The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1920-04-09
THE GREAT RACE NOW ON Be
TWEEN WAGES AND RATE

"One of the great difficulties "a
bout the railroad situation in the past
has been the fact that the causes for
increases in their operating expenses
have been multiplied SO rapidly that
the rates from which the railroads
earn revenue to pay their expenses
have not kept pace with them," says
The Railway Age in an editorial in
its current issue. THE provisions OF
the new transportation act seem to
that increases in expenses shall be
give some assurance for the future
taken into consideration more
promptly than they usually have
in the past when rates are being de-
termined, but it would be well for
those who are planning now to object
to the increases in rates that will
result from the proceeding initiated
by the interstate commerce COM
mission this week that the increases
in wages and in other items of the
railroads cost of living are still one
or two jumps ahead of the rates. 40.
ut is true that the railroad conf
panies are guaranteed for six months,
the same net operating income that
they enjoyed, or got along with, as
the case may be, in the three years
ending June 80. 1917. hat the emU pl.
ees, by the same law, are guaranteed
for the same six months period the
rates of pay which they had been al
lowed up to February %. 1920. IN
the latter part of 1917 and the early
part of 1918 the eastern railroads got
q Is per cent increase, and the south
ern and western roads much smaller
one, to meet the advances in wages
which resulted largely from the pass
age of the Adamson eight hour law
which went into effect on January
/. 1917. The rate increases were also
intended to take care of some other
increases in expenses, notably in fuel.
ION May %, 1918, Director Cen
eral McAdoo issued his General Or
der No. q increasing wages retro
active to January l. and also his
General Order No. 28,which was in
tended to advance the rates suffici-
emily TO meet both the new in
crease in wages and the advances in
other items of operating costs which
had accrued while the interstate
commerce commission was consid-
ering the fifteen per cent case. The
rate order, however, was not made
effective until June and while the
wage order was later found insult
ficient to satisfy the employees and
supplemental orders continued to be
made up to the end Of federal control
the railroad administration contin-
ued to be optimistic for the future
md refrained from raising the rates:
THE result was that while the
government during its operation of
the railroads increased freight rates
about twenty-eight per cent. it in
creased wages about fifty-six per
cent and the resulting Gencit was
passed on to the taxpayers. Direc-
tor General Hines has preferred to
explain his deficit by saying that the
first rate case was not made soon
enough, and that the failure to make
second increase was matter OF
policy, although the increase in the
deficit during 1919 as compared with
1918 demonstrates that the first in
crease was not made sufficiently
high when it was made. The fact
therefore remains that wages have
continued TO increase throughout
1913 and 1919 while the rates have
not been changed-eXcept in the way
of local OF particular adjustments
since June. 1918, and yet the demand
for new increases in wages has al
ready got start on the, rate case"