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From the time this company took the lines in Iowa up to the present, the rates of transportation of freight have decreased one hundred.

per cent.

“I think the great difficulty at the present time is the fact of large crops, with an immense surplus, and no foreign demand to absorb it. This, together with the stagnated condition of manufacturing and mining interests throughout the country, lessens materially the demand, or the purchasing capacity of those heretofore engaged in manufacturing and mining pursuits.

"With this in view, how will a reduction of the present rates increase the value of farm productions? A reduction would only lead, in my judgment, to a reduction in price of the farm products at the markets of Chicago, Milwaukee, St. Louis, Peoria, and other centers. of trade.

“So far as our road in Iowa is concerned, we are perhaps less able to make reductions than any other line in Iowa. We have just closed our operations for a year, and in our accounts for the first ten months of the year the operation of the Iowa line has resulted in an absolute loss (to 1st November last) of sixty-two thousand, six hundred and ninety-nine dollars and eighty-two cents, and this will be swelled to nearly one hundred thousand dollars when our accounts are finally made up and closed to 31st December. We pay, as you know, thirtysix per cent on the gross earnings of the lines in Iowa, and this has to be paid without reference to wbat the rate of freight is; so that any reduction from present rates simply means so much more absolute loss to the Illinois Central Company."

The following letter from C. E. Perkins, President of the Chicago, Burlington & Quincy Railroad Company, is inserted in full.

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46 SEARS BUILDING, BOSTON, December 24, 1884.

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Hon. J. W. McDILL, Des Moines, Iowa:

My Dear Judge-I have your letter of the 17th, on the subject of grain rates. There can be no doubt of the truth of what you say, that “in the general reduction and shrinkage of values, transportation values will almost inevitably have to shrink too.” If corn will not move because of the currest rates of freight, it woull seem obvious that the rates ought to be reluced, in order to move the surplus crop, rather than see it rot in the bins, or used for fuel. If, as is probably the case, it is somewhat uncertain whether any reruction which the railroads could make, and save themselves, would move the crcp, it would nevertheless seem to be the part of wisdom.

to try the experiment, by making a small reduction to begin with, and following down, if necessary, even to the bare cost of moving it, or possibly below that point, rather than that the surplus crop should not move at all. The railroads have so vital an interest in the welfare of the community that they can sometimes afford to lose money, temporarily, if necessary, to help tide over bad times. Railroad prices, like all other prices, ought to be adjusted by experience-by feeling our way. Entertaining these views, I believe the managers of the railroads west of Chicago would have reduced the grain rates before this, if they felt that they could do so with safety to the properties they have in their keeping, but they reason in this way: they say experience shows that when a rate is once made, it can never be raised without exciting popular clamor. They say it is somewhat uncertain just now whether it is the railroad tariff, or something else, which is chiefly operating to keep back the shipments of com; whether any practicable reduction of the freight charge would bring the corn to market; they say, further, that even if we can move the present crop by making low rates, we may never get those rates up again, in the face of a popular belief that the lowest rate ever voluntarily made by railroads should be insisted upon as a permanent basis, and with these doubts we hesitate to try an experiment which may, in the end, cost us a great deal of money. We recognize, they say, the wisdom of meeting the market-feeling our way by a gradual reduction in the rates, but what we are afraid of is that when we get the rates down, in order to move corn at the present low price, the farmers will never let us put the rates back again, no matter what corn is worth.

The present situation, it seems to me, illustrates very clearly the evil consequences of a mistaken public opinion upon so important a question as this one of transportation. I remember two or three years ago, when corn was selling at a very high price, the freight rates were advanced on a certain railroad two cents per hundred pounds. The farmers were receiving good prices, and could well afford to pay this increase in the freight charge, but they said it was an outrage. They said the railroad could just as well afford to carry at the old rate then as it could the year before, when corn was not so high. They said it cost the railroad no more to carry corn when it was worth forty or fifty cents a bushel than when it was worth fifteen or twenty cents a bushel, and argued that the cost of the service, rather than its value, must be taken as the basis of the charge.

That is just what the railroads west of Chicago are afraid of to-day. If this fear could be removed, I do not believe there is a doubt they would immediately make a reduction in the rate. They would reason that the best way to find out how much of a reduction is necessary, what is the real value of the service, is to try the experiment; but, being afraid, they do lot, reason in this way. They say the experiment is too dangerous for us to try, at all events until we are perfectly sure what the value is, and that there is no possibility of iroving the crop unless we do make a reluction. They know, if the mil lic dcez not. that the expr?ss on “what the traflic will bear mearißi thai tev cauzoi charge nare times the trade will reasonably

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bear; that the value of the service is the true measure of rates. But they say, we must not be in a hurry; we must go slow; we are uncertain whether the present rate is more than the traffic can reasonably bear or not. It takes time to ascertain what is the value of the service. We know that the present rate is not one at which the railroads can make much profit, and we must move with great caution, lest we make a mistake, because the public will take advantage of any mistake we make, and insist next year, or the year after, if prices are better, that nevertheless the railroads shall not make any advance in their prices.”

I have been in the east for the last six weeks, and have had no opportunity to consult with our own, or other managers on the ground, and I say what I do, therefore, as being only my owa opinion. I am personally in favor of trying the experiment of a reduction, because I believe it is good business policy to meet the market, but inasmuch as the value of the service is the proper measure, I should do so with the intention of raising rates again if or when the service is worth more. Yours truly,

C. E. PERKINS.

The Commissioners are glad to report that the various railroad companies have by agreement, reduced the rates on grain to Chicago, Peoria, Beardstown, St. Louis and East St. Louis, from stations on the Iowa divisions to and including Creston and corresponding points, three cents per hundred weight. Reductions east of Creston and corresponding points are now being considered.

A result reached so pleasantly cannot fail to be a matter of congratulation. Nothing has ever been done in railway matters in the State which has proven so satisfactorily to the public a proper appreciation of the common public good by the railway officials as this reduction of rates. Many thoughts presented by the managers in the letters and extracts of letters herewith presented are worthy of much consideration. The cause of the general depression should be known and the various reasons given therefor should be well weighed.

If it shall appear that in spite of the reduction low prices continue, it may well be claimed that transportation rates were not the cause, certainly not the sole cause of the depression.

Attention is called to Mr. Perkin's statement that a few years ago when one of the railroad companies sought to advance rates on account of high prices of grain it was claimed by the public that the “railroad could just as well afford to carry at the old rate then as it could the year before when corn was not so high,” and to his statement that the officials of the railway fear that if the rates are now reduced they could never, without trouble, be raised even under changed circumstances. Those who argue that the price of carriage should be reduced on account of low price of products without reference to other circumstances, would seem to be logically driven to concede that when prices advanced, rates should also advance. The Commissioners do not, however, endorse either position. They held in the case of Township Trustees of Red Oak vs. Chicago, Burlington & Quincy Railroad Company (Commissioner's Report of 1882, page 556) that "from the standpoint of the carrier's interest it is needless to make a rate less than what is fair and reasonable,” and that “from the shipper's standpoint the rate should not be more than fair and reasonable.” The Commissioners still believe the position to be correct. A proper rate is neither more nor less than a reasonable rate, and when all controlling circumstances are considered, the real value of the service rendered constitutes a reasonable rate.

A consideration of all the circumstances is a task extremely difficult, but not impossible. There does not seem to be properly a partnership between carriers and shippers or producers by which profits and losses are to be shared, yet in the end reduced prices and values must affect all industries having any relation whatever. In all cases in the future as in the past, the Commissioners will labor for reasonable rates, insisting as against the carrier that it shall not be more than reasonable, and as against shipper that it shall not be less than reasonable. The same sense of justice that would demand the reduction of a rate that is higher than reasonable, would equally demand the increase of a rate that is lower than reasonable.

CAPITAL STOCK.

The total number of miles of railroad in operation in Iowa reported by the companies to the Board is seven thousand two hundred and forty-nine and twenty-five one hundredths.

The report of the capital stock and debt is based on the entire line of the roads which run into other States. These lines are twentyone thousand one hundred and fifty-four and thirty-two one hundredth miles in length.

The Commissioners estimate the stock of these roads representing the portion of them in Iowa, added to the stock of the roads entirely in Iowa, amounts: broad gauge roads, to $147,795,353.75 or $20,408.37 per mile; the narrow gauge roads, $1,279,862.40 or $6.281 per mile. The total number of stockholders living in the State is returned as seven hundred and forty. The total amount of stock reported as owned by persons living in the State is $8,620,341.41. The narrow gauge roads owned by the Chicago, Milwaukee & St. Paul and the Wabash, St. Louis & Pacific Railways are not reported separately and are included in the estimates of the broad gauge lines—this mileage however is not large.

DEBT.

The total debt of the roads in Iowa, as reported and estimated by the Commissioners, is: broad gauge, $122,415,050.11 or $17.601 per mile; of this amount, $117,881,169.37 is funded debt; $4,533,890.74 is unfunded or floating debt. Narrow gauge is, $1,410,298.89 or $7.270 per mile of road; of this $1,355,500 is funded debt; $54,798.89 is unfunded, or floating, debt.

STOCK AND DEBT.

The stock and debt of the roads in Iowa amounts to $273,007,694.16 or $37,661.29 per mile.

The following table shows the amount of stock and the amount of debt per mile of each company, as the returns were made to this office:

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