Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1924-04-10
EXPOSES THREE
FINANCIAL FAKES
Politicians MisIead Public Re-
garding Corporations, Credit,
and Railroads, Says f.
N. Shepherd.
FALLAcIES MET WITH FACTS
Declares People viii Make Short
shrift of Those Who Deceive
Them When Aroused to Truth
of Own Interests.

thOtH fsHGU AFOQSCO ~ > tNAH
of Own Interests.
Three great Misrepresentation by
which certain politicians have adj
vanced their own interests at the ex-
pense of public welfare, were recently
declared by f. N. Shepherd, Executive
Manager, American Bankers Assocfa-
ton, in an address at Kansas City,
Missouri, to be the oft-repeated state
ments that "Wall Street" owns the
corporations, that the Federal Reserve
Banks Disseminated against agricul-
ture and debated the farmers, and that
there are seven billion dollars of wa
teri in railroad capitalization and
rates should be reduced accordingly.
What Facts Tell
In regard to the alleged ownership
Of the corporations by "WaH Street,
Mr.. Shepherd showed that the securi-
ties of American corporations are very
widely held by the people. The Union
Pacific, he pointed out, has over 1000
stockholders and the Pennsylvania
Railroad $4,000 stockholders, $1,000
of whom are women, with an average
ownership of AT shares each The
American Telephone and Telegraph
Company has 100000 stockholders,
10000 of whom are employees, and
the United States Steel Corporation
has $4,000 stockholders. According
to recent report of the Interstate
Commerce Commission, he said, Class
/ railroads have total Of 777,132
stockholders, there being, therefore,
practically as many owners of shares
as there are employees.
''The real capitalists OF America,
continued Mr.. Shepherd, "are these
and the bondhclders whose funds are
invested in securities through their
thirty million savings accounts, and
through their ownership of over II
million life and industrial insurance
policies. Once arouse these people to
the fact that it is their interests which
are being attacked through these mis-
representations and they will make
short shrift of those who deceive them.
Truth About the Federal Reserve
GAS to the Federal Reserve System,
instead of its discriminating against
the farmer, exactly the opposite is
true. During the period of greatest
decline in the value of agricultural
products, about which there has been
so much loose talk, rediscounts with
Federal Reserve banks in non-agricul-
tural districts actually decreased by
% per cent, but in agricultural dis
tricts rediscounts were actually in
creased by Sc per cent. The Federal
Reserve Banks of the big cities of Bos-
ton, New York, Philadelphia and
Cleveland poured into other Federal
Reserve Banks in agricultural dis
tricts literally hundreds of millions Of
dollars.
cas- to the alleged seven billions of
water in the railroads, a physical
valuation Of the railroad properties
has been under way for che past ten
years, as a result of the La Toilette
Act, conducted by a body of unpreju-
diced, non-political experts by whom
the valuation has been placed at $18,
10000 900. Although it has been Of
fcially stated, and reiterated, that, in
arriving at this figure, no considera-
ton whatever was given to capitaliza-
ton, carbohydrates men are still
deceiving the public, and particularly
the farmers, about the water in the
railroads. Railroad stock today is
not watered. Any possible fair scheme
of valuation today proves that our
railroads are worth from one to two
billion dollars more than their CAPT
talization.
No Railroad Income Guarantee
"Further, demagogues are telling
people that the railroad income is
Guaranteed. The Esch-cummins Act
does not guarantee any return to rail-
road stockholders, as the demagogues
constantly assert. BY its terms the
Act simply provides yard stick for
rate making, which is that a fair rail-
road rate is one which would show
= return of 5A per cent upon the ac-
tual Yalue OF the properly useu IL
transportation in a given territory.
"This provision bears no relation
whatever to railroad capitalization
and, moreover, no relation to individ-
nal railroads, some of which might
show earnings under such rate-mak-
ing provision in excess of six per cent,
and some much less. No considera-
ton whatever is given in the Act or
in the administration of the Interstate
Commerce Commission to railroad
capitalization or any return upon il"