New Britain herald., 1915-03-02
REFUTES TESTIMONY OF RAILROAD MANAGERS
W.S. Stone Submits Statement to
 Board Of Arbitration.

Stone, grand chief engineer Ot the Brotherhood of Locomotive Engineers, today submitted to the board of arbi- tration which is hearing the Vest ern Railroad Wage case, a statement in rebuttal to the testimony of the railroad managers, in which he charged that the issuance of fictitious securities had absorbed past, present and future revenue gains of the west ern railroads, and that there is no hope for the railroad employees to se- cure an equitable participation in the fruits of their labor so long as the present finincial control and admin istration of the railroads is unregu- lated"
 Mir. Stone pointed out that the em- ployes' organizations found economic justice for their demand for increased wages in the productive efficiency of their work, but that the constant contention of the railroads in reply to this argument was that revenue gains arising from increased produc- tive efficiency were absorbed by in- creased operating costs and by the payment of interest charges on ad- ditonal capital investments, which have been incurred in the attempt to
 
 tion, and because of public demand as to safety and quality of service.
 Denies Causes of Railroads.
 ''It is now our purpose to disclose that any decline in operating or net income has not been due to the causes set forth by the railroads" said MT. Stone. Statistics already read into the testimony by the em- Y1n ho1 T C1 he rc markable gains in railroad revenue and the amount available fer the increased compensation of labor
 We shall show" he continued, that the constant tendency has been for those in financial control of the railroads to absorb revenue gains arising from increased productive ef- ficiency by the issuance of fictitious securities; that the productive eff ciency of the men working today, tho operating officials as well as the em- ployes, had already been hypothecated and capitalized before we were born; that measures have already been taken by the issuance of fictitious cap- italization to absorb the increased work and productive efficiency of our children and our Childfens' children; and that there is no hope for the engineer and fireman and other classes of railroad employees to secure the equitable participation in the fruits of their work so long as the present financial control and administration of the railroads is unreSulated. In other words, that any advances which the employees have been able to ob- tain in wages or, earnings have been of no financial significance as com pared with the indefensible absorb tion of operating gains by the 1inan- cial management of western rail roads.
 Not Properly Conserved.
 Finally, we shall show that if gains from past productive efficiency had been properly conserved and ad- ministered. enormous advances could be granted to all classes of railroad employees, both organized and unor- ganized, without prejudice to the 1n- terests of the owners of the prop erty, and the financial status of west ern railroads today from the inves- tors standpoint would be all that could be desired.
 The points we shall submit in this connection are:
 First. That the proceeds from the munificent grants of land made by the federal and state governments to assist in the building of western rail- roads, were not properly used, but their value, as we'll as the increased business arising from the develop ment of western territory, was cap italized by the Notation of fictitious securities.
 Rests With Bankers.
 Second. That the direct financial control of western railroads, and the welfare of their employees now rests with a small group of bankers and financial institutions, which make and unmake railroad presidents, and which, by their methods of admin ;stration of the railroads, have ab sorbed present and future revenue gains of employees by the issuance of employees and operating officials are the victims of financial administra- tion.
 Third. We shall show from the publicly expressed opinions of emi- nent tinanciers and financial experts that this present inequality in the distribution of the output of the in- dustry is wrong.
 "Four.-We shall conclude by show ing that despite the financial eXcesses of railroads in the past that they are still financially able to pay req sonablc and fair increases in wages"