Evening star., 1938-10-30

attempting to prevent a strike
J. Pelley, president of the An
Brotherhood OF Railway Trainr
the possibilities Of improving produc-
tivity and service to the degree that
science and invention during these
years have made feasible. Opinions
upon such q subject naturally vary
and find expression too frequently
from those whose want Of informa-
ton is no barrier to their desire to
generalize."
While the funded indebtedness Of
the roads. In relation to total invest
ment, has fallen. the amount Of money
going to pay fixed charges has In
creased. In 1921 ll.2 cents OF every
dollar OF operating revenue went to
pay fixed charges. In 1897 1t took 1874
cents, low and high points for the
intervening period being respectively
l0.2 cents in 1923 and 2l9 cents In
1888"
The percentage Of railroads, on q
mileage basis. in the hands OF trustees
or receivers, which from 1921 to 1892
never exceeded 8 per cent, rose to ~
per cent in 1885 and 81 per cent as
OF July 81, 1898.
THE CASE PRESENTED BY THE
RAILROADS: The report summarizes
the argument Of the railways as
follows:
Broadly stated. the argument is not
only that the railroads are in q des-
perate financial condition, that for
too long time have sacrifices been
demanded Of ownership, so that fair
ness attends this request Of labor, but
also that the proposal Is not made in
disregard Of the existing level of wages
OF railway labor since, under the cir
cumstances as they now exist, that
level Is too high when measured in
comparison with wage levels else
where"
The distressed condition Of the in
dustry Is the ma jor argument Of the
carriers in behalf Of a wage reduction.
AANy SAeS tA1C lAAulS toIulHC u
trafiic. diminishing operating revenues,
declining net income, the deficits, the
meager return on investment and the
many roads in receivership or trustee
ship.
The carriers point also to certain
additional factors that make for the
necessity of effecting operating econo-
mics. One Of these Is that increases
in tax costs resulting from the Social
Security Act and the Railroad Retire.
ment Act add So per cent, or about
s103, 500, 900 annually. to the pay rolls.
Another argument advanced by the
roads is that rate increases no longer
offer possible solution, nor is there
hope OF an increase in traffic. The
roads. too, are doubtful as to the posi-
bility of aid from the Government.
They deny the employees claim that
economies could save 100000 a day.
Maintenance and other expenditures,
they say, are already being skimped.
Carriers Contend Slash
In Wages Is Just.
The one avenue open in the present
emergency, in the judgment OF the
carriers. is to effect a saving on labor
COSTS Reduction in wage rates. they
feel, would AFFORD quick financial re-
lief" would make possible increased
expenditures for maintenance, repairs
and the purchase of equipment, with
consequent benefits in terms of en-
ployment.
The carriers contend that a reduc-
ton in railway wage rates Is just, for,
they maintain, railway wages today
whether stated in cents per hour, dol
lars per week or dollars per year, are
at the highest peak ever attained, while
the cost of living is considerably lower
than it was in 1929 or 1920. The car
riers maintain that annual earnings
are the most meaningful measure of
railway wages, for upon their amount
and the cost of living, the economic
welfare of the worker depends. The
roads state that average annual earn
ings which stood at $1,796 in 1920,
fell to $1,36l in 1888 and reached q
level of about 81 800 for 1898. Fur
thermore, If these earnings are ad-
justed to the United States Bureau of
Labor Statistics cost of living" index,
the average weekly earnings Of $33. 70
in 1898 would have a per cent more
purchasing power than the $3l "a had
in 1896, 1T per cent more than the
$26l0 had in 1885 and 25.7 per cent
more than the $32.O7 had In 1929. The
carriers conclude that p movement Of
over Is per cent In real purchasing
power of weekly earnings in q period
of nine years is most unusual move
ment. This advance of 25.7 per
cent in real wages within nine years
has taken place at time in our his
tory when other things have not been
pursuing normal upward course. In
1929 all things In general turned down,
But In the face of that general depres-
sion we find these real earnings per
week Of railway employees showing this
extraordinary rise contrary to all
other trends"
THE DEFENSE PRESENTED BY
THE EMPLOYES-Railway labor, &C.
cording to the report, recognizes the
unfortunate present plight of the rail-
roads and their need for relief. They
differ with the roads, however, as to
the reasons for this condition. While
recognizing the effect of forces such
as competitive means Of transporta-
ton and the relocations Of industries.
the employees feels that the present
dimculty arises in part from unwise
financial practices in the, past, over :.
capitalization, til burden of hxed