The Indianapolis times., 1931-05-09
RAILROADS OF
NATION UNITE
TO END SLUMP
More Revenue, Pay Boosts
Hinge on ReadiuStment
of Freight Rates.
STAKE FATE ON PLAN
Cite 1921 Recovery to Back
Their Plea; Fear Chaos
if Rejected.
BY FREDERICK c. OTHMAN
United Press staf Correspondent

CHICAGO, May 9.-Amerca's s
railroads started today on a con-
crete attempt to do their part in
bringing prosperity back to the ma
tion.
II the attempt fails, the country's
most important railway executives
predicted utter chaos in the trans
portation industry, with widespread
wage cuts and other drastic opera
ton economies affecting millions
OF workers.
The plan is contained in a reso-
luton adopted by the Association Of
Railway Executives advisory COM
nittee, composed of almost every
important rail leader in the United
States.
After deliberating for hours in a
closed meeting at the blackstone
hotel here, the transportation
chieftains recommended thaC the
various railroad rate agencies eX-
anime the existing freight tariff
structures with a view to leveling
the inequalities" now prevalent.
S4OO,OOO,0OO Income Boost
The more optimistic of the COM
rnittee members hoped such an
equalization would result in an aver
age increase of about 10 per cent.
Such rate advance would boost
railroad income by about S400,0O0,-
900 a year, of which some $l20, ,0OO,-
600 would got to the wage earners,
they said.
ut would give very potent push
to prosperity, similar to that Of the
1921 rate increase" said one Of the
leaders.
The United Press learned that the
railroads hope thereby to regain
some Of their lost revenue, and, as
they did in 1921, when the country
also was in a siege of depression,
lead the way to general financial
we'll being.
The rate increases granted the
railroads at that time aided In the
start Of a wave of buying which
eliminated in perhaps the greatest
period of prosperity the world ever
has known,
Helped End Depression
In the height of the 1920 depres-
sion. the railroads were granted
40. pei. cent blanket freight rate in
crease. Although the rates were
stepped up actually only about 20
Der cent, the resultant spending OF
millions of dollars for higher wages,
more employees and better equip
rnent was credited in many quarters
with brining the nation out OF lts
war-end doldrums.
Then, as it was discussed by the
twenty-four railroad heads attend
ing the Chicago meeting, whit
Ting process set. in, whereby one
freight rate and then another was
reduced, until some 5000 tariffs
we're lowered and today's rates ap-
proximately those in force in 1920.
The present lowered rates and the
general depression thus are affect
ing seriously the railroads credit,
said the executives, who agreed that
their problem, put simply, consists
of increasing their income or de-
creasing their outgo.
Cut to the Limit
The roads already have laid of all
possible men, reduced dividends,
and curtailed purchases Of equip
ment. If the outgo is to be reduced
further, the conferees decided they
must cut wages drastically
With approximately 20 per cent
of all workers in the country de-
pendent directly or indirectly on the
railroads, a general salary cut would
mean another segment added to the
vicious depression circle.
The only other solution, continued
the transportation chieftains, is the
raising OF income, in the hope that
railroad earnings may increase from
the 315 per cent on valuation re-
ported in 1880 to something ap-
proximating the 5s4 per cent termed
fair by law.
The railroad rate bodies. acting
upon the resolution, are expected to
complete their report in from three
weeks to a month. The executives
association then will meet again to
receive the report. and the recon-
mendations will be turned over to
the interstate commerce committee
for action.