Evening star., 1932-08-28

something Of an enigma at this stage
Of the situation.
The railroad executives and organ
iZed labor are now maneuvering for
positions from which to deal with the
wage question, that is bound to require
settlement prior to February l of next
year, when the present wage scale agree
ment expires. The carriers succeeded
in persuading labor to take 10 per
cent cut for one year. 1t was hoped
conditions would change sufficiently by
the end of that time to permit reStora-
ton of the original scale. The execu-
tives Of the carriers now are saying
they cannot permit 10 per cent in
crease next February to place the wages
back on the old basis. Indeed, many
of them are claiming there must be a
further reduction. the amount most
frequently mentioned being per cent.
Union leaders are preparing the
ground to battle against continuation Of
the 10 per cent reduction. Their argu-
ments have not been disclosed fully.
but it is understood they are prepared
to claim that benefits will result all
around from increased buying power if
the scale is restored.
X +
will be reached amicably. They be-
lieve executives on both sides will be
willing to consider all Of the factors
involved when the showdown comes.
But there are others, both in and out
Of Government, who are saying that
only the use of Federal conciliatory Of
fees can avoid trouble over this wage
question.
The rate structure Is another sub
ject about which debate is taking place
on an increasingly large scale. Ship
ping interests are leading in this. They
declare there must be readjuStment,
revision downward, Of the commodity
rates, because commodity prices can
not justify current freight charges.
Every one recognizes that one effect Of
the depression Is to be a new world
level Of commodity prices. The ship
pers are pointing to this as Justiflca-
ton for the demands they are prepar-
ing. The railroad argument naturally
is that the carriers cannot stand any
further reduction in income.
The third question outstanding in
the discussions is being linked with the
other two for obvious reasons Car
riers throughout the country have
enormous overhead charges, ear-marked
for debt payment. These constitute a
heavy drain on the rail income. The
railroad executives have been looking
for ways and means to reduce those
charges, believing such reduction will
go far toward removal OF the most acute
part Of their stress. They claim they
must find relief in this direction II they
are to continue to function on the pres
ent basis.
The shipping representatives and
labor leaders together are directing at
tention to the railroad debt situation
Their description Of the condition is
not complimentary Some of them
boldly say it resulted from bad manage
ment. The railroads contend their
hands are tied because Of their debts
and that they cannot stand reduc-
tion in rates or an increase IN wages
or even maintenance of present scales
unless they can unload some OF the
debt burden.
There has been no consistent rail
policy as regards financing for come
years, and there is none now in pros
pect. The Reconstruction Finance Cor
poration loans do not solve the prob
lem finally, although it Is agreed they
have helped the roads over temporary
difficulties and have been OF value to
the holders Of rail securities. How far
the Federal loans will carry them, OBJ
viously none can foretell, but continua-
ton of advances to the carriers has
caused some of the advocates of gov
ernment ownership to suggest that
Uncle Sam may eventually own some
railroads as a result OF these loans.
Some authorities feel, however, that
the Government loans are providing
the necessary impetus to put the car
riers back on their feet. The latter
view is held by important bankers and
some industrial leaders. 1t is the diff
ference Of opinion on this point that
has started so much discussion since
the Reconstruction Finance Corpora
ton list was made available.
lCopyriRht, 1921