The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1921-01-24
ROADS EARNINGS CUT
BY PAYROLL; DECLINE
TO COME SOON, dunn
1Ry Associated Press


NEW YORK, Jan. "a Railway
wages should and must be substantial
~ reduced sooner or later. and steps
toward their reduction should be taken
in the very near future. Samuel o.
Dunn, editor of the Railway Age, told
the New FORK Railroad Club in an ad-
dress here. s Ss. s go r
Experience since the recent advan-
ces in rates were made have demon
strated, Mr.. Dunn contended, that even
with a maximum traffic the railways
cannot earn 6 per cent on the valua-
ton fixed by the Interstate Commerce
Commission with the present passen-
ger and freight rates and the present
wages. They are not now handling a
maximum business. Their freight traf-
fic has declined 80 per cent since
October and on January 5 they had a
net surplus of PSI 900 cars.
Earnings Below Normal.
1.-THE demons trated inability Of the
railways to earn the return expected
even when handling a maximum traf-
fc,' Mr. Dunn said, and the tremend-
Gus decline of traffic are creating a
serious situation to which not only
railway managers, but the Railroad
Labor Board, the Interstate Commerce
Commission and Congress must give
early attention.
I'm September the railways earned
only CT per cent of the expected net
return; in October only II per cent,
in November only So per cent. The
total net operating income they should
have earned for those three months to
have contributed their share toward
per cent annual return was $324,4l7.-
600, while the amount actually earned
was. only $219,500,000. At this rate
they would earn only 4 per cent, and
these were months of large business.
The Interstate Commerce Commission
has recognized the principle that the
railways must earn = per cent to en-
able them to expand their facilities
sufficiently to give the public adequate
service.
Oppose Advance.
1.-THE public would strongly oppose a
further advance in rates under present
conditions when prices of most conf
raodities, and especially of farm pro-
ducts, are declining. The only alter
native is to reduce operating expenses.
The present very high operating ex-
penses are chiefly due to the enormous
pay roll This enormous pay roll is
due to the granting of the eight hour
day under government control, which
has caused a large increase in the
number of employees, and to the large
advances in wages made by the rail-
road labor board last July.
"Ail the present railway costs should
he reduced. but the pay roll is so
large part Of the total expenses that
no substantial relief TO the railways,
which are not earning an adequate net
return, or to the public, which has to
Fay present freight and passenger
rates, can be obtained without sub
siantial reduction in wages.
Farmers and business men recently
lave lost many hundreds of millions
of dollars because of declines in prices
Wages already have been reduced in
many industries. The Railroad Labor
Board, in granting the advance in
wages last July, based it largely upon
the high cost of living. In view OF
developments since then a rehcarins
of the wage case should be held and
wages fixed which are more" in har
nony with existing conditions