Evening star., 1921-10-23
RAILWAYS MUST LOWER
RUNNING COST, SAKSL C.. c.
Remarkable Decision Handed Down Giving
Broad Tems on Economic
Situation

| turn. and are too high to permit of
INDUSTRIAL expansion that would give
''id Aihuh ana steady employment. the
Labor Board should be called upon
10 determine If railroad labor costs
are not too high as compared with
other economic factors.
~ tune when our railways are
charging lower rates and paying
| hisher wages than carriers of other
countries, 1t takes lot to explain
an oruer requiring Il rate reduction
When the earnings of the carriers are
nluch less than the minimum fair re-
| turn which the law prescribes," Com
| missioner Potter said
! - nave the keenest appreciation
thal We must be watchful and alert
20 see whether our action is Dene-
hclai or harmful he continued. 'Our
action Will be wrong and Will need
prompt correction if the results of
recent and further needed readjust-
ments respecting operating costs do
not strengthen the carriers. So far
Tor the current year net earnings
nave been insufficient to compensate
the carriers tor their services, in the
amount which the law has fixed as a
fair return upon the value of their
properties used in the public service
ing results are no better than those
or the past nine months. the carriers
| VIII he unable TO maintain their efii-
cheney and render the service which
is vital to the public welfare-ignor-
ing entirely the element of common
Justice to the owners in the way of
4 1alr return upon their Investments
IN the public interest, as we'll as
in fairness to the carriers, there must
be done without delay whatever is
! ihecessary SO to improve their operat-
ii!S showing as to protect their credit
restore confidence and attract new
money to make betterments for which
there Is urgent need. To require 4
rate reduction under such circum-
stances is for us to assume grave
responsibility. Notwithstanding the
risk involved. We must be guided by
our pest judgment and / am con.
Vlhced that reduction should be
made.
practically every one admits that
rates are too high. Rates too high
are dan unjust and unreasonable and un-
osr the law must be reduced Those
VINO justify present rates regard them
as Il necessary evil--somethine that
must be tolerated because high costs
OF operation prevent their reduction.
nat is no justification. If operating
Gsts are holding rates at q level too
costs. "
Should Cut All Costs
Many Of the cost factors of rail-
way operation which forced higher
| rates nave been substantially reduced
Mis.in the last Year. The most i'm
! n; 70, ant item OF cost is labor. The car
l.ers teil us that they are now paying
extraVagantly high wages. If we NAV
Ieiy upon their statement in this re.
saru they are not operating their
p.1peI.'es economically and efficiently
Su' therefore, operating costs NAV
lur.her a De reduced. We have no juris-
We We may take note of the admission of
me carriers and require them tn find
ut whether their wage scales are too
hiRh, and to lower them if they can,
,.t, IL, upon the presentation of the
hoard - Iso;n ine law requires. the labor
b;sh decides that wages are not too
haS hhssn. those using transportation will
naHe nay, 70 pay the bill of the Oreanized
the h.,way eay,,rnp employees; 10y, The shippers Of
entitled to tbeir aha daH labor pr generally are
oarrlers are the ones to present their
Sase, Tor carriers, shippers and Ia :
rs TVS ;ndnpto;yd edmpioyed in all of the coun-
riers are slss intersstsdh winch &c ~, use the car
| Inc right and power to reduce
! MaSes rests initially with the car
taininp res 1hs nave no excuse for main
say are too high. If they believe them
20 oe 100 high they should take stems
20 reduce them. Until they make the
taiorI they are not entitled to refer
| 70 wages as excusing high rates. The
IaDor board was created to d.termine a
such questions and shippers have the
1Ignt 70 require carriers to resort 10
protectinn prot .r,nnna!. nf untii they have the
existlng conditions by the labor boa rd
lney cannot Justify the present rates
On the race of things there is nothing
mn ,n lhe wage situation to justify a rate
level entirely abnormal and which is
menacing the country's welfare.
Inc carriers should bring the gen.
erai economic situation to the at.
tention Of the labor board.
some urge that we must take wage
contemplate further wage reductions
In dealing with rates. On the ar
sument 1t was pointed out to ne
oy the representatives of the petit
! TONERS that such Is not the law
They urged upon us that it was the
uuty OF the commission to consider
the oroad economic question as to
what rates the industry Of the coun.
try could stand, and that our finding
| In TINS regard should be taken into
consideration in fixing wages. I an
inclined to the view that the Opinion
| thus urged upon US by counsel for
the petitioners is sound, although II
was new to me. It seems to ms
there is warrant for their view in
\ action which the Labor Board has
| heretofore taken.
1.-The transportation machine of the
country is being used for the benefit
OF the shippers and railway en-
ployes, and the owners of the ma.
| chine are receiving much less for il.
use than the law says they are en-.
titled to. In considering what rail.
way employees should receive regard
should be had for what the shippers
can afford to pay. The record in this
case shows that the Labor Board has
declined to give consideration to this
broad basic question, and has refused
t" hear shippers while considerine
wage controversies. The question al
to what rates are fair and reasonable
is with us. If the broad economic
question as to how much shipper,
can afford to pay is a question to be
determined by US when we fix fail
and reasonable rates, it will follow
that the Labor Board, in considerine
wages. would regard our finding as
one of the relevant circumstances to
he taken into consideration in tixine
wages. In this aspect Of the case
| there apparently is necessity for >
determination by US as to the prope1
rate level. and we are authorized tc
order a rate reduction without wait.
ing for wages to be reduced to q
point where the carriers can prospe,
under the rate level which we pre.