railroad grants which the Government immediately raised to $2.50 per acre as soon as grants to railroads were made; and, secondly, because the building of the railroads into the sparsely settled areas of the country led to the repeal in 1862 of the Graduation Act of 1854 which had permitted the sale of public lands below $1.25 per acre minimum. But even accepting for the purpose the average of 942 cents per acre received by the Government during the period from 1850 to 1871 as the value of the land donated to the railroads which later could only have been worth approximately $125,000,000 instead of $762,000,000, as claimed by Mr. Reilly, the Government saves by reason of the land-grant deductions from the regular commercial rates about $5,000,000 per annum; therefore, these early grants to the railroads bring back to the United States their maximum sale value every 25 years, and this goes on forever.

It is quite true that the railroads did receive some $374,000,000 for granted lands later sold, but most of this land was sold years after the original grants were made, and the added value was given to such lands by the railroads themseves. In other words, the existence of transportation gave value to the lands; in like manner the existence of transportation gave added value to the remaining lands of the Government, and the latter profited greatly thereby.

With regard to placing value on retained lands at prices prevailing some 50 or more years after the original grants were made, it will probably suffice to say that back in 1803 the United States purchased from France 530 million acres of land at a cost of about $27,300,000, known as the "Louisiana Purchase." It would be absurd to say that because these Louisiana lands are today worth many hundred times the original purchase price, we should now come forward and pay France for this tremendous increase in the value of the land, or that the added value should be termed a subsidy, and yet that is precisely what Mr. Reilly endeavors to do in connection with his statement filed with the Senate committee.

In brief it may be said respecting the early land grants of the Government that each side of the bargain gained value and each side received value. On the part of the Government, it received reduced rates in perpetuity on Government traffic, including troops, materials, and mail moved over land-grant lines, and over other lines that meet land-grant rates for competitive reasons, and that this concession amounts to about $5,000,000 per annum; it increased the salability of retained public lands contiguous to granted lands, at prices which were double the maximum price of other public lands; and last it gave impetus to national expansion and development. On the railroad side the land grants supplied tangible security upon which to raise necessary construction funds; they had a speculative value, if held for a period of years after construction of the line; and provided a reserve with which to meet the almost certain deficits of early years of operation, keeping in mind in connection with the last statement that the areas in which public lands were located were wholly undeveloped.

No such similar situation can be found in connection with the waterways. In the first place ample transportation facilities are already available, and new and additional facilities simply means the diversion of traffic from existing forms of transportation; furthermore, while in connection with the railroads, the Govern ment suplpied cheap land only and the railroads themselves built, and thereafter maintained, their highways, with the inland waterways the Government has not only paid for all of the improvements, but has also maintained the locks, dams, channels, etc., without cost to the users thereof.

STATEMENT OF FRED BRENCKMAN, WASHINGTON REPRESENTATIVE THE NATIONAL GRANGE, WASHINGTON, D. C.

Mr. BRENCKMAN. My name is Frederick Brenckman, and I represent the National Grange.

The farmers are both producers and consumers. They are unusually affected by the cost of transportation. Without it they cannot market their crops. When freight is too costly the proceeds of their crops are eaten up. And they pay the freight in the price of everything they buy. Many farmers have of late been removed from the consumer class and are on public relief because their crops sell for less than the cost of production.

High freight costs are not the only thing which impoverishes the farmers, but they are an important item. If we are to have any

measure of permanent farm relief, particularly in areas far removed from the sea and from great consuming centers we must have the lowest possible freight rates.

Railroad rates have not been reduced with the reduction of the prices of commodities. They are much higher than they were before the war. And the railroads claim they must have more revenue in order to meet their requirements and recently asked the Commission to allow them to further increase their rates on many things which we produce and consume.

In order to relieve themselves of high freight costs farmers all over the country have bought trucks to haul their goods to market. Many of these farmers haul back goods for the local merchants and reduce their costs. We have protested against the provisions of the motor-truck bill which would interfere with that operation.

This bill would permit the Commission to limit the services and raise the rates of boats and barges on the lakes and waterways of the interior and on the high seas. We are opposed to all this legislation in principle. Some of the farmers' cooperative organizations use these cheaper services on the rivers and the savings are credited to them in the returns on their produce, or it enables the cooperatives to pay a higher price directly.

In the South the freight on cotton has been reduced from a third to a half since the trucks began to haul the cotton to the rivers and deliver it to the barges. It has caused the railroads to reduce their rates where this competition has been felt.

Many thousands of bushels of corn have moved down the Mississippi River and through the Panama Canal to the Pacific coast in the last 2 years at lower freight cost than by rail directly across the continent. Corn has been bid up all through the Mississippi Valley through this competitive buying.

It has been explained that it is not the intent of this legislation to raise rates either by water or by rail. We are told that the purpose is to stabilize freights and prices.

In our experience prices are never stable. They change daily with every fluctuation of the demand and the supply. The only possible effect of this legislation will be to raise the cost of transportation. Prices will fluctuate just the same, but with every increase in freight we will get less for our produce and pay more for what we are compelled to buy.

We know that the railroads want this legislation. They have been trying for 5 years to create a public demand for it. They say the waterways have an unjust advantage because they are regulated and the waterways are not.

If any change is necessary in the existing order of things to bring about equal competitive opportunities, we favor the elimination of some of the restrictions on the railroads which were necessary when they had a monopoly of land transportation, to put water transportation on the same level as rail transportation.

There are millions of tons of grain moved over the waterways of the country, and the boats carry fertilizer, farm supplies, machinery, and many other commodities, all at much lower rates than could be had by transporting these commodities by rail. There is no public demand whatever for this legislation and the farmers are opposed to it, and, for that reason, we hope that the bill may not be reported by

the committee. If it is reported by the committee, we hope that it may be defeated.

The CHAIRMAN. Have you a brief you want to file?

Mr. BRENCKMAN. I have no brief.

Mr. MANSFIELD. You are not in favor of this bill?

Mr. BRENCKMAN. No, sir.

The CHAIRMAN. Have you any brief?

Mr. BRENCKMAN. These papers I have are simply some notes I have, which are not to be inserted in the record.

The CHAIRMAN. If you do want to file a brief, you may file it in the next few days.

Mr. HOFFMAN. You favor lower rates?

Mr. BRENCKMAN. Yes, sir.

Mr. HOFFMAN. Are you in favor of taking it out of the wages of the men who are operating the railroads?

Mr. BRENCKMAN. We are not in favor of reducing the wages of anybody. We simply feel that we have a right to the lower freight rate obtained by water transportation.

Mr. HOFFMAN. You have got to get it somewhere.

Mr. BRENCKMAN. I do not see why we should deliberately destroy the inland waterways. We ought to have lower freight rates.

Mr. HOFFMAN. I agree with you that the farmers ought to have lower freight rates.

Mr. BRENCKMAN. The lowest possible freight rate, consistent with other people having a living at the same time.

Mr. HOFFMAN. Let me ask you this: If you are going to have a lower freight rate, you will have to cut the cost somewhere. Where would you cut it?

Mr. BRENCKMAN. I am not speaking about individual freight rates. I am opposed to the regulation of rates on the water routes.

Mr. HOFFMAN. I understood you to say that you wanted lower

rates.

Mr. BRENCKMAN. No. What we are opposed to is the idea that the water-transportation rate should be raised so as to make it easier for the railroads to compete.

Mr. HOFFMAN. I think I have a letter from your organization stating that you favor regulation-at least from some farm organization-of busses, but not of trucks.

Mr. BRENCKMAN. Well, now, then, we think that there is some little difference between the proposal that motor trucks shall be regulated and the proposal that busses shall be regulated, because truck transportation-I mean bus transportation-is in the form of a national system, and the different parts are interdependent; and it appears that the operators of the busses really want regulation. If they want it, why, we do not care. But we are opposed to regulating the motor trucks, especially if the purpose is, as in this instance, simply to raise rates on goods that are carried by trucks.

Mr. HOFFMAN. Your organization does not favor any regulation of trucks at all?

Mr. BRENCKMAN. Well, we are in favor of the kind of regulation we have got now. We feel that there ought to be reasonable regula

tion.

Mr. HOFFMAN. You mean by the States?

Mr. BRENCKMAN. Yes, sir; but we have not been in favor of the Federal regulation of motor-truck transportation.

Mr. HOFFMAN. Well, for instance, here over in the southwest side of Michigan, and on up the west side, the district I come from, they ship potatoes and apples and fruits of all kinds into Chicago and south. There is a motor truck line operated up in there by the Goodrich Transportation Co.

When our trucks get into Chicago, they are met with the contention that they have no right to get in there and that we cannot get into the market without paying a fee to some organization or union in Chicago. If we do not pay it and this has actually happened-they will ram our truck with another truck and destroy it; and we have no remedy in the Chicago courts, which will not take any action to protect us. With all due respect to the gentleman from that State, we have no remedy in the Chicago courts and it is absolutely hopeless. Should not there be some protection for the people of Michigan who bring their products into Chicago by truck?

Mr. BRENCKMAN. You mean that the Michigan trucks cannot get the protection of the Illinois authorities?

Mr. HOFFMAN. I mean to say that the State has given no protection whatever and that we either have to pay a fee to some organization or union over there or have serious trouble, have our trucks destroyed. Mr. BRENCKMAN. Well, now, that is a local condition with which I am not familiar.

Mr. HOFFMAN. Well, I can show it to you. Are we not entitled to protection? We do not get it.

Mr. BRENCKMAN. Certainly, those trucks are entitled to protection. Anybody would say so. Yes, indeed. But I do not know that such a situation as that would warrant us in subjecting the whole system of motor-truck transportation in interstate commerce to Federal regulation, when there is no demand for it.

Mr. HOFFMAN. Personally, I do not favor Federal regulation of anything that can be avoided. But, when these trucks go through there, they use our highways and do a great deal of injury to them. For instance, in our little town, 23 miles from Lake Michigan, where I live, they come through there, on a little hard road, and every spring and fall they cut that road to pieces. It is a State road. The Federal Government and the State government, or both, will have to build a good road and a big bridge to accommodate the Goodrich Transportation Co., which operates these big trucks. Cannot something be done about that?

The CHAIRMAN. Are there any further questions?

Mr. Brenckman, will you just state what your organization is, and the number of units comprised?

Mr. BRENCKMAN. The National Grange is a national farm organization and has been in existence for more than 65 years. We have State units in 34 States and our present membership throughout the country is 800,000.

The CHAIRMAN. Mr. Gray, we can hear you for a short time now.

STATEMENT OF JAMES H. GRAY, WASHINGTON REPRESENTATIVE OF THE AMERICAN FARM BUREAU FEDERATION

The CHAIRMAN. Will you state your name and whom you represent? Mr. GRAY. My name is James H. Gray. I am Washington representative of the American Farm Bureau Federation.

Perhaps I can give the committee a birdseye view of our approach to the type of legislation contained in the pending bill by reading a portion of the last resolution passed by the American Farm Bureau Federation on the general question of the coordination of transportation.

I shall not read it all because half of it relates to motor transportation, motor-truck transportation, which is not the immediate issue before this committee; but I do notice that the members of the committee and the witnesses can hardly keep off of it, because it relates so directly to other types of transportation.

The CHAIRMAN. You may put whatever part of it you want in the record.

Mr. GRAY. The extract which I want to read is as follows:

The United States now has four main transportation facilities, railways, highways, waterways, and airways. Competition between these methods of transport as to rates and services must be maintained else our citizens will be compelled to pay freight and passenger rates of the highest cost transport method and to receive services from all methods of transport no better than the most inferior method can supply. No one transport agency should have its methods, rates or services by law or regulation, imposed on other transport agencies.

It may be reasonably expected that if all transport agencies are so thoroughly coordinated that their supervision is placed under a single Federal regulatory agency, inevitably the trend of event will be to remove all competition between and among the different types of transportation agencies.

Just by way of brief explanation, that extract means that the American Farm Bureau Federation is not in favor of putting any two methods of transport under any one Federal regulatory agency, whether it be the Interstate Commerce Commission, the Department of Commerce, or any other new agency that might be set up.

If you want railroad reglation, it is all right to keep it under the Interstate Commerce Commission. If you want one or another type of water regulation and it is public policy to have that method regulated, do it under another agency. If the motor truck, for instance, and the motor vehicles generally need regulation, as they do in slight part, then let that new method of transportation be regulated separate and apart from the other and competitive methods of transportation.

Now, inasmuch as some members of the committee have just recently asked about motor trucks and motor vehicles generally, may I deviate from the pending bill to say that the motor vehicle does need regulating. It needs regulating for public safety. It needs a Federal law which will, so far as dimensional requirements are concerned, the length of the vehicle, trailers allowed, tonnage per wheel base, length, height, and things of those nature, be determined, so that, they being determined, under Federal law, the States soon will adopt the same or similar specifications and will have the public safety provided for and will have the public highways protected against tearing up by excessive loads, as is too much the case at the present time.

The CHAIRMAN. If we go too far into the question of highway transportation, we will get away from the waterways.