Cheraw chronicle. [volume] (Cheraw, S.C.) 1896-2005, 1921-12-01
RAILROAD PLAN TO
GET RATES DOWN
Propose to Reduce Wages and
Return All the Saving by
Reduction in Charges.
FULL TEXT OF the PROPOSAL
Statement by Thomas Dewitt cuylsr,
Chairman Of the Association Of
Railway Executives on the
Situation.

October IA, 1921, OF the presidents OF
nearly all the leading railroads in the
country, Mr.. Thomas Dewitt Cuyler,
chairman Of the Association Of Rail-
way Executives. made the following
statement:
At q meeting of the Association OF
Railway Executives today 1t was de-
termined by the railroads of the
United States to seek to bring about
a reduction in rates. And as a means
to that end to seek reduction In the
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 increases
made by the labor boards decision OF
July 20, 1920 (Which would involve a
further reduction Of approximately 10
per cent? and for a reduction in the
wages of all other classes Of rail-
road labor to the going rate for such
labor in several territories 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 beneht
Of the reduction thus obtained shall
with the concurrence of the Inter
state Commerce Commission, be pass
ed on to the public in the reduction
of existing railroad rates, except In
so far as this reduction shall have
been made in the meantime. The
managements have decided upon this
course in view of their realization OF
the fact that the wheels Of Industrial
activity have been closed down to q
point which brings depression and dis
tress 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 rail
way operating income OF about Ss2,
900 900 upon a property investment o.
over $4,000, 100000 and even this
amount of ss2,o0e,o0o included bach
mail pay for prior years received from
the government Of approximately
$64,000,000, thus showing, when the
operations Of that year alone are con-
sidered, an actual dencit before max
ing any allowance for either interes,
or dividends.
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 com
modities, resulting in 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 postpon
ing and cutting to the bone Of the up
keep 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 NUM-
Der, of the freight cars OF the carriers
were in bad order and needing re-
pairs, as against normal OF bad or.
der Of not more than 100000 az 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 ur
against the future-which must soon
be provided for and paid II the car.
riers are to perform successfully
their transportation duties-the re-
suit of operations for the first eight
months OF this year, the latest avail.
able figures, has been at rate Of net
railway operating income, before pro
viding for interest or dividends
amounting to only 2.6 per cent pei
annum on the valuation Of the car.
rier properties made by the Inter
state Commerce Commission in the
recent rate case, an amount not SUI
ficient to pay the interest on theil
outstanding bonds.
Roads Earning 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 l, 1920, fixed In the Transpor.
tation Act as q minimum reasonable
return upon railroad Investment, has
not been even Appropriated, much
less reached; and that the present
high rates accordingly are not due tc
any statutory guarantee Of earnings,
for there is no such guarantee.
In analyzing the expenses which
have largely brought about this sit
uation, 1t becomes evident that BY
far the largest contributing cause is
the labor cost.
Today the railroads pay out to Ia.
Dor approximately go cents on the dol
lar they receive for transportation
services whereas in 1916, 40 cents on
tho dollar went to labor.
On the first day Of January. 1917.
when the government took charge ei
wages through the Adamson Act ~
labor cost Of the railroads had ncs s1.