The daily star-mirror. (Moscow, Idaho) 1911-1939, 1921-10-21
RAILROAD PLAN TO
GET RATES DOWN
Propose to 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.

Following a meeting In Chicago
October IA, 1921, of the presidents Q
nearly all the leading railroads in tn
country, Mr. Thomas Dewitt Cuyler
chairman of the Association of Rail
way Executives, made the following
statement:
At meeting of the Association o
Railway Executives today, it was de
termined by the railroads of the Unitet
States, to seek to bring about reduc
ton in rates. and as means to tha
end to seek a 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 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 re-
duction in the wages OF all other
classes of railroad labor to the going
rate for such labor in several terri
tories where the carriers operate.
To Reduce Rates as Wages Go Down..
The foregoing action is upon the
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 a net railway operating
income of about $62000,0 900, upon a
property investment of over $19,000,-
100000, and even this amount of sixty
two millions included back mail pay
for prior years received from the gov
eminent of approximately $64,000000
thus showing when the operations of
that year alone are considered an
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 very |
serious falling off in the volume of |
traffic.
Roads Forced to Defer Maintenance
In this situation, policy of the
m ri o nd n nir,O
and cutting to the bone the upkeep of
the properties was adopted by the
railroads. This was at the price of
neglecting 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 per cent or
374,431 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
160, 000 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 if 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 a rate of net railway operating
income, before providing for interest
Or dividends. amounting to only 2.6 :
Der cent per annum on the valuation of :,
he carrier properties made by the in
erstate commerce commission in the
o111O mr. inf
icient to pay the interest on their u
bonds
Roads Earnings Far Below Reasonable
Returns. p
It is manifest from this showing, o
hat the rate of return of 51a or 6 per a.
ent for the first two years after &c
1arch 1. 1920, fixed in the transporta- II
ion act as a minimum reasonable re- ol
urn upon railroad investment, has not o'
cen even approximately much less ca
and that the present high
ates accordingly are not due to any Pc
tatutory guarantee of earnings for Tn
lere is no such guarantee. sc
In Analysing the expenses which tls
ave largely brought about this situa- pc
on, it becomes evident that by far NY
lie largest contributing cause is the
Dor cost. ~
Today the railroads pay out to labor ~ ~
)proximately so cents on the dollar ~
ey receive for transportation services, w.
hereas in 1916. 40 cents on the dollar NC
ent to labor. ~
On the first day of January, 1917, On
hen the government took charge of on
ages through the Adamson act, the -;
Dor cost of the railroads had not ex- AZ
eded the sum of about 1853 100000 roi
nually. In 1920, when governmental mi
thority made the last wage increase, oot
e labor cost of the railroads was
out 3,698.000,OO0 annually, or, II n
ntinued throughout the year instead nue
for the eight months during which 10
3 wage increases were in effect the 900
,or cost. on an annual basis would 90
We been largely in excess OF S.. oh q
1000. dnc ,
An increase. since the government tior
* charge OF railroad wages in the