Worcester Democrat and the ledger-enterprise. (Pocomoke City, Md.) 1921-1953, 1921-10-29

cars of the carriers we're in bad order
and needing repairs, as against nor
nal Of bad order cars of not more
than 100000, as is further Illustrated
by the deferred and mac equate main
tenance of other equipment and of
roadway and structures.
Even under those conditions, and
with tn; large bill charged up against
tie fiIture.-which must soon be pro-
vidod for and paid il the carriers are
to perform successfully their transport
tation duties.-the result of operations
for the first eight months Of this year,
the latest available figures, has been
at n rate Of net railway operating in
come, before providing for interest
or dividends, amounting to only 90
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 Earnings Far Below Reasonable
Returns
1t Is manifest, from this showing,
that the rate of ret"rn of 5B or 6 per
cent for the first two years after March
l, 1920 fixed in the Transportation Act
as q minimum reasonable return upon
railroad Investment, has not been even
approximations less reached +;
and that the present high rates accord
ingly are not tue to any statutory
guarantee of earnings, for there ls 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 soc on the dollar they
receive for transportation services,
whereas in 1916, Ace on the dollar went
to labor.
On the first day of January, 1917,
when the government took charge of
wages through the Ajamson Act, tho
labor cost Of the railroads had not
excet died the sum of about $1,46S,00O,-
900 annually. In t02G, when govern.
mental authority made the last wage
Increase, the labor cost Of the rail.
roads was about S3,69S 100000 annual
ly, Or If continued throughout he year
instead of for the eight months during
which the wage Increases were In eff
feet, the labor cost, on an annual basis,
10 IL, -
$1,000 900, 000-an increase, since the
government took charge Of railroad
wages in the Adamson Act, of approx.
mately $2,450O00,00O annually.
In the light of these figures, 1t is
manifest that the recent reduction Of
wages authorized by the Labor Board
estimated at from 10 to II per cent
II no sense meets or solves the prob
lem of labor costs and in 7 way makes
1t possible for the railroads to afford
reduction III their revenues.
Thousands of Rates Already Reduced
Indeed, during the past year there
have been between four and five thou
sand individual reductions In freight
rates. On some railroads the reduc
lions in rates have amounted to more
than the reductions in wages so far
made, and on many other railroads the
reductions in wages allowed no net re-
turn on operations, but merely pro-
vided against the further accumulation
of u deficit.
The point is often made that agricul-
ture and other industries are also suf-
fering the same immediate difficulties
as the railroads, why, therefore, do not
the railroads take their medicine like
anybody else? The answer lies In sew
eral facts:
/. The railroads were not permitted
as were other industries, to make
charges during the years Of prosperity
making possible the accumulation of 8
surplus to tide them over the present
extreme adversely. According to the
reports Of the Interstate Commerce
Commission, the rate Of return on
property Investment of the railroads OF
the United States for the past several
years has been as follows: