The New York herald., 1921-05-23
COSTS OF OPERATION
TOO HIGH FOR ROADS
L. s. Chamber of Commerce
Committee Says Sharp Cuts
Must Be Made.

WASHINGTON, May 22.-Railroads
must make sharp reductions in their
operating expenses u their credit and
financial stability are TO be reesta D.
lished. a committee OF the Chamber OF
Commerce OF the United states. which
has made a survey OF the transportation
question. declared tonight.
Necessity OF practising strict economy
was urged the committee pointing out
that "readjustment Of salaries and
wages is in progress in all other indus
tries, and it is 10 be assumed that rail-
road wages in the future, as they have
in the past, will bear an equitable rela-
tionship TO wages paid in other activi-
ties
The committee was OF the opinion
that the grouping or consolidation OF
railroads must be accomplished. 1t also
declared that Federal Incorporation OF
railroads was highly desirable.
No additional legislation on the rail-
road question, however. was needed at
this time. the statement said, as II was
advisa Bile TO have further experience
with the transportation act before at
tempting to modify it.
The committee stated 1t had come to
the conclusion that "even with increased
return of business prosperity the busi-
ness OF railroad transportation cannot
be restored TO a profitable basis until
the present high operating expenses are
cut down.
1T is recognized by the railroads, Z
the committee report continued. tnat
rates and fares cannot be increased.
Stressing the need for more economic
methods Of opera ton, the committee said
the first step toward the accomplish
ment of economies should be greater CO.
operation among the carriers in the per-
formance Of their services In terminal
organization and management. the re-
port stated. the cooperation OF the car
riers was especially urgent.
Whatever economies may be affect
ed by changes in operating methods it
was stated, there inevitably must be a
reduction in the percentage which SAL
aries and wages comprise Of the total
operating revenue. The payroll of the
railroads in 1917 amounted to sl,70V,-
900. 600, or about As per cent of the OPP
Grating revenue. In 1920 the payroll
had more than doubled. having risen to
$3.50. 600. 900 which was about 60 per
cent OF operating revenue.
'The committee assumes that every
effort will be made by the carriers TO
MAINTAIN SQuildUit scd4eS u Wages vi
different ella sses of employment While
wages must be reduced no class of labor
should bear an inequitable share OF the
burden of the rehabilitation period and
all should render full eight hours SER
vice for eight hours pay
Both railroad owners and their organ
lied employees declare they welcome the
resumption Of the hearing into their in
terlocked affairs, which takes place this
morning in the Chamber Of Commerce,
So Liberty street. The testimony will be
taken by examiners for the Interstate
Commerce Commission. and it is likely
the first witness will be +. n. Hardin,
chief engineer of motive power and roll
ing stock for the New York Central lines.
All the railroad executives who nave
testified thus far have elaborated upon
the mooted point of exorbitant operating
EXPENSES They declare they have suf-
ficiently refuted the statements OF W..
lett Lauck, counsel for the railroad
unions. and of William T.. Johnson pres
ident of the International Association OF
Machinists. both of whom insist the in
ability OF the executives to pile up large
earnings is due to inefficiency.
But r. Dewitt Cuyler, julius krutt-
schnitt. Daniel Willard. A. H. Smith
and other executives, who have been
showing the way in the desire OF the
railroads to get back TO normal eco
nomic basis, are contending they foresee
an euuable solution of the contested
points and have reason to be honestly
optimistic in regard to the future