The New York herald., 1921-10-31
Railroad Men Expect Hearings
by Labor Board of Argu-
mcnts for Wage Cuts.
STOCK MARKET STRONGER
Steel Trade Gives Promise Of
Marked Improvement in
Late Winter.

Tho financial markets had contend,sd
all along that railroad strike could not
effect it's purpose. but that belief did not
prevent expression OF great relief last
week when the strike order was cam
celled. Railroad stocks and industrial
stocks both advanced. and there was
demonstration OF strength In bonds
which seemed to show that the strike
threat had checked buying for time.
only to malas purchases more insistent
when that threat was removed For in
dustry the prospect of uninterrupted
transportation means that the initial
movement in recovery from q year of
depression Is not to hs halted by serious
handicaps in shipping raw material and
finished goods. 1t would have been lit
tie short of q calamity IL manufacturing
and trade had been compelled to suffer
from even short disruption of rail-
road schedules.
The direct benefit to the railroads
themselves is not to be read clearly yet.
Superficial examination of comment by
members of the United States Railroad
Labor Board and union leaders on the
decision in Chicago suggests that the
roads may have to wait long time to
put through another reduction of wages.
II that suggestion should prove to be
the fact 1t would be difficult, probably,
to see that the carriers received much
direct help from TIE declaration Of
peace by the unions. The tendency OF
freight rates certainly is downward.
| The record of net earnings of railroads
for many months shows that If rates
! should be reduced without an offset In
hsssened expenses there would be rail-
road bankruptcies. assuming that the
volume OF traffic should recover from
its present low tonnage scale only In O
| gradual fashion-and there is no prom
ise of rapid expansion in current
business records.
! 1t is by no means certain, however,
that the railroads will have to wait for
| action on wages until great mass of
disputed questions about working con-
| ditions will have been settled by the
| United State Railroad Labor Board, a
| cago last week, may require six months
or longer The railroads, 1t Is under
stood, will apply soon for cuts of wage
schedules in accordance with reductions
of freight rates ordered by the Inter-
state Commerce Commission, and there
Is expectation in railroad employers
quarters that arguments for lower
| wages, based on sound premises, con-
4 ta.nad in freight rates and net earnings.
will get a hearing by the United States
Railroad Labor Board, with more than
good chance of an early decision. 1t
| Is not to be forgotten in that connection
that the voice of the people had much
to do with the cancellation of the strike
order. and that same voice is being heard
in respect to freight rates The punlic
has made IL clear that adequate railrocd
service is demanded without inrerrup-
ton and figures Of gross receipts, ex-
railroads make plain that carriers can
not carry freight at reduced costs to
shippers without corresponding lower
Ing of running expenses.
The railroads need only q proper bal
ance between rates and wages to lift
them out OF their present troubles. The
cost of materials Is moving In the Fight
direction to promote increasing econ
omies Of construction and maintenance.
Last weeks reduction of 10 per cent. in
the price OF steel rails is a signpost
pointing the way. Through rigid cur
tailment of upkeep costs. aided by the
IL per cent. wage cut of July, tfss car
riers are making a fairly encouraging
comparison with their results of l9n0.
Railroad statisticians estimate that the
revenue as about s75.oCo,oOo from opera
tions in SEPTEMBER IN marked contrast
TO $62,0O0.000 In September. 1920. Certain
railroads are not earning their fixed
charges and the custom OF neglccting
maintenance cannot go on forever. but
with q growth OF traffic most railroads
probably would begin to get their heads
above water with q further moderate
reduction of the largest single item OF
transportation cost-the wage account.
The steel business is looking up in n
much better fashion than seemed likely
last July. Although the United States
Steel Corporation failed to earn its pre-
ferred stock dividend in the third quar-
ter Of 1921 by 10000. the net income OF
! September was rs per cent larger than
It was In July, and the Bethlehem Steel
Corporation reported that its dividends
were earned. The industry assurediy
had long way 10 go in the return to
/ generally profitable operations, but II
has been seldom that a year OF dcpres-
sion was followed by another bad year.
II precedent Is to be followed the steel
trade should begin to show real business
and fair profits by February, because
II was in that month OF last year that
the forces of reaction began to lie felt.
The optimism OF Charles NJ. Schwab has
become proverbial. but his predictions
have been accurate many times and he
sees good business ahead.
BANK RESOURCES DECLINE.