Show propose to reduce wages and deture all by reduction in charges FULL TEXT OF THE PROPOSAL by thomas dewitt cuyler chairman of the association of railway executives antho situation r follow ing a meeting in chicago oc tocci 14 1021 of the presidents ol 01 nearly all the leading railroads in the country sir thomas debritt 1 chairman of the association of aall way executives made the following statement at a meeting of the association ot railway executives today it was deter mined by the railroads of the united states to seek to bring about a reduction in ates and ae a means to that end to seek a reduction in present rail road wages which have compelled maintenance of the present rates an application will be made immell abely to the united baates railroad la bor board for a reduction in wages ot li ain service employees sufficient to remove the remainder of the increases made by the labor boards decision of july 20 1020 which auld involve a further reduction of approximately tea per cent and for a reduction in the wages of all other classes of railroad labor to the going rate for such labor in several where the car biers operate to kates go the foregoing action I 1 upon the un der standing that concurrently with such reduction in wages the benefit of the reduction thus obtained shall with the concurrence of the interstate commerce commission be passed on to the public in the i of existing railroad rates except in so tar as this re shall have been made in the meantime the managements have decided upon this course lu view of their realization of the tact that the wheel of industries Indu al have been closed down to a point which brings depression and dis aes ues to the entire public and that something must be done to start them again in operation the situation which confronts the railroads Is ex critical the railroads in 1020 leall zed a net railway operating income of about upon a property of over and even this amount of sixty two million included back mall pay for prior years received from the government of ap thus when the operations of that year alolu considered an actual deficit before making any allowance for either inter cat or dividends the lear ended in serious depression in all branches of industry and in marked reduction of the market de mand for and the prices of basic corn modifies resulting in a deiy serious falling oft in the volume of traffic to defer lu this a policy of the most rigid and of postponing and cutting to the bone the upkeep of the properties was adopted by the rail roads this was at the price of neg electing and tor the time deterring work which must hereafter and in the near future be done and paid tor this Is illustrated bi the fact that as of september bep 15 1921 over 18 per cent or in number of the frelent cars of the carriers were in bad order and needing re palis as against a nor 1 of bad order cars of not more than as Is further illustrated by the and inadequate maintenance of other equipment and of roadway and alven under those con and with this large bill charged up against alie future which must boon be provided tor and paid it the 1 are to perform successfully their duties the result of opt rations for the alt eight months ot icari the latest available figures has been at n rate of net operating income before providing for in otiest or dividend amounting to only 28 per cent pr annum on the kalua ot the currier tM made by the commerce commission in tile recent rate case an amount not to pay the interest on their outstanding bonds Earn lne flea onU return it la manifest from this sh otting that the rate of return 0 or per lent fur the first tw beare after march fixed in the transportation act as a reasonable return upon railroad has not been even approximated much less reached and that alil present high rates accordingly are not due to any statutory guarantee of earnings tor there Is no such guar antee in analyzing the espensen which have largely brought about this situation it becomes llant that tar the larg est contributing causo 1 the labor cost toiley the pay out to labor approximately 60 ants on the dollar alicy receive for transportation services whereas in 1910 40 centa on the dollar went to labor on the farat day of january 1017 when the took charge of wages through the adkinson Ad ainson act the labor coat of the railroads bad not ex the sum of about in 1020 when made the last wage increase the lubor cost of the railroads has about sa COS annually or if con hiluid hie ienir insipid of bof alie during watch the age were in effect the labor cost on an basis would have been in of an increase since the government took charge of railroad wages in the adamson act of approximately 2 annually la th bt 0 abee dpree tt b manifest that the recent reduction of wages ed bv the labor beani estimated nt from 10 to 12 per cent in no sense meets or the problem of labor costs and in no way m ikes it possible for the railroad to afford a reduction in their revenues of hate 11 indeed during the vear there ft ere between four and the thousand individual reductions in freight rates on some railroads the in rates have amounted to boic than the reductions in wages so far luide and on many other railroads the reductions in wages allowed no net leburn on operation but merely provided the farther accumulation of a deficit the point Is often made that agriculture and other industries aie also suffering the same immediate ties as the theofore then fore do not the railroads take their medicine like anybody else the answer lies in several facts 1 the railroads were not permit ted as were other industries to make charges during the years of prosperity making possible the accumulation of a surplus to tide them over the present extreme adversity according to the reports of the interstate commerce commission the rate of return oa prop erty investment on the railroads of the united states tor the past several years has been as follows RATE OF RETURN EARNED BY RAIL ROADS OF THE UNITED STATES ON THEIR PROPERTY IN VESTMENT ii 4 84 1913 1914 1915 1919 fiscal year 1916 calendar year 1917 1918 8 5 1820 it will thus be noted that during the tears when other industries were making very large promas when the prices of farm products aud the of la bor were soaring to unheard of heights the earnings upon railroad investment in the united states were held within very narrow limits and that they have during the past tour years declined cload more than other nui ilae 2 the railroads are responsible to the public tor providing adequate transportation their charges are allm cited by public authority and they are in very large respects notably tor labor compelled to spend money on basis fixed by public authority the margin within which they are permitted to earn a return upon their invest ment or to otter inducements to attract new capital tor extensions and better ments Is extremely limited however much the railroads might desire therefore to reduce their charges in times of depression it will be perceived that the limitations surround lu their action do not permit them to give effect to broad and elastic policies which might very properly govern other lines of business not thus restricted it has been urged upon the railroads that a reduction in rates will late traffic and that increased traffic will protect the carriers from the iwa incident to a reduction in rates the railroad managements cannot disguise froni themselves that this suggestion Is merely conjectural and that an adverse result of the experiment would be disastrous not only to the railroads but to the public whose supreme need 1 adequate transportation consequently the railroad rall roAd manage ments cannot feel justified la icing these instrumentalities so essential to the public welfare at the hazard of aich an experiment based solely upon such a conjecture farmer aeed loner it la evident however that existing transportation charges bear in many cases a donate relationship to the prices at which can be sold in the market and that existing labor and other costs at transportation thus imposed upon industry and agriculture generally are a burden greater than they should bear this ts espell ally true of agriculture the railroad managements feeling to and sympathetic with the distressing situation and beshe to do everything to assist in relieving it that is compatible with their duty to furnish the transportation which the public must have at the moment railroads in many cases are paying 40 cents an hour to unskilled labor when similar labor la working alongside the railroads and can easily be obtained by them at 20 cents an hour the railroads of the country paid in 1920 a total of considerably over 1300 to unskilled labor alone it may be to pay this or that of wage it is that it cannot be paid out of railroad earnings unless the industries Indu which use the railroads are capable of meeting such charges the railroads and through them tho people re also hampered in their efforts to economize by ft ached tile of working rules and condition now in fercl as a heritage from the period of federal control and upheld by the railroad labor board these conditions are uneconomic and unnecessary from the point of lew of railroad operation and extremely burdensome upon the public which pays the bill thi schedule of and of working condition prevents the railroads from dealing equitably with their labor costs lu accordance with rapidly changing and the great variety of local considerations which ought to control wages in different part of the country the rail roads are becking to have these rule and working conditions abrogated the railroads will seek a reduction itt wages BOW proposed by first re questing the sanction of the railroad labor board the railroads will pro aeed with at possible dispatch and ae soon ii the railroad labor board shall have lyan its to tho toa of fifles the la catl WW b W |