New-York tribune., 1921-03-14

Nalii oau executives now 1cSI tn0 noeQS
of doing simultaneously three things
which they had originally planned 70 do
separately. They had hoped first to
scrap the national agreements % to
working conditions which were adopted
during the regime Of the railroad ad-
ministration. The managements Of the
roads contend these agreements MAXI
for inef1cisncy. Having eliminated
these obstacles, the executives next
hoped to readjust downward the wages
of unskilled labor. And then, lastly,
they desired to reduce the compsnsa-
tion in dollars Of skilled workers, but
felt that, since theirs had not risen in
proportion to the unskilled, it WAS only
fair to postpone reductions. But in
ability to get quick action on the pre-
llminary program as q result Of tho at
titude of the men and the force of
shrinking earnings has driven the d.
recting minds Of the roads to the con-
clusion that it is now necessary to put
through the entire scheme OF liquida-
tion of labor at once. The executives
estimate that 60 cents out Of every
dollar they spend goes to labor, and, In
the attempt to slash expenditures. they
feel that labor must necessarily be
affected. Other parts Of the economy
policy involve deferment Of new con-
struction, g handto-mouth policy In
regard to purchase Of equipment, coal
conservation, better loading and other
technical matters.
Of course, if the railroads should
escape from the present wise Of high
costs and shrinking income by means
of wage cuts the result will be favor
able in strictly financial sense. How
ever. the focusing Of attention on the
plight of roads received bearish in
terpretation among spectators, who
evidently were expressing their fear
that the unions and the Railroad Labor
Board were likely to thwart the de-
fationist efforts Of the railroad man
ayers. The heavy selling toward the
close of the week of railroad stocks
represented selling by those who pre-
ferred to be out of the market during
the critical period of adjustment that
looms ahead, as we'll as heavy short
selling and liquidation by disappointed
spectators for the rise.
The concentration of attention on the
marked degree to which the railroads
are failing to earn the per cent on
their property valuation which the
transportation act Of 1920 describes as
fair return accomplished In the stock
market what important international
news failed to do. 1t succeeded in rous-
ing the stock market from its career of
sleeping sickness, in which only the
encounters among professional specu-
lators preserved the continuity of the
market In spite of the failure OF the
Allies and the Germans to agree on
reparations at the London conference,
the reported revolt in Russia and the
assassination in Spain, the market re-
mained listless and inactive until to-
ward the middle Of the week, when
attention was focused on the diff
culties of the railroads.
The troubles of the railroads are
interviewer with those of industry. The
recession in trade has decreased the
volume Of freight offered to the roads.
Both the railroads and industry are in
the midst of the same process of read
justment to after the-war conditions.
1t is not surprising, therefore, that
weakness in the rails was followed by
heavy selling of the industrials. The
pressure was largely Of professional
origin at first, but it succeeded later in
causing real liquidation. Some Of the
selling very evidently was by those in
quest Of cash with which to pay the
first instalment of their Federal taxes
tomorrow. By Friday night the aver
ages of both industrial and railroad