The Bismarck tribune., 1934-07-03
Railroads Under the New Deal
(Railrnad Auol

There is sharp contrast between
the promise in Governor Roosevelt.
speech at Salt Lake City on Septem.
Der II, 1882. and the performance OF
President Roosevelt's administration
and the Congress which he virtually
controlled. At Salt Lake City Gov
ernor Roosevelt criticized the Hoover
administration because its depression
policy was merely to loan the railroads
money to prevent general bankruptcy,
which would occur anyway il their net
earnings were not increased. my
policy goes to the root Of the Difficult
ty." he said. While I would do every
thing possible to avert receiverships
which now threaten us, seek to bring
the operating balance sheets of the
railroads out of the red and put them
irto the black"
What actually has been done?
!. Subsidies to competing means Of
transportation have been increased
by large federal appropriations for
highways and waterways. No such
legislation as was promised for plac-
ing motor transportation under the
same federal supervision as railroad
transportation has been passed. No
modification Of the long-and-short
haul section Of the Interstate Com
merce Act has been made, although it
IS needed to enable the railways to
meet competition, and q bill for the
purpose was introduced.
2. The office Of Federal Co-ordin-
ator Of Transportation was created
ostensibly to help reduce railroad
competition and effect economies. But
provisions were adopted which pro-
hibited economies in labor and there.
by have prevented any substantial
economies.
3. The president and the co-ordin-
ator mediated q dispute regarding
restoration OF the 10 per cent deduc-
ton from basic railway wages. They
used their influence to postpone the
restoration for six months. The out.
come was an agreement under which
21a per cent will be restored on July
!, 5 per cent on January !, 1885, and
21s per cent on April !. On the basis
OF the pay roll in the first quarter OF
1888. this will increase wages at the
rate Of about $3.500,000 monthly on
July /, by an additional $1,000 900
monthly on January l, and by an ad-
ditional $500, 900 on April l, making q
total increase Of $4,000, 900 monthly.
4. Almost without discussion, Con-
gress passed a bill to provide retire.
nient pensions for employees which
will soon increase railway operating
expenses about 5000, 900 monthly,
unless 1t is vetoed.
5. Congress passed legislation
which virtually abolished company
unions and created national boards
Of adjustment. It increases the pow
er of the labor union leaders, and
therefore will reduce the power Of the
arrangements to operate efficiently
and economically.
D. Under N.R.A. wages have been
working hours reduced, and,
consequently, prices have been I'D.
vanced By industries from which the
railways buy equipment, materials and
supplies.
7. At the request OF the administra-
ton the railways have made reduced
rates on relief supplies shipped by the
government for the unemployed and
drouth sufferers. The National Hous.
ing Act contains provision con-
reduced rates on building
materials.
8. Increased government loans
have been made to the railways ct
reduced rates Of interest, but almost
every economic policy Of the admin
istration has tended to curtail net
earnings and reduce ability to meet
principal and interest.
It Is impossible now to estimate
the adverse effect upon railway net
earnings Of the reduced rates already
secured by the government and Of
the increases IN prices caused by N.
r. A., but It = and viii be important.
With net operating income now run
ming ct the rate of only about $780,
100000 . year. and prospective In
oease6 q wages and pensions which,
after the first quarter Of 1895, would
b ct the rate Of 123o O00, 900 . year,
only an early and very substantial
Improvement IN general business and
traffic can save the railways from
the necessity Of again drastically re-
ducing employment and purchases.