The labor world., 1922-06-10

rolls, with the result that in April OF
1921 the pay rolls of all the roads
in this country totaled only $221,,
900, 900.
| This was a decrease, or saving, OF
$114.O00,00O Il month. or of $1,36S,
| 100000 year. No part of this saw
ing was returned to the shippers.
In addition to this, the United
States railroad labor board ordered a
IL per cent cut in the employees
wages, thus effecting an additional
saving Of $40.O00,000. On top Of tina
the board made sweeping changes
in the rules governing working con-
dltions, and it is estimated that those
changes will net the railroads some
place between $200,0O0,000 and
$500, 100000.
Dr.. Warne told the interstate COM
merce commission that despite these
sweeping reductions in pay rolls,
there have been only slight reduc-
t1ons In freight rates and that these
reductions have "affected less than
2 y per cent Of the freight traffic" !"
According to railroad estimates the
cost of these reductions is. somewhere
between $35,0o0,000 and $50,000,0 900.
Profits ON Watered Capital.
DIR. Warne pointed out that 6 per
cent on $4,000, 900. .00O-the inter-
state commerce ommission's tenta-
tive valuation of the property of the
railroad companies-Would amount
to s1,134,O0O,0 900. That is the profit
the railroads are authorized to COL
lect each year from those who use
the roads.
It is $223,OO0.00o in excess of the
rental received by the railroads dur
ing the period of government con-
troll.
This rental was the average of the
profits made by the railroads dur
ing the three most prosperous years
Of their existence. 1t was so high
that Senator Cummins of Iowa-who
cannot be charged with hostility to
the railroads-said lit shocked the
moral sense of mankind"
Since the commission placed the
valuation of $1s.9OO,O0O,00O on the
roads, it has been, through its engi-
neers, ascertaining the cost of re-
producing these properties on the
basis of war time prices The work
of valuation on II first class rail-
roads has be0n completed. These
roads have a "book" value Of ST.
520.OO0,OO0. but the commission's
engineers report that they could be
rebuilt and equipped new for $751;
100000, or a trifle more than one
half the amount upon which they
are claiming returns.
If the other railroads have been
"Watered" to the same extent-and
there is ample evidence to sustain
that theory-then the total value of
the railroads Of the United States
does not exceed 11,000,OOO,0OO.
That is about the price Wall street
places on the roads. On Jan. 4, 1922,
every share of stock and every bond
issued by every railroad in the Unit
ed States could have been pur-
chased, at the prices quoted on the
New ork Stock Exchange, for $780,
640,000,000, or sS,26O,0OO,O00 less
than the tentative value placed on
the carriers by the interstate com-
Fierce COMMISSION.
In view of the foregoing DIR.
warne contended that the first
economy in railroad operation de-
manded by public policy was the
"un altering of the roads.
This would effect a saving of ap-
proximately s4so,Ooo,oOO a year.
ExOrbitant Sums Paid for Supplies
pr Warne showed from the Off
cial records that the roads were pay
ing "extortoinate prices for sup
plies of all kinds. and that these sup
plies were purchased from institu-
tons which were controlled by the
same financial interests that do1nin-
ated the railroads. In other words,
the powerful financiers are "r1ilk-
ing' the railroads through the sup
ply houses.
For example. he showed. Through
the testimony of John Shelton Will
Jams, former comptroller of the cur
rency, that the Steel Corporation was
profiteering in railroad supplies to
the extent of $35 ton. If that one
leak" had been stopped. DR.. Warne
said, the railroads would have saved
$120,oo0,oo0 in 1920.
The railroads coal bill increased
22o per cent from 1915 to 1920, 60
ing from $2o9,oOO,00O to $668,000,-
900. The railroad propagandists
have had nothing to say about this
because coal is purchased from COM
panies controlled by the same inter-
ests that control the railroads.
DR.. Warne read into the record q
mass OF evidence showing the inti-
mate relations between the railroa ds
and these coal mining companies.
One instance will suffice. The O'Gara
Coal company, IN which tn presi-
dent of the New York Central was
personally Interested" wars discov-
cred by the interstate commerce
commission to be selling coal to an
other railroad company for very
much less than it charged the New
York Central.
''The fact is,'' said the Interstate
commerce commission. that the
connection of some of the high Off
cials Of the New York Central lines
with these coal properties resulted
in no small decentralization in the
services, and led to belief on the
part of minor officials that in per-
mitting these abuses to go on they
were promoting the interests of their
superior officers"
Fat Contracts for "Insidcrs."
Dr. Warne touched on the deals
between the railroads and the great