The Kendrick gazette. [volume] (Kendrick, Idaho) 1892-1968, 1921-10-28

labor board for 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 20. 1920 (Which would
involve further reduction of approx.
mately ten per cent?, and for re-
ductiol in the wages of all other
classes of railroad labor to the going
rate for such labor in several ter.
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 commission, 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 point which brings depres-
sion and distress to the entire public,
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 $62,000000, upon a
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 $4,000, 600,
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 a 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 lutuTc US uoUS anu pdfu IOT his
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 normal
of bad order cars of not more than
100, 900, 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.
vided for and paid if the carriers are
to perform, successfully, their trans.
portation duties-the result of opera
tions 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 20 only &c
per cent per annum on thu valuation of
the carrier properties made by the in
terState commerce commission in the
recent rate case, an amount not suf-
ficient to pay the interest on their
outstanding bonds.
; Roads Earnings Far Below Reasonable
Returns.
: II is manifest from this showing,
that the rate of return of 51s or 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 analyzing the expenses which
have largely brought about this situa.
ton, it becomes evident that by far
the largest contributing cause is the
labor cost
Today the railroads pay out to labor
approximately 80 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 81 ,468, 000, 900
annually. In 1920, when governmental
authority made the last wage increase.
the labor cost of the railroads was
about $685. 100000 annually. or, if
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 &c..
100000.
An increase, since the government
took charge Of railroad wages in the