The daily times., 1921-12-14
Propooe - Reduce Wages and
Return All the Saving By
Reduction in Eharges.
Statement BY Thomas Dewitt Cuyisr,
CS,alrWsan 81 the Association ~
Railway Executives On the
Situation.

hartman of the Association OF Hail
way Executives. made the following
statement:
At meeting of the Association o
hallway Executives today it was de
.ermined by the railroads of the
United States to seek to bring about
reduction in rates. And az means
to that end to seek q reduction in the
present railroad wages which have
compelled maintenance OF the present
rates.
An application will be made imme-
liately to the United States Railroad
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 20, 1920 (Which would involve a
further reduction of approximately 10
per cent? and for a, reduction in the
wages Of all. other classes Of rail
road labor to the going rate for such
labor in several territories where the
carriers operate.
To Reduce Rates az Wages Go Down.
The foregoing action is upon the
understanding that cencurrently with
such reduction in wages the benefit
of the reduction thus obtained shall
with the concurrence of the Inter.
state Commerce Commission. be pass
I'd on to the public in the reduction
of existing railroad rates, except in
50 far as this reduction shall have
been made in the mea1time. The
;nanaGem eHts have decided upon this
course in view OF their realization o:
the fact that the wheels Of industriai
activity have been closed down to
point which brinEs depression and dis
.ress to the entire public and that
something must be done to start thsm'
,sain in operation.
The situa tieA which ccnf:'onts the
railroads is extremely critical. he
..iiroads in 1890 realized q not rail
way operating income OF about 3s2,.
100000 upon . property Investment OF
over $4,000. .0o0.e0J and even tAir
mount of $4,000. zoo included back
nail pay for prior years received from
he government Of approximately
$4,000. .000, thus showing. when the
operations Of that year alone arc con.
sidered, an actual deficit before max
ing any allowance for either interes,
Or dividends.
The year ended in serious depres.
sion in an branches Of industry and
IN marked reduction Of the market de-
mand for and the prices OF basic com
lnodities. resulting in very serious
.alling OF In the yolame Of traffic:
Roads Foreed to Defer Maintenance.
In this SituatiOn,- a policy of the
most rigid economy and Of postpon.
Ing and cutting to the bone Of the up
keep OF the properties was adopted
by the railroads. This was at the
price Of nsglecting and for the time
'deferrinE work which must hereafter
and in the near future be done and
paid for. This is illustrated by the
fact that, rs Of September Is. 1921.
over Is per cent, or 374.431 in num-
Der, OF the freight cars Of the carriers
were in bad order and needing r.
pairs, As against a normal of bad or
der Of not more than 1eo,0 a. IL
further illustrated by the deferred
and inadequate maintenance Of other
equipment and Of roadway and struc
lures.
Even under those conditions. anc
with this large bill charged UT
against the future-which must soon
bs provided for and paid if the car
riers are to perform successfully
their transportation duties-the re
suit of operations for the first eigh'
months Of this year, the latest avail
able figures, has been at a rate of net
railway operating income. before pro
vidins for interest or dividend:
amounting to only &c per cent Pc.
aanum on the valuation of the car
rier properties made by the Inter
state Commerce Commission in the
recent rate case, an amount not sui
fcient to pay the interest on thei,
outstanding bonds.
Roads Earning Far Below Reasonable
Returns.
lt@ts manifest, from this showing
:hat the rate Of return of 5h or
per cent for the first two years afteI
March 1, 1920. fixed in the Transpor
tation Act IS q minimum reasonable
return upon railroad Investment, hat
not been even approximated. mucf
less reached: and that the presen
high rates accordingly are not due te
any statutory guarantee OF earnings
for there is no such guarantee.
In aaaiyzfng the expenses which
have largely brought about this sit
uatioa, it becomes evident that BY
far the largest contributing cause is
the labor cost.
Today the railroads Fay out to Ia.
Dor approximately 50 cents on the dol
lar they receive for transportation
ssrvtces vherees IN 1915, 40 ceAts on
0s dollar went ta labor