The northwestern bulletin-appeal., 1924-09-20
EXPOSES THREE
FINANCIAL FAKES
Politicians Mislead Public Re-
garding Corporations, Credit,
and Railroads, Says F.
N. Shepherd.
Declares People VIII Make Short
Shrift Of Those Who Deceive
Them When Aroused to Truth
of Own Interests.

Three great Misrepresentation, by
which certain politicians have ad.
vanced their own interests at the ex-
pense of public welfare. were recently
declared by F. N. Shepherd. Executive
Manager. American Bankers Assocfa-
tion, 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
ter" in railroad capitalization and
rates should be reduced accordingly.
What Facts Tell
In regard to the alleged ownership
OF the corporations by "Wall 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 $4,000
stockholders and the Pennsylvania
Railroad 147,00o stockholders. $1,000
Of whom are women, with an average
ownership Of AZ shares each. The
American Telephone and Telegraph
Company has 100000 stockholders.
10000 of whom are employees, and
the United States Steel Corporation
has 174,000 stockholders. According
to a recent report Of the Interstate
Commerce Commission, he said, Glass
I railroads have q 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 bondholders 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 t.
the fact that 1t 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
"As 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 56 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.
"As to the alleged seven billions of
water in the railroads, a physical
valuation of the railroad properties
has been under way for the past ten
years. as result of the La Toilette
Act, conducted by a body of unpreju-
diced. non-political experts by whom
the valuation has been placed at $1S,-
800 900 900. Although 1t has been of.
icially stated, and reiterated, that, In
arriving at this figure, no considera-
ton whatever was given to capitaliza-
tion, politically-minded 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 capi.
talization.
No Railroad Income GUARANTEES
Further, demagogues are telling
people that the railroad income IL
guaranteed. The Eseh-cummlns Act
does not guarantee any return to rail.
road stockholders, AZ the demauoeues
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 5X per cent upon the &C.
tual value Of the property used in
transportation in a given territory.
"This provision bears no relation
whatever to railroad capitalization
and, moreover, no relation to individ-
ual railroads, some Of which might
show earnings under such a rate-mak.
Ing provision in excess Of six per cent,
and some much less. No considers.
tion whatever 10 given in the Act or
In the administration Of the Interstate
Commerce Commission to railroad