The Meridian times. (Meridian, Idaho) 1909-1938, 1921-10-28
5sstsmsus by Thsnsa~ Dewitt Cuyles
chairrssn Of the Assesiatisn 81
Railway Executives ON the
sItuatien


nearly NIL the leading railroads In the
country, Mr.. Thomas Dewitt cuyler,
Chairman OF the Association OF Rail
way Executives, made the following
statement:
At meeting OF the association OF
railway executives today, II was deter.
mined by the railroads of the United
ktates, TO seek to Bring about reduc-
ton In rates, and as means to that
end to seek reduction In present rail-
read wages which have compelled
maintenance OF the present rates.
An application will be made ifnmedI-
steiy to the United States railroad la
Dor board for reduction In wages OF
train service employees sufficient to
remove the remainder Of the increases
made by the labQs boards decision OF
July 20. 1920 (Which would Involve a
further reduction OF approximately ten
per cent? and for reduction In the
wages OF all other classes Of railroad
labor ~ the going rate for such Labor.
IN several territories where the car
rsers operate.
Te @eaaee Rates As wages Go Dswm
THE foregoing action II upon the un-s
derstandlng that concurrently with
such reduction In wages the benefit OF
tks reduction thus Obtained shall, with
the concurrence Of the Interstate COM
mercs commission, be passed ON TO the
public In the reduction OF existing rail-
read rates, except In so far as this re-
duction shah have been made In the
meantime.
The arrangements have decided upon
this course In view Of Heir realization
Of the fact that the wheels Of industrl-
ell aetiyi.y have been closed down to a
point which brings depression and dis
tress 70 the entire public and that
something must be done to start them
again In operation. The situation
which confronts the railroads Is ex-
tremely critical. The railroads In 1920
realized a net railway operating income
OF about Sd2. 900, 900, upon q property
Investment OF over $4,000, 000,Oo0 and
even this amount OF sixty two million
Included back mall pay for prior years
received from the government of APP
proxiplatsiy s64, 600 900, thus showing,
when the operations Of that year alone
are considered, an actual deficit before
making any allowance for either inter
eat or dividends.
The year ended In serious depression
la all branches OF Industry, and In
marked reduction of the market de-
laand for and the prices Of basic COM
n,odities, resulting In a very serious
falling off In the volume OF traffic.
Rs@as Fercea To D~fer Maiatensnee
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-
roads. This wes at the price of neg
lecting and for the time, deferring
work which must hereafter and In the
near future be done and paid for. This
" illustrated by the fact that, as OF
September Is, 1871, over 10 per cent
or 374.431 la number, OF the freight
ears OF this carriers were In bad order
and needing repairs, as against nor
mai of bad order cars OF not more than
160, 900, MS 10 further illustrated by the
deferred and Inadequate maintenance
OF other equipment and OF roadway
and structures. Even under those con-
ditions, and with this large bill charged
ND against the ure,-whieh must
soon be provided for and paid II the
carriers are TO perform successfully,
their transportation duties,-the result
OF operations for the first eight months
OF this year, the latest available figures,
has been at rate OF net railway oper-
ating income, before providing for In
terest or dividends, amounting to only
20 per cent per annum ON the valua-
tlon 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,
asaas Earaiag. Far Beiow Reasonable
Retarns
1t Is manifest, from this showing,
that the rate of return of Oh or per
cent for the first two years after March
/, 1920, hxed In the transportation act
as a minimum reasonable return upon
railroad Investment, has not been even
appropriated, much less reached: and
that the present high rates accordingly
are not due to any statutory guarantee
of earnings, for there Is no such guar
aDtee.
In analyzing the expenses which have
largely brought about this situation, 1t
est contributing cause Is the labor cost.
Today the railroads pay out to labor
approximately 90 cents on the dollar
they receive for transportation ser
vices, whereas In 1916, 40. cents 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 ex-
esedsd the sum of about S1,46S.0oO,0o0
annually. In 1920, when governmental
authority matie the last wage increase,
the labor cost of the railroads was
about IS. eos ,000O00 annually. or If con-
tinued throughout the year instead OF
Tor the eight months during which the
wage increases were in effect the labor
cost, on an annual basis, would have
been largely in excess of IS 800. 600. 600.