The Era-leader., 1921-10-27
SeoposE TO REDUCE WAGES AND
REriIgN ALL TIE SAVINGS BY
REDUCTION IN CHARGES.
FULL TEXT OF PROPOSAL
Statement 9y Thomas Dewitt Cu'yer'
Chairman of the Association OF
Railway Executives, on the
Situation.

nearly all the !Gadlng lallloduS III tno
country. Mr.. Thomas Dewitt CHyer'
chairman of the Association CT Kali
way Executives, made the following
statement:
At a meeting Of the Association OF
Railway Executives today, it was De.
termined by the railroads of the Unit
ed States to seek to bring about re-
duction in rates, and as means 10
that end to seek reduction IN pres
ent railroad wages. which have com
pelled maintenance of the present
rates.
An application will be made I'M
mediately to the United States Rail-
road Labor Board Tor reduction N
wages of train service employees SUI
ficient to remove the remainder OF the
increases made by the Labor Boards
decision of July 20, 1920, which would
involve a further reduction of approXl'
mately ten per cent and for reduc'
ton In the wages Of all other classes
Of railroad labor to the going rate for
such labor in several territories where
the carriers operate.
TO Reduce Rates as Wages Go Down.
The foregoing action is upon the un'
derstanding that concurrently with
such reduction In wages the beneflt
Of the reduction thus obtained shall,
with the concurrence Of the Interstate
Commerce Commission, be passed on
10 the public In the reduction Of eS'
tsting railroad rates, except in so far
as this reduction shall have been made
In the meantime.
The management has decided upon
this course in view Of their reallza'
ton Of the fact that the wheels OF in
dustrial activity have been closed down
70 a point which brings depression
and distress to the entire public, and
that something must be done to start
them again in operation.
The situation which confronts the
railroads Is extremely critical The
railroads In 1920 realized net rail-
way operating income Of about sez,'
100000 upon property Investment OF
over $19,OOO,0O0,0OO and even this
amount of $62,oOO.OOO included back
mail pay for prior years, received from
the government Of approximately $64,'
100000, or thus showing, when the
operatlons Of that year alone are con-
sidered, an actual deficit before MAX
7 ing any allowance for either interest
I Or dividends.
The year ended In serious depres'
+ sion In all branches Of industry, ana
in marked reduction Of the market de-
:, mand for and the prices Of basic COM
. . modities, resulting in a very serious
falling off in the volume Of tr~ffic.
Roads Forced to Defer Maintenance
In this situation, q policy of the
n most rigid economy and of postpon'
: Ing and cutting to the bone the up
IS keep of the properties was adopted By
II the railroads. This was at the price
IS OF neglecting, and for the time, de
= ferring work which must hereafter
and in the near future be done and
paid for. This Is illustrated BY the
, fact that as Of September Is, 1921
" ~ over 1e per cent or 374,431 in number
- Of the freight cars of the carriers wer'
Is IN bad order and needing repairs, a.
rs against a normal of bad order cars o
y not more than 100000 as is further II
a lustrated by the deferred and made
at ouate maintenance Of other equ1pmen
Vi and of roadway and structures.
IN Even under those conditions, AM
with this large bill charged up agalns
the future, which must soon be pre-
yided for and paid If the carriers ar
q TO perform successfully, their trans
VI portation duties, the result Of opers
ID tions for the first eight months G
e this year, the latest available figures
er has been at a rate of net railway OF
he Grating income, before providing fo
interest or dividends, amounting
ce only 2s per cent per annurn On tn
valuation Of the carrier propertie
% made by the Interstate Commerc
~. W. Commission in the recent rate cas-
he any amount not sufficient to pay tn
interest on their outstanding bond
Roads Earning Far Below Reasonab
Returns.
Il is manifest, from this shown
that the rate OF return OF bh or
uer cent for the first two years att
March /, 1920, fixed in the transpo
tatien act as 4 minimum reasonab
return upon railroad investment n
re. not been even approximated mu'
OF less reached; and that the prese
,re high rates accordingly are not d
81. 70 any statutory guarantee of earning
for there Is no such guarantee.
. In analyzlng the expenses Will
have largely brought about this sitl
tiou, 1t becomes evident that by /
/. the largest contributing cause IL {
,u- labor cost.
,sr Today the railroads pay out to lao
'p- approximately so cents on the q
70 70. iar they receive for transportati