The daily banner. (Cambridge, Md.) 1897-2008, 1921-10-22

FULL TEXT OF I'll: PROPOSAL
Statement by Thosn@s C Wit CuyieT.
Chairman of the Association Of
Railway Executives m
the Situation.

way Executives, made the following
statement:
At meeting Of the Association o
Railway Executives today, it was de
termined by the railroads Of the Tnite'
States, to seek to bring about q rCduc
ton in rates, and as Il means to thai
end to seek a 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 a reduction in wages
Of train service employees sufficient I"
remove the remainder of the increases
made by the Labor Boards decision Of
July 90, 1920 (Which would involve q
further reduction Of approximately ten
per cent?. and for reduction in tie
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 &C Down
The foregoing action is upcn the un-
erStanding that concurrcntly with
such reduction In wages the lonefit of
the reduction thus obtained shall, with
the concurrence of the interstate Com
merCe Commission. be passed 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 maQagRnents have decided upon
this course in view Of their realization
of the fact that the wheels of indus
trial 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 then
again in operation.
The situation which c0nfronts the
railroads Is extremely critical. The
railroads IN 1920 realized net raiIwGy
operating income Of about $50 100000.
upon a property investment of over
$4,000, 100000, and even this amount
nt 81 million included back mail pay
FOR prior years received from the gov
eminent of approximately $64,000,G00
thus showing, when the operations Of
that year alone are considered, an
lctual deficit before making any al
owance for either interest or diyi
lends.
The year ended in serious depression
in all branches Of Industry. and in
marked reduction of the market de-
mand for and the prices of basic COM
nodities, resulting in a very serious
falling off in the volume Of traffic.
Roads Forced to Defer Maintenance
In this situation. rolicy of the most
rigid economy and Of postpcning and
cutting to the bone the upkeep of the
properties was adopted by the rail
"oads. This was at the price of neg
Letting 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 number, OF the freight
cars Of the carriers were in bad order
and needing repairs, as against nor
NAL of bad order cars Of not more
than 100000, as Is further illustrated
by the deferred and inadequate main
tenance 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 II the carriers are
to perform successfully their 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 2G
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 B.low Reasonable
Returns
It is manifest, from this showing,
that the rate Of return Of 513 or per
cent for the first two years after March
|. 1920. fixed in the Transportation Act
rs minimum reasonable return upon
railroad investment. has not been ever
approximated-much less reached;
and that the present high rates accord
'ngly are not Tue to any statutory
guarantee Of earnings. for there Is NJ
such guarantee.
In aEaIyzing the expenses which
have largely brought about this sitlra-
ton, 1t becomes evident that by fl.
the largest contributing cause is tie
labor cost.
Today the railroads pay out to labor
approximately Coo on the dollar the
receive for transportation services
III 1916. 40c on the dollar wer,
to labor.
On the first day Of January, 1911
when the government took charge Of
wages through the Adamson Act. tn
labor cost Of the railroads had nof
Exceeded the sum Of about 81 ,4GS,GOu.
'eo annually. In 1929, when govern
mental authority made the last wage
Increase, the labor cost OF the rail,
roads was about %3.G%3.000 $40 annual.
", or. if continued throughout the year
instead Of for tie eight months during
which the wage increases were III cf-
!, i. the labor cost. on an annuGI an$tS,
Wa@id have been largely III exec =
;:' 90 0O3 O00-an Increase. sin. 49,
tool; charge II y. '..-..i
wages in tha AGamson 80, &c q. roNi-
M. tcly %2,4Jo,000o" aHnv>@>.
in the ii-ht Of tHe&" :,surr~ : :
"'aifoSt u:at the recent r~da .r ?