overtime to be computed at 11⁄2 hours for each hour worked. Machinists, $177,60; boilermakers, $176.80. BROTHERHOOD OF LOCOMOTIVE ENGINEERS-ORDER OF RAILWAY CONDUCTORSBROTHERHOOD OF RAILWAY TRAINMEN FEBRUARY 7, 1939. Officers, General Chairmen, Divisions and Lodges, Brotherhood of Locomotive Engineers, Order of Railway Conductors, and Brotherhood of Railway Trainmen. DEAR SIRS AND BROTHERS: A situation has arisen in Washington and in certain State capitals where legislatures are in session which suggests prompt handling. A number of individuals in the transportation groups, particularly cut-off men and men on the extra boards, are advocating and seeking to secure legislation limiting the opportunity to work during any given month to, in some cases, 2,600 miles or its equivalent. It is not difficult to understand the predicament that confronts men who are unable to properly provide for themselves and their families, however, we cannot subscribe to a policy that suggests the fixing of miles and hours, and possibly wages, by the Congress of the United States or by State legislatures. The policy of these organizations has always been to do the greatest good for the greatest number, and each of these organizations has sought during recent years to prevent our members from making excess miles or excess hours. This policy will be continued, but we cannot subscribe to a program of limiting monthly earnings by law as we believe any proposal to regulate earnings by law is improper and unsound in principle, and should be opposed by organized labor. Such matters should be left for handling entirely by the membership of our organizations as they have been in the past. Such a law might conceivably lead to further legislation which would further restrict the prerogative of the organizations and the committees to negotiate and deal directly with employers in matters pertaining to wages and working conditions. Railroad Retirement Board records show that for the year 1937 men employed in engine and train service did not earn on an average to exceed 3,000 miles per month. There were a few instances where individuals exceeded what we consider is a proper limitation, but these cases did not predominate and did not materially affect the average monthly mileage. In view of these facts, we suggest that lodges and divisions should pass resolutions, sending copies to each of your United States Senators and to your Congressmen and State legislators, setting forth your opposition to any legislation proposing to fix mileage or hourly or monthly limitations, or earnings. Similar resolutions should be passed and sent to State legislators where such bills have been introduced at your State capitals. Fraternally yours, J. A. PHILLIPS, President, Order of Railroad Conductors. Grand Chief Engineer, Brotherhood of Locomotive Engineers. E. F. WHITNEY. President, Brotherhood of Railroad Trainmen. BROTHERHOOD OF LOCOMOTIVE FIREMEN AND ENGINEMEN, Mr. W. W. ADAMS, M424, Mr. L. M. LESTER, Mr. G. H. BURCHAM, Russell, Ky. DEAR SIRS AND BROTHERS: This will acknowledge receipt of your communication of July 9, and for the kind expressions of confidence contained therein. Please accept my thanks. Having served my full apprenticeship as extra and regular fireman, and later as extra and regular engineer, a number of years ago, believe that without boasting claim for reasonable understanding of the conditions under which enginemen work may be made, and although during period of my actual service on a locomotive there was no such depression as the one with which we have been struggling during the past 9 or 10 years, at the same time the need for a more equitable share-the-work plan has long been realized. The necessity for such regulations has been particularly keen during recent years, and it is my sincere hope that the efforts of our brotherhood shall not cease until this reform has been achieved. Briefly, in addition to being in full sympathy with action of our last convention in favor of a 6-hour day without reduction in pay, it is my firm conviction that as labor unionists we should strive to secure rules under which men would not be required or permitted to work more than the equivalent of a full month-in my personal opinion this should be limited to 26 days-at a rate which would enable the workers to live decently and have a little time for personal enjoyment, recreation, and rest. It is my studied judgment that such desirable conditions could be better secured through the enactment of national legislation, which laws should provide for the keeping of records and regulating the boards and working lists by the railroad companies, in somewhat the same manner as the hours of service law is applied. By this means proper application of the regulations would be adopted, and the contention which inevitably grows out of the handling of such matters by individuals or committees would be eliminated. It is understood, of course, that to bring about these changes will require sincere determination and much hard work on the part of all directly interested, but our organization has proved time and again that it is equal to the task, and the part you boys have to play is to stir up interest and supply the support necessary to carry the movement to success. Again thanking you for spirit manifested, I am, with kindest personal regards and best wishes, Yours fraternally, A. PHILLIPS. STATEMENT OF J. D. SHATFORD, CHAIRMAN, EXECUTIVE COMMITTEE, RAILROAD OWNERS' ASSOCIATION, WASHINGTON, D. C. Mr. SHATFORD. Mr. Chairman, I appear on behalf of the Railroad Owners' Association, an organization of stockholders and bondholders of railroads. The CHAIRMAN. Would you prefer to proceed without interruption? Mr. SHATFORD. I think that you might ask me any questions from time to time, while they are fresh in your minds, and fresh in my mind. I think that it would be well to do it. The CHAIRMAN. Mr. Shatford, we are a little bit later in getting started with your testimony than we had anticipated, but we hope that you can conclude your statement this morning. The committee has another program beginning Tuesday, so you will be permitted to place in the record anything that you omit from your statement this morning. Mr. SHATFORD. Thank you. I will just make this statement. As I started to say, I appear on behalf of the Railroad Owners' Association, an organization of stockholders and bondholders organized in 1924 and incorporated in the District of Columbia the same year under an act of Congress of March 5, 1905. We represent approximately $2,000,000,000 of the $20,000,000,000 of securities issued by the railroads. The CHAIRMAN. You represent how much, did you say? Mr. SHATFORD. $2,000,000,000; about one-tenth of the entire capitalization of the railroads. Last July, when conditions were in a very frightful condition with the railroads I called a meeting of my committee in New York to see what we could consider and discuss to bring about a condition that would improve the situation in the railroads. That resulted in another call for a meeting in November. We discussed it for 2 weeks, my committee, myself, and associates called in from the outside, and with the purpose in view of submitting to you or to Congress a national transportation policy. We arrived at such conclusion and we intended to introduce bills both in the Senate and in the House embodying our views, but in view of the fact that Chairman Wheeler, of the Interstate Commerce Committee of the Senate, and Chairman Lea, of this committee, said that they would introduce bills, we thought we would just present to you our views as to a national transportation policy, and if you find anything in our views that are constructive, you can incorporate it in your bills. We think that something should be done for the railroads in order to increase our commerce nationally. There never has been a prosperous time in the history of this country, and I venture the opinion that there never will be a period until the railroads are prosperous. That I think is accepted by everybody. Now, if you will allow me to proceed in my own way, I will read this and come to our policy a little bit later. Now, if you will permit me to read an extract of a few lines from the annual report of the Interstate Commerce Commission, you will see just what they think about the situation: "Basically the financial condition of the railroads can be improved apart from Government subsidy only"-and I ask you to just bear emphasis on the word "only" "by increase in revenues or decrease expenses or both." in That is what they say, showing that they did, in that instance think constructively of our necessities. At this point I would like to introduce an excerpt from an address, by Commissioner Splawn before the National Association of Railroads and Public Utility Commissioners at New Orleans, November 16, 1938. It refers to appropriations by the Government to the waterways, rivers, canals, and highways. I will not read that. I want to be as brief as possible. I will ask that it be inserted in the record. The CHAIRMAN. That may be done. (The matter referred to is as follows:) EXCERPT FROM AN ADDRESS MADE BY HON. WALTER M. W. SPLAWN BEFORE THE NATIONAL ASSOCIATION OF RAILROAD AND PUBLIC UTILITIES COMMISSIONers at New Orleans, La., November 16, 1938 Public aid to water transportation has been continuous. For all purposesthat is, of seacoast harbors, for lakes and river transport-the Federal Government had appropriated $111,299,465 by 1882. This had increased over $800,000,000 at the outbreak of the World War to $1,311,597,000 10 years later (1925), and had now reached a total of $3,000,000,000. Following these appropriations there has actually been expended by the Federal Government on our seacoast harbors and channels $700,940,000, on the Great Lakes $236,800,000, on the Mississippi River and its tributaries about $798,800,000, and on other waterways over $180,000,000. Our public roads were at first largely private projects. There was some aid by local governments but the hope was to amortize the investment and maintain the highways through tolls. In recent years, the development of the oil industry and the concurrent advance of the automobile industry have stimulated the construction of hard-surfaced highways. The municipal, State, and Federal Governments combined have appropriated to the system of designated highways approximately $11,000,000,000. The Federal Government, including $566,000,000 of relief funds, has expended almost $2,000,000,000 on public highways. But other governments, municipal and State, have been encouraged to make their appropriation through the hope of obtaining Federal aid. While the direct subsidies to the airways are not so great, the indirect subsidies have been relatively very considerable, considering the infancy of the industry. I want further to point out to you that our executives asked for an increase in Ex parte 123 of 15 percent in rates. The Commission granted us 6 percent. If it had granted us a full 15 percent, or the 9 percent extra, it would have meant only three-quarters of 1 cent a day to each individual in the country, but that is not the real fact. The real fact is that if the 9 percent had been given us extra, or the full 15 percent, the amount of money that would have been spent by the railroads would have produced such a prosperity that the threequarters of 1 cent a day would have been increased many times in additional income to each individual of the country. No one will deny that the expenditure of three-quarters of 1 cent per day, if it brings in many times that three-quarters would be anyting but beneficial to the country, and that is where the Commission has fallen down continuously. Now, if I speak frankly and feelingly, Mr. Chairman, and members of the committee, I want you to bear with me, because we believe as investors in these properties we have been very badly treated. RATES TO PRODUCE FAIR RETURN The Commission received a mandate from the Congress, as we view it, to make rates that would produce a fair return upon the value of our property, investment in our property. They never have done so, and we who have invested our money in these properties feel that they have failed utterly in functioning properly. FINANCIAL CONDITION OF RAILROADS Now, I will not read our plan. I will read the prelude. The railroad industry, as is well known, is in serious financial condition. Great concern has been expressed about the situation, but there would have been no such problem had justice been applied to it. It is not even an approach to justice that although the railroads are privately owned, commissions and boards appointed by Congress govern the rates rail carriers charge for their services and the wages they pay to labor. Furthermore, even though the results be disastrous or confiscatory, these agencies of Congress assume no responsibility for their acts. COOLIDGE REPORT Now, I want to quote you from the Coolidge committee. As you remember, 73 important companies, including life-insurance and other fiduciary companies, asked that a committee be appointed and a committee was appointed, which was known as the Coolidge committee.. It says: Regulation is expensive. It is bureaucratic. Once established it expands and it paralyzes private initiative without offering constructive leadership. That was the conclusion of the committee. Mr. COLE. What is the date of report? Mr. SHATFORD. That is dated February 13, 1933. Again, on page 41, speaking of the Interstate Commerce Commission the Honorable Alfred E. Smith, in a minority report, makes this statement in speaking of the Commission: They have attempted to function under an obsolete and unworkable law, and in the face of conditions which call for intelligent planning and leadership as distinguished from endless debate on details. Everyone admits that more and more of the work of the board must be delegated anyway, and if this is so, the question arises as to why a board is needed at all. I believe that too much emphasis has been placed on the judicial functions of the Interstate Commerce Commission, especially on valuation and ratemaking, and too little on planning and administration. That is what Mr. Smith said. Again, on page 31 of the report, in speaking of this-I will go just a little further with our prelude. This leads to the question, Should railroad regulation exist without responsibility and should two or more such regulatory commissions or boards operate independently and without coordination? In the light of past experience, it would seem that the answer should be in the negative. There should be but one body fixing rates of service and wages of labor so that both may be adjusted in proper ratio. The Coolidge committee report on page 31 says: Nobody can assume authority without accepting responsibility. The existing railroad condition speaks for itself to say that regulation by the Commission has left something to be desired. Another important consideration is whether the railroads may be able to maintain their fair share of the transportation business if rates and wages are regulated while those of their competitors are generally unregulated. It is plain that before the entire transportation industry can be stabilized all forms of transportation must be brought under the jurisdiction of one regulatory body. The railroads must build and keep in repair their rights-of-way as well as to pay taxes to have built and repaired the highways used by their motor-vehicle competitors. No business can prosper or even survive under such unfair methods. During 1937 the Government spent $830,000,000 on new highways. It also spent approximately $100,000,000 on airways and $142,000,000 for the opening up of new waterways, but not one dollar was contributed to the railroads. Waterway users as well as highway users should be compelled to pay their full proportion for the building and upkeep of such waterways and highways. If the wages of the railroads are to be fixed by the Government, as they practically are, then comparable wages should be fixed for waterway and highway users. TRUCK TAXES LESS THAN DAMAGE DONE TO HIGHWAYS The study of the Public Service Commission of the State of Missouri shows that 2-ton trucks pay $137.50 each less per annum, and heavy trucks $615 less than the damage they inflict upon the highways, part of which costs the railroads are compelled to pay by way of taxes. A similar study made in Illinois shows that heavy trucks pay $996.72 less per year than they should pay for use of the highways. Mr. HINSHAW. Mr. Chairman, may I ask a question? The CHAIRMAN. Mr. Hinshaw. Mr. HINSHAW. May I ask the source of your information; who made those studies? Mr. SHATFORD. I beg your pardon? Mr. HINSHAW. I ask who made those studies. Mr. SHATFORD. This information? Mr. HINSHAW. That you have just given; yes, sir. |