The copper era and Morenci leader., 1921-12-02
RAILROADS PLAN ID
 GET RATES DOWN
Propose to Reduce Wages and Return All Savings by Re-
 duction in Charges.
FULL TEXT OF THE PROPOSAL
Statement By Thomas Dewitt Cuyler, Chairman of the Association Of Railway Executives, on the
 Situation.


 nearly all the leading railrsads ia the chairman of the Association Sf Rail- way Executives, made the following statement:
 At a meeting of the Association of Railway Executives tsday, it was de- termined by the railroads of the United States to seek te bring assut a reduction in wages, and as a means to that end to seek Il reduction ia present railroad wages which have compelled maintenance of the present rates.
 3 An application will be made im- mediately to the United States Rail- road Labor Board fer a reduction in wages of train service employees sui ficient to remove the remainder of the increase made by the Laber Boards decision of July 2e, 1920 (which would involve further reduc- tion of approximately 1e per ceRt), and for q reduction iR the wages sf all other classes of railrsaa labor ts tRe geing rate for such labsr in several territories where the carriers operate. To Reduce Rates as Wages Go Down. The foregoing action is upsh the understanding that concurreRtly with such reduction in wages the benefit of the reduction thus obtained shall, with the concurrence of the IRtefstate CsIa- nIerce Commission, be passed eH to tic public in the reductieh of existing railroad rates, except insofar as this reduction shall have been made in the | meantime. # 3. The arrangements have decided upon this course in view of their re- | &I, tl lw of industrial activity have been clesed down to a point wkich brings depre<- sion and distress to the entire public, and that something must be done te start them sagaiR in speratisa. Ike lsituatiOn which cOnfronts the railroads | is extremely critical. The: railroads in 1920 realized a net railway sperat- ing income of about $S2, eco, ,0o0 upon a property investment of ever $1S,- coo, ,000, 600 and even this ameHnt of sixty-twO million included back mail pay for prior years received frem thc government of approximately $s4 ,eeo,- GOO, thus showing, when the operations of that year alone are considered, 1n I actual deficit before making any al I lewance for either Interest CT divi- | dends. -.!; .css;.- d.; The year ended in serious dsPrsss I sion in all branches, of industry, aad I in marked reduction of the mark ct demand fer and the prices ef baxie J commodities, resulting in very se- ri0us falling off in the vslane of Il traffic. --'.-i Y; Il Roads Forced to Defer Maintenancs. In this situation, a policy of the 1 most rigid economy and of pestpon- 4 ing and cutting to the bone the up-
 keep of the properties was adopted by the railroads This was at the 1 price of neglecting and, fer the time.
 deferring work which must hereafter and in the near future be deRe and paid for. This is illustrated by the
 fact that, as of Sept. IS, 1921, over
 16 per cent, or 374,431 in number.
 of the freight cars of the carriers
 were in bad order and needing re- pairs, as against normal of bad
 order ears of not more than 1S6, zee,
 as is further illustrated by the de
 ferred and inadequate 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 provided for and paid if the car
 
 their transportation dutics-the re-
 Bulu of operations for the first eight
 months of this year, the latest avail able figures, has been at . rate of net railway operating income, befsrs
 providing for interest or dividends, ! amounting to only 2.S per ceRt per annum on the valuation of the car rier properties made by the Inter l state Commerce Commission in the recent rate case, an amount net suf- ficient to pay the interest sn their outstanding bonds. N Roads Earnings Far Below Reason able Returns.
 It is manifest from this showing that the rate of return of 511z or 6 per cent for the first tive years after
 March 1, 1920, fixed in the trans portation act as minimum reason able return upon railroad investment has not been even apProximated, much less reached, and that the pres
 ent high rates accordingly are not due to any statutory guarantee ei
 earnings, for there is no such guar
 antee In analyzing the expenses which have largely brought about
 this situation, it becomes evident that by far the largest contributing cause is the labor cost.
 Today the railroads pay out to la bor approximately so cents on the dollar they receive for transportation services, whereas in. 1916, 4e centi on the dollar went te labor. :, On the first day ef January, 1917 when the government took charge o1
 wages through the AdamssR act, ths
 labor cost +of the railroads had aet
 exceeded the sum of about $1,4SS,
 000, ,000: annually: In 1Sze, whel
 governmental authority made the las
 wage increase, the labor sest sf tht railroads was about $S,SsS,eee,ee
 annually, or, if continued through
 out the year instead of fer the eigh'
 months during which the wage in
 creases were in effect, the laber cost pH an annual basis, would have bee1 Largely in excess of $3.see,eea oee