Wausau pilot. [volume] (Wausau, Wis.) 1896-1940, 1921-11-03
Propose to Reduce Wages and
Return All the Saving by
Reduction in Charges.
FULL TEXT OF THE PROPOSAL
Statement by Thomas Dewitt cuyler,
Chairman of the Association of
Railway Executives, on
the Situation.

I
chairman of the Association of Rail
way Executives, made the following
statement: AT meeting of the AS.
ISOLATION of Railway Executives today
| II was determined by the railroads
of the United States to seek to bring
about reduction in rates, and as
means to that end to seek reduc-
ton in present railroad wages which
have compelled maintenance of the
present rates.
AN application will be made inn
mediately TO the United States Rail-
road Labor Board for reduction in
wages of train service employees suf-
flcient to remove the remainder of
the increases made by the Labor
Boards decision of July 20, 1920
| (Which would involve further reduc-
ton of approximately ten per cent?,
and for reduction in the wages of
all other classes of railroad labor to
the going rate for such labor in sew
eral territories where the carriers
operate.
To Reduce Rates as Wages Go Down.
The foregoing action is upon the
understanding that concurrently with
such reduction in wages the benefit
of the reduction thus obtained shall,
with the concurrence of the Interstate
Commerce Commission, be passed on
to the public in the reduction of ex-
listing railroad rates, except insofar as
this reduction shall have been made
in the meantime.
The arrangements have decided
upon this course in view of their reali
cation of the fact that the wheels of
industrial activity have been closed
down to point which brings depres-
sion and distress to the entire public,
and that something must be done to
start them again in operation.
1.-THE situation which confronts the
railroads is extremely critical. The
railroads in 1920 realized net rail
way operating income of about s62.-
100000 upon property investment of
over $4,000 100000, and even this
amount of s62,000,000 included back
mail pay for prior years received
from the government of approximately
$64 100000, thus showing, even when
the operations of that year alone are
considered, an actual deficit before
making any allowance for either in
terest or dividends.
THE year ended in serious depres-
sion 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 Maintenance.
I'm this situation, policy of the
most rigid economy and of postpon-
ing and emitting to the bone the un-
keep of the properties was adopted by
the railroads. This was at the price
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 Is per cent, or ,431 in mum
Der, of the freight cars of the car
riers were in bad order and needing
repairs, as against normal Of bad
order cars of not more than 100000
AS is further illustrated by the de
ferred and inadequate maintenance OF
other equipment and of roadway and
structures.
Gwen under these conditions and
with this large bill charged up against
the future, which must soon be pro
vided for and paid of the carriers are
to perform successfully their trans
portation duties, the result of opera
tons for the first eight months of this
year, the latest available figures. has
been at rate of net railway operat
ing income, before providing for in
terest or dividends, amounting to only
26 per cent, per annum, on the vaIu
alton of the carrier properties made
by the Interstate Commerce Commits
sion in the recent rate case, an
amount not sufficient to pay the in
terest on their outstanding bonds.
Roads Earnings Far Below Reason
able Returns.
at is manifest, from this showing
that the rate of return of 5lA to 6 pei
cent for the first two years aftei
March !, 1920. fixed in the transpor
tation act as minimum reasonable
return upon railroad investment. ha!
not been even approximated-mucf
less reached-and that the present
high rates accordingly are not due u
any statutory guarantee OF earnings
for their Is no such guarantee
I'm analyzing the expenses which
have largely brought about this situa
ton, II becomes evident that by fai
the largest contributing cause is thu
labor cost. Today the railroads pa,
out to labor approximately 60 cent!
on the dollar that they receive fol
transportation services, whereas, IL
1916. 40 cents on the dollar went Il
labor.
ION the first day Of January, 1917