The labor journal. [volume] (Everett, Wash.) 1909-1976, 1922-03-31

in an extraordinary manner. They
are to represent the difference be-
tween what the contractor pays in
wages and what the railroad would
be required to pay to the same num-
Der of employees under the transport
tatiOn act and the awards of the
United States Labor Board.
The more men Wagner can put on
the pay roll the more money he will
make. The efficiency of the work
ers is not taken into consideration.
a mere cut in labor costs does not
necessarily mean a reduction in the
cost Of operation, AS a rule, it gen
orally works the other way.
No Provision for efficiency
The Wagner contract makes no
hard and fast provisions to control
this important element. All that is
demanded of the contractor is that
he advise the railroad at stated in
tervals the amount he is paying
workers, the number employed, and
the service rendered The railroad
then figures out how much these
workers have received had they been
paid at the rate Of wages prescribed
by the labor board The difference,
according to the formula, is termed
Savings" That is all there is to il
\ simple arithmetical exercise
But there is vastly more to the
contract so far as the public and
Erie stockholders are concerned.
They may discover that there are no
real savings" but rather greatly ex-
/ ~
rendered.
Wagner may employ hundred in
/ ferior workmen at his lower wage
! who will not deliver as much service
as so competent mel receiving living
pay and still be given credit for hav-
ing made a Saving" The number
Of men employed, not the service
| they render, makes the measure OF
Wagner's savings" and his profits
This gives unlimited opportunity
for the padding of pay rolls. The
more men the contractor uses the
larger will be the savings" The
more wasteful and eXtravagant the
methods in force the larger will be
the sum for division between Veg.
mel and the Erie.
Everything Helps Contractor
Reduced morale. inevitable under
the cost plus contract. is all to the
contractors benefit. If the individ-
ual worker, heartsick because Of til.
intolerable conditions imposed upor
him, produces less than he would
under more satisfactory conditions
additional labor will be required, anC
that viii automatically add to tbs
savings fund set up for the con.
tractors benefit.
Wagner must effect savings
Of Is per cent before the Erie can
participate to the extent of per
cent.
In other words, before the stock
holders OF the railroad can enjoy any
benefit Wagner will take a sum equal
to the reduction in wages that is nor
being urged by railroad officials in
hearings before the labor board
In addition to the opportunity to
exploit labor in an open and above
| board manner. Wagners generous
contract also gives him freedom tc
exploit the stockholders and the pub
lie if he elects to take it. viii hi
Dc it? That depends upon whether
I the railroad management has under.
gone any radical improvement ir
morale during the past few years.
Are Rail Officials Involved?
1t is not possible to say whether
any officials of the Erie are actually
behind Wagner and are financially
interested in his fatcontract. That
can only be determined by an officia
/ investigation. But there are officia
records of numerous instances where
railroad officers have been the chief
beneficiaries of cost plus contracts
Millions of dollars have been taker
from railroad stockholders and tn,
public through fake contracts made
with inexperienced nobodies whC
were willing to be the tools o.
scheming railroad managers.
Before the Erie picked out a loca
politician for this work it approached
number of other citizens of Jersey
City with tenders of contracts. A
prominent leader of the workers was
among those invited to become :
dummy for the cost plus arrange
ment. He declined because he recog
nized the nature of the deal.
As it lays. the Wagner contract IS
open to the deepest suspicion, What
is the Fries interest in this man
that it gives him the benefit of un
limited opportunity to make large