The Penn's Grove record., 1921-11-04
RAILROAD PLAN TO
Get RATES DOWN
Propose to Reduce Wares and
Return All the Saving by
Reduction in Charges.
FULL TEXT OF THE PROPOSAL
Statement by Thomas de Witt Cuyler,
Chairman of the Association of
Railway Executives on
the Situation.

Following a meeting in Chicago, Dc
scber "a. 1921, of the presidents Of
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:
A. q meeting of the association of
I Railway Executives today, it was de
.ermincd by the railroads of the United
States, to seek to bring about a reduc-
lion in rates, and as ii means TO that
snd 10 seek a reduction in present rail
road wages which have compelled
maintenance of the present rates,
An application will be made lmme
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.
To Reduce Rates as Wages Go Down
The foregoing action is upon the un-
\ derstsnding that concurrently with
such reduction in wages the benefit Of
the reduction thus obtained shall, with
the concurrence of the Interstate Com
nerce 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 arrangements 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
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 1926 realized a net railway
' Operating income of about $62, DOC, 900.
upon a property investment OF over
t19. 1000, 900. 900. and ever this amount
Of 60 million included back mail pay
for prior years received from the gov
6rnment of approximately S64, DOC, 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-
bends.
The year ended In serious depression
n oil hroDchoc ~ industry apd in
marked reduction of the market de-
{ nand for and the prices of basic COM
modities. resulting in a very serious
falling off in the volume Of traffic.
Roads Forced to Defer Maintenance
In this situation, a Tolicy of the most
rigid economy and Of p%ostponing 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 be done and paid for. This
Is illustrated by the fact that, as of
September IS, 1921. over 16 per cent
or 374.431 in number, of the freight
cars of the carriers were In bad order
and needing repairs, as against a 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
I roadway and structures.
y Even under those conditions, and
with this large bill charged up against
the future,-which must soon be pro
vided for and paid If the carriers are
4, -a,for1o cy,aoocCfrny, fha;r - ncD
tation duties,-the result of operations
for the first eight months Of this year,
the latest available figures, has beer
at q rate of net railway operating in
come, before providing for interest
or dividends, amounting to only PC
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 ret-rn of So or 6 per
cent for the first two years after March
{ | 1920, fixed in the Transportation Act
as a minimum reasonable return upon
railroad investment. has not been even
observation-disclosures less reached
and that the present high rates accord
ingly are not Gue to any statutory
guarantee of earnings, for there is no
sach guarantee.
In analyzing the expenses which
| have largely brought about this situa-
y ton. It becomes evident that by far
the largest contributing cause Is the
labor cost.
Today the railroads pay out to labor
approximately soc on the dollar they
receive for transportation services.
whereas in 1916. 4Oc 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