The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-06-09
THE r. r.. WAGE CUT.

In. voting for a reduction in the
wages of railroad employees the mem
I bers of the railroad labor board rep
resenting. the public and the members
Representing the government doubt
Tess voiced the sentiment of the
masses of the people who ultimately
pay the bill.
| Whatever may be the attitude Of
railroad management with respect to
rate reductions or labor union Off
Gals in regard to wage cuts, the great
third party, the public. gives full en-
dorsement to the principle involved.
! Railroad rates have been entirely too
high to be in proper balance with the
prices now current for all but few
of the nations products. Railroad
wages have been too high to be in
proper balance with the returns OBJ
| tanned by other workers in practically
similar lines of effort.
At present the public is asking no
further rate reduction. f. On an esti-
mated basis of traffic the saving to
the shippers of the country will be
about s25O.OOO.OOO. The public is
most vitality interested in the welfare
of the railroads. and feels that the
carriers must be placed in a position
that will give them a reasonably
profitable return If this country is
| again to realize a prosperous and nor
NAL business condition
Assuming that the average reduc-
ton in rates amotRts to 10 per cent.
a reduction in the wage scale of 10
per cent will absorb approximately
per cent of the rate decrease and
leave the railroads with a net reduc-
ton in revenue of 45 per cent.
This loss is only theoretical, how
ever. says the WolIman Review, aItho
it might be actual under certain con-
ditions. If the margin between the
cost of transportation and the price
received for transportation is suffi-
GENTLY large, it points out, an increase
in the volume OF traffic could give the
railroads a larger actual return.
1t is understood that the Interstate
commerce commission, in making its
rate reduction, figured on a rather low
volume OF traffic. Assuming that the
wage cuts already made by the labor
board are accepted the carriers may
nav c a SOGAO baS4S 1OT OpLdlnlnE the
full 5.75 per cent yield-based on
property values-wh:ch the commits
sion had in mind when it made its
order for rate cuts.
1t is true that, Notwithstanding the
high rates, the railroads of the United
States as whole were unable to earn
during 1921 more. than 3.3I per cent
on the total value of their property.
In March of this year they reached "A
basis of 5.ss per cent.
Railway executives. at least some of
those who have expressed opinion, are
quoted as taking the position that the
rate reductions will not stimulate traf-
fic. This view is opposed to all eco
nom:c experience, whether relating to
commodity prices or anything else
Lower freight rates mean lower prices
for almost everything produced in the
country. In broad sense they. mean
substantial gain in buying power.
far more, in fact, than the $3.50. 600
600 set down as a theoretical saving
to the shippers and consumers of the
country. They mean cheaper food.
cheaper clothing, cheaper houses and
lower rents for millions of people.
The reduction will remove one of the
chief obstacles standing in the wav of
reimbursement in other industries
From practical standpoint it NAV be
regarded as the most constructive de-
velopment OF the year.
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