Hermanner Volksblatt. [volume] (Hermann, Mo.) 1875-1928, 1921-10-28
Propose TO Reduce Wages and
Return All th3 Saving by
Reduction in Charges.
FULL TEXT OF TIE PROPOSAL
Statement by Thomas De Witt Cuyier
Chairman of the Association Of
Railway Executives, on the
Situation.

nearly all of the leading railroads in
the country. Mr.. Thomas De Witt
Cuyler, chairman OF the Association
of Railway Executives. made the fol.
lowing statement:
AT a meeting Of the Association
If Railway Executives to-day. it was
determined by the railroads of the
United States, to seek TO bring about
a reduction in present railroad wages
which have compelled maintenance
of the present rates.
An application will he made i'm.
mediately to the United States Rail,
road 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 90, 1920,
which would involve a further re-
duction OF Approximately ten per cent
and for 4 reduction in the wages OF
all other classes of railroad labor 10
the going rate for such labor in sew.
eral territories where the carries op.
crate.
To Reduce Rates as Wages Go Down.
The foregoing action is upon the
understanding that Concurrentlv 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 eN'
listing railroad rates, except in so far
as this reduction shall have been
made in the meantime.
The managements 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 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 tn"
railroads is extremely critical. The
railroads in 1920 realized a net Operat.
ing income of ABOUT $500 10 900. upon
n property investment of over Sl9-
600, 00O. 600, and even this mount OF
s62. 600 900 included back mail pay for
prior years received from the govern
ment OF approximately $4,000 900
thus showing, when the operations
e that year alone are considered, an
actual deficit before making any al
Iowance for either interest or divi.
dpnds.
The year ended in serious dcpreS.
sion in all branches of industry, and
in marked reduction of the market
demand for ed the prices of basic
commodities, resulting in a very seri-
Gus falling off in the voume of traffic.
Toads For To Defer Maintenance.
In this situation, Il policy of the
most rigid economy and of ~postponinS
and cutting to the bone the upkeep
of the properties was adopted by the
railroads. This was at the price
of neglecting and for the time defer.
ring work which must hereafter and
at the near future be done and paid
for. This is illustrated by the fact
that. as of Santember 10, 1921, over
l6 per cent or 374,431 in number, Of
the freight cars of the carriers were
IN bad order and needing repairs, as
against a normal of bad order cars Of
not more than 100000; and as is
further illustrated by the deferred
and inadequate maintenance of other
equipment and of roadway and struc.
lures
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, their trans
~portation duties-the result of opera
tons for the first eight months of
this year, the latest available figures,
has been at a rate Of net railway
operating income, before providing for
interest or dividends, amounting to
only &c 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
Reasonable Returns.
It is manifest, from this showing,
that the rate of return of Sc or 6
per cent for the first two years after
March /, 1920, fixed in the t~ransporta-
tation act as a minimum reasonable
Ceturn upon railroad investment, has
VOL OeeD eNGH dppIOAlliIdLSu ~ilulu
TESS reached; and that the present
nigh rates accordingly are not due
10 any statutory guarantee of earn.
ings, for there is no such guarantee.
In Analysing the expenses which
ave largely brought about this sit
lation, 1t becomes evident that by far
the largest contributing cause is the
labor cost.
To-day the railroads pay out to
labor approximately Coo on the dol
lar 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 wage through the Adamson act,
the labor cost Of the railroads had
not exceeded the sum of about ST.
t6S, 900 900 annually. In 1920 when
governmental authority made the last
wage increase, the labor cost Of the
railroads was about S3,69S, 900 900 an
nuaily, or, If continued throughout
the year instead of for the eighr
months during which the wage II
creases were in effect the labor coSS