The New York herald., 1922-05-27
The Cut in Railroad Rates Makes
Cut in the Railroad
Wage Inevitable.

reductions measure against railroad
rate reductions, as the World does,
probably is merely ignorant of all
the determining facts in the situa-
ton. Not knowing or caring that
the billions of rate increases went
into payrolls. such an uniformed
critic would not stop to ask itself
out Of what moneys hundreds Of
millions of rate decreases could come
if not out of the wages that had alb
sorbed all the rate increases.
But il the United States Railroad
Labor Board does not know the de-
termining facts in this vital national
problem 1t is not fit to be on the job
and ought not to be in existence.
Yet the United States Railroad Labor
Board seems to hold the astounding
attitude that there need be and
should be no relationship between a
wage decision of the board and a
rate decision of the Interstate Com
merce Commission! But the two
things are absolutely and inseparably
interdependent. And If the fact Is
ignored by traffic rate maker or by
wage scale maker, then either the
insupportable transportation bill OF
the American public cannot come
down to the level it should reach
or the railroads of the country, both
as business properties and as eff
cient carriers, are bound to pile up
in colossal wreck.
The record of who got the billions
of rate increases that were steam
shoveled out of the American people
is as clear as daylight. In the calen-
dar year of 1917 the total operating
revenues of the roads were s4.014,-
142,74S. The stupendous rate in
creases which followed under Gov
ernment operation and later ran those
revenues up to $4.sS1 900, 900 in 1913,
to $5,145, 900, 900 in 1919 and in 1920
to $6,171 ,493, ,3O1.
| Here was an increase of $2,157,-
100000 for the American public to
pack on its bending back. But the
railroads did not get one nickel out
Of that two billions and nearly two
hundreds of millions Of dollars of in
creased transportation bills. On the
contrary, the railroads got worse
than nothing out of it.
The tax collector in 1920 got $685.
100000 more than in 1917, the rail-
road tax bills in that time going up
from less than $214 100000 to S279.-
000, 900. The bond debt creditor got
$50, 200, 900 more, the interest charges
going up from $419, 100000 to $475,-
100000. But it was railroad labor
which swallowed almost whole that
rate increase of approximately two
billions of dollars. OF the increased
operating revenues coming from the
increased traffic rates piled on the
public railroad labor got s1,959, ,00O,-
600 year, the railroad payrolls 60
ing up from $1,739, ,4S2,142 in 1917
to the staggering 1920 total of $685.
216,351.
So the railroads to meet their other
expense increases--coal materials,
supplies and miscellaneous-had to
work it out as best they could, all Of
them paying out of what had previ-
ously been returns on the invest
ment, many Of them out of accumu-
lated surplus and some of them out
Of borrowed money.
In 1916, for example, with only a
little more than three and half bill
ions Of dollars of total operating
revenue the roads had earned as in
vestment return to pay interest and
dividends a billion of dollars. In
1917, with four billions Of dollars Of
operating revenues, the investment
return was $934.O00,000 In 1920,
however, after the two billion dollar
rate increase piled on the back OF
the public, the railroads, as a whole,
with more than six billions OF dol.
lars of operating revenues, had an
investment return of SCI, ,92S,626.
The majority of the roads were
bankrupt. The greatest and strong
est, as we'll as the smallest and
weakest. we're falling to pieces be-
cause after paying the s3,69s. s.216,351
in wages, s673.000, 900 in coal bills,
s475 100000 in interest and $279 ,000,-
900 in taxes, not to mention $122.-
000,0 900 in loss and damage, S66,000.-
600 in insurance and injuries to per-
sons, &c, they did not have chicken
feed left to pay for rolling stock re-
pairs, rail renewals and roadbed up
keep and betterments.
One thing more to show whether
the American public can ever get
back to normal transportation bills
unless the railroad payrolls are read
justed to permit the lower traffic
rates:
In the three fiscal years of 1912,
1913 and 1914 to July before the
war the whole transportation bill Of
the American people, that is to say,
the total operating revenues of all
the railroads. averaged below $4,000.