The Ocala banner. (Ocala, Marion County, Fla.) 1883-194?, 1921-10-28
RAILROAD PLAN 70
GET RATES DOWN
Propose 10 Reduce Wages And Return
All The Savings By Reduction
IN Charges
FULL TEXT OF THE PROPOSAL
Statement BY Thomas Dewitt cuy!er,
Chairman Of the Association OF
Railway Executives, On
The Situation

New York, October 18.-FOllowing q
meeting In Chicago, October IA, 1921.
of the presidents of nearly oil the lead
ing railroads In the country, Mr.. Thorn
as Dewitt Cuyler, chairman Of the AS
fQciatioR Of Railway Executives, made
the following statement
AL 3 meeting 81 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 means to
that end to seek q reduction In pres
emit railroad wages, which have COM
PEELED maintenance Of the present
rates.
An application will be made immedi
ately to the United States railroad la
Dor board for reduction In wages of
train service employees sufficient to
remove the remainder of the increase
made by the labor boards decision of
July 80. 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 to the going rate for such labor
in several territories where the car
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
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 pOi,ic which brings
depression and distress 10 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 net rail
way operating income of about $50,
100000 upon a property investment Of
over s19,000.000.00 and even this
amount of $6a,000.000 included back
mail pay for prior years received from
the government of approximately $64..
Ot9 900, thus showing when the OPP
erations of that year alone are con-
siuered, 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. an,
in marked reduction of the market de
mand for and the prices of basic com
madities. resulting in 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-
roads. 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
This is illustrated by the fact that
AS Of September Is. 1921, over is pc.
cent, or 374,431 in number. of the
freight cars of the carriers were In
bad order and needing repairs, as
against normal of bad order cars of
not more than 100000. as is further
illustrated by the deferred and made
qua,e 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 If the carriers are
to perform successfully, the transpor
tati0n duties-the result of operations
for the first eight months of this year
the latest available figures, has beer
at rate of net railway operating in
come, before providing for interest or
dividends amounting to only 2.6 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.
Gent to pay the interest on their out
standing bonds.
Roads Earnings Far Below Reasonable
~ 49, Returns.
1t is manifest. from this showing, thai
the rate of return of 5 1I2 or 6 pei
cent, for the first two years after
March /. 1920. fixed in the transporta
ton act as a minimum reasonable re
turn upon railroad investment has not
been even approximated--muc less
reached: and that the present high
rates accordingly are not due to any
statutory guarantee of earnings, fol
there is no such guarantee.
In analysing the expenses which have
largely brought about this situation, ii
becomes evident that by far the largest
contributing cause is the labor cost.
Today the railroads pay out to Labor
approximately 60c on the dollar they
receive for transportation services
whereas in 1916, 40 cents on the dol
lar went to labor.
On the first day Of January, 1917
when the government took charge oil
wages through the Adamson act, the
labor cost or the railroads had not ex
ceeded the sum Of about 81, 468, 000, DOT
annually IN 1920, when governments.
authority made the last wage increase
the labor cost Of the railroads was
49, q . enc 49,