The Connecticut labor press., 1920-07-31
Rail FINANCES in
DESPERATE STATE
ASSERTS THE |. G. G.
Net Income for Month of Nav
$3S, 1897, 1882 Under
1919.
The nine WISE men FAIL
Report That Part of Deficit Is
Due to Increased Wages
Unfounded.

In statement issued few days ago
by the Interstate Commerce Commits
sion, the financial position of the rail-
roads is depicted in more dep1orab1e
condition than ever before Failure of
private management to function, even
when propped up by the special privil-
eyes guaranteed under the Cummins-
Esch law, has created a crisis which
will soon result in forcing the govern
ment to- resume complete control and
operation in order TO insure transpor-
tation service to the country. Creation
of the committee of mine wise men,
at the recent meeting of the Associa-
ton of Railway Executives in New
York has not brought about the unity
of action on part of tn. more than 200
separate carriers which was so vocifer-
ously predicted by those who partici-
pated in the meeting
In support of its contention that the
roads are in dire financial distress the
Interstate Commerce Commission
points out that earnings and expenses
for May, 1920, show a deficit of 81,
266,o64 in the net operating income of
the carriers. In May, 1919, under gov
eminent operation, net income of
$31, 730,o18 was recorded This dis
closes, that the earnings for May, 1920,
under private ownership and operation,
had falling off of $38,oo7, 1882 as COM
pared with the same months last year
when the transportation system of the
nation was operated as a unit by the
government.
The report asserts that this deficit is
accounted for to some extent by "a
large increase i'm wages" and cost of
coal and other materials, without a
corresponding increase in freight and
passenger rates." How the commits
sion reaches conclusion that increase
in wages2 was responsible to any de-
gree for this great deficit is almost be-
yond comprehension.
AS a matter of fact there has not
been a dollar wage increase to en-
p1oyes since the roads were returned
to private management March /, except
perhaps in a few instances, such as re-
lated in last weeks issue of Labor,
where division superintendent of the
Pennsylvania system have paid college
students SO per day and board to take
the places of men on vacation" or
shown on the Southern Pacific The
railroad managers have refused in
creases to old and experienced employees
who keep the wheels moving, asserting
that this was matter for adjudication
by the Railroad Labor Board, created
by the CumminS-Esch law.
The report of the commission shows
that the operating revenue for May,
1920, was 1868, 1868, and for May,
1919, 1927, 675,o 4o, an increase of $685.
4o7, 684. AS against this the commits
sion report shows that expenses were
$346,039,o75 for May, 1920, and $780,
4o4, 9o3 for May, 1919, an increased ex-
pense for the same month this year of
$65, 544, 982.
Evidently it costs a great deal more
for privateers to run the roads than
under government operation. This in
crease cannot be charged to additional
labor costs, but can be accounted for
in some measure by the greatly in
creased salaries paid 20 officials and at
torneys under private ownership and
other economic wastes which came
from unscrambling the unit system.
The heaviest deficit IN net income
for May was in the Eastern district,
which was $o,83O, 48o, as compared to
net earnings of $10,8l4,o67 during the
same period last year. This is a fall
ing off of $20,645, 456.
And the Cummins-Esch law has been
hera1ded by advocates of private own
ership as the most constructive piece
of legislation" enacted by Congress
during the present generation.