Evening star., 1938-10-30
Summary Of Report Of Railroad Wage Inquiry Board
By the Associated Press,

the Railroad Fact-Finding Board:
The report Of the emergency board
makes the following findings:
/. The wages Of railway labor are
not high, even rs compared with
wages in other comparable industries
2. A horizontal reduction OF wagei
on a national scale would not meet the
financial emergency Of the industry
since the savings would not be dis
tributed merely to the needy roads.
3. A wage reduction in the railroad
industry would run counter to the
trend Of wage rates in industry gen.
orally
4. The financial distress Of the car
riers which has obtained since Oc-
tober, 1887, when the last wage in
creases were granted, Is ~ yet q
short-term situation. As such 1t can
not be regarded Is grounds for q wage
reduction, especially in view of pres
ent indications Of an improvement in
the business Of the carriers.
5. In the light OF these findings the
board concludes that the proposal OF
the carriers for a reduction Of the
wages Of railway labor should not be
pressed and recommends that the car
riers withdraw and cancel the notices
which would put such reduction into
operation as Of December l, 1898.
Board Was Created
BY President Sept. -.
THE EMERGENCY BOARD-The
emergency board, composed Of James
M. Lands, Harry A. Mills and Walter
P. Stacy, was created by the President
September n. 1898. under the provi-
sions Of the Railway Labor Act, to in
vestigate and report Its findings con-
corning q wage controversy between
the class I railroads and certain OF
their employees.
HEARINGS-Public hearings were
held by the board from September 80
to October II, 1898, in Washington,
D. c.
HISTORY OF THE PRESENT DIS
PUTE-On May IL, 1888, the carriers
involved served notice on certain of
their employees Of Is per cent wage
cut to take effect July l, 1898. It was
agreed to negotiate the matter on =
national basis. but efforts at settle
ment were fruitless, and mediation
failed to adjust the dispute. The car
riers then announced that the wage
cuts would take effect October l.,
1898. and the employees on September
26 announced their intention to call
a Nationwide strike unless the wage
cut proposals were withdrawn On the
following day the President, following
the procedure presented in the Rail-
way Labor Act, created the emergency
board to investigate the dispute and
to report within 80 days.
THE ISSUE PRESENTED BY THIS
PROCEEDING-The ultimate issue in
this proceeding. the carriers contend, is
whether under all the facts and cir
cumstances involved the carriers wage
reduction proposal is reasonable and
justified. But even further the car
riers contend in the absolute ulti-
mate"-to use their expression-the
issue is what under all the facts and
circumstances involved, would be
fair and reasonable disposition of the
pending wage controversy. with due
regard to the condition. necessities and
rights of both the carriers and their
employees.
Deficit for Six Months
Is S1S1,253,5s6.
THE CONDITION OF THE RAIL-
ROADS-The report of the board ex-
amines closely the present condition Of
teh railroads. 1t finds that the operat-
ing revenues Of class I railways de-
clined from level of approximately
$4,000 900, 900 during the l921-3O Pc
riod to level of between $4,000, 900 900
and $4,000 900, 900 in the 193l-38 pc
riod. The net income Of the roads,
the report finds, which stood in 1929
at 1897 900 900, has declined seriously
since them and although net income
showed an upturn in 1895, the first six
months of 1888 have resulted in a def
cit Of $18l ,253, 596.
The report states that in 1929 "95.75
per cent of the railroads in point of
mileage were operating with net in
come, whereas from 1881 to 1887 that
ratio has never been higher than 81
per cent. In 1882 it stood at 32.l4
per cent and for the first six months
Of 1898 it stood at 1917 per cent. Both
dividend rates and dividend payments
have declined, as has the market value
OF railroad securities"
The report attributes the declines
in gross and net operating revenues
not only to general declines in business
activity, but to other causes which, the
report says, have been operative and
will continue to affect the density of
railroad trafic independently of any
revival OF business activity. Chief
among these causes" the report con-
tinues, has been the rapid develop
ment Of new and competitive means OF
transportation. The private automo-
bile, inland waterways, the pipe line.
the truck, the bus, the airplane-all
have taken their toll. The number Of
passengers carried by commercial air.
lines has risen from 5,7s2 in 1925 to
1902, TOT in 1887 and is certain to in
crease to even greater numbers" Ex-
press, freight and mail carried by air
plane in recent years, the report finds.
have also shown sharp increases.
Registration Of passenger automo-
biles has increased 1884 per cent
since 1921" the report states, while
the revenue of the railroads from
traffic during the same period
decreased 6l.6 per cent. Much OF
the passenger trafiic of the railroads
must be recognized to have become
permanently diverted from the rail-
ways. Even what Is now carried is,
upon the whole, carried At an out
of-pocket cost"
Tractors, trailers, pipe lines and
barge lines have all drawn traffic away
from the railroads, the report finds,
and relocations of industrial plants,
the development Of other forms of
power and new methods Of produc-
ing power have also had their effect.
This competitive situation, the re-
port states, has had the effect of re-
dl1ciDU ro ilrrod rotoc ond Fo~a, v,,itl,