Palatka daily news. [volume] (Palatka, Fla.) 1919-1994, 1921-10-27
RAILROAD PLAN To
GET Rates DOWN

Of the pres idents OF nearly all the lead
ing railroads in the country, Mr.. Thorn
as Dewitt Cuyler, chairman OF the AS
sociation of Railway Executives. made
the following statement:
At q meeting Of the Association OF
Railway Executives today, 1t was de
termined by the railroads OF the Unit
ed States, to seek to bring about re
duction In rates and as meana to
that end to seek reduction in pres
emit railroad wages. which have com
PEELED maintenance OF the preseH'
rates.
An application will be made immedi
ately to the United States railroad Ia
Dor board for a reduction In wages OF
train service employees sufficient to
remove the remainder Of the increase
made by the labor boards decision of
July 30. 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
in several territories where the ca.
riers operate.
To Reduce Rates As Wages Go Down
The foregoing action is upon the I'M
derstanding that conCurrently with
such reduction In wages, the benetlt
ri the reduction thus obtained shall,
with the concurrence Of the interstate
commerce commission be passed on TO
the public In the reduction OF exist
ing railroad rates, except IN so far
as this reduction shall have been made
in the meantime. The management
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
depression and distress to the entire
public and that something must be
done to start them again In opera
ton.
The situation which confronts the
railroads is extremely critical. The
railroads in 1920 realized a net rail-
way operating income OF about $62,-
100000 upon a property investment OF
over 9OO0.000,000 and even this
amount of S62,0O0,000 included back
mail pay for prior years received from
the government of approximately $751;
100000, thus showing, when the op-
erations of that year alone are con
sidered, an actual deficit before max
ing any allowance for either interest
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 a 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 postponing and
cutting to the bone the upkeep of the
properties was adopted by the rail
loads. This was at the price Of neg
lcCting and, for the time, deferring
work which must hereafter and, in
The near future, be done and paid for.
Fhis is illustrated by the fact that,
b. of September Is, 1921, over Is pei
bent, or 4,431 in number, of the
freight cars of the carriers were i'll
bad order and needing repairs, as
against a normal Of bad order cars OF
hot more than 100000 as is further
illustrated by the deferred and made,
huate maintenance of other equipment
and of roadway and structures.
Even under those conditions. and
with this large bill charged up against
the future-whiCh must soon be pro
vided for and paid IL the carriers are
to perform successfully, the transpor,
tation duties-the result Of operations
for the first eight months of this year,
the latest available figures has been
at rate of net railway operating in
come, before providing for interest or
dividends amounting to only 90 per
cent per annum on the valuation of
the carrier properties made by the in.
terstate commerce commission in the
recent rate case. an amount not suffi,
cient to pay the interest on their out.
standing bonds.
Roads Earnings Far Below Reasonable
Returns.
1t is manifest from this showing, that
the rate of return of ; 1i2 or pei
cent, for the first two years aftcl
March l, 1920, fixed in the transporta
ton act as a minimum reasonable re.
FIRM unon railroad investment has no,
hean even Northumberland les.
reecbad. and thai the present high
rates accordingly are not due to any
statutory guarantee OF earnings, tol
there is no such guarantee.
In analyzing the expenses Whicn nave
largely brought about this situation, it
becomes evident that by far the largest
contributing cause IS the laDor cost
Today the TallrOaGS pay out 10 IdDOT