Evening star., 1938-10-07
|NEW LAWS CITED
BY RAIL HEADS
Retirement, Unemployment
Tax Held Added Reasons
for Pay Cut.
p, the Associated Press.

P' the Associated Press.
Railroad management contended to-
day that increased costs resulting from
two new Federal laws provided addi-
tional reasons for cutting rail wages
Is per cent
Ernest E. Norris, president of the
Southern Railway said the railroad re-
tirement tax and unemployment tax
under the Social Security Act had
added heavy pay roll burden for
carriers.
He presented his argument to the
Emergency Fact-Fnding Board, which
Is seeking to avert a strike voted in
protest against the proposed pay cut.
Answering questions of James NJ
Lands, dean Of Harvard Law School
and q member of the board, Mr.. Nor
ris said he regarded both tax laws
as "a social movement for the benefit
Of the employees" and equal to a wage
increase.
Mr.. Lands asked If other industries
could not use the same argument for
reducing wages.
Other industries might pass extra
costs along, the rail executive OBJ
served, while railroad charges were
limited by Federal regulation.
His railroad had no private pension
plan before the Government Re-
tirement Act, Mr.. Norris added, esti-
mating it added 100000 year to
the annual wage cost.
Says Wages Must Be Cut.
The railroads also called Charles
Donnelly, president of the Northern
Pacific, and H. A. Enochs, chairman Of
the Joint Railroad Committee, to tes-
tify before the board today in support
Of the wage reduction.
They were to amplify testimony by
four executives representing major
railroad system who told the board
yesterday that rail wages must come
down.
The group included F. E. Williamson,
president Of the New York Central
system; H. A. Scandrett, trustee OF
the Chicago, Milwaukee, st. Paul g.
Pacific; Hale Holden. chairman of the
Southern Pacific, and Mr. Norris.
Each presented figures to show his
system must reduce costs, and said
cut in wages, the major operating
expense, offered solution.
Executives Pay Reduced.
The board was told that salaries
Of railway executives had been sharp
ly reduced during depression years
and that they would take another
wage slash along with labor.
Mr.. Norris said there was q posi-
bility wage reduction would increase
employment.
If the reduction in wages is made
and business increases, as I think it
will, we will employ more men and
thus the sum total of the purchasing
power Of railroad employees will be
increased" he said.
Higher wages can benefit only
those who receive them. They do
no good to the thousands of railroad
men out OF jobs"
The board also heard debate yester-
day on the question whether reduc-
ton in railroad wages would lead to
cuts In other industries.
Lands Raises Issue.
Dean Lands asked Mr.. Williamson
whether the group Of railroad execu-
rives who originated the wage-cut pro-
posal had considered the relationship
between rail pay levels and those Of
other industries.
"Only in general way" the New
York Central head replied, adding that
he thought all rail wages, regulated by
many Federal and State laws, were
somewhat isolated"
Attorneys for railroad brotherhoods
took issue with him and, by questions,
contended that, If railroad wages were
reduced, wages in the steel, coal, au-
tomobile and other industries would
On down also