Connecticut western news., 1921-11-03
Propose to Reduce Wages and Return All the Saving by
 Reduction in Charges.
FULL TEXT OF THE PROPOSAL
Statement by Thomas de Witt CuyIer, Chairman of the Association of Railway Executives on
 the Situation.

way EXeculINeS, udue IHe lOllOWAhS 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 a reduc- tion in rates, and as a means to that end 10 seek a 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 Railroad Labor Board for a 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 a 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
 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 railroad rates, except in so far as this reduction shall have been made in the meantime
 The homogeneous have decided upon this course in view of their realization of the fact that the wheels of indus trial activity have been slowed 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 2,000 GOO, upon a property investment of over $19OOO,0O0,O and even this amount of 62 millions included back mail pay for prior years received from the gov ernment of approximately S64 000, ,0O0. l thus showing, when the operations of | that year alone are considered, an actual deficit before making any all l lOwance for either interest or div- dends.
 1 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 con- modities, resulting in very serious failing off in the volume of traffic. Roads Forced to Defer Maintenance
 Work
 In this situation, Tolicy of the most rigid economy and of postpcning and 1 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 deferrng work which must hereafter and in the near future be done and paid for This Is Illustrated by the fact that, as of September 15, 1921, over 16 per cent l or 374,4 in number, of the freight cars of the carriers were in bad order and needing repairs, as against a nor mai of bad order cars of not more than 160OOO, 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 th's large bill charged up against the future,-which must soon be pro- Ntded for and paid if 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 a rate of net railway operating in come, before providing for interest or dividends, amounting to only 26 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
 Return
 It is manifest, from this showing, that the rate of return of 511 or per cent for the first two years after March l, 1920, fixed in the Transportation Act as minimum reasonable return upon railroad investment. has not been even apprOximated-muc less reached i; and that the present high rates accord ingly are not ue 10 any statutory guarantee of earnings. for there Is no such guarantee.
 aIn analyzing the expenses which have largely brought about this stua- tiOn, 1t becomes evident that by far the largest contributing cause is the labor cost
 Today the railroads pay out to labor approximately 6Oc on the dollar they receive for transportation services. whereas in 1916 4Oc on the dollar went to labor.
 On the first sday of January, 1917, when the govefnment took charge of wages through the Adamson Act, the labor cost of the railroads had not exceeded the sum of about $1, 1,468, ,OOO,- GOO annually. In 1920, when govern