The Lambertville record. [volume] (Lambertville, N.J.) 1872-1968, 1921-10-21
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 de Witt cuyier,
Chairman of the Association OF
Railway Executives on
the Situation.

| NVilVNluS d meeting Ill SHlChSb, W.
tober II, 1921, of the presidents of
nearly all the leading railroads in the
country, Mr.. Thomas De Witt 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 United
States, to seek to bring about a reduc-
tion in rates, and as means to that
end TO seek reduction in present rail-
road wages which have compelled
maintenance Of the present rates.
An application will be made imme.
diately to the United States Railroad
Labor Board for 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 reduction 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
rlers operate.
To Reduce Rates as Wages Go Down
The foregoing action is upon the un-
derstanding that concurrently with
| such reduction in wages the benefit of
the reduction thus obtained shall, with
the concurrence of the Interstate Com
merce Commission, be passed on to the
L. tl,4 "a
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 indus
! trial activity have been slowed down to
point which brings depression 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 S62,000,0OO,
| upon property investment OF over
| $4,000, 100000, and even this amount
of 62 millions included back mail pay
for prior years received from the gov
eminent of approximately S64 100000,
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 depression
| in all branches Of industry, and In
I a.
mand for and the prices of basic COM
! modities, resulting In a very serious
falling off In the volume of traffic.
Roads Forced to Defer Maintenance
Work
In this situation rolicy of the most
| rigid economy and Of postponing and
! cutting to the bone the upkeep of the
properties was adopted by the rail-
| roads. This was at the price of neg
| lecting 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 10 per cent
1 or 3T4 49, in number, of the freight
! cars of the carriers were in bad order
and needing repairs as against a nor
! NAL of bad order cars of not more
/ Than 10000, as is further Illustrated
! by the deferred and inadequate main
tenauce of other equipment and of
| roadway and structures.
Even under those conditions, and
/ with this large hill charged up against
tile future,-whrh must soon he pro-
| yided for and paid il the carriers are
| 10 perform successfully their transpor-
| tation dutieS.-lhc result of operations
| for the first eight months of this year,
| the latest available figures. has been
at a rate of net railway operating in
come. before providing for interest
nr dividends. amounting to only 2.6
per cent, per annum or 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
Return
II is manifest. from this showing,
thai the rate Of ret nm of 81 or 6 per
! cont for the first two years after March
l. 1920 fixed in the Transportation Act
as 4 minimum reasonable return upon
railroad investment. has not been even
approximated-~ much less reached
and that the present high rates accord
ingly are not cue to any statutory
| guarantee Of earnings for there is no
such guarantee
In analyzing the expenses which
have largely brought about this situa-
ton. il becomes evident that by far
the largest contributing cause Is the
labor cost
Today the railroads pay out to labor
approximately 60c on the dollar they
receive for transportation services.
whereas in 1916. 40c on the dollar went
to Labor
On the first day of January. 1917,
when the government took charge of
wages through the Adamson Act, the
labor cost of the railroads had not
exceeded the sum Of about 81 ,46S, 00O,-
900 annually. In 1920, when govern
mental authority made the last wage
increase, the labor cost of the rail-
roads was about S369S, 100000 annual
~, or. IL continued throughout he year
instead of for the eight months during
which the wage increases were in eff
feet, the labor cost, on an annual basis,
would have been largely in excess Of
$4,000, 000000-an increase, since the
government took charge of railroad
wages in the Adamson Act, of approx
mately S2,450,000,O00 annually.
In the light of these figures 1t is