Ellsworth American. [volume] (Ellsworth, Me.) 1855-current, 1921-10-26
Propose to Reduce Wages and
Return All the Saving by
Reduction in Charges.
FULLTEXT OF THE PROPOSAL
Statement by Thomas de Witt Cuyler.
Chairman Of the Association of
Railway Executives on
the Situation.

nearly all the leading railroads in the
country, Mr.. Thomas de Witt Guy
Ter, Chairman of the Association of
Railway Executives, made the follow
ing statement:
At meeting of the Association OF
Railway Executives today, it was de-
termned by the railroads of the Uni
ted States, to seek to bring about
reduction in rates, and as a means to
that end to seek reduction in present
railroad wages which have compelled
maintenance of the present rates.
An application will be made imme
diately to the United States Railroad
Labor Board for a reduction in wages
of train service employees sufficient to
remove the remainder of the increases
made by the Labor Boards decisi0n of
July 20, 1920 (Which would involve
further reduction of approximately ten
per cent, and for reduction in the
wages of all other classes of railroad
Il Dor to the going rate for such labor
in several territories where the car.
rlers operate.
20 Reduce Rates as Wages Go Dowr
The foregoing action is upon the un.
decstanding that concutrently 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
railroad rates, except in so far as this
reduction shall have been made in the
mcsntime.
The Arrangements have decided up,
on this course in view of their real
ization of the fact that the wheels OF
industrial activity have been slowed
down to point which brings depres-
Son and distress to the entire public,
and that something must be done to
start them again in operation.
Ihe situation which confronts the
railroads is extremely critical. The
railroads in 1920 realized a net rail
way operating income of about SCI
tnt 0l;, upon a property investment
Of over $19,000.000 600. and even this
amount of G. millions included back
mail pay for prior years received from
the government of approximately $685..
lUt- 600, thus show ng, when the opera
tions of that year alone are considered
ar actual deficit before making any
advance for either interest or divi
Gends.
The year ended in serious depres-
SIGN in all branches of industry, and
in marked reduction of the market de
mand for and the prices of basic com
modsties, resulting in a very serious
falling off in the volume of traffic
Reads Forced to Defer Maintenance
Work
In this situation Il policy of the most
rigid economy and of postponing and
eating to the bone the upkeep of thu.
pr. pcrties was adopted by the rail
roads. This was at the price of ne
gIecting and for the time deferrine
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 cen:
or 374.431 in number, Of the freight
cars of the carriers were in bad order
and needing repai j. as against nor
NAL of bad order cars of not more
than 100 000, as is further illustrated
by the deferred and inadequate main
tenance 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 DO pro-
vided for and paid if the carriers are
to perform successfully their transpor-
tation duties. tho result of operations
for the first eight months of this year,
the latest available figures, has been
at rate Of net railway operating liz
come, before p DIVIDING for interest or
dividends, amounting to only 2.6 PEI
cent, per aLnum 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 Reason
able Return
It is manifest, from this showing
thst the rate of return of 5h or 6 per
cent for the first two years ate.
Ma! Oh ], 1920, fixed y the Transports
ton Act as a minimum reasonable re-
turn upon railroad investment. ha.
not Teen even approxim ted-muc.
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 whict
have largely brought about this sit
| uation. it becomes evident that by fa,
| the largest contributing cause is the
: labor cost.
Today the railroads pay out to labo.
approximately Coo on the dollar the,
receive for transportation services
whereas in 1916, 40c on the dolla
I went to labor.
On the first day of January, 1917
! when, the government took charge Ct
wages through the Adamson Act, the
labor cost of the railroads had moi
exceeded the sum OF about $1,46S,009,
0OQ/annually In 1920, when govern
mental authority made the last wage
Z increase. the labor cost Of the rail
roads was about $3.6s8 100000 annual
ly. or. If continued throughout tn