Between now and early winter a decision will have to be arrived at in the United States as to whether that country is to be subjected to all the inconvenience and hardship which a general railway strike would necessarily entail. The Association of Railroads are seeking to reduce wages by about 15 per cent. and this is being strenuously opposed by the Railway Brotherhoods, consisting of no less than 21 unions who threaten a strike rather than accept the cut. The case for the railroads is that the tremendous increases in operating costs, the diversion of traffic to freight truck lines, and the recent refusal of the Interstate Commerce Commission to grant a full 15 per cent, increase in rates, makes it impossible to continue the payment of the annual wage bill at its present level, which in 1937 amounted very closely to U.S.$2,- 000,000,000. 'The Railroad Brotherhoods appear to accept the Association of Railroads' contention, but blame the present predicament upon them, because of excessive capitalization and borrowings and failure to reduce expenses through good management. There is probably a great deal to be said for the arguments on both sides, but the fact remains that should the ordinary processes of negotiation, arbitration, and the appointment of a fact-finding commission fail to bring about some sort of compromise, the United States will be plunged into a general railroad strike which would paralyse the flow of goods from one locality to another and not only inflict considerable hardship upon the strikers themselves but cause other tremendous losses of employment and money.
The employers and employees are not the only two parties in this dispute. The United States Senate in rebelling against the passage of a Bill which would authorize the Reconstruction Finance Corporation to lend to railroads for equipment, refunding, fixed charges and maintenance, is openly declared to have made an attempt to bring pressure to bear on the railroads so that they will not insist upon this proposed 15 per cent. cut. It is interesting to note that the rebellion was started by Senator Robert Lafollette the day after he returned from a cruise with President Roosevelt. It is apparent that the proposed wage cut is opposed and feared by the New Dealers from the President down.
They are caught in somewhat of a dilemma, for although they will admit privately that the best interests of the railroads would be served by lower wages, New Dealers believe that the best interests of the nation demand the retention of existing wages. Their actual fear is that the cutting of wages by public carriers would start an avalanche of indiscriminate wage-cutting, and collapse of the whole wage structure of the country would in all probability be the one development which is most greatly to be feared. Consequently, however right the Association of Railroads may be in their contentions, it seems evident that the big battalions are massed against them, for by threats of strikes, by the withholding of desired legislation, and by every other means known to an astute administration, the railroads' much desired wage cut can be blocked. It has been very aptly remarked that trying to keep the carriers from cutting wages by withholding the new Reconstruction Finance Corporation Bill is "like telling an impoverished gentleman that his haberdasher will not let him charge any more neckties if he dares to fire his chauffeur. The roads want the wage-cut and they will give up the R.F.C. Bill to get it."
It is possible that the one chance left is that the wage question may be kept from coming to a head until early winter, when it is hoped the forces of recovery will be in the ascendency again and the elections over. Amongst most of the expert economic observers of the United States there seems to be agreement that the nadir of this present "business recession" has been reached and that signs of upward trends are to be perceived. That may indeed be so, but it is obvious that unless the improvement is so rapid and so great as to bring to the railroads within a very short time such increase of traffic as will enable them to continue paying the present wage bill, the Association of Railroads will continue to push for reduction. That, of course, will be sternly resisted by the men, and there will then follow a struggle between two contending factions—the employers to ward off final decision as long as possible, and the employees to accelerate it. A spokesman for the railroads is quoted as explaining that if the employees refuse to accept the wage decrease, conferences between representatives of the unions and railroads will be called to negotiate a settlement. If these negotiations fail, the controversy will be referred to arbitration, a compulsory proceeding under the present railroad law, failing which President Roosevelt may be asked to appoint a fact-finding commission. The interesting position arises from the fact that if, despite these three moves to secure a compromise, the commission insists on a wage, reduction, the Brotherhoods can still reject the cut and plunge the country into a general railroad strike. On the face of it the employees seem to be batting on a wicket admirably prepared for them, for if negotiations fail, they appear to be entitled to reject the findings of a compulsory arbitration, and even after that the decision of the fact-finding commission. That being the case, with the support they are undoubtedly receiving from the New Dealers, the employees are in a very strong position, and it may mean that, rather than permit a wholesale strike, the government may be ultimately forced to adopt other schemes, all of which would necessitate the introduction of an entirely different method of managing the country's railways.
Text read from the printed page and cleaned; old type leaves the occasional error.