Form P 56
a t I to a 1}
uainraa Aaanriattflit
NO TIME FOR TINKERING
Agricultural and Business Recovery and Provision of Railway
Facilities for the Coming Load, Require Rest from Statutory
Experiments and an Opportunity for the Federal Agencies to
Work Out a Policy Under Existing Laws
Liberty Building
Philadelphia, Mar. 13, 1922
Hon. Samuel E. Winslow, Chm.,
Committee on Interstate and Foreign
Commerce,
House of Representatives,
Washington, D. C.
My dear Mr. Chairman :
You are requested to con¬
sider recommendations nade
by the Railway Business As¬
sociation in resolutions adopted at the
annual meeting, Feb. 1, 1922, urging
postponement of amendments to those
provisions of the Transportation Act
of 1920 affecting net railway income—
Section 15a, containing the rule of
rate making, and that part of Section
13 which establishes federal control
where federal and State regulation af¬
fecting rates or car service conflict.
The Railway Business Association is
composed of about 600 members sell¬
ing goods or services to steam railways
and located in nearly every State in
the union. Besides the resolutions we
attach a list of our officers, committees
and members.
OBJECTS
^~\UR object is fuller and steadier
employment for the labor and
capital which look to these concerns
for a living or a return. By reason of
the miscellaneous character of output.
there being hardly any commodity
which railways do not buy, and the
diversity of consumers served other
than railroads, estimates of the num¬
ber of men formerly employed in mak¬
ing railway supplies when railway pur¬
chases were normal are an approxi¬
mation ; but it has been generally ac¬
cepted as substantially correct that
about as many men are employed from
mine and forest up through the stages
of fabrication to the completed road
and units of rolling stock as are em¬
ployed by the railways themselves—at
present probably in excess of two mil¬
lion. For a dozen years employment
in these industries has been character¬
ized by relatively sluggish expansion
at the busiest times and increasing
fluctuation.
PROGRAM
/^UR program is to aid in strength-
ening the credit and hence the
purchasing power of the railways by
supporting such laws and their admin¬
istration as will tend to attain and pre¬
serve adequacy of net railway income.
METHOD
i^UR method is to seek the cooper-
ation of everyone whom we be¬
lieve to be in position to bring strength
to our efforts. We intensify our en-
deavors in that direction in those
States and localities where the attitude
of government officials indicate a pub¬
lic opinion not yet brought into con¬
currence with our views. We seek
with special zeal the assistance of indi¬
viduals whose relation with members
of Congress or other federal officials is
such that if they are willing to acquaint
such governmental officials with the
existence of the sentiment represented
by our movement, whether or not ex¬
pressing agreement with the conclu¬
sions, these, in the midst of a multi¬
tude of matters pressing for attention,
may command perusal.
ORGANIZATION OF OPINION
ESSENTIAL
are particularly solicitous that
* our practice in this respect shall
become widely known. We hope oth¬
ers will pursue it. Various earnest
groups of Americans are confronted
with serious governmental problems.
These groups have a legitimate pur¬
pose. It is vital to the national inter¬
est that each of them should be fully
heard. Access to the official ear is in¬
creasingly difficult. In our judgment
failure of the several elements in the
country to adopt and pursue adequate
methods of organization and sys¬
tematic means for registering opinion
and for facilitating its official consid¬
eration will deprive this republic of a
process vital to the perpetuity of rep¬
resentative institutions. While not en¬
tirely familiar with the precise meth¬
ods employed by other occupational
groups in laying their special pleas be¬
fore Congress, we are glad to note the
energy, organization and resourceful¬
ness with which occupational problems
are being carried to the individual cit¬
izen as well as to members of Congress
by those embraced in such callings as
skilled mechanical labor, manufactur¬
ing, commerce, transportation and
even the public service, including the
vocation of regulating public utilities
under authority of the several States.
A witness before your committee
has placed in the record copies of let¬
ters written by us to our members and
others which serve admirably to illus¬
trate the method we are endeavoring
to develop. We hope such publication
will serve the double purpose of a sug¬
gestion to others where our procedure
commends itself and a suggestion to
us where criticism affords opportunity
for improvement.
RECOVERY AND FACILITIES
"^pO the policy of adequate railway
income the public has given wide¬
spread and eager support registered
by Congress in the Transportation Act.
Such support we attribute to a grow¬
ing conviction displacing previous in¬
credulity or indifference—a new reali¬
zation of two fundamental economic
propositions. The first of these is that
unless transportation facilities are ade¬
quate national prosperity will bring
again as it has brought in previous
crises its own destruction by over¬
whelming the tracks and terminals.
The second proposition is that general
prosperity never returns after a de¬
pression until railway purchases have
been resumed on a large scale.
MR. HOOVER'S VIEW
"^HE Secretary of Commerce, Mr.
Hoover, in testimony before the
Interstate Commerce Commission
Feb. 4, 1922, said:
"A real program of construction
wöuld in its various ramifications give
relief to 500,000 or 600,000 of our un¬
employed. It would enable even added
numbers to increase their standard of
living and thus give increased market
to the produce of our farmers. Our
farmers who look to foreign markets
for their surplus should stop to con¬
sider that our home consumption of
meat decreased nearly seven pounds
per capita in 1921 mostly owing to un¬
employment, and that if this decrease
could be overcome it would be worth
more than a 35% increase in exports.
... A billion dollars spent upon
American railways will give more em¬
ployment to our people, more advance
to our industry, more assistance to our
farmers, than twice that sum ex¬
pended outside the frontiers of the
United States."
DISCUSSION OF AMENDMENTS
DEMORALIZING
^ONGRESS saw fit in the Trans-
portation Act of 1920 to omit pro¬
visions which the Railway Business
Association advocated. Competent
observers regard certain provisions
which were embodied in that measure
as defective and unwise. We have no
doubt that the best interest of the
nation will in due course require re¬
vision in various particulars. In the
year 1922, however, the task which
confronts the country with regard to
transportation is to provide facilities
against the inevitable new peak of load
and to bring about the recovery of ag¬
riculture, manufacture and commerce.
It is futile to discuss the accomplish¬
ment of either of these results short
of winning the confidence of the in¬
vestors to whom railway companies
must look for new capital if they are
to enlarge their properties. If you
are willing to run the risk of indefi¬
nitely postponing large flotations of
railway securities with which to pro¬
vide tracks and terminals, locomotives
and cars and to initiate general busi¬
ness recovery and restoration of the
farmers' domestic market, you can
adopt no course so certain of that ob¬
ject as to enter at this time upon re¬
vision of the Act.
FOR STABILITY AND RECOVERY
CERIOUS discussion of amendments
such as has been going on has given
apprehension. Efforts, on the other
hand, of the Interstate Commerce
Commission and the Labor Board to
carry out the provisions of the Act
as it stands and to find a reasonably
stable rate level have tended to in¬
crease confidence. One of our reso¬
lutions describes the aim of the hour
as "net railway income fair alike to
the employees, the railways, the ship¬
pers and the public." The immediate
responsibility of all concerned in and
out of the government is to promote
and encourage the Commission and the
Labor Board to do their utmost for
the attainment of that purpose. If
these gestures toward amendment
could cease every center of unemploy¬
ment and every agricultural region
would feel the impulse of renewed
faith that with the law as it stands a
solution for the time being at least will
be worked out, laying the foundation
for prosperity.
With high respect
Yours truly.
ALBA B. JOHNSON,
President.
FRANK W. NOXON, Secretary.
3
Resolutions
Unanimously Adopted by the RAILWAY BUSINESS ASSOCIATION
in Annual Meeting, Feb. 1, 1922
(Extracts)
THE WAY TO BUSINESS RECOVERY
Return of general prosperity can in
no way be so effectively promoted as
through resumption of large rail¬
way purchases. Industrial, mercan¬
tile and agricultural shippers have a
greater concern in adequate railway
income than in lower rates. Factory
and farm alike are suffering from
curtailment of markets through im¬
pairment of buying power. The war
abnormally enlarged mines and
mills, which in many cases are
letting demand approach existing
capacity before creating new. The
railroads on the contrary, due to
restrictions affecting credit, came
to the war period with serious
arrearages of provision, which have
been aggravated during and since
federal control. A relatively small
gain in traffic would overtax facilities
again as in the fall of 1920. The un¬
derdevelopment and undermainte-
nance of the railroads warrant replace¬
ments, improvements and extensions
vast enough to use all the capital
which would be available under the
best conditions. Large railway pur¬
chasing, in itself prudent and far
sighted, would start up industry and
trade. It would readjust prices by re¬
establishing a balanced relation be¬
tween farm products and the manu¬
factured goods for which they are ex¬
changed. By reviving the pay rolls in
every community it would bring back
the buying power throughout the
United States which always and es¬
pecially now is the farmer's chief reli¬
ance, and enable him to purchase mis¬
cellaneous commodities in normal
volume.
TRANSPORTATION ACT
We favor a reasonable experience
of the Transportation Act of 1920
without modification of the rule of
rate-making. Since the railways were
relinquished to their owners condi¬
tions have been extremely abnormal
and are unlikely to recur. The Com¬
mission has said "The rate adjustment
cannot with advantage be made de¬
pendent upon fluctuations in traffic.
.... The duty cast upon us by
Section 15a is a continuing duty and
looks to the future What
is contemplated by the law is that in
this exercise of our rate-making power
the result shall reflect our best judg¬
ment as to the basis which may reason¬
ably be expected for the future to
yield the prescribed return." Judg¬
ment requires experience. Experience
should have time to develop before we
subject the Commission, the users of
transportation, the country and the
railway managers to another legisla¬
tive upheaval. Amendments can be
intelligently considered only after a
period of average tonnage and aver¬
age gross earnings under moderate
rates and under labor cost adjusted
to levels prevailing in other employ¬
ment.
UNIHED CONTROL
Proposals for repeal of the federal
control established in some sections of
4
the Transportation Act of 1920 show
that certain misunderstandings are not
yet obsolete. Congress has been urged
to restore State control of car service
and of rates. It is argued that State
commissions give shippers more sat¬
isfactory response. The fact is that
the car supply is national, the sea¬
sonal mobilization at points of de¬
mand necessarily centralized and the
State authorities helpless to con¬
script cars as the Interstate Commerce
Commission can and does, for move¬
ment across State lines. What pro¬
vides the national car supply is the
financial strength of the individual
road, whose revenue domes from its
total traffic—about 15% State hauls
and the rest interstate hauls taking
rates based upon the sum of the locals.
Neither as to car service nor as to
rates has the federal Commission in¬
terfered with the State authorities ex¬
cept in major emergencies and then
only after consulting them. We favor
preservation of federal control where
State regulation conflicts with federal.
THE LABOR BOARD AND THE
COMMISSION
The Interstate Commerce Commis¬
sion has said : "While the law makes
no provision for co-ordination be¬
tween the Labor Board and the Com¬
mission, the desirability of contact be
tween the two bodies is appreciated.
Since the creation of the Labor Board
informal conferences have been held
from time to time, and will without
doubt be continued in the future. We
have been particularly solicitous to
procure and have at hand such statis¬
tical information as may aid the Labor
Board in its work." We urge initia¬
tion and maintenance of such contact
between the Labor Board and the
Commission as will assure a relation
of labor cost to net railway income
fair alike to the employees, the rail¬
ways, the shippers and the public.
5