Essex County herald. [volume] (Guildhall, Vt.) 1873-1964, 1921-11-03
Propose to Reduce Wages aud
Return All the Saving by
Reduction Ia Charges.
FULL TEXT OF THE PROPOSAL
Statement by Thomas &c wftt Cuy%e~.
Chairman OF the Association Of
Railway Executive on
tha Sttuathol

October ID, 1921. OF the presidents Of
nearly all the leading railroads in the
country, Mr.. Thomas de Witt Guy
Ter, Chairman Of the Association Of
Railway Executives, made the follow
ing statement:
At a meeting Of the Association Of
Railway Executives today, it was de-
termined by the railroads of the Uni
ted States, to seek to bring about a
reduction tn rates, and as a means to
that end to seek a reduction IN present
railroad 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 to
remove the remainder of the increases
made by the Labor Boards decision Of
July 20, 1920 (Which would involve a
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
AL cCNSidl ACS "hoAS SoO Si
riers operate.
To Reduce Rates as Wages Go Down
The foregoing action is upon the un-
Outstanding 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 public in the reduction Of existing
railroad rates, except in so far as this
reduction shall have been made in the
meantime.
The managements have decided up
on this course in view of their e
ization Of the fact that the wheels of
industrial activity have been slowed
down to a point which brings depres-
sion 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 rail
way operating income of about $e2,-
coo, 900, upon a property investment
| of over $40, 900 900. and ever this
amount of 62 millions included back
mail pay for prior years received from
the government Of approximately 1884,
100000, thus showing. when the opera
lions Of that year alone are considered
an actual deficit before making any
allowance Cor either interest or dtyi-
dendS.
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 OF in the volume of traffic.
Roads Forced to Defer Maintenance
Work
In this situation a policy 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 ne
glecting and for the time defezring
work which must hereafter and In the
heal future be done and paid for. This
Is illustrated by the fact that. as OF
September IS, 1921, over 16 per cent
or 374431 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, az IL further Illustrated
by tho deferred and inadequate main
beaanoe q other equipment and Of
roadway and structures,
Even under those conditions, and
With thts large bill charged up against
vtded for and paid II the carriers are
10 perform successfully their transpor-
tation duties,--the result Of operations
Tor the hrst eight mouths OF this year.
the latest svaiiabie figures. has been
at q rate ot net railway operating IN
come. before providing for Interest or
ttvtdenda, amounting TO only 2.8 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 Below Reason
able Return
II Is manifest, from this showing.
that the rate Of return Of 5h or 6 per
cent for the first two ear after
March l. 1920, fixed in the Transports
ton Act as a minimum reasonable re-
turn upon railroad investment, has
not been oven approximated-much
less reached; and that the present
high rates accordingly are not due to
any statutory guarantee Of earnings.
for there Is no such guarantee.
In analysing the expenses which
have largely brought about this sit
uation, 1t becomes evident that by far
the largest contributing is the
labor cost.
Today the railroads pay out to labor
approximately G0c 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 $1,46S, 900,
900 annually. In 1920, when govern
mental authority made the last wage
increase, the labor cost OF the radl
roads vas about $3,69S, 100000 annual
b. Or, Y continued througtout ~