The herald., 1921-10-27
RAILROAD PLAN TO
GET RATES down
PROPOSE TO REDUCE WAGES AND
RETURN ALL THE SAVINGS BY
REDUCTION IN CHARGES.
FULL TEXT OF PROPOSAL
Statement BY Thomas Dewitt Culyer,
Chairman Of the Association Of
Railway Executives, on the
Situation.

Following meeting in Chicago,
October IA, 1921, OF the presidents OF
nearly all the leading railroads in the
country, Mr.. Thomas Dewitt CuyIer,
chairman Of the Association of Rail-
way Executives, made the following
statement:
At meeting Of the Association OF
Railway Executives today, it was de-
termined by the railroads of the Unit
ed States to seek to bring about re-
duction in rates, and as a means to
that end to seek a reduction in pres
ent railroad wages, which have COM
PEELED maintenance of the present
rates.
An application will be made I'm
mediately to the United States Rail-
road Labor Board for a reduction in
wages OF train service employees suf-
ficient to remove the remainder OF the
increases made by the Labor Boards
decision OF July 20, 1920, which would
involve a further reduction Of approx
mately ten per cent and for reduc-
ton in the wages Of all other classes
of railroad labor TO the going rate for
such labor in several territories where
the carriers operate.
To Reduce Rates as Wages Go Down.
The foregoing action is upon the I'M
Outstanding that concurrently with
such reduction in wages the benefit
Of the reduction thus obtained shall,
with the concurrence OF the Interstate
Commerce Commission, be passed on
TO the public in the reduction OF ex-
listing railroad rates, except in so far
rs this reduction shall have been made
In the meantime.
The management has decided upon
this course in view of their realiZa-
tion OF the fact that the wheels OF in
dustrial 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 situation which confronts the
railroads is extremely critical. The
railroads in 1920 realized a net rail-
way operating income of about $685.
100000 upon property investment OF
over $ls,OOO,O0O,00O and even this
amount OF s62,OOO,0OO included back
mail pay for prior years, received from
the government of approximately S64,-
100000, or thus showing, when the
operations OF that year alone are con-
sidered, an actual deficit before max
ing any allowance for either interest
or dividends.
The year ended In serious depres-
sion In all branches OF industry, and
In marked reduction OF the market de-
mand for and the prices Of basic COM
modities, resulting in a 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 postpon-
ing and cutting to the bone the up
keep of the properties was adopted by
the railroads. This was at the price
OF neglecting, and for the time, de-
ferring 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 Is per cent or 974,431 in number,
Of the freight cars Of the carriers were
In bad order and needing repairs, as
against a normal of bad order cars of
not more than 100000 as is further IL
Illustrated by the deferred and made
Quate 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 il the carriers are
to perform successfully, their trans
portation duties, the result Of opera
tons for the first eight months of
this year, the latest available figures,
has been at rate Of net railway op-
Grating income, before providing for
interest or dividends, amounting to
only 26 per cent per alnum On the
valuation Of the carrier properties
made by the Interstate Commerce
Commission in the recent rate case,
any amount not sufficient to pay the
AAsoAOoS VA thOAE OubStduuiHh JULIUS.
Reais Earning Far Below Reasonable
Returns.
manifest, from this showing.
II the rate OF return Of 5h or 6
per cent for the first two years after
March 1, 1920. fixed in the transpor.
tation act as minimum reasonable
return upon railroad investment has
not teen even Appropriated much
less reached; and that the present
high rates accordingly are not due
10 any statutory guarantee Of earnings,
Cor there Is no such guarantee.
In analyzing the expenses which
have largely brought about this situa-
zion, it becomes evident that by far
the largest contributing cause is the
labor cost.
Today the railroads pay out to labor
approximately so cents on the dol
lar they receive for transportation
services. whereas in 1915, 40 cents on
the dollar went to labor.
On the first day of January. 1917.