The Birmingham age-herald., 1922-02-09


 more cordial relations between the road and it's patrons than has ever existed before" and declared that the railroad heads are anxious to hear Icomplaints and adjust differences be- fore legal action Is resorted to.
 Normally the railroads of the Unit ed States should add 350,0o0 new cars annually but last year only 40,- t354 new freight cars were added. Of this number, he said, the Louisville & Nashville obtained 1875 which he de- eiared to be large proportion of the total for all roads.
 His remarks were made to M l capacity hall, the occasion being the regular weekly luncheon which was presided over by Rotary Vice Presi- dent E. J. Rowe in the absence ot . President Oscar Wells.
 Operating Revenue
 The present conditions of business do not justify an optimistic expecta- tion for an early commercial revival,' he said. Judged even by the net rail- carriers for the four-month period since the wage reductions, from July 1, 1921, to October 31, 1921, the yield on the investment falls about 53 l-3 per cent short of that con ltemplated by law. The mana cement } of almost every road in the southern region has given expression to a de- ferred maintenance in 1921 particu largely in equipment
 "To what extent can net income be } increased by enhanced economy and efficiency in management" he asked.
 This question deals with the whole , field of management and opens tre- mendous realm of conjecture. Eco nomy in railroad operations is ot two kinds: one thatvis voluntary and helpful and the other that is com pulsory and, generally, detrimental l believe that thrifty and careful ad- ministration has been practiced to the maximum extent and it is quite evident that the exigencies of the i transportation situation during the past year have forced the applica- ton of economy upon 8 scale which, If continued for any great length of 1 time, must ultimately rebound to the detriment of the public interest.
 T do not believe economy can be appreciably enhanced without a modification of the existing regula tions or the expenditure of vast sums of money for additions and better ments which had to be suspended when net income was so greatly di- unfinished or disappeared" he said.
 EaFty mO0IItcatfOn "The possibility of an early modi- fication of the regulations prescrib- ing rates of pay and working con ditions is problematical but the rail- road managers are making and ex- lpect to make, all possible progress in such direction until 1t may be pos sible to greatly increase the net in- come-thereby improving and stabilis- ing the credit of the carriers-they cannot prudently assume the obliga- tions of additions ana betterment expenditures on any large scale or beyond what may be imperatively ne- Icessary to meet the requirements of II safety.
 At present. all the railroads, pur- suant to the dictates of prudent man. lagement, are obliged to sonser i've their revenues and retrench their expendi- lures to most abnormal and unde- lsirable degree. Expenditures for both maintenance and improvements are being regulated to the minimum al- lowable under due consideration of the factor of safety and. in conse- Iquence, work that is highly desirable or necessary is being deferred" Referring to the wage problem confronting railroads, he said: I"Wages are now fixed by an agency of the government and are practi- cally standardized. Wages should be more flexible and in a larger de- gree controlled by the management In this way railroad operations will more quickly adjust themselves to economic conditions and the ability of the railroads to pay q given wage under certain conditions will be given consideration in fixing wages. The Standardization of railroad wages is wrong in principle.
 Supply and Demand
 Only few employees outside of train service men are properly classed as specialized employees and even among specialized employees the varying conditions in different To- ealities should be taken into consid- eration in determining the wage There is. in my opinion. no logical reason why railroad labor should not be amenable to the law of supply . land demand to the same extent as labor engaged in other lines of indus trial endeavor. Aside from this dis [ cussion, however, the first essential to increasing the net income of car- riers in the southern region is a re- duction In wages.
 While the greatly increased cost of fuel in recent years has been a , substantial factor, the excessively high expenditures for labor have pre-
 
 sented by far the most formidable barrier in the way of smaller costs of operation. and, incidentally, the , greatest obstacle against the realiza- 5 ton of satisfactory income under : the transportation act. Labor costs. although measurably modified by re- l cent revisions in wage schedules and } agreements. are still oyerstepping all bounds of proportion in comparison , With other charges, and their ab- sorption of gross earnings is yet sub stantially greater than was ever re- corded under normal or prewar con- { ditions."
 In 1915" he said, "the Louisville ) and Nashville labor charges agere- gate s21 ,S50,000. In 1917. at the close l of which year the property was taken , over by the government, the labor l costs had increased to s29, 300, 900. But l when the road was returned to pri- 5 vate control in 1920 the labor charges l ihad increased to $75,643, TOO"