Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1921-10-27
Propose to Reduce Wages and
Return All the Saving by
Reduction in Charges.
FULL TEXT OF THE PROPOSAL
Statement by Thomas De Witt CuyIer,
Chairman of the Association of
Railway Executives, on the
Situation.

country, MIR. Thomas Dewitt Cuyler,
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 Uni
ted States, to seek to bring about a
reduction in rates, and as 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
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 a further reduction of approx
imately ten per cent? and for a 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 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 insofar
as this reduction shall have been made
in the meantime.
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 closed
down to a point which brings depres-
sion and distress to the entire pub
lie, 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 &c.,,
100000 upon property investment of
over $19,00O,000,00O and even this
amount of $62,OOOOOO included back
mail pay for prior years received
from the government Of approximately
$64,0OO,000 thus showing, when the OPP
CREATIONS Of that year alone are con-
sidered, an actual deficit before max
ing any allowance for either interest
or dividends.
I 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
commodities, resulting in a very seri-
Gus 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. That 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 15 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 100000, as is fur
Their 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 rate of net railway Operat-
ing income before providing for inter-
est or dividends, amounting to only
&c per cent per annum on the valua-
ton of the carrier properties made by
the interstate commerce commission
i'm the recent rate case, an amount not
sufficient to pay the interest on their
outstanding bonds.
Roads Earnings Far Below Reason
able Returns.
1t is manifest, from this showing,
that the rate of return of 52 or 6
per cent for the first two years after
March 1, 1920, fixed in the transpor-
tation act as a minimum reasonable
return upon railroad investment, has
not been even approximated-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 situa-
ton, it becomes evident that by far
the largest contributing cause is the
labor cost.
Today the railroads pay out to labor
approximately sixty cents on the dol.
lar they receive for transportation
services, whereas in 1916, forty cents
on the dollar went to labor.
On the first day Of January, 1917
when the government took charge OF
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