The Nonpartisan Leader Newspaper, September 6, 1920, Page 3

-~ "IN THE INTEREST OF A SQUABE DEAL FOR THE FARME! Enter: Minaespolis, Publlc-tlon "address, 427 Sixth avenue 8., Minneapol inn, Address all remittances. to The Nonpnrumm Leadér, Box 2075 Minheapolis, Minn, VOL 11,,NO. 7 : tered as second-class matter at the postoffice at I I : nbal llga“ I&de[ Minu., ander ‘the. act of March 3, 1879. lis, Official Magazine of tlle Nahonnl Nonpartisan League—Every Two Weeks 3 ER S. MORRIS, Editor. MINNEAPOLIS,‘ MINNESOTA, SEPTEMBER 6, 1920 A MAGAHNE THAT DABES TO PRINT THE TRU One year lnudvunce 82 50 six mnn'.hs $1.50, Clas- other adverushm rates on npplicn'.lon Member Audlt Bureal Circulations, 8. C. Beckwith Special Agency, ndver sing represen- tatives, New York, Chicago, St, Louls, Kansas City. WHOLE NUMBER 254 The Railroad Grab—What It Means with the recent rate award to the railroads by the inter- state commerce commission, the result is astonishing. ,Any way you figure it, the Amerxcan people have been made the victims of the most stupendous ‘steal” in the history of public utility cor- porations. The government has been committed, through the Esch- Cummins law, to a policy of guaranteemg prlvate owners profits, without any guarantee of efficient service. The railroads are to be permitted to earn 6 per cent profit on a valuation of $19,000,000,000, or something over a billion dollars in profits a year. Thls 19—b11hon valuation is two billions in excess of the par value of all railroad securities outstanding in the hands of the public. Tt is seven billions in excess of the actual market value of all railroad securities outstanding in the hands of the public. The valuation granted the railroads is only slightly less than the valuation they demanded. Their demand was that they be per- mitted to earn 6 per cent on their “book value,” roughly 20 billion dollars. This book value, practically what the interstate commerce commission-has granted them, is simply their actual cost or “prop- erty investment.” In other words, the valuation fixed by the .com- mission virtually assumes that there has been NO DEPRECIATION in the value of railroad equipment since it was first purchased. They have assumed that all cars, locomotlves, rails, ties and every— thing else are brand new, as though put in use yesterday. To fix such a valuation is flying in the face of a decision of the . United States supreme court, which has said that the TRUE value of a public utility can not be reached except by diminishing the cost of reproduction “by the depreciation which has come from age and use.” The valuat-ion decision is furthermore in direct opposi- ‘ N THEN one commences to do a little figuring in connection S WAGES AND FREIGHT RATES \HE expected has happened. With the aid of the big busmess press.and even some alleged farmers’ organizations like the Farm Bureau federation, the rallroads and the opponents of government ownership are trymg to convince the public that the raise in wages granted railroad workers has in- creased the cost of living to a staggermg extent. This is in spite of the fact that the rate increase: granted is THREE TIMES as much as is neces- sary to make-up for the increased wages the labor unions have obtained from the roads and that a cool billion dollars a year will be exacted from the public to pay railroad PROFITS. Not a CENT of this BILLION is to pay WAGES, as Leader arti- cles have shown. We have also pubhshed an article from our ‘Washington bureau showing just what the wage increase actually means to the public. This knocks into the cocked hat the:argument of those who are attributing the new high railroad rates to labor, and ex- poses the attempt of the railroads to get vast fare and. freight increases to cover what, in fact, is compara- tively a paltry, though absolutely fair and necessary, mcrease in wages for the workers. Just what do the new wages mean? In cold figures the increases granted to labor will add just 20 -cents to each $100 worth of goods shipped over the roads. A $30 suit of clothes shipped from Chicago to Los Angeles in 1914 paid just 1614 cents freight. A similar suit in 1919 was worth $50, and for the same haul paid in freight rates 22 cents. Labor got 8 cents out of this 22 cents. So that had the railway wage board DOUBLED the pay of railroad workers, it would only have cost the buyer of that suit of clothes 8 cents more. ‘But the chances are that, with higher wages to railroad workers and higher freight rates as an EXCUSE, every agency that handled that suit of clothes from the manufacturer to the wearer’s back would have added to the price of the suit, and very likely the consumer would have paid $5 more for the clothes to cover the 8 cents more which labor got. For this big business, and not labor. is responsible. But the wage board did not DOUBLE rallroad wages, as the above argument assumes. The actual raise granted was only 22 | BETTER TIMES COMING I ‘—Drawn expressly for the Leader by Ww. C. Morns. Wltl\ Doctor Ladd in the senate, helping out the Leaguers in the house of representatives, the plain people of America will have a better chance of just government than they have had in the past, Morris believes. tlon to the precedent of the interstate commerce commission itself, which, in a report to congress in 1908, said: ; No court, or commission, or accountant or financial writer would - " for a moment consider that the present balance sheet statement pur- porting to give “the cost of the property” suggests, EVEN IN, A RE- MOTE DEGREE, a reliable measure either of money invested or of present value. The capitalization is ours. While in.1908 the commission saic’ that “the cost of the property” (the “book value” or “property in- vestment”) does not suggest, “EVEN IN A- REMOTE DEGREE,” the present value of a public utility, the commission now practically accepts the cost of the property, or book value, as correct. The book value was roughly 20 billions; the commission granted 19 billions. And all this is aside from the fact that the commission did not set any standard of efficiency for the railroads to live up to. Nc effort was made to make rate increases contingent on the railroads DELIVERING THE GOODS. It was within the power of the com- mission to order a pooling of ticket offices, of cars and equipment. of terminals, and otherwise require unified, efficient operation. They should have told the railroads that positively all the increase they could have AT THIS TIME was enough to cover increased railway wages; that, should they be able to show they could not make fair profits AFTER PUTTING INTO EFFECT EFFICIENT OPERA.- TION, then a further rate raise would be awarded. If this had been done, probably little, if any, rate increase would have been neces- sary. The roads would have made their profits by increasing theix efficiency. As it is travel has practically become prohibitive, and ev- . ery American family has been assessed $50 per year to pay railroad profits on the basis of inefficient operation and inflated valuation. . per cent, so that the increased freight rate on that suit of clothes ; to cover "the increased wages actually adds less than 2 cents to the price. But it is a safe guess that when you buy your new suit of clothes and kick on the price you will be told that the greed of or- ganized labor is to blame. All this is merely a repetition of the case of the farmer. Let him get a necessary and badly needed increase in the price of farm products, say an_increase in the price of wool that adds maybe 25 cents or even $1 to the price of that suit of clothes, and everybody down the line of handlers "adds a dollar or two to the price, until the con- sumer pays maybe $10 more for the suit, to cover the $1 more the farmer got out of it—and to Mr. Farmer’s rapacity and profiteering is attributed the blame for the whole increase. LADD FOUGHT FOR FARMERS ERBERT HOOVER, wher . food administrator, was crit- 7 icized because he had arounc him too many representatives of big " business~ and too few representa-’ tives-of the farmers. But there was one representative of the farmers who was always on the job. This was Doctor E. F. Ladd, president of the North Dakota Agrlcultural college. Doctor Ladd was first appoint- ed on the price-fixing committee for wheat, where he put up a plucky fight on behalf of the growers, succeedlng in beating a proposal to fix the price at less than $2 and getting instead the $2.20 standard. He was later appointed federal food administrator for North Da- kota, serving throughout the war. Mr. Hoover had good opportunity for observing Doctor Ladd’s work. Following Doctor Ladd’s victory, in the North Dakota primaries, for the Republican nomination for United States senator, Mr. Hoover sent him the following telegram: Palo Alto, Cal., August 5, 1920. Doctor E. F. Ladd, Agricultural College, Fargo, N D.: Iwas glad to hear of your, selectlon Your able and honest advocacy of the agri- cultural . mterests during the war won for you the admiration of all - who came in contact with you at Washington. With your real knowl- edge of agricultural problems, both in their local and their national aspects, your election will be a real contribution to the ability of the senate to deal constructively with these matters. HERBERT HOOVER. . PAGE THREE AR Y PR TR S