Evening star. [volume] (Washington, D.C.) 1854-1972, 1947-09-09
Railroads Pictured
As Tragic Examples
OF Wage Initiation
Lines Held UnobIe to
Absorb Higher Costs
Stemmine From Raises
By David Laurence

For several months, William
Green, Philip Murray and Walter
Reutner of the labor union worlo
have been telling the country that
high prices are the fault Of Amer
lean business and that wage in.
creases could be absorbed out Of
profits and prices held down.
President Truman has used the
prestige of his position and the
publicity machine of the White
House to spread the same argument
but now the fallacy has been ex-
posed and the Government itself
must acknowledge by its action that
such generalizations are erroneous
The railroads today stand forth
as q tragic example Of what wage
imitation can do to the American
economic system. The rail worker.
deserve increases to meet the cost
Of living just as much as do any
other class of employees. But the
railroads cannot increase Their
prices at will, as do most businesses
They must get permission from a
Government agency-the Interstate
Commerce Commission.
Coal, Other Supplies Up.
The railroads must pay more fol
their coal because the miners got
a big boost. The coal bill Of the
American railroads is enormous
But coal isn't the only item of ex-
pense that has gone up. Steel and
iron used to replace equipment and
maintain track and engine facilities
have gone up in price. So has
everything else the railroads use.
American railroads face this year
an increase Of about $4,000, 900, 00C
in operating expenses. They got
one increase in rates which took
care of about $1,000, 100000 in in
creased expense. Now they are ask
ing for rates to yield 100000, 00C
more.
All this is based on the expecta-
ton that traffic will continue in its
present high volume. If the in
crease in rates isn't granted, the
railroads Of the United States in
1948 will show red figures for the
coming year Of about $16S,000, 900
A big and successful railroad like
the Pennsylvania will go from a
S. 100000 profit this year to loss
Of 100000. Despite all the fancy
talk of high profits in American
business, the New York Central
and the Pennsylvania operated in
the red last year.
S460,000, 900 Raise Granted.
The latest increase in wages
granted last week to the nonoperat-
ing employees Of the railroads as a
whole amounted to $3.50, 600, 900
Unit operating costs have gone UP
62.2 per cent since 1899 and labor
costs have risen II per cent above
what they were in 1899.
Railroad workers, nevertheless
must meet rising costs Of living
Nearly every article the worker buys
has gone up in cost and food prices
have gone up most. The world
wide imitation has bid up all prices
and the railroads are the last OF
the major industries to catch ur
with the cycle Freight rates are
not rising, however, as rapidly as
other costs. Farm products have
risen 300 per cent and lumber zoe
per cent, but the freight rates
represent small part Of that in
crease. On farm products it has
been only II per cent and on lum-
Der about 10 per cent.
Dispute Over Start.
In an inf1ationary cycle, the ques-
ton of whether the chicken or the
egg came first goes unanswered also
Thus the labor union leaders say
prices rose first, yet Immediately
after VI day they insisted that
workers must get the same pay fol
40 hours work as they got before
for 40 hours straight time and
hours of overtime. A total payment
was demanded for 40 hours of work
equal to what was paid out before
for 48 hours. Management, Of
course, did not get from labor the
same production. Hence, prices
generally had to go up and that is
why labor union leadership ir
America is responsible for the
present price spiral.
Naturally the labor leaders wan
to shift the blame so they cry out
about big profits or Taft Hartley
bills or whatever excuse seems tx
be most effective in diverting thu
attention of the public from the
true reasons. President Truman
cannot say to the railroads they hac
better absorb the increased cost O.
the labor union contracts in Goa
and steel and other commodities
He must necessarily concede tina
prices of freights have to go vi
when wage costs go up.
(Reprodrction Richts Rkseryed