Mountain Home Republican. [volume] (Mountain Home, Idaho) 1915-1946, 1921-10-22
RAILROAD PLAN TO
GET RATES DOWN
Propose TO Reduce Wages and Retur'
All the Saving by Reduction
in Charges
FULL TEXT or the PROPOSAL
Statement by Thomas Dewitt Cuyler
Chairman of the Association OF
Railway Executives on the
Situation

FOLLOWING a meeting IN chicago, OC'
tober IA, 1921, of the presidents OF
nearly all the leading railroads IN the
country, Mr.. Thomas Dewitt Cuyler,
Chairman of the Association OF Rail
way Executives, made the following
statement:
AT a meeting of the association OF
railway executives today, it was deter
mined by the railroads of the United
States, to seek to bring about reduc
ton in rates, and as means to that
end to seek a reduction in present rail
road wages which have compelled
maintenance of the present rates.
An application will be made immedi-
ately to the United States railroad la
Dor board for a 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 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
rers operate.
To Reduce Rates AS Wages Go Down
The foregoing action is upon the I'M
derstandng 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 to the
public in the reduction Of existing rail
road rates, except in so far as this re-
duction 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 industri-
al activity have been closed down to a
point which brings depression and dis
tress to the entire public, and that
something must be done to start them
again In operation. The situation
which confronts the railroads Is ex'
tremely critical The railroads In 1920
realized a net railway operating income
of about $62, 100000, upon a 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 government of APP
proxnuaie,y $64,000,000, thus showing,
when the operations of that year alone
are considered, an actual deficit before
making any allowance for either inter
est or dividends.
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 very serious
falling off In the volume of traffic.
Roads Forced To Defer Maintenance
In this situation a policy of the most
rigid economy and of p0stponing 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
September Is, 1921, over 16 per cent
or 974,431 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 maintenance
of other equipment and of roadway
and structures. Even under those con-
ditions, and with this large bill charged
up against the uture,-which must
soon be provided for and paid If the
carriers are to perform successfully.
their transportation duties,-the result
of operations for the first eight months
of this year, the latest available figures,
has been at a rate of net railway oper'
ating income, before providing for in.
terest or dividends, amounting to only
&c per cent per annum on the valua-
ton of the carrier properties made by
the interstate commerce commission In
the recent rate case, an amount not
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 5h or per
cent for the first two years after March
1, 1920, fixed in the transportation act
as minimum reasonable return 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 guar