The Farmington times. (Farmington, St. Francois County, Mo.) 1905-1926, 1921-10-28
Propose TO Reduce Wages and
Return All the Saving by
Reduction in Charges.
FULL TEXT OF THE PROPOSAL
Statement by Thomas De Witt Cuyler,
Chairman Of the Association Of
Railway Executives, on the
Situation.

nearly all of the leading railroads il
the country. Mr. Thomas De Wit
Cuyler, chairman of the Association
Of Railway Executives, made the fol
lowing statement:
Eat meeting of the Association
of Railway Executives to-day, it was
determined by the railroads of the
| United States, to seek to bring about
a reduction in present railroad wages
which have compelled maintenance
of the present rates.
An application will be made i'm
mediately to the United States Rail
road Labor Board for a reduction in
wages Of train service employees
sufficient to remove the remainder
of the increases made by the Labor
Boards decision of July 20, 1920
which would involve further re.
duction of approximately ten per cent
and for a reduction in the wages OF
all other classes of railroad labor to
the going rate for such labor in sew
eral territories where the carries op.
crate. ''...........
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 ex-
listing railroad rates, except in so far
as this reduction shall have been
made in the meantime.
The arrangements 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 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 operat-
ing income of about 100000 900, upon
a property investment of over &c.,
900, 0OO, 900, and even this amount Of
$62, 900, 900 included back mail pay for
prior years received from the govern
ment Of approximately $64,000,000,
thus showing, when the operations
of that year alone are considered, an
actual deficit before making any al
lowance for either interest or divi.
dends.
The year ended in serious depres-
sion in all branches of industry, and
in marked reduction of the market
demand for and the prices of basic
commodities, resulting in very seri
Gus falling off in the voume of traffic
Roads For 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 neglecting and for the time defer
ring work which must hereafter and
at the near future be done and paid
for. This is illustrated by the fact
that as Of September 10, 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; and as is
further illustrated by the deferred
and inadequate maintenance Of other
equipment and Of roadway and struc.
lures.
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
lions for the first eight months of
this year, the latest available figures.
has been at a rate OF net railway
income, before providing for
interest or dividends, amounting to
only 26 per cent, per annum on the
valuation of the carrier properties
made by the Interstate Commerce
Commission in the recent rate case
an amount not sufficient 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 s
per cent for the first two years after
March 1, 1920, fixed in the transporta.
tation act as minimum reasonable
return upon railroad investment, has
not been even approximated-much !
less reached; and that the present |
high rates accordingly are not due
10 any statutory guarantee Of earn
ngs, for there is no such guarantee.
In Analysing the expenses which !
have largely brought about this SIT
nation, it becomes evident that by far |
he largest contributing cause is the
abor cost.
To-day the railroads pay out to
abor approximately 60c on the dol
ar they receive for transportation
services, whereas in 1916, 4Oc, on the
lollar went to labor.
On the first day of January, 1917, |
when the government took charge
If wages through the Adamson act,
he labor cost of the railroads had
lot exceeded the sum of about ST.
I6S, 100000 annually. In 1920 when
authority made the last
wage increase, the labor cost of the
was about $3,69S, 000, 900 an.
lually, or, If continued throughout
he year instead Of for the eight
months during which the wage in.
.reases were in effect the labor cost,