Sioux County pioneer., 1921-12-15
RAILROAD PLAN ID.
GET RATES DOWN
Propose to Reduce Wages and
Return All the Savings by
Reduction In Charges.
FULL TEXT OF THE PROPOSAL
Statement by Thomas Dewitt cuvler
Chairman Of the Association 81
Railway Executives, on
the Situation, -g,


nearly all the leading railroads in the
country. MIR. Thomas Dewitt Cuyler
chairman of the Association of Ruil.
way Executives, made the following
statement:
At meeting Of the Association o1
Railway Executives today, 1t was de
termined by the railroads of the United
States to seek to bring about reduc.
ton in rates and as q means to that
end to seek u reduction in present rail.
road wages which have compelled
maintenance of the present rates.
An application will be made imme.
diately to the United States RailroaC
Labor Bonrd for reduction in wages
Of train service employees sufticien,
to remove the remainder Of the In
creases made by the Labor Boards
decision of July 20, 1920, (Which would
involve further reduction of approx.
imately 10 percent), and for reduc
tion in the wages of all other classes
of railroad labor to the going rate fol
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 benefit OF
the reduction thus obtained shall, with
the concurrence of the Interstate Com.
merce commission, be passed on to the
public in the reduction of existing rail.
road rates, except insofar as this re.
duction shall have been made in the
meantime.
The managements have decided
upon this course in view ofsthe realiza.
tion of the fact that the wheels OF in.
dustrial activity have been closed
down to a point which brings depres.
sion 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 d net railway
operating income of about $62,OOO,.
GOO upon property investment of
over $10O00,O0O,O00. and even this
amount of $62,0O0,OOO included bach
mail pay for prior years received from
the government of approximately $84,.
100000, thus showing, when the opera
tions for that year alone are consi-
dered, an actual deficit before making
any allowance for either interest or
dividends.
The year ended In serious depression
in all branches Of industry, and in
marked reduction Of the marked de-
mand for and the prices Of basic eoln=
modities, resulting, in very serious
falling off in the volume Of traffic.
Roads Forced to Defer Maintenance.
In this situation, "a policy Of the
most rigid economy and of postponing
and cutting to the bone the upkeep of
the properties was adopted by the rail-
roads. This was at the price Of neg
lecting ard for the time deferring
work which must heretofore and in
the near future be done and paid for,
This is illustrated by the fact that, as
Of September Is, 1921, over 18 per cent
or 374,431 in number, Of the freight
Sars of the carriers were in bad order
and needing repairs; as against nor
nal If bad order ca-s Of not more than
100000. ard Is further illustrated by
the deferred and ;isadeqNate mainten-
ance Of other equipment aad Of read:
way and structures.
Even under these conditions and
with this large bill charged up against
the future, which mnst soon be pro-
vided foE-and paid IL the carriers are
to perform successfully theif tFpRspQr-
tation duties, the result OF operations
for the first eight months Of this year,
the latest available figures, has been at
A rate of net railway operating income,
before providing for interest or divi-
dends. amounting To only 2.6 per cent
per annum on the valuation 6f the car
rier properties made by the Interstate
Commerce commission In the recent
rate case. an amount not Sufficient to
pay the interest on their outstanding
bonds. at
Roads Earning Far Below Reasonable
Returns.
II il manifest from this showing that
the rate OF fstHfa OF 53a or per cent
for the first two years after March I,
1920 fixed In the transportation act
as minimum reasonable return upon
railroad investment, has not been even
approximated - much less reached !;
and that the present high rates ac-
coFdnYly are not due to any statutory
guarantee Of earnings, for there is no
such guarantee.
In anaiyzing the expenses which
have largely brought about this situa-
tion It becomes evident tllat by Tar the
largest contributing cause is the labor
cost. (
Today the railroads pay out to labor
approximately 90 cents on the dollar
they receive for transportation SER
vices, whereas in 1915. 10 cents ee the
dollar went to labor.
On the nrst day Of January, 1917,
when the government took charge Of
wages through the Adamson act, the
n~.k ~ kN,n flanAAe,h h.,N :. ~ -.