Evening star., 1920-02-04
MR.. HINES OFFERS
ANALYSIS OF RAIL
CONTROL BY j. S.
Director General Discusses
Operating Costs, Wages,
Other Problems.

control of the railroads of the United
States is asked of editors and the pub
lie by Director General Hines in a
statement to editors made public today.
Mr.. Hines goes at length in his dis
cussion of federal control of the roads
into alleged excessive costs of railroad
operation by the Railroad Administra-
ton; alleged extravagant increases in
wages of railroad labor; alleged exces-
Sive increase in the number of railroad
employees under federal control; deficit
from railroad operations; railroad serv-
ice. the condition of the property and
other allied problems of the railroads
of the country
Speaking of alleged excessive operat-
ing costs, Mr. Hines says support has
been given the confused notion that
While the increased operating cost in
private enterprise is due to war con-
dltions, corresponding increase in
railroad operating cost is due to mis-
takes of the Railroad Administration.
Such an argument assumes that the
railroads should have been and in the
future can be made to be independent
OF economic conditions which have af-
fected and will affect every other indus
trial enterprise. The public will de-
ceiVe itself to Its own injury if it is
led to rely upon this fallacy," Mr. Hines
says.
Operating Costs for 1919.
The operating costs of the railroads
Tor 1919 can now be closely approxi-
mated and therefore will be used for
comparison because they are larger than
for 1918. The operating costs of the
class 1 roads were s2.I4O' 600, 900 for 1914.
ana were approximately S4324, 900 900
IOr 1919. being an increase of S2,1S4 ,O0O,-
oO0; IN other words, operating costs in
1919 were 1O2 per cent more than oper-
atlng costs in 1914. Many people are
disposed to assume until the Contrary is
proved that this increase in railroad
operating costs is due to mistakes of the
kailroad Administration and not to en-
iarged production of transportation or to
necessary increases in prices and
wages"
The director general compares the in
creased operating costs of the roads with
lncreasestin the cost per ton of the prod
uct of the United States Steel Corpora
non ana asserts that while. the cost of
the nnlshed product of the latter cor
poration in 1918 was 81 per cent over
that of 1914, the increased cost per unit
OF service on the railroads during 1919
over 1914 Will be not more than 50 per
cent.
Public discussion always assumes.
except when railroad operation is un-
der discussion" the director general
continues, that on account of the
conditions growing out of the war the
purchasing I power of money is great
~ decreased. so that it requires per-
haps from $50 to 81 to buy as. much
material and labor as 81 would have
bought in 1914. Thought on this
point should be clarified so that it
VIII be generally appreciated that
for their operating costs cannot be
expected to go any further on the
average than the dollar spent by any
one else. There can be no serious
denial that in the purchase of ma
terials and supplies such as steel and
or ho
railroads must pay the very heavy in
creases in prices which are paid by
others similarly situated"
Increases in Wages.
Regarding alleged extravagant in
creases in wages Of railroad labor
the director general says employees
who work for the railroads are con-
fronted with the increased cost OF
living just like other people, and in
creased wages for railroad employees
have been not only necessary, but
just Contrary to popular impression
increases to railroad labor have not
been out of line with increases to
labor generally.
when the wage commission OF
which Franklin K. Lane was chair
man, reported in the spring of 1916 on
the wages of railroad employees, it
pointed out that contrary to common
conception, railroad employees were not
highly paid; that 81 per cent received
during 1917 SIS or less per month and
so per cent received $100 per month,
or less. The leading executives of the
eastern roads. when they appeared
before the Interstate Commerce Com
mission in the fall of 1917 laid stress
on the fact that their earnings were
not sufficient to enable them to pay
adequate wages in competition with
other industries.
I'm making the important increases,
which were as indispensable to the
railroads as in other enterprises, and
which were long overdue in the case
of the railroads, the government could
not escape the policy of reasonably
uniform treatment and the result OF
this policy operated to produce nu-
merous individual cases of abnormal
ly large wage increases, but the mat
ter, from the standpoint of its total
cost to the railroads and the public,
must be considered as a whole and
the average increase per hour to rail-
road employees as a whole has been no
more than was responsive to the con-
ditions which have forced heavy IN
creases upon all industrial enterprises
and has not been out OF line with
what other enterprises have done.
'If this subject is viewed in the
light of facts, the conclusion can only
be the pay per hour to railroad en-
pIoyes On the average makes rea-
sonable comparison with what has
DttH uOnc CHSSi PiAS
Number of Employees.
'HThe increase in the number of en-
ployes under federal control has been
due principally to the adoption of
the eiSnt-hou- day. Prior to federal
control many classes of employees
worked ten hours per day and in some
instances even longer, although the
adoption of the eight-hour day. had
already made substantial progress on
the railroads. There haye been many
comments on the fact that in July,
1919, there was an increase of 11.Z
per cent in the number of employees
over the month of December. 1917.
Since July. 1919, was a month favor
able to outside work. calling for ad-
di tional employees, and December, 1917,
a month unfavorable to outside work,
and besides there was at that time an
admitted scarcity of railroad employees
on account of competition of NUM-
tions plants and the other war de-
mands. more reliable comparison of
the difference between the number of
employees under private control and
under federal control is the compari-
son of the entire year 1917 with the
entire years 1919. On the latter basis
there was an increase of 81 per cent
and yet the actual number of hours
of work paid for was SO per cent less
in 1919 than in 1917. This is explain
ed by the fact that during the year
1917 the employees worked on an aver
age 261.4 hours per month. while dur
ing the year 1919 the employees work
ed on an average 21S.5 hours per
month"
Deficit From Operations.