Thus

claimed, and won, an extra day's pay in addition to his pay for no work. he was paid once for not doing the job, and once for doing it—all in the same day (NRAB, 1st Div., 10681).

In the second category of rules (those that compel retention and preparation of work and pay standards made obsolete by advancing technology) the prime example is one that continues to regard 100 miles or any part thereof as the equivalent of a basic day's work for most members of train crews, although with today's modern diesel locomotives and high-speed trains, 100 miles (150 miles in the case of passenger conductors and trainmen) is many times only 2 hours' work or less.

Between New York and Washington, for example, where the round-trip distance is 452 miles and the round-trip running time of fast passenger trains is less than 8 hours, engineers and firemen receive 42 basic days' pay for actual train running time of less than a standard 8-hour working day. Similar situ1tions, with only the figures changed, exist on various passenger runs all over the United States.

The following table shows to what extent the increase in train speeds since 1922-an increase made possible by advancements in technology such as dieselization, modern signal and communications systems, centralized traffic control, radio, heavier and stronger rail, and reduced grades and curves-has reduced the number of hours required on the average for various classes of railroad operating personnel to earn a basic day's pay:

Average number of hours of work required to earn a basic day's pay

The manner and degree to which increased train speeds and improved technology have inflated the pay of operating employees, through reducing the number of hours they work, is further evident in the fact that road passenger engineers, road passenger firemen, and road freight enginemen, in that order, fill the first three positions among all 128 classes of railroad employees on the hourly pay rate roster. Executives, officials, and assistants, who traditionally have received the highest rate of pay, have today fallen from that position and now rank fourth.

Rules that infringe upon the rightful authority of railroad management to make decisions of operational policy (the third category) include (1) those that prohibit even the slightest departure from the general principle that yard work shall be done by yard employees and road work by road employees and (2) those that interfere with the right and responsibility of management to change, adjust, or adapt roalroad operations so as to keep them constantly attuned to changing requirements and changing conditions.

As the result of a precedent-setting decision of the National Railroad Adjustment Board (NRAB, 1st Div. 17377), a road employee assigned to move his train a distance of some 40 car lengths in a freight yard claimed, and received, in addition to his pay for road work, a basic day's pay at yard rates. Moreover, the Board's decision awarded an extra day's pay to the yard crew, which it said should have been employed to do the work.

In another decision (NRAB, 1st Div., 16608), the Board held that the same reasoning should apply in a reverse situation involving the use of a yard employee to perform work on the road. It awarded a yard crew an extra day's pay at road rates for a round-trip of 4 miles made to free a train that was snowbound, and awarded a road crew still another day's pay for not doing the work which the Board said it should have been employed to do.

Such cases stand rigidly as precedents, against which even the slightest flexibility in making interchangeable use of road and yard employees is impossible, except at penalty rates of pay. Although the effect of some of these decisions and rules has been modified by agreements that provide arbitrary rates which reduce the amounts of extra pay required, the total cost to railroads of the prohibition against their making interchangeable use of yard and road employees adds many millions of dollars to the cost of producing railroad service.

Additional costs result from the rigid mileage limitations placed upon distances trains may run without crew changes. These limitations were established in the early days of steam locomotives when long-distance runs, now entirely practicable with diesel locomotives, were impossible, due to the more frequent needs of steam locomotives for servicing, refueling, and water. Dozens of crew terminals continue to be maintained at distances of one hundred or so miles apart, and hundreds of trains continue to have their crews changed at division and seniority boundaries. Sheer prudence and sound business judgment long ago suggested abandonment or consolidation of many crew terminals and establishment of numerous interdivisionl and interseniority runs. But the old order remains.

Such in brief is the documented record of some of the outmoded work practices that add over $500 million a year to railroad costs. Even without imposition of costly and unwarranted additional retirement benefits proposed for railroad employees, such practices threaten the ability of railroads to continue as privately owned and operated business enterprises.

This letter would not be complete without some reference to the studies of public authorities who have investigated the situation on railroads and made known their findings.

Emergency Board 109, appointed in the so-called Conductors Graduated Rates Case, said in its report of March 25, 1955: "The fact that the railroad wage rate structure, for operating classifications, has received no comprehensive review for more than 30 years, and no systematic study for almost 20 years (as of 1955), alone suggests that it may well be obsolete and ill-designed for a modern railroad system." The report added: "If the railroads are to maintain a strong place in the intense competition among transportation industries, their obsolete wage structure must be carefully reviewed and revised."

The National Resources Planning Board, in a report entitled "Transportation and National Policy," dated May 1942, observed: "Much restrictive regulation pertaining to railroads has been placed on the statute books, purportedly in the interest of safety and service, but which actually interferes with both, and which serves only the objective, quite apparent from a study of the legislative proceedings, of adding unnecessary jobs to payrolls ***”

In 1952, a special committee appointed by the National Association of Railroad and Utilities Commissioners found outmoded make-work rules on railroads to be a major contributing factor in the rapidly increasing railroad passenger deficit and the decline of railroad passenger service. Its report, which was adopted by the full association in a meeting at Little Rock, Ark., on November 11, 1952, commended:

"For many years, wage agreements between the railroads and the enginemen have contained scales of pay graduated according to the weight on drivers of locomotives operated. Thus as the carriers have sought to reduce per-carmile expenses by operating longer trains with heavier motive power, they have been confronted with automatic wage increases for the enginemen.

"The vast increases in train speeds made possible by improved equipment and roadway have also tended to increase the daily earnings of operating employees.

"It is a practice of the operating brotherhoods to limit the mileage a member employee can run in road service in a month. Generally, regular passenger train enginemen and firemen are permitted to make no more than 4,800 miles each month, and passenger trainmen are subject to a maximum generally not exceeding 6,600 miles per month.

"The earnings of individual employees are therefore limited by these mileage restrictions under which an employee can frequently receive his maximum allowed monthly earnings within 15 working days, or less. The wages paid by the railroads, however, for keeping a train and engine crew in service daily are not affected by these mileage limitations, except that unemployment and retirement taxes are increased slightly. Thus the cost to the railroad of keeping an engineer, for example, on a certain run for a month may be more than

twice the earnings of any engineman employed on that run due to the limitations imposed upon the monthly earnings of individual employees.

"In many instances the number of men in a train crew is governed either by State full-crew laws or by labor agreements rather than by the requirements of the operation in question."

I should mention, finally, the findings and observations of the Senate Commerce Subcommittee under Senator George A. Smathers whose investigation of the "deteriorating railroad situation” in 1958 preceded passage of the Transportation Act of 1958 and other measures of an emergency nature. The subcommittee's report dated April 1958 said, "There should be reappraisal of the entire railroad labor situation in the light of the present plight of the railroads." This is necessary, the report continued, "because the number and kind of jobs held by the membership of the railroad labor unions is inextricably intertwined with the economic welfare of the railroad industry. The problems of the two groups are mutual problems."

The report added: "The subcommittee urges that railroad labor cooperate in proceedings designed to strengthen the economic position of the railroads." I submit in all candor that provisions of S. 226 are not designed to strengthen the economic position of the railroads. Rather, if enacted into law, they can only undermine further a position already seriously endangered by a burden of over $500 million a year in excess costs imposed by outmoded work rules.

Attached to this letter is a copy of the speech I delivered to the annual meeting, National Association of Shippers Advisory Boards in St. Louis on February 11. Particular attention is invited to the comments I addressed in that speech to our railroad workers. I emphasize again that those comments were not and should not be construed as an attack on railroad labor. There is no more able or conscientious work force in any industry in the Nation. My target was rather the deadly rules railroadmen work by-rules which impose harsh limits on their creative ability and output and which, ironically, undermine the very jobs they were meant to protect.

More than 500,000 railroad jobs have been lost since the end of World War II. Unless railroad labor and management and representatives of the public work out sound solutions to both the internal problems of outdated work rules and the external problems of discrimination in governmental treatment of the various forms of transportation, more thousands of jobs will be lost.

I firmly believe that "make work" destroys work. An end to such restrictive practices would cut operating costs, streamline service, and make railroads more competitive in attracting new business. This would open the way toward more, not fewer, employment opportunities on the railroad. Rather than trying to freeze job levels in a weakened industry, it would seem that a more sensible course for rail labor leaders would be to concentrate on ways of helping railroads regain strength, expand business, and create new prosperity-not only for railroads but for all the Nation.

If we can attain these goals, we will be on our way to a new era in railroading a new era of vigorous growth and unprecedented levels of transportation service to our dynamic America.

Sincerely,

D. P. LOOMIS.

Excerpts from address, "Year of Decision: Clear Track or Crisis?" by Daniel P. Loomis, president of the Association of American Railroads, before the National Association of Shippers Advisory Boards at St. Louis, Mo., on Wednesday, February 11, 1959

"Wasteful and burdensome work rules-commonly known as featherbeddinghang like an economic albatross around the neck of American progress." "A sick industry means a sick economy. And sick railroads mean a national calamity. It could not be otherwise with an industry pumping $10 billion a year through the economy's bloodstream."

"Featherbedding is a handmaiden of the ruinous inflationary spiral."

"The elimination of $2 billion a year in wholly nonproductive make-work and featherbedding in the railroad industry would represent a tremendous contribution to the fight against inflation. For nothing is more inflationary than pay for work not done, for services not performed, for goods not produced."

"Featherbedding gnaws insidiously at our competitive position and ultimately destroys the very jobs it seeks to protect-both for railroaders and all those who depend on railroad purchases."

"A half million railroad jobs have been lost in the last dozen years. Unless we solve our internal and external problems, more thousands of jobs will go down the drain."

"I am not attacking railroad labor-I am, however, attacking and condemning the deadly rules our workers must work by-rules which limit their creative ability and their output and detract from their dignity; rules which are thoroughly un-American in concept and economically destructive in practice."

"Our goal boils down to this simple, reasonable objective: A fair day's work for a fair day's pay."

"If we can attain this goal, and if we can couple it with forceful, effective action on the public-policy scene, we will be on our way to a wholly new era in railroading, a new era of vigorous and lusty service to our growing America." "In these times of upheaval, America cannot afford the luxury of labormanagement discord in a vital industry. Nor can it tolerate work stoppages and the inexorable grinding down of the economy that would come if train wheels stop turning."

“It is time to face up to the possibility of tie-up—and time to take forthright action to make sure it does not happen."

"I therefore propose that leaders of the train operating brotherhoods join with railroad management in asking President Eisenhower to name a nonpartisan group of distinguished citizens to study this whole question."

"Both the brotherhoods and management need help. And we cannot shrink from seeking it. The American people themselves have too much at stake on the outcome. In return we will express our gratitude in the rebuilding of a great industry, in new achievement and in new benefits for all the Nation."

YEAR OF DECISION: CLEAR TRACK OR CRISIS?

(Address of Daniel P. Loomis, president, Association of American Railroads, before the annual meeting of the National Association of Shippers Advisory Boards, St. Louis, Mo., February 11, 1959)

Gentlemen, we meet again in a time of continued economic uncertainty here at home and of undiminished political tension abroad. We meet as partners in the great drama of production and distribution that is America's. We meet to reaffirm our faith in the lasting spirit of cooperation between you shippers, who represent America's vast productive might, and the railroadmen whose sweeping transportation facilities form the vital base for our rising standards of living.

As we work together, so are our fortunes linked together. And so also are the fortunes of all America reflected in our activities. We prosper together. And when one of us suffers, the Nation suffers. A sick industry means a sick economy. And sick railroads mean a national calamity.

It could not be otherwise with an industry pumping $10 billion a year through the economy's bloodstream, that employs nearly a million Americans whose purchases of materials and new equipment intimately affect the jobs of another million workers in supply industries, whose stocks and bonds are held by still another million people, whose trains carry 400 million passengers a year, and whose freight cars are the great burden bearers of the Nation, bringing us the food we eat, the clothes we wear, the fuel we burn and all the other things we use in our daily home and work life.

Yet I am here today not to dwell on our problems, but to hold out new hope of recovery for a seriously afflicted industry, new hope for a brighter day in transportation for Americans everywhere. I hold out hope of healthy and vigorous railroads, making rising contributions to the Nation's economic vitality and national security, and spreading greater prosperity outward to all businesses and to all America.

There are challenging horizons before us. This is the most exciting and promising era in all of transportation's history. Almost daily miracles are performed by transportation men of vision. The world is preparing to conquer outer space. We fire missiles and satellites into the heavens and stand on the threshold of a wholly new form of transportation.

But what an ironic and devastating failure in human progress if we conquer space, only to become mired down and earthbound on the world we live in. How empty will be the glory of landing on the moon.

If you are tired of hearing about railroad troubles, I can assure you that the railroads are tired of telling you about their troubles. We are sick of being the problem child of the American economy. But let us be realistic; let us all, everyone everywhere, get sick and tired for once over the causes of those troubles. Let us come to iron grips with those causes.

Only then can railroads regain their rightful place in the national economy. And by that, I don't mean rising from a sickbed to a wheelchair. I mean becoming a healthy, vigorous, progressive railroad industry again, making the vital contributions to an expanding America that our citizens have a right to expect. The railroads intend to fight toward that goal, and we ask for your help, and the help of all thoughtful Americans.

The results will be worth the effort. Railroads have woven a marvelous new pattern of facilities out of a postwar investment of $14 billion. This private capital spending, made in the face of the most forbidding obstacles, has changed the face of railroading and provided greatly improved service at low costs for producers, consumers, and the whole country.

Yet this is only the beginning. Modern railroading has enormous undeveloped potentials. Given a real chance to earn a decent living and rise to their full potentials, the railroads can and will give the Nation wonderful new levels of streamlined service and provide a vibrant nucleus for a dynamic American economy.

This is the choice before us, before you, before America. It is the Nation's decision as much as it is ours, for the railroads, acting alone, cannot possibly solve the crushing problems of discrimination that have grown up in public transportation policies over the past half century.

A start was made toward solution last year in passage of the Transportation Act of 1958 and repeal of the price-inflating Federal excise tax on freight shipments. But you know, as do we, that much more remains to be done. Before us now lies the tougher, yet much more meaningful and rewarding job to be done on the deep-down roots that are tapping the industry's strength and spreading its weakness throughout the economy.

It is imperative that the Nation get on with this job of putting some realism into Government's transportation policies. America's railroads cannot resume their rightful position and make their fullest contribution under a policy which bleeds off rail revenues through blinding taxes, then applies these to the subsidy and promotion of competing carriers. This is a sorry way to run a railroad. In fact, I don't think the Nation could have created any better way to ruin the railroads if it had set out purposely to do so.

While railroadmen are going to fight as never before for a solution to such public policy problems, this, even when successful, will not alone give us the clear track to greater progress which is our country's privilege. There is another area of festering and cancerous growth which must be cleaned out before our full potential can be reached. In this area lies the opportunity for great progress with consequent benefits to labor, management, shareholders, shippers, and, indeed, the entire American economy.

I refer now to the wasteful and burdensome work rules-commonly known as featherbedding-which hang like an economic albatross around the neck of American progress. Rooted in the horse-and-buggy era of 40 and more years ago, the work rules have remained fixed and inflexible while the industry made enormous strides in technical improvement. These outmoded rules now constitute an immediate drain on the industry in excess of $500 million annually and, equally important, act as a deterrent to further progress, as a job depressant and a barrier to advancement to the men and women employed in our industry.

Imagine, if you will, what half a billion extra dollars a year could mean if plowed into repair work. The backlog of bad-order cars would evaporate and vast numbers of laid-off men put back on the payroll. Or think of what such a volume of additional investment in modernization could do to railroadingand what it could mean to our customers, our suppliers, and to the national economy.

Featherbedding by any definition is a net loss to all America.

It puts pressures on our rate structure and bids up prices to all consumers. It is a handmaiden of the ruinous inflationary spiral.

It helps impoverish and weaken the railroads, means fewer returns to investors, and a virtual freezeout of the new equity capital needed to expand and improve plant.