The Grangeville globe. [volume] (Grangeville, Idaho) 1907-1922, 1921-10-27
RAILROAD Plan to-
: GET RAT res DOWN
Propose to Reduce Wages and
Return All Saving BY Re.
duction 10 Charges.
FULL TEXT OF PROPOSAL
Statement by Tho mas Dewitt cuyier,
Chairman Of the Association OF
Railway Executives, or
the Situation.

Following meeting IN chicago,
October IA. 1921. of tee presidents OF
nearly all the leading railroads In the
country. Mr. Tholnas Dewitt Cuyler.
chairman of the Association of Rail
way Executives, made the following
statement.
At meeting OF the Association of
Railway Executives today. II 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 imne-
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 de-
cision of July 90, 1920 (Which would
involve further deduction OF APPROX i
mately ten per cent?, and for a re-
duction in the wages of all other
classes of railroad labor to the going
rate for such labor In several terri.
tories 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 comm iasion. be passed on
to the public in the reduction OF exist.
ing railroad rates. except In so far
as this reduction shall have been made
in the meantime
The arrangements have decided up
on this course In view OF their realiza
ton of the fact that the wheels of in
dustrial activity have been closed
down to q 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 net railway operating
income of about k62.000.000. upon q
property investment of over $4,000
100000. and even this amount of sixty.
two millions included back mail pay
for prior years received from the gov
eminent of approximately $64. 900. 900,
thus showing. when the operations OF
that year alone are considered. an
actual deficit before making any allow
ance for either interest or dividends
The year ended in serious depres
sion In all branches of industry, and
in marked reductions OF the market
demand for and the prices OF basic
commodities. resulting in very
serious falling Off in the volume OF
traffic.
Roads Forced to Defer Maintenance.
In this situation. policy of the
most rigid economy and of postponing
and cutting to the bone the upkeep of
the properties was adopted by the
railroads This was at the price of
neglecting 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 is per cent or
S74.431 In number. of the freight cars
OF the carriers were In bad order and
needing repairs, as against normal
or bad order cars OF not more than
10000. as is further illustrated by the
deferred and inadequate maintenance
OF other equipment and of roadway
and structures
Even under those conditions, and
with this large bill charged up against
the future--which must soon be pro.
vi0ed for and paid II the carriers are
to perform. successfully, their trans
portation duties-the result of opera
lions for the first eight months of this
year. the latest available figures. has
been at rate OF net railway operating
income. before providing for interest
or dividends. amounting to only IS
per cent per annum on the valuation OF
the carrier properties made by the In
ferstate commerce. commission in the
recent rate case. IN amount not SUI
ficient 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 s. II or 6 per
cent for the first two years after
March /. 1920. fixed in the transporta.
ton act as minimum reasonable re-
turn upon railroad investment has not
been even Appropriated. much less
reached; and that the present high
rates accordingly are not due to any
statutory guarantee of earnings for
there is no such guarantee
In Analysing the expenses which
have largely brought about this situa,
ton. II becomes evident that by far
the largest contributing cause is the
labor cost
Today the railroads pay out to labor
approximately so cents on the dollar
they receive for transportation services.
whereas in 1916. 40 cents 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 ex
ceeded the sum OF about $1.46S.000. 900
annually. In 1920.4when governmental
authority made the last wage increase.
the labor cost of the railroads was
about s3,698. 100000 annually, or. IL
continued throughout the year instead
of for the eight months during which
the wage increases were in effect the
labor cost. on an annual basis. would
have been largely In excess OF 49,
900 900
An increase, since the government
took charge Of railroad wages III the