original report and not reach the conclusion that many of the rates assailed were unreasonable in the past.

I would be willing to join in a conclusion that the basis of reasonableness in the past should, all things considered, be fixed upon a somewhat higher level than the basis of reasonableness for the future; but I am unable to join in a conclusion that there was no unreasonableness in the past.

190 I. C. C.

EX PARTE No. 106

SIX-HOUR DAY INVESTIGATION IN RE THE EFFECT UPON OPERATION, SERVICE, AND EXPENSES OF APPLYNG THE PRINCIPLE OF A 6-HOUR DAY IN THE EMPLOYMENT OF RAILWAY EMPLOYEES

December 6, 1932

Upon investigation of what would be the effect upon operation, service, and expenses of applying the principle of a 6-hour day in the employment of all classes and each particular class of railway employees because of such application, found:

Operation. There would be no material effect, adverse or otherwise, upon operation of the several carriers, assuming that revenues would be sufficient to cover any added operating expense and still maintain credit.

Service. There would be no material effect, adverse or otherwise, upon the service of the several carriers, subject to the same qualifications as shown above with respect to operation.

Expenses. (a) Assuming the same volume of traffic and operations as in 1930, and assuming no reduction in the then-existing compensation for an 8-hour or other basic day's work, the initial effect would be to increase operating expenses of the carriers collectively, including the express and sleeping-car companies, at the rate of approximately $630,000,000 per year, or about 14.6 per cent of the operating expenses, and approximately 22.2 per cent of the payroll expenses in 1930. However, the compensation of steam railway, express, and sleeping-car employees was on February 1, 1932, reduced 10 per cent by an agreement which expires on January 31, 1933. Various reductions in wages of electric railway employees have also been made. If the wage reductions are continued, the above estimate of $630,000,000 would be reduced to something less than $570,000,000 per year.

(b) Assuming the same volume of traffic and operations as in 1930, and a reduction in the then-existing compensation pro rata to the reduction in the basic day's work, and excluding road train and engine service from consideration, for reasons stated in the report, the initial effect would be to decrease operating expenses of the carriers collectively, including the express and sleeping-car companies, at the rate of approximately $26,000,000 per year, or about 0.6 per cent of the operating expenses, and approximately 0.9 per cent of the pay-roll expenses in 1930. Allowing for the wage reductions above mentioned, this estimate would be reduced to something less than $24,500,000 per year.

(c) Using the same percentages of operating expense, and assuming the same volume of traffic and operations as in the 12 months ended with September, 1932, the initial effect would be an increase at the rate of approximately $414,000,000 per year under the first assumption with reference to wages and a decrease at the rate of approximately $20,000,000 per year under the second assumption. The estimates of $414,000,000 and $20,000,000 above given are probably both somewhat too high, if wage reductions are to be continued.

(d) The increase in expenses at the outset under the first wage assumption would gradually be lessened and the decrease in expenses at the outset under the second wage assumption would gradually be increased as the result of experience with the proposed new arrangement and by technological developments. Upon either basis of compensation the application of the principle of a 6-hour day would render necessary between 300,000 and 350,000 additional carrier employees in a year such as 1930, and between 60,000 and 100,000 additional employees in a year of abnormal economic conditions such as now exist.

Alfred P. Thom, jr., for American Railway Association; Jacob Aronson, Douglas Swift, and Charles E. Miller, for eastern railroads; J. Carter Fort, Wallace T. Hughes, and Douglas F. Smith, for railroads of western region; M. Carter Hall and W. A. Northcutt, for bureau of information, southeastern railways; Ben B. Cain and Clar

Henry T. Hart, for Bangor & Aroostook Railroad Co.; Arthur Van Meter, for the Monongahela Railway Co. and Pittsburgh, Chartiers & Youghiogheny Railway Co.; M. G. Roberts and H. L. Worman, for St. Louis-San Francisco Railway Co.; and C. D. Cass and Adolf K. Barta, for American Electric Railway Association; Albert M. Hartung, for the Railway Express Agency; H. G. Greene, for Southeastern Express Co.; and G. A. Kelly, for the Pullman Co.

Donald R. Richberg, for Railway Labor Executives Association; A. Johnston, for Brotherhood of Locomotive Engineers; D. B. Robertson, for Brotherhood of Locomotive Firemen and Enginemen; S. N. Berry, for Order of Railway Conductors of America; A. F. Whitney, for Brotherhood of Railroad Trainmen; T. C. Cashen, for Switchmen's Union of North America; E. J. Manion, for Order of Railroad Telegraphers; J. G. Luhrsen, for American Train Dispatchers' Association; A. O. Wharton, for International Association of Machinists; J. A. Franklin, for International Brotherhood of Boilermakers, Iron Ship Builders, and Helpers of America; Roy Horn, for International Brotherhood of Blacksmiths, Drop Forgers, and Helpers; J. J. Haynes, for Sheet Metal Workers' International Association; C. J. McGlogan, for International Brotherhood of Electrical Workers; Martin F. Ryan, for Brotherhood of Railway Carmen of America; John F. McNamara, for International Brotherhood of Firemen and Oilers; G. M. Harrison, for Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees; F. H. Fljozdal, for Brotherhood of Maintenance of Way Employees; D. W. Helt, for Brotherhood of Railway Signalmen of America; M. S. Warfield, for Order of Sleeping Car Conductors; Fred C. Boyer, for National Organization Masters, Mates, and Pilots of America; Charles M. Sheplar, for National Marine Engineers' Beneficial Association; Joseph P. Ryan, for International Longshoremen's Association.

REPORT OF THE COMMISSION TO THE SENATE AND HOUSE OF REPRESENTATIVES OF THE UNITED STATES

BY THE COMMISSION:

This report is submitted in response to a joint resolution of the Congress, approved March 15, 1932, which reads as follows:

PUBLIC RESOLUTION NO. 13, SEVENTY-SECOND CONGRESS

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the Interstate Commerce Commission be, and is hereby, directed to investigate what would be the effect upon operation, service, and expenses of applying the principle of a six-hour day in the employment of all classes and each particular class of railway employees because of such application. SEC. 2. The commission is further directed to report its findings to the Congress on or before December 15, 1932.

By our order of March 28, 1932, instituting the investigation, all common carriers by railroad subject to the interstate commerce act were made respondents. This order was served upon the respondents and notice of the proceeding was served upon the several organizations representing groups of carriers or employees. Upon petition of interested employees we entered our supplemental order of May 19, 1932, including as respondents all express companies and sleepingcar companies. The proceeding was assigned by us to division 6 of

the commission for the purpose of conducting hearings. At the hearings, evidence was presented both by respondents and by the employees. In all, 42 witnesses were heard and 81 exhibits introduced on behalf of respondents and 43 witnesses were heard and 63 exhibits introduced on behalf of the employees. This evidence was supplemented by data from our own records and various other sources. No briefs were filed, nor was there oral argument following the close of the hearings.

At the beginning of the hearings the following statement was made by the presiding commissioner:

It will be noted that the commission is not directed, by this resolution, to express an opinion upon the wisdom or expediency of the 6-hour day but to ascertain and report certain facts, namely, the "effect upon operation, service and expenses of applying the principle of a 6-hour day." In other words, the commission is here acting as a fact-finding body. The commission does not, therefore, regard the proceeding as a controversy between parties with respect to the wisdom or expediency of the matter under consideration, but as a mutual search on the part of all parties for the facts which are to be ascertained.

1

The scope of the investigation is indicated in part by the following statement, which shows by groups of officers and employees of Class I steam railways the average number of employees in 1930, deemed by the railroads to be a reasonably normal year, and the amount of their annual compensation:

Including, in addition to the Class I steam railways, the other carriers covered by the investigation, the average numbers of employees were as follows:

Average num.
ber of em-
ployees
1, 487, 839

22, 615 6, 589 22, 303 32, 213

⚫ 38, 769 • 51, 162 28, 019

1,689, 509

Since 1930 there have been sharp declines in railway employment. The average number of employees of Class I railways decreased from 1,487,389 in 1930 to 1,031,014 in June, 1932, and 980,627 in August,

1 Class I steam railways are those having annual operating revenues of or above $1,000,000.
Class II steam railways are those having annual operating revenues from $100,000 to $1,000,000
Class III steam railways are those having annual operating revenues below $100,000.

1932. The number increased to 994,630 in September, 1932. These reductions were not due wholly to the present business depression, but partly to conditions which have developed gradually over a period of several years. This persistent decrease in employees is shown in comparison with volume of work done in the following statement for Class I railways, excluding switching and terminal companies:

Each of the several groups of employees was affected by the reductions, as illustrated by the following comparisons of the number of employees in 1923 and in 1931, and in August of 1930 and 1932:5

The number of occupations involved is indicated by the fact that in our wage statistics the employees of steam railways are divided into 6 main groups and 148 reporting divisions, which include more than 2,300 pay-roll classifications.

THE PRESENT WORKDAY OF RAILWAY EMPLOYEES

Employees in road and yard service.-The Adamson Act (39 Stat. 721), to which all common carriers by railroad engaged in interstate commerce, except railroads independently owned and operated not exceeding 100 miles in length and electric street and interurban railways, are subject, provided, in substance, that beginning January 1, 1917, eight hours should be deemed a day's work and the measure

The first four columns of the table pertain to Class I line-haul railways and the last two columns include