The Glasgow courier. [volume] (Glasgow, Mont.) 1913-current, 1921-10-21
RAILROAD PLAN mi
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 cuyIer.
Chairman Of tho Association Of
Railway ~Exscutlvsa on
3 the Situation.

Following a meeting in Chicago. Oc-
tober IA, 1921, of the presidents N
nearly all the leading railroads In the
country, Mr.. Thomas Dewitt Cuyler.
chairman Of the Association of Rail.
way Executives, made the following
statement:
At a meeting of the Association Of
Railway Executives today, it was de-
termined by the railroads of the United
States to seek to bring about a reduc-
ton In rates and as a means to that
end to 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 in.
creases made by the Labor Boards
decision Of July 20, 1920, (Which would
involve a further reduction of approx
imately 10 percent), and for a reduc-
ton In the wages of all other classes
of railroad labor to the going rate for
ouSA AZ SCNClul les 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 h reduction Of existing rail-
road rates, except insofar as this re-
ductiOn shall have been made In the
meantime.
The homogeneous have decided
upon this course in view of the 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 a net railway
operating income Of about $62,OOO,-
OU upon a property investment of
over $19,OOO,0O ,OO9, and even this
amount of $62, 100000 included back
mail pay for prior years received from
the government of approximately $64,-
100000, thus showing, when the opera
lions 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 COM
modities, resulting in a 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 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 heretofore 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, and is further illustrated by
the deferred and inadequate mainten-
ance of other equipment and of road
way and structures.
Even under these conditions and
with this large bin charged up against
Tho futurn which p,uut snnn hn mo
vided for and paid if the carriers are
to perform successfully their transport
tntion 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 90 per cent
per annum on the valuation of the car
rier properties made by the Interstate
Commerce commission in the recent
rate case, nm amount not sufficient to
pay the interest on their outstanding
bonds.
Roads Earning Far Below Reasonable
Returns.
1t Is manifest from this showing that
tAc AulC VI leluEi Va oI2 VI " pei Cclll
for the first two years after March 1,
1920 fixed in the transportation &C
as a minimum reasonable return upon
railroad investment, has not been even
Appropriated much less reached
and that the present high rates ac
cord1ngly are not due to any statutory
guarantee Of earnings, for there Is ne
such guarantee.
In analyzing the expenses whicl
have largely brought about this situa
ton it becomes evident that by far the
largest contributing cause is the labol
cost.
Today the railroads pay out to labo,
approximately go cents on the dolla.
they receive for transportation ser
vices, whereas in 1916, 40 cent on TIT
dollar went to labor.
On the first day of January, 1917
when the government took charge o
wages through the Adamson act, tn
labor cost of the railroads had not eX
ceeded the sum of about $l,46o,UO.WN
annually. In 1920, when governmental
authority made the last wage increase
the labor cost Of the railroads wa
about $3,69S, 900, 700 annually, or
continued throughout the year instea
of for the eight months during whic
the wage increase was in effect tn