The midland journal. (Rising Sun, Md.) 1885-1947, 1921-11-11
Propose to Reduce Wages and
Return All the Saving by
Reduction In. Charges.
FULL TEXT OF THE PROPOSAL
Statement by Thomas do Wit cuyler,
Chairman Of the Association Of
Railway Executives on
- the Situation.

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:
At meeting of the Association Of
Railway Executives today, 1t 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 a reduction in present
railroad wages which have compelled
maintenance of the present rates.
An application will be made imme.
diately to the United States Railroad
Labor Board for q 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 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. IN
To Reduce Rates ~ Wages Go Down
The foregoing action is upon the un$
Outstanding that concurrentiy 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 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
point which brings depression and
distress to the entire public. and that
again In operation.
The situation which confroEts the
railroads is extremely critical. The
railroads In 1920 realized a net railway
operating income Of about $82. 000,O 600.
upon a property investment of over
$4,000, 0O0. 900, and even this amount
of 81 million included back mali pay
for prior years received from the gov
eminent OF approximately $84. 000, 900.
thus showing, when the operations, of
that year alone are considered. an
actual deficit before making any al
lOwance for either interest or divi-
dends.
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 COM
modities. resulting In a very serious
falling OF In the volume Of traffic.
Roads Forced to Defer Maintenance
In this situation, a POLICY Of the most
rigid economy and Of pOstponing 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
IL 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 10000, 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 this large bill charged up against
the future,-which must soon be pro
vided for and paid II the carriers are
to perform successfully their transpor-
tatiOn dpties.-the result Of operations
for the first eight months Of this year,
the latest available figures, has been
at 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 Ghe interest on their
outstanding bonds.
Roads Earnings Far Below Reasonable
Returns
1t Is manifest, from this showing.
that the rate Of return Of 51s or 6 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
northumberland less reached;
and that the present high rates accord
ingly are not ''ue to any statutory
guarantee Of earnings. for there is no
such guarantee.
In analysing the expenses which
have largely brought about this situa-
zion. II becomes evident, that by far
the largest contributing cause Is the
labor cost.
Today the railroads pay out to labor
approximately Coo ON the dollar they
receive for transportation services
whereas In 1916. 40c 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 az the railroads had not
exceeded the sum Of about 81, 46s, OOO.-
900 snnaally. In 1920, when govern