The nonpartisan leader. [volume], September 05, 1921, Image 3

About The nonpartisan leader. [volume] (Fargo, N.D.) 1915-1921

Image provided by: State Historical Society of North Dakota

                
IN THE INTEREST OF A SQUARE
DEAL FOR THE FARMERS
Entered as second-class matter at the postofflce at
Minneapolis, Minn., under the act of March 3, 1879.
Publication address. 427 Sixth avenue 6., Minneapolis,
Minn. Address all remittances to The Nonpartisan
Leader, Box 2072, Minneapolis, Minn.
RA.ILRQAD
Argument
on Wages
Not Sound
We have repeatedly pointed
out that the big increase in rail
road rates a year ago under the
Esch Cummins transportation
act was only partially to cover
increased wages. It was an
nounced by the interstate com
merce commission at the time
that the great rate raise was
granted, that the additional rev
enue the railroads would get un
der the new rates was estimated
at $1,500,000,000 a year, while
the railroad wage raises grant
ed just prior would cost the
roads only $500,000,000 a year.
The roads got rate raises that
were intended to bring them
three times more additional rev
enue than necessary to cover
higher wages for railroad work
ers.
shippers in general and farmers in particular, as,
well as business men, demand that railroad rates be cut to a
pre-war basis. Railroad managers see that this demand is
making headway. Hence the national advertising campaign the
railroad executives are now conducting. The ads, published in farm
papers to convince the farmers that rates are not too high in com
parison with railroad costs, and that the wages of
railroad workers must be further cut before rates
can be reduced any, are typical of the unsound argu
ments transportation corporations are making.
As a matter of fact, the railroad labor board a
few weeks ago made a cut of 12 per cent in railroad
wages. The advertisement of the Association of Railroad Execu
tives, published in' the last issue of the Nonpartisan Leader, admits
this. But it fails to state that this wholesale cut in wages means
the railroads will save $400,000,
000 a year. Did the railroads,
when this wage cut was made
a few weeks ago, cut rates in
proportion to their savings by
reason of the lower wages? No,
they did not! Then what assur
ance is there that further wage
cuts will bring down rates?
But that railroad wage boost
has practically been wiped out
by the recent reduction in rail
road wages. The 12 per cent re
duction in wages made the other
day saves the roads $400,000,000
a year. Wages are practically
back to where they were before
the wage raise of a year ago, yet
rates are 20 to 30 per cent higher
than they were at that time.
Wages have practically gone
back to the basis existing before
the Esch-Cummins law resulted in the sweeping 1921 increase in
rates. Yet these sweeping increases are still in effect. Under these
circumstances what right have the railroads to expect farmers to"
put any confidence in the wage argument?
IHE fallacy of the railroad arguments about impending bank
ruptcy (see railroad ads now running in farm papers, includ
ing the Leader) lies in the fact thatthey figure their profits
or lack of profits on an excessively inflated valuation. Their adver
tising practically admits that railroads will make 3 per cent this
year. But obviously 3 per cent on a valuation DOUBLE what it
should be, is 6 per cent on a FAIR valuation. And if railroad own
ers are making 6 per cent they are making more than any one else
is at this time—even 3 per cent, which they admit they are making,
is more .than farmers and most business men are making.
The issue of the Leader for August 8 reported the fact that a
.The
Published at Minneapolis, Minn., Every Two Weeks
OLIVER S. MORRIS, Editor.
VOL. 13, NO. 5 MINNEAPOLIS', MINNESOTA, SEPTEMBER 5, 1921 WHOLE NUMBER 280
Railroads Nervous About Lower Rate Agitation
y«SRes
False Value
Reason for
Book Losses
THE "FIXERS" FORGOT GASOLINE!
MARKETINC.
THE BATTERIES AND COILS SEEM O.K.
BUT THE GENERATOR DON'T CHARGE
WAIT
HADN'T you better put some gas in it?
fit
MINUTE.
I'LL, FIX HER!
ipoLvrTcTWJ
THIS rtEVJ TARlFPv SELF-STARTER
WILL. SURELY MAKE HER 60
—Drawn expressly for the Leader by John M. Baer.
T!
0
PAGE THREE
A MAGAZINE THAT DARES TO
PRINT THE TRUTH
One year, $1.50. Classified rates on classified page:
other advertising rates on application. Member Audit
Bureau of Circulations. S. C. Beckwith Special
Agency, advertising representatives. New York, Chicago,
St Louis, Kansas City.
recent official valuation of 18 railroads by the interstate commerce
commission .showed that their actual value was just HALF of their
"book" or "property investment" value. Yet it was practically this
"book" or "property investment" value of the rail
roads that the government took in valuing the rail
roads for rate purposes last year!
From this evidence it is reasonable to suppose
that an actual physical valuation of all the rail
roads would show much the same result, and that
the railroads are now making 6 per cent or more on a fair valuation.
In the absence of such an actual physical valuation covering all
lines, there is no evidence that the roads, if they admit making 3 per
cent now, are not really making twice that. The amount of divi
dends paid is not a fair measure of railroad profits. A small divi
dend on watered stock might be a large or excessive one on stock not
issued in excess of the value of
the property. Remember that.
Trailroads
I HE inside details of the
proposed new grab of the
are surprising.
They are asking to be financed
by the government *to the tune
of another half-billion dollars.
President Harding says there is
"moral obligation" on the part of
the government to give the rail
roads this cash, but the moral
obligation can more reasonably
be supposed to be
the promises of
the Republican
party to big busi
ness during the
am pa a
year. Harding, as a president
elected by a party which made
all kinds of promises to big busi
ness, is perhaps "morally obli
gated" to help the railroad get
this new financial grant, but
there is no such obligation on
the part of the people or the gov
ernment.
No "Moral
Obligation"
by People
i'u* oer
Something
SHE. MEEDS A MEW IGNITION SYSTEM
I wi
INVESTIQfVTE
IT
a cool billion dollars—the difference between what Uncle Sam had
coming from the railroads and what he owed the railroads. But
since then—
OFFSET as far as possible what they owed the govern
ment for improvements and additions during government op
eration, the roads brought all kinds of outrageous and vir
tually fraudulent claims for "wear and tear," etc. Some of these
claims the government has agreed to pay and the roads to accept
at 30 cents on the dollar. The government has not agreed to the
others, but even when these disputed claims are settled the roads
will owe Uncle Sam hundreds of millions.
Now it would be perfectly fair for the government to accept
.railroad paper, bearing interest, for what they owe the govern
ment. This would give them time to pay it. But instead of a legit
imate "funding operation" such as that. President Harding pro-
When government operation
of the transportation system
ended on March 1, 1920, the rail
roads, according to the United
States railroad administration,
owed the government about $1,
677,000,000 for additions and
improvements put in during gov
ernment operation. At the same
time the same authority esti
mated that the government owed
the roads about $661,000,000 on
various claims of the lines. So
that, as accounts then stood, the
railroads owed the government