Catoctin clarion., 1921-10-27
Propose to Reduce Wages and
Return All the Saving by
Reduction in Charges.
FULL TEXT OF THE PROPOSAL
Statement by Thomas de Witt cuyisr,
Chairman Of the Association OF
Railway Executives on
the Situation.

nearly all the leading railroads. In the
! country, Mr. Thomas De Witt Cuyler.
/ Chairman Of the Association Of Rail-
way Executives. made the following
statement:
At a meeting of the Association OF
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 a means to that
end to seek reduction in present
railroad wages which have compelled
maintenance of the present rates.
An application will be made imme,
diately to the United States Railroad
Labor Board for q reduction In wages
Of train service employees sufficient to
! remove the remainder Of the increases
made by the Labor Boards decision Of
July 20, 1920 (Which would Involve q
further reduction Of approximately ten
per cent?, and for a reduction In the
wages Of all other classes Of railroad
labor to the going rate for such labor
In several territories where the car.
riers operate.
To Reduce Rates a. Wages Go Down
The foregoing action Is upon the IN.
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
railroad rates, except In 80 far as this
reduction shall have been made In the
meantime.
The managements have decided upon
this course In view Of their realization
OF the fact that the wheels Of indus,
trial activity have been closed down to
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 a net railway
operating income OF about $62 600 600.
upon property investment of over
$4,000, 100000, and even this amount
Of 62 million included back mail pay
for prior years received from the gov,
ernment OF approximately S64 900 600,
thus showing, when the operations OF
that year alone are considered an
actual deficit before making any al
lowance for either interest or divi
dends.
The year ended in serious depression
in all branches OF Industry. and In
marked reduction OF the market de-
mand for and the prices Of basic COM
mOdities. resulting In very serious
falling off In the volume OF traffic.
Roads Forced to Defer Maintena anes
In this situation, Toicy OF the most
rigid economy and OF postpcnlng and
cutting to the bone the upkeep OF the
properties was adopted by the rail-
roads. THIS was at the price OF neg
lecting and for the time deferring
work which must hereafter and In the
near future he done and paid for. This
Is Illustrated by the fact that, as Of
September Is, 1921. over 16 per cent
or 3744 431 In number, Of the freight
cars of the carriers were In bad order
and needing repairs. as against nor
NAL Of bad order cars OF not more
than 100000, as Is further illustrated
by the deferred and inadequate main
tenance Of other equipment and Of
roadway and structures.
Even under those conditions, and
with ths large bin charged up against
the future.-which must soon be pro
vided for and paid II the carriers are
to perform successfully their transpOr-
tatiOn duties,-the result OF operations
for the first eight months Of this year,
the latest available figures, has been
at rate Of net railway operating In
come, before providing for interest
or dividends, amounting to only 2.8
per cent, per annum on the valuation
Of the carrier properties made by the
Interstate Commerce Commission In
the recent rate case, an amount not
sufficient to pay the interest on their
outstanding bonds.
Roads Earnings Far Below Reasonable
Returns
1t Is manifest, from this showing.
that the rate Of return OF 5h or 6 per
cent for the first two years after March
l, 1920, fixed In the Transportation Act
as a minimum reasonable return upon
railroad investment, has not been even
approxlmated-much less reached;
and that the present high rates accord
ingly are not ''ue to any statutory
guarantee Of earnings, for there 10 no
such guarantee
In analyzing the expenses which
have largely brought about this situa.
tion, 1t becomes evident that by far
the largest contributing cause IL the
labor cost.
Today the railroads pay out to labor
approximately 60c on the dollar they
receive for transportation services,
whereas In 1915, 40c on the dollar went
to labor.
On the first day OF January, 1917,
when the government took charge of
wages through the Adamson Act, the
labor cost of the railroads had not
exceeded the sum OF about 81, ,46S, 600.
100 annually In 1920. when govern
mental authority made the last wage
increase, the labor cost Of the rail.
roads was about $8.698 OOO, 600 annual
ly, or, II continued throughout he year
instead of for the eight months during
which the wage increases were 10 Of
feet, the labor cost, on an annual basis,
would have been largely In excess Of
$1,000 900 ,000-an increase, since the
government took charge OF railroad
wages in the Adamson Acts of approx