The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1928-07-19
RAILROADS keep
PROFIT HIGH BY
SLASHINC WAGES
Machinery Re la ces
Men In Shops
By LELAND OLDS
Federated Press)

Railroad profits of 376,505,S19 in
the first months of 1923 show how
the cold blooded arrangements have
been trimming down payrolls tby
speeding up their workers. These
profits represent a decline of less
than $10.00O,0O0 from the first s
months of 1927 although gross reve-
nues have fallen more than $780,
100000. The money saved for divi-
dends means loss of jobs to thous-
ands of railroad workers.
Slash Expenses.
Total railroad revenues for the s
months amounted to S2,404, 382, $50
compared with $780,, 487,s the
previous year Expense was cut
from 1922, 900, 226 in the first 5
months of 1927 to $3.50, 579,S71 this
year. The ratio of expense to reve-
nues fell from 1917 to 1919.
The 5-month profit this year is at
the annual rate of 1920 on the
enormous valuation established by
the Interstate Commerce Commits
sion for the railroad industry. For
the same period last year the profit
was equivalent to an annual return
of $500. That this is a satisfac-
tory rate of return from the in
vestor's standpoint is shown in q
Wall Street Journal analysis of the
market prices of 25 dividend-paying
railroad stocks. Investors are will
ing to pay for these stocks prices
which yield an average of 5.02Ro on
their investment.
These 25 dividend-paying railroads
show profits in line with the best
industrial corporations. The profits
of 16 out of the 25 roads for the
IL months ended with May 1923 rep
resented returns Of more than 1917
on the par value of their common
stock. Several Of them showed re-
turns of more than 1917. For own
ers of Chesapeake G. Ohio common
stock the 12-month profit meant .
return of 21.89o
Slash Wages.
How the railroads have cut ex-
penses is illustrated in the cost of
maintaining equipment on the st
Louis Southwestern or Cotton Belt
road. Between 1923 and 1927 the
Cotton Belt reduced the cost of
freight-car-miles.
Such figures reflect big reduc-
tions in total wages Of railroad shop
men in wages. They explain the
ability of the railroads as a whole
to cut their shop forces more than
100000 men in the 5-year period.
The journal explains that the Cot
ton Belt reduced car repair costs by
undermining its shops, tools and ma
chinery, retiring obsolete wooden
equipment and substituting steel
underframe equipment. From 1928
to 1927 it spent $268,000 for new
shop machinery and tools, strapped
5,845 cars and substituted 5000
modern cars. The railroads afford
Just another example of the dis
placement by modern machinery of
men.
Figures from other roads show
arrangements cutting expenses, es
pecially maintenance costs, to re-
tain a satisfactory profit for the
owners of railroad stocks. This year
compared with the first months of
1927, the Pennsylvania reduced
maintenance expenditures $10,642,-
1853 and total expenditures $22,677,-
979; the New York Central cut
maintenance expenditures $4,455, 1922
and total expenditures $7,s55,915
the Baltimore & Ohio made similar
cuts of $2,981,6 and $5,738,472.
These cuts in expenses appear in
dollars but they mean men off the
payrolls and wage payments cut SO
that the investing class may have a
generous return, whatever the state
of the industry.