Evening star., 1938-04-29
RAILROADS SERVE
NOTICE OF 15'PCT.
SLASH IN WAGES
All Classes of Labor Would
Be Reduced, Effective
First Of July.
$3.50, 900, 900 SAVING
EXPECTED ANNUALLY
Loss of Revenues and Increases
in Operating Costs Are
Cited as Reasons.
Ry the Associated Press.

ny the associated Press.
CHICAGO, April 29-The Associa-
ton Of American Railroads adopted
today resolution under the Railway
Labor Act to serve notice of Is
per cent wage reduction effective July
] for all classes of labor
The cut would represent a saving
Of $250,000,000 annually to member
roads, the association said
In a memorandum. the association
stated the wage cut was necessary
because of loss of revenue and in
creases in operating costs
Revenue Losses Blamed.
Revenue losses the association laid
to decline in traffic, diversion of
traffic to competing forms of trans
portation and inadequacy of the re-
cent freight rate raise allowed by the
Interstate Commerce Commission.
Operating costs were higher, the
memorandum said, because of ad-
vanced pay rolls due to the 1897 wage
increases and adjustments, costly and
restrictive interpretations placed on
working rules by a judgment board
particularly for employees in the trans
portation group legislative expenses
accrued in opposing regulatory meas
ures, tax expenses and the increase in
materials and supplies costs.
The memorandum said that in de-
terminins the amount of the wage re-
duction to be sought for approx
mately 100000 workers, serious con-
sideration was given the present
financial condition of the carriers,
which it said was even more des-
perate than it was in January. 1882.
when deduction of 10 per cent from
pay checks was accepted voluntarily
by the employees"
Net Income OF 10 Per Cent.
In the four months ended in jan
uary, 1888, the net operating income
of class l railroads, the statement
said, was sl3.7l0,622, or 10 per cent
below that earned in the four months
ended in January, 1882
Even more significant" the men,
orandum continued. lis the fact that
net railway operating income in jan
uary, 1888, fell SO per cent below that
OF January, 1882. In this connection
it must be remembered that the car
riers' 1881 request for wage reduction
was prompted by the inadequacy of
railway net earnings in the latter
part of that year
To Give Notice at Once.
The railroads announced they would
give formal notice of the reduction to
the 81 brotherhoods at once
A spokesman explained that If the
employees refuse to accept the cut, con-
ferences between representatives of the
unions and spokesmen for the manage
ments would be called to attempt to
negotiate settlement.
If these negotiations fail, he added.
either side could move to submit the
controversy to the Arbitration Board.
II the arbitrators fail to bring about
solution. President Roosevelt would be
asked to appoint fact-finding COM
mission.
The spokesman estimated that if the
negotiations followed this complete
course three or four months would be
consumed
The association represents 142 class
| railroads
Brotherhood to Oppose Cuts.
CLEVELAND. April 20 (P).-D. B.
Robertson, president of the Brother
hood of Locomotive Firemen and En-
ginemen, declared today there will be
no wage reduction agreed to by rail-
road employees.
Mr.. Robertson said the wage re-
duction resolution of the Association
of American Railroads was "an at
tempt to embarass the President in
his efforts to bolster recovery" He
asserted the wage bill of the rail-
roads has been reduced $4,000 900
a month since last October
We're paying our price right now"
the brotherhood leader said, and if
those bondholders who are controlling
the railroads will take their losses,
We'll be in pretty good shape"