Evening star., 1938-10-31

much sound counsel with respect to
what ought to be done by the rail-
roads, the labor unions, the Gov
ernment and the investors that if
the document is carefully studied 1t
will point the way at last to a solu-
ton of the perpleXitieS of the rail-
road problem.
The report is $4,000 words long,
yet it is far more persuasive than
the official summary, and only if
one takes the time and trouble to
read it carefully does the states
manlike character of the analysis
made by Chief Justice Stacy of the
North Carolina Supreme Court,
Dean James Lands of the Harvard
Law School and Prof. Harry Mills
of the University of Chicago become
apparent.
Penetrates Many Fallacies.
To say the report is New Dealish
because it deals fearlesSly with prob
lens of interest due the bondholderS
or dividends the owners should not
have been awarded or because it
attacks the crudity of horizontal pay
cuts as applied to groups of varying
incomes is to ignore the fact that
the report also penetrates incisively
into the fallacies of continuous Gov
ernment subsidy or a continuously
upward curve of wages when eco
nomic conditions do not warrant
Here, for example, is a paragraph
which answers the labor union con-
tention that much of the answer of
the railroad problem lies in pre-
ventable wastes or in new legisla-
ton to fight off the competition
given railroads by other means of
tranSportation:
That savings of a large nature
can be made by attention to some
or all of the matters contained in
the program advanced Cby the en-
ploye organizations TO eliminate
preventable wastes may be admitted.
Every industry undoubtedly as Gov
ernment itself, commits waste be-
cause the problems of administra-
ton must rest in human and fallible
hands, That those wastes can pro-
gressivelv be prevented must be true,
for otherwise little hope would re-
main for the advancement of the
art Of management. But prevention
Of these wastes will involve whole
hearted constructive effort over a
period of years.
Then. as If recognizing that some
Of the proposals from the labor Or
carnations would put the Govern
ment further into handling the rail-
roads, the report adds significantly:
Many of the suggestions entail
other than governmental action, un-
less we conceive the railroad prob
lem in terms of governmental man.
agement rather than governmental
regulation. The elimination of these
wastes, necessary though they may
be, thus affords little in the way of
solution for the pressing problem
Of immediate relief
Pay Roll Subterfuges Hit.
With relentless logic and with
pointed reference to the efforts
made by labor organizations to get
Congress to enact full crew bills
and other devices to overcome the
economies in pay roll growing out
OF chronological efficiency, the re-
port adds:
"The social problem of unemploy-
ment resulting from chronological
development is common to most in
dustries. 1t admits of no simple
answer. The legislative proposals
complained of chat is, by the rail-
roads, are, in part, the answers that
the employees are seeking to make to
the problem of chronological unem-
ployment. The answers that can
be made must of necessity be partly
without the industry and partly
within it. But we believe that such
answers as can be made to it within
the industry should flow from the
processes Of collective bargaining
between the carriers and the men,
not by resort to legislation. The
problems of chronological unemploy-
ment are, indeed, part of those
working conditions which the Rail-
way Labor Act of 1926 sought to
oave worked out through negoti-
ton and mediation between man.
cement and men"
There are many more passages
Ike the foregoing which will be
lelpful and valuable to railroads
nd the employe organizations in
recasting their relations in the light
If the financial crisis that faces hte
ailroads today.
In projecting a solution. the
Nmergency board modestly outlines
, program which is distinctly a
iooveresque philosophy in the
ense that it recognizes defation
IS painful but inexorable remedy
IN some cases and one in which
Government aid can soften the blow.
Here we come to the advocacy by
he board of reorganization of
capital structures with reasonable
1acrifices on the part of ownership"
nd revision by Congress of exist
lg reorganization procedures" so
nat reorganization is a real re-
birth and not a mere temporary
compromise between creditors and
equity owners"
Wage Findings Complex.
AS for wage reductions, the board
dealt with the facts and figures sub
mltted in a way that can hardly be
described in newspaper dispatch
or any summary, for that matter.
1t painstakingly took all the data,
compared it with wages in other
industries and with living costs in
other years and found that the
general average wage now was about
1883 a year, but that one-quarter
Of the employees earned less than
S911, another quarter earned between
S911 and $1,433, another quarter
between $1,433 and 1888 and the
remaining quarter earned $3.50 or
more. In the same way, the board
discussed the S25o,o0O,000 proposed
10 be saved by wage reductions and