Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1919-08-02
House Kills Recess
to Meet Rail Crisis



Continued From Pnsc Ono
any recommended increase in wages,
and therefore in the cost of operating
the railroads.
The President acted upon advice
from Walker D. Hines, director general
of the roads, that the government would
not be justified in using the war emer-
gency rate making power of the railroad
control net 10 meet increases in wages
TO be established under existing peace
conditions. Director General Illness
opinion OF the situation which threatens
the railroads with $500. .0OO. .O0e addi-
tional expenses If the wage demands are
granted. was contained in a letter to the
President. also forwarded to Congress.
Whole Railroad Issue. Open
Action by Congress In setting up such
body as recommended by the Presi-
dent and Director General Hines as the
only means of coping with present wage
and cost of living difficulties Of railroad
employees, will inevitably prccipitate
the entire problem of future railroad
control. A wage determining commits.
sion with the power to make its findings
mandatory upon rate making to in
sure adequate revenues for the rail-
roads could be established only BY
changing tho status of the Interstate
Commerce Commission and the Public
Service Commissions of the various
states.
Although the Interstate Commerce
| Commission and the state commissions
have found their authority transcrnde1
by the direct 1r general undcr the war
railroad control act. the original laws
i. Ia, tE Nr.
| ganizatiOns remain intact. not to bN
| SGT aside definitely without substitute
, legislation.
Mr.. Hines's Letter
The director generals letter follows {:
! Several months ago the railroad shop
employees asked for an increase in
wages. The matter was considered by
the railroad administration board of
wages and working conditions. which
is composed of three representatives Of
labor and three representatives of the
railroad management. This board was
unable to agree and, therefore. took no
action as n board hut on July 1G 7 re-
ccivcd two reports from members of the
, board. on" from the three labor members
recommending n general increase in
wages for example. increasing the
wages of machin:Sts from sixty eight
cents an houi 10 eighty cents an hour.
and prOportiOnatcly increasing the
wages of othor classes of shop ON =
| plOyrsO another report from the three
management members recommending
against any general increase in wages.
although recommending certain read
| iuStmcnts of the wagcs of some classes
of the employees.
The situation thus presented in
wolves the following considerations
I'VE have received the most positive
assurances that any general increases to
shop employees will result in demands
for corresponding increases to every
other class of railroad employees. The
situat ton, therefore. cannot be viewed
except as n whole for the entire .. 600. =
600 railroad employees. Viewing it as
n whole. every increase of | per cent
per hour means an increase of $50, 900, e
| O0O per year in operating expenses for
straight time with a substantial addi :
ton for necessary overtime. An in =
crease of twelve cents an hour MS ask I'd
| 70" by the snOp employees would, if an
piled to all employees, mean Cincludng
| necessary overtimr) an increase of
probably $500. 600, 900 a year in oper :
ating expenses.
The government is already incurring
a deficit at the rate of several hundred
million dollars a year in operating the
railroads because the increase in trans
portation rates has been proportioratnly
less than the increases in wages already
granted and the increases in prices
which have taken place. Therefore
there is no fund whatever out of which
additional wages can be paid 50 that
additional wages cannot he pHid unless
new revenues arc produced through an
increase in transportation rates. and
any immediate payment of additional
wages would nccesstate for scvcra
months M appropriation by Congress
out of the treasury because substantial
increases in rates could not bc made i'm =
meuiatc'y effective.
'Whi'H YOU may find it cXpedient tC
use the temporary rate making power
which was conferred upon YOU rs d
war emergency during federal control
to prevent the continuance Of the deficit
now bcingSinCurr"d which grows out oi
increases in wages and prices due tC
the war. you would not, in my opinion
be justified in regarding that rate max.
! ing power as Il sufficient warrant fol