The Ocala evening star. [volume] (Ocala, Fla.) 1895-1943, 1921-10-24
RAILROAD PLAN TO
GET RATES DOWN

NEW K OEAlDEE 4C--E q
meeting In Chicago. October II. 1921.
Of the presidents OF nearly all the lead
ing railroads in the country. Mr.. Thorn
as Dewitt Cuyler. chairman OF the As
socfation OF Railway Executives. made
the following statement:
At a meeting of the Association Of
Railway Executives today. 1t 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 immedi-
ately to the United States railroad Ia
Dor board for a reduction In wages OF
train service employees sufficient TO
remove the remainder of the increase
made by the labor boards decision OF
July 80. 1920 (which would involve
further reduction of approximately ten
per cent?. and fer 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,
riers operate.
U
The foregoing action is upon the I'M
Outstanding that concurrently with
such reduction in wages, the benefit
OF the reduction thus obtained snail.
with the concurrence of the interstate
commerce commission, be passed on 10
| the public in the reduction OF exist
ing railroad rates, except IN SO Tar
as this reduction shall have been made
| in the meantime. The management
| have decided upon this course In view
| of their realization of the fact that the
| wheels of industrial activity have been
/ closed down to a point which brings
/ depression and distress 10 the entire
| public and that something must be
done to start them again in opera
ton.
The situation which confronts the
railroads is extremely critical. The
railroads in 1920 realized net rail-
| way operating income of about $62,-
OOO, 900 upon a property investment of
| over $4,000, 100000 and even this
amount of $4,000 900 included back
mail pay for prior years received from
| the government of approximately S64r
| 200, 900, thus showing when the op-
| erations 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 tbs prices of basic com
inodities, resulting in very serious
/ falling off in the volume of traffic.
| Roads Forced To Defer Maintenance
In this situation, policy of the most
| rigid economy and of postponing 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 pei
cent, or 374,431 In number, Of the
freight cars of the carriers were in
bad order and needing repairs, az
against a normal of bad order cars Of
not more than 100000, as is further
illustrated by the deferred and made
auate 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 If the carriers are
to perform successfully, the transpor
tation duties-the result of operations
for the first eight months of this year
the latest available figures, has beer
at a rate of net railway operating in
come, before providing for interest o.
dividends amounting to only &c pei
cent per annum on the valuation o.
the carrier properties made by the in
terstate commerce commission in thu
recent rate case, an amount not suffi
cient to pay the interest on their out
standing bonds.
Roads Earnings Far Below REASONABLE
Returns.
It Is manifest, from this showing, tina
! the rate of return of S 1/2 or pc
cent for the first two years afte
March l, 1920, fixed in the transports
| ton act as a minimum reasonable re
turn upon railroad investment has no
been even approximated-much les
reached; and that the present higl
rates accordingly are not due to an,
statutory guarantee of earnings, 70
there is no such guarantee.
In Analysing the expenses which hav
largely brought about this situation,
becomes evident that by far the larges
contributing cause is the labor cost.
Today the railroads pay out to labo
approximately soc on the dollar the
receive for transportation services
whereas in 1916, 40 cents on tha do,
lar went to labor.
On the first day of January, 1917
when the government took charge o
wages through the Adamson act, tn
labor cost of the railroads had not ex
ceeded the sum of about 81 ,46S, 100000
annually. In 1920, when governments
authority made the last wage increase
the labor cost of the railroads wa
about S3,698, 100000 annually, or,
continued thruout the year, instead o
i for the eight months during which tn