New-York tribune., 1920-12-05

in commodities that the railways do
not buy in quantity. In fact, the lat
est available Wholesale figures. those
for August, show almost the highest
figures of the period for the commodi-
tles the railways purchase
SO far rs coal is concerned, we have
the testimony Of executives that most
contracts have been made. and that 4
fall in prices could not benefit the
roads materially in the immediate fu-
/ ture.
Labor One Of Greatest Items
As for labor. the item that consu-
tntes more than 50 per cent Of the
total railway expenditure, there is op-
portunlty for economy only in in
creased efficiency or in the discharge
, Of men, not in lowering Of wages
The recent increase in wares granted
by the Railway Labor Board added
$4,000 600 to the annual wage bill
Ims increase has been in effect scarce
V six months and it is idle to distuss
ac'ua' decreases in wages for many
months to come, possibly years.
AS for the discharge Of men ,hia
can. Of course be done as traffic de-
cllnes, although it is not ~ all likely
mat the saving through laying off mon
can keep pace with the loss in earninfr,
through decline in traffic. The onIv
.. other source Of labor saving is in
greater labor efficiency, and here the
railways insist that they are makjnc
headway. The morale Of the men as
UNITS IN an operating organ zation. so
seriously impaired during Federal op-
orauon' is being gradually restorod
ne reproduction of piece work in the
shops is strongly urged by the man
ayers as an incentive to rreatsr ors
ciency but there is little probability
OF any immediate restoration of this
method of wage payment
ne controversy between manaper~
and men over the retention Of the no~
llonal boards of adjustment has d.
rect bearing upon this question. The
New law provides for the voluntary
creaIon OF local and regional boards
81 adjustment and these are STRONGLY
favored by the executives. The lahor
'eaders are working for the continu.
ance of the national ediustmon+ scheme
which was one Of the principal infln.
ences that destroyed disc plinc and
srnpted organization on the separate
railways during the period O. Federal
operation Decentralization OF rail-
road management is essential to eff;
clency' ms problem is still await
ing settlement and at present the ad
lustment machinery contemplated bv
VAC law lS non existent
Drive for Increased Traffic
The drive for load of shirtv ,ons
. car ana haul of thirty miles a
Gay is another effort to increase eff.
S'encS ana reduce expense, and in con-
nection with this has gone the miro
duction Of many time saving and labor.
SaVIng plans and devices in shops and
YARDS Although the statistics Of on.
eIal'oh sho" gratifying results rom
thls campaign. Il is still too early to
discover any marked effect upon on
Grating expense.
lna!ly, most important considcra-
'lon ~ connection with the probability
V' reuucihE operating expenses is the
present condition Of maintenance oc
me olf1erent roads. The Federal Ad-
mlnistratlon always stoutly insisted
during its incumbency that II was
keeplng up maintenance, and asserted
AZ the end that II had complied with
IT'S contract and returned the roads to
their owners In substantially as rood
condition as when received.
with thus position the RAILWAYS have
taken emphatic issue, and are preparing
TO submit their claims for reimbu,se7
mens to the government. The problem
/ IS too complex for the lavr0an and no
"a
cofhpar son OF maintenance expendi-
lures by the railways during the three
years previous 10 Federal control win
the period OF government operation
may throw some light upon the oueq-
ton.
Uncertainty Prevents Conclusions
lhis discussion has arrived at no
very definite conclusions, and mona i.
possible at this time This inconcln~
s'Veness Is due primarily to the uncer-
Ja'nty as to how far the docline IN
traihc Will extend and how soon recov-
cry will come. 1t ls doubtful whether
Ohe railways can during the coming
year meet any serious fall in groes
earnings with a spending cut in
expenses 1t may be that the roads
VIII again before long be suppInnts
ocfore the commission for another IN
crease n rates. And if this turns on.
10 be the case it will make ciear u,hat
seems now to be the fact, that Conrress
dealt with the railways In far from q
gene rous spirit. :"
10 allow the carriers maximum of
per cent on their Investment befora
dividing with the government. when Tho
corporanons must pay III per cent in
me open market for new capital and
""en be It particularly noted, the pov-
! 80 Tia fRIHK tfe roads ppr
cent Tor the capital that It lo4ns to
mem. IS a policy which in the end ia
uHciy 70 dcfeat itself, for the aerv,ce
mat tne country needs and which furn-
'an,a tho incentive for the legislation
of THIS year Will scarcely be forth
coming. ~
The interest rats Of 7H per cent
winch rai'ways In good standing are
now c"<npe He'd TO pay for capital Is to
us us compared with rate Of slightly loss
lhah @% per cent in 1914. Had the
ptce paid tor transportation risen oro.
poruona,ely this Increased in,rrrs,
rate would have been no burden hut
everyone knows that 1t has not dona
50 Moreover. the money borrowed to-
day buys scnrcely more thun third Of
"nat II bought in l9lA
Eut there Is still another considcrn.
t'on to which far too little atten,,on
mas peen given. The roads are being
competed 10 borrow capital measured
IN appreciated dollars, which ar. iu.,
no" beginning. with the fall of pr{ces
/ 10 appreciate The corporntlons ara
faced with the future necessl1y Of con-
tnulnR to pay high interest ratss after
the market rates have fallen. and OF
phy'nX on the loan ii. maturity in dol.
'ars th"t hnve purchasing power far
IN excrss Of the do lars thep horrov.J
We did not solve our railway nroh-
lem when we passed the TRANSPORTATION
act Of 1920.