for the purpose of counteracting the disastrous effects of competition run wild. William K. Ackerman, ex-President of the Illinois Central Railroad, states, on page 601 of the Cullom report: "I do not know that any better explanation can

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be given of the word 'pool' than that it is simply an effort to maintain rates and to distribute the business between two or more lines." On page 1204 of the same report, Charles Francis Adams, ex-State Railway Commissioner of Massachusets, and now President of the Union Pacific Railway Company, says: "Pooling, as I regard it, is a mere makeshift; it is an attempt on the part of railways to hold in check a natural law which would result in the survivalship of the fittest." Further down the same page, Mr. Adams uses this language in reference to this same matter: "It is to prevent that law of the fittest working with the force with which it would naturally work, and it was the dread of being wiped out of existence by that law which caused railroads to have recourse to what is known as pooling, which is merely an agreement to establish and maintain rates, and to divide the business as nearly as possible as it would naturally flow. Pooling is a makeshift and cannot last. It is an attempt to set aside by agreement the natural law of the survival of the fittest."

The general impression outside of railway circles is that pooling is a plan by which an unreasonable rate can be maintained at common points. By the admission of railway men themselves, this is a failure, because railroad men do not keep faith with each other.

The same authority above last quoted says, on page 1205 of the same report: "The pooling system, as represented through Col. Fink's organization, has broken down, at any rate for the time being. The pooling system depends upon confidence among railroad men that they will maintain faith with each other and observe their agreements. Unfortunately there has been no time in the history of the railroads of this country when among railroad managers the want of faith and confidence in each other was so great as to-day."

Again on page 1206 Mr. Adams says: "The effect of pooling has been to equalize and steady rates. It has never been able to hold the rates up."

When asked by Senator Cullom what remedy he would recommend for the deplorable state of affairs among railroads, caused by this continued breaking of agreements among railroad managers, and often saying that "nothing has saved the railroad companies from bankruptcy before this but the fact that Bessemer had discovered the steel process," replied: "I don't know. That is indeed a conundrum. I have not seen the gentlemen responsible for the so-called trunk lines for several months. When I did see them last they were assem