Vashon Island news-record. [volume] (Vashon, Wash.) 1919-1954, 1921-10-28
Propose 10 Reduce Wages and
Return All Saving BY Re.
duction in Charges,
FULL TEXT OF PROPOSAL
Statement by Thomas Dewitt Cuyler.
Chairman OF the Association Of
Railway Executives, on
the Situation.


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, 1t was de.
termined by the railroads or the united
States, to seek to bring about reduc'
t!on In rates. and as 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 reduction In wages
OF train service employees sufficient
to remove the remainder OF the in
creases made by the labor boards de-.
cision OF July 20, 1920 (Which would
involve further reduction OF approx
mately ten per cent?, and for n re-
duction In the wages OF all other
classes OF railroad labor to the going
rate for such labor in several tori.
tories where the carriers operate.
To Reduce Rates as Wage Go Down.
ne loleBOluB uNtioii 10 uboh Wv
understanding 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 exist
ing railroad rates. except in so far
as this reduction shall have been made
in the meantime.
The arrangements have decided up.
on this course in view OF their realiza.
ton of the fact that the wheels OF in.
dustrial activity have been closed
down to a point which brings depres
sion 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 net railway operating
income OF about $62,000,000 upon a
property investment OF over $4,000.
100000 and even this amount of sixty
two millions included back mail pay
for prior years received from the gov.
eminent Of approximately S64,000,000,
thus showing, when the operations Of
actual deficit before making any allow
ance for either interest or dividends
The year ended in serious depres
sion in all branches Of industry, and
in marked reductions OF the market
demand for and the prices Of basic
commodities. resulting in a 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
railroads This was at the price Of
neglectng and for the time, deferring
work which must hereafter and in the
near future be done and paid Tor This
is illustrated by the fact that. as OF
September Is. 1921. over Is per cent or
374.431 in number, of the freight cars
of the carriers were In bad order and
needing repairs, as against normal
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 conditions, and
with this large bill charged up against
the future-which must soon be pro.
vided for and paid II 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 operating
income, before providing for interest
or dividends, amounting to only &c
per cent per annum on the valuation OF
the carrier properties made by the in.
terstate commerce commission in the
recent rate case, an amount not sui.
ficient to pay the interest on their
outstanding bonds.
Roads Earnings Far Below Reasonable
Returns.
It is manifest from this showing,
that the rate OF return OF 5h or per
cent for the first two years after
March /. 1920, fixed in the transporta
ton act as minimum reasonable re.
turn 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 guarantee
In Analysing the expenses which
have largely brought about this stua.
ton, It becomes evident that by far
the largest contributing cause is the
labor cost
Today the railroads pay out to labor
approximately 60 cents on the dollar
they receive for transportation services
whereas in 1916, 40 cents on the dollar
went to labor.
On the first day OF January, 1917,
when the government took charge Of
wages through the Adamson act, the
labor cost of the railroads had not ex'
ceeded the sum Of about 81 ,46S, 000,0 900
annually. In 1920, when governmental
authority made the last wage increase,
the labor cost of the railroads was
about $3,69S,OO0000 annually, or, II
continued throughout the year instead
| of for the eight months during which
the wage increases were in effect the
labor cost, on an annual basis. would
have been largely In excess OF So,
100000.
An increase, since the government
took charge Of railroad wages in ~