Imperial Valley press., 1921-10-25
RAILROAD PLAN TO
GET RATES DOWN
PROPOSE TO REDUCE WAGES AND
RETURN ALL THE, SAVING By i.
REDUCTION IN CHARGES =
FULL TEXT OF THE P3C7 SSSAL
Statement By Thomas Dewitt Cuylsri
Chairman Of the Associatien \
Of Railway Executives On =, /
the Situation =. . ! !.

October II, 1921, of the Presi-
dents Of nearly all the leading rail,
roads in the country. Mr.. Thomas De-
witt Cuyler, chairman Of the Associa'
ton Of railway 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 tina.
end to seek a reduction in present
railroad wages which have compelled
maintenance Of the present rates.
An application will be made 1mmedi-
ately to the United States Railroad
Labor Board for reduction in wages
Of train service employees sufficient to
remove the remainder of the increases
made by the Labor Board decision OF
July 20, 1920 (Which would involve
further reduction of approximately ten
percenU 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
understanding 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 the
public in the reduction OF existing
railroad rates. except in so far as this
reduction shall have been made In the
meantime.
The managements 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 situa-
ton which confronts the railroads is
extremely critical. The railroads in
1880 realized = net railway operating
i1ACme Of about $62,000,000, upon
property investment Of over $4,000
100000, and even this amount Of sixty
two million included back mail pay
for prior years received from the gov
ernment Of approximately $e4,000,0no,
thus showing, when the operations ct
that year alone are considered, ar
acslal deficit before making any allow.
ance for either interest or dividends.
The year ended in serious depres
sion in all branches Of industry. and II
marked reduction Of the market d.,
mand for and the prices of basic COM
nlodities. 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 postponihs
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 Sep
tember 16, 1921. over 16 per cent or
374,431 in number, Of the freight cars
OF tho carriers were In bad order and
needing repairs. as against a normal
OF bad order cars OF not more than
100000 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.
tious for the FIRST eight months Of this
year, tho latest available figures. has
been ct q rate Of net railway operating
income. before providing for interest
or dividends, amounting to only 2.6
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 Earning Far Blow Reasonable
Returns.
It is manifest. from this showing
that the rate Of return Of 5h or 1
per cent for the first two years. after
March l, 1920, flxed in the transporta
ton act as a minimum reasonable
return upon railroad investment. has
not been even Appropriated, much less
reached: and that the present higf
rates accordingly are not due to an!
statutory guaranty Of earnings. TO,
there Is no such guarantee.
In analy1tng the expenses whict
have largely brought about this, stu
alton, It becomes evident that by ia,
the largest contributing cause Is the
labor cost.
Today the railroads pay out to. labor
approximately 60 cents on the dollar
they receive for transportation serv
ices, whereas in 1915, 40 cents on ths
dollar went to labor.
On the drst day Of January, 1al7
when the government took charge o.
wages through the Adamson Act, the
labor cost OF the railroads had not ex
ceeded the sum Of about n,46S,0 0,oo(
annually
In AyQ2o when governmental author