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and computed the cost, as represented by the average opinions of these men. The result shows that the average annual cost of operating an automobile, including depreciation, based on the opinion of these gentlemen, was $760.10. In considering these figures we must keep in mind that they represent the cost at the peak price period of inflation. It is chiefly the bills we made in those days that vex us now. I ascertained from the state department the number of automobiles registered. A portion of those registries were trucks and business cars, and at that time our state did not keep a separate list of the trucks. However, prior to taking this up on a state basis, and merely as a matter of personal interest, I had secured data from the county officials of two or three of our local counties, where I was familiar with the conditions, and in making up their reports, the country treasurers segregated the trucks and pleasure cars. Therefore, by basing my estimates on the reports from the county treasurers, I eliminated the same percentage of trucks and business cars from the number of automobiles registered in the state, and multiplied the cost of operating a single car by the total number of cars, and had a total of $311,641,000 as the annual cost of supporting pleasure automobiles in the state of Iowa. I am free to say that when I was making that computation, I had to look twice to see if I had the decimal point in the right place.
A little later in the season, and following the same line of thought that I had used in our local counties, I secured the state weather and crop bureau report, showing the crop production in the state of Iowa. In that year we planted 10,300,000 acres of corn, yielding forty-six bushels per acre—the largest yield per acre we had ever grown-giving a total corn production of 473,800,000 bushels, of a market value of forty-seven cents per bushel, giving a total value of $222,686,000. These crop report figures were issued in December, and the market price at that time was more than the average farmer received for his crop, as the price continued to decline for some time. Subtracting the total value of the corn crop from the automobile bill, we had a deficit of $88,955,000. It was plain we must have some more income, to support our automobiles and hold our record, as first in automobiles per capita.
CHAIRMAN HAGERMAN: The gentleman will have five minutes
MR. VAN ALSTINE (continuing): Therefore, I approximated the oat crop in the same manner and found the value to be $86,746,144. After deducting that, we still had a deficit of $6,208,856 necessary to pay our automobile bill. Iowa is pre-eminently an agricultural state, and while we produced a diversity of crops, corn and oats are the two largest.
Now, gentlemen, the automobile bill for that year had absorbed the entire corn crop, without setting aside an ear of corn to feed the cow that gives the baby its milk, or a kernel for next year's seed; it had absorbed the entire oat crop, without reserving a bushel for seed or to feed the horses which must be fed to produce next year's crop, and was still calling for $6,208,856 more. In that year, of 1920, these two crops represented fifty-four per cent of the total value of all crops produced from the soil, but not including livestock products. With all its wealth and all its resources, I don't believe that the state of Iowa can long stand that tax; and I want to say to you that when I first made up these figures I was loath to give them publicity. I was ashamed to admit that the people of the state of Iowa were spending more than the value of their two principal crops on automobiles—a luxury, when compared with such essentials as food, raiment, shelter and education. I do not want to be misunderstood on this point; I would not deny anyone, especially the farmer or the laborer, any and every convenience or luxury that he can afford. Nor do I wish to imply that the automobile is the only luxury that is sapping our prosperity. The easy money of those inflation days left us a legacy of extravagances that hang on like leeches. We cannot have real prosperity unless we live within our income.
Now, gentlemen, just a word as to what this means to the nation. The National Automobile Chamber of Commerce, of New York City, issues a booklet, called Facts and Figures of the Automobile Industry. Their 1922 booklet, covering the statistics for 1921, shows that in the United States there are about nine and one-third million passenger automobiles. It gives the number and average cost of the automobiles produced in 1921, and much other data. Without going into detail, basing my deductions upon a combination of the figures that are given in statistics, which I assume are authoritative, and the Iowa estimates, I find that the annual depreciation of the average automobile in the United States is $200.70. Reducing the cost of oil from thirty cents per gallon, the price in 1920, when I made those figures, to twenty-four cents, the present price, and reducing the cost of repairs one-third, which I believe to be approximately fair, I find that in 1921 the annual cost of operating an automobile in the United States, including depreciation, was $508.50.
The automobile association states that there are nine and onethird million pleasure cars, and anticipates that there will be another one and one-quarter million added, when the new figures for 1922 are made up. The computation on that is easy. If we multiply the cost of operating a single car by the whole number of passenger cars now in use, we have an expenditure of nearly five billion dollars. But, according to the National Chamber of Commerce data, we have not included all of the direct costs. Their booklet tells us that there are 256,000 men employed in factories, 250,000 in manufacturing accessories, 235,000 in garage work, over 250,000 salesmen, and so forth; those should all be included in our cost computations. They also tell us that there are 1,200,000 professional chauffeurs; that expense would be additional to the cost items included in our figures. Those professional artists usually command fancy salaries, but if we allow the modest wage of $100 per month, or $1200 a year, we have $1,440,000,000 paid to chauffeurs. Add that incidental expense to our cost of operation. and we have $6,180,804,775. Then to be fair, we should deduct a percentage for the cars that are perhaps paying their own freight, earning their own way. That can only be estimated, but the same automobile booklet tells us that the doctors of the United States are using over one hundred thousand cars; that the checking of 2 large number of licenses in Massachusetts indicated that nine per cent of the cars were owned by business concerns. Let us be liberal and deduct twenty per cent for utility cars. We then have an annual automobile expense of nearly $5,000,000,000 for pleasure cars now in use; and if we accept our booklet estimate of the number that will be indicated, when the 1922 returns are in, the annual cost will be materially more than $5,000,000,000.
Gentlemen, how long can we continue to pay the price?
(The following supplemental data, supporting the above estimates, has been submitted by Mr. Van Alstine.-Ed.)
Sample of questionnaire sent out to farmers, business men, auto dealers, etc. The figures carried out are the result of averages of all replies:
GILMORE City, Iowa, JUNE 1, 1920. Dear Sir:
For the purpose of securing data on the average automobiles in ordinary use, I would like to have you give your estimate in answer to the following questions. We do not include trucks, busses, or commercial cars. This is intended to refer to the average passenger or pleasure cars of all kinds, in ordinary use. What is your estimate of the average “life” of a car,
meaning the number of years the average car owner uses a car? ...
4.5 years What is your estimate of the average cost of new cars during the year 1920?
$1505 What is your estimate of the average mileage run per year, per car? ..
4550 miles What is the average car's gas consumption; number of miles per gallon ?
11.7 per gal. What is the average oil consumption; number of miles per gallon?.
354 mi. per gal. What is your estimate of the cost of tires, and repairs, etc., on the average car, per year?
ESTIMATED COST OF OPERATING IOWA AUTOMOBILES The following estimates of cost are based on replies to questionnaires sent out to business men, farmers, and auto dealers, and averages summarized: Depreciation, or cost of new cars in 1920; based on the average
cost of cars in 1920 divided by the average life ($1505 = 4.5 yrs.)
$350.00 Gasoline-based on mileage per car, divided by miles per gallon,
multiplied by average price per gallon (4550 mi. • 11.7 mi. x 30c.)
116.10 Oil-as above (4550 mi. • 354 mi. x 25c.). Tires, repairs, etc.-average estimates
268.00 Average license fee
Total cost per car in 1920
$760.10 Number of pleasure or passenger cars in Iowa as indicated by
registry. There are 426.922 vehicles registered, and while no record is made in the state department, we base estimate on figures from counties, at 410,000 cars. Total cost (410,000 x $760,10)
.$311,641,000 Value of lowa corn and oat crops, as shown by the official bureau
of crop statistics 1920: 10,300,000 acres—46 bu. per acregives a total yield of 473,800,000 bu. valued at 470. per bu. Total value
Total corn crop falls short of auto cost by
5,895,000 acres—39 bu. per acre-gives a total yield of 329,
Total corn and oat crop falls short of auto cost by.... $6,208,856
Estimate of average expense per car in the United States for 1921, based on figures and memoranda from Facts and Figures of the Automobile Industry, issued by the National Automobile Chamber of Commerce, and from estimates as to automobile expense in the State of Iowa: Estimate life of car-Iowa figures ....
4.5 years Estimated average cost per car-arrived at by dividing
wholesale value of all cars produced—$1,093,918,000
by number of cars produced—1,514,000 =........ $722.50 Add 25% for freight, jobber's and retailer's commissions (which is less than actual) ...
Net average cost to consumer in 1921 .
$903.12 Estimated annual mileage (Iowa estimate)
4550 miles Estimated gas consumption (miles per gallon—Iowa estimate).. 11.7 miles Estimated lubricating oil (miles per gallon—Iowa estimate)
354 miles Estimate cost of tires, repairs, garage bills, etc.
$178.67 Cost per car in the U. S., based on the above data and estimates:
Depreciation-based upon the average cost divided by the aver
age life-$903.12 = 4.5 Gasoline, based on mileage per car, divided by miles per gallon,
multiplied by price per gal.—4550 miles • 11.7 x 25c. Lubricating oil, estimated at Tires, repairs, garage bills, etc. License fees, based on total taxes paid, being license fees and personal taxes
$197,478,000 Local license fees and miscellaneous taxes
Total tax, exclusive of federal or gasoline, license for chauffeurs, etc.
... $208,478,000 Divide this total tax by the number of cars-9,325,150
Total cost per car, for 1921
Estimated cost of operating all cars in the United States, based on foregoing figures, and making deductions for estimated number of cars used for business, or actual and necessary utility purposes: Total cost for all cars—No. of cars as shown by the statistics,
multiplied by the cost per car-9,325,150 x $508.50 = .... $4,741,838,775 The National Automobile Chamber of Commerce booklet states
that there are 1,200,000 professional chauffeurs employed, the cost of which is not included in the foregoing estimates of cost per car. Estimating a low annual wage of $1200 per year would add a cost of 1,200,000 x $1200, or ...... 1,440,000,000
Making a total annual expense for cost of cars and wages of professional chauffeurs of ..
$6,181,838,775 Some of those cars are used by doctors, traveling men, busi
ness houses, etc., for utilitarian purposes, and we deduct 20% for such utility cars
Leaving a net cost for pleasure cars of
$4,945,471,020 The above figures do not include such expense as investment in a garage, extra equipment on cars, etc.
CHAIRMAN HAGERMAN: The meeting is now open to round table discussion, under the five-minute rule.
W. H. King of New York: On the subject referred to, of the limitation of expenditures and taxes, we have the interesting topic of the relative value of the various legal devices to control public expenditures in the light of experience, and the further topic of home rule.
In New York we have had broad experience with tax and debt limitation. It should be borne in mind that in New York we have