The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1931-11-27
Agitators' and
Propagandists'
Column
Railroad Profits & Wage Cuts
BY LABOR RESEARCH ASSOCIATION.

IN trying to weaken the railroad workers re-
sistance to wage cuts by telling "hard-luck"
stories about railroad capital, railroad and union
officials are keeping very quiet about the high
profits gathered in by the railroads during the
boom years before the present crisis. Total oper-
ating revenues we're climbing and a steadily ex-
panding slice was taken out by the capitalist
class.
The record Of what happened to the workers
and what happened to the capitalists during
prosperity" is important as background to the
present wage cutting campaign in the railroad
industry.
Workers remember well the crisis Of 1921,
when in the course of two years about 100000
railroad workers we're displaced, wage rates we're
slashed tvice-with the approval of government
boards and boss serving union officals-and
the total railroad payroll was cut by more than
$1,ooo,ooo0oO. Shop workers resisted in the "out-
law" strike of 1922, which was defeated by
combination of reactionary union officials to
labor betrayers, and a water-tight anti-strike
injunction.
This cleared the way for the boom with rising
profits and further decrease in the number of
workers. High-salaried executives increased;
the number of minor executives on daily pay re-
manned about the same; but the number of
workers paid by the hour went down from an
average of 1,63o,439 in 1924 to an average of
1539,385 in 1929. Operating revenues were
pushed up and operating expenses were pushed
down. "Other income" from non -seilroad in
vestments held by the railroad corporations also
increased. So more money available and
most OF it went to the capitalist class.
Spokesman for the capitalists point out that
the average hourly wage paid went up from SGT
L., DO co "
so fond of mentioning that since fewer workers
we're employed the total payroll of hourly work
ers increased less than per cent And they keep
very quiet about the much greater increases that
went to the capitalist class. The payroll of
highly paid executives increased nearly Is per
cent and the total paid in interest on railroad
bonds plus dividends on railroad stocks increased
nearly Is per cent.
Partly the increase In dividends reflected an
increase in capital investment, but most of the
big systems were paying the stockholders rising
dividend rate on each share of stock. For
example:
The New York Central Railroad Co. which
has taken the lead now In asking for "volun-
tary" wage cut, pushed its dividend rate up from
5 per cent in 1922 to per cent, then and 71s
per cent From 1923 to 1890 inclusive 1t paid
8 per cent, or So on each 500 par value share
Of stock.
The Pennsylvania Railroad pushed its dividend
rate up gradually from AZ per cent in 1921 and
1922 to per cent in 1928. The rate was raised
again to an per cent yearly basis in the spring
Of 1929 and this rate was maintained through
the first two quarters Of 1881.
Atchison, Topeka and Santa Fe one of the
largest and most solidly prosperous systems in
the United States, pushed up from per cent to
10 per cent and this rate has been carried
through 1881. Many other examples could be
given.
After the crash the Glass / railroads together
paid larger total in dividends in 1880 than in
1929. Some companies paid their 1880 dividends
partly from accumulated surplus, but taking the
group as whole, they not only paid dividends
but added s335,633,0oO to surplus For 1881,
figures are still very incomplete. But the Wall
Street Journal reports that of 30 major systems,
20 are clearing some net profit (after payment
of bond interest and other so-called fixed
charges and are still earning enough to cover