'Twixt Lucifer and Land

The railroads of the country are caught in a cross-fire between the trainmen and conductors on one hand (who are asking a 12% increase in wages) and the demands of the farmers and others for lower freight rates. At the same time there will be a substantial demand in the next Congress for the repeal of the Esch-Cummins Railroad Act. All these things the railways do not relish.

This will probably be only part of the railroads' trouble, for the demands of conductors and trainmen are expected to be followed by wage demands of other railway employees-- especially engineers and firemen. It is estimated that during the last six months these men (conductors, trainmen, engineers, firemen) received wages aggregating $394,000,000. A 12% wage increase would mean an annual drain of $80,000,000 or $90,000,000 on the railroads and restore wages to the highest point they reached in 1920. The conductors, trainmen, engineers, firemen have powerful, well organized unions; if they make demands the other less powerful employees may well take part.

What will the railroads do? It is assumed that they will let the dispute go for decision to the Railroad Labor Board, even if they feel it necessary to meet the workers' demands, in order that the Government and not they shall be responsible for any discomfiture resulting to the community.

This discomfiture might take several forms. It might mean higher freight rates -- which is improbable because of Congressional opposition. It might result in poorer service. Or it might entail loss to the holders of railroad securities. According to the Interstate Commerce Commission there were 777,132 railroad stockholders on Dec. 31, 1922. The bondholders are even more numerous, and include, as has often been pointed out, many savings banks. So actually millions of people are indirect holders of railroad securities.

The attempt to lower freight rates and to repeal the Esch-Cummins Act will be vigorously fought by the roads. They are not at all satisfied with the Act, and a few months ago were in favor of vital amendments. But under the shadow of a demand for the repeal of this Act and the substitution of less favorable legislation, the railways have rallied to its defense.

Already the defense has been set in motion by E. E. Loomis, President of the Lehigh Valley Railroad Co., who last week in a published letter defended the Act on the following grounds:

"1) Freight and passenger rates are fixed or controlled entirely by a Government Commission.

"2) Rates are required to be reasonable and to be fixed at levels which will give the owners a 'fair return' on the value of property used for transportation purposes.

"3) The value of the transportation property on which this 'fair return' is based must be fixed by a Government Commission.

"4) Wages paid to labor are subject to supervision and control of a Government tribunal.

"5) No stocks or bonds can be issued except with the approval of a Government Commission.

"A word to your representatives in Congress in line with the above will help to forestall possible impairment of the transportation capacity of the railroads. What the railroads now need is a legislative holiday."