Evening star., 1946-01-06

nected with the main issue as to whether
the roads could stand an increase in
wages, and to what extent, that the
board referred in its report to the
President to the wealth of material
presented on issues which it could not
decide.
Had Help of ICC.
What set railroad fact-finding apart
from other industry cases is that the
board was able to fall back on the ac-
cumulated evidence of the Interstate
Commerce Commission for such peril
nent facts as the value of the prop
critics involved, gross income, overall
costs, labor costs and profits This is
the type of evidence referred to in the
fact-finding discussions now going on
for other industries.
Knowing what was available in net
profits, the fact-fnderS knew that the
increase originally sought by the men
was impossible. 1t then looked for a
figure that was possible, considering the
profits likely to develop within the fore
seeable future, the claim of investors
against those profits, and the amount
that should reasonably be used for i'm
proving the competitive position of the
properties. Referring to an investiga-
ton of railroads, holding companies and
affiliated companies by the Senate Com
mittee on Interstate Commerce. the men
pointed to the financial abuses on some
OF the roads Acknowledging the abuses,
the board thought that they were only
a minor factor in the overall financial
position of the roads, but, whatever the
case, it was not going to ease the posi-
ton of the roads guilty of such abuses
by any wage offsets
AS to the future earning power of the
roads, the men acknowledged the in
roads made by other means of trans
portation but thought that competition
from that source was being stabilized
through regulations imposed on such
other means and through the increased
efforts of the roads themselves to meet
the competition. AS between this opti-
mistic outlook and the dark future the
roads painted for themselves, the board
dence, take wholly independent posi-
ton of its own.
Coming to grips with the wage prob
lem itself, the board on the one hand,
recognized that the men were falling
behind the processing of wages paid in
other industries, absolutely and in rela-
ton to the cost of living, and, on the
other, that the roads were beginning to
approximate the volume of business, in
dollars and cents, they once enjoyed in
the '20S. 1t could not, however, overlook
the difficult days Of the sos and the
more or less revolutionary changes in
transportation which brought them
about. At the same time the board was
not at all sure that the then current
defense prosperity would enable the
roads, in view of the rising cost of
equipment and materials, to pay a fair
return on the value of their properties,
provide necessary Improvements and
pay higher wages, even if merited.
The net operating income in sight for
1941 was about $1,O0O,0O0,O00; after in
tereSt and taxes, a net income of about
$600,000,000 would remain The cost of
giving the men all they asked for in
wages, 80 cents for the incorporating
employees and 80 per cent for the operat-
ing, would amount to about $500 900 900
a year.
Arrived at Compromise
In spite of these considerations. the
board tried to avoid full discussion of
ability to pay, or with the approval of
both sides tried to minimize the issue.
In the end it hit on 9 cents an hour for
the incorporating employees and 71a per
cent for the operating. The two to-
gether would cost about 40,000,0O0 an
nually. Still skirting the issue of ability
to pay but not certain whether that
much could be squeezed out of the then
current prosperity nor how long the
prosperity would last, it recommended
that the increase be treated as an emer-
gency bonus and not as part of the
basic pay, and further recommended
even if it could not take positive action
toward that end, an increase in rates tc
take care of the increase in wages.
The men rejected the boards recon-
mendation, as they had right to, and
the board was later reconvened, not as
fact-fnding board but as a mediation
board. In that capacity it succeeded
in getting the men and the roads to
patch up their differences at 10 cents
an hour for the incorporating employees
and 912 cents an hour for the operating
both to become part of the basic
scale.
In the light of this case, typical of
the complexities inherent in any at
tempt to determine the amount to be
paid to labor, against the amounts to be
paid to other contributing factors, the
question of the value of fact-finding is
raised. The whole procedure seems to
be one of judgment based on straws in
the wind, now blowing in one direction
and now in another. There is no deny
ing the fact that, even with fact finding
judgment still has to play an important
part in determining wages. This is ever
true of management with all informa-
ton at its disposal. The only difference
and this is important, is that with fact
finding, the area of doubt is greatly re-
duced and at critical points. If the
board in the present case had not known
the operating and financial conditions
of the roads, it probably could not have
come so close to an acceptable figure
To the credit of the board it should be
said that it refused to make recon.
mendation for the short lines. because
| it did not have sufficient evidence tt