Letter Urging Cooperation between Management and Employees of the Railroads.

Gentlemen:

I am concerned by conditions in the railroad industry. With all the other means of transportation which have become so important and are developing so rapidly, the future of the railroads depends on sustained ability to improve service and, in many cases, reduce rates. Much new equipment is and will be needed. Not all that should be done can be done at once, but if the railroads do not progress, they will retrogress. The opportunities for progress are great and will expand. The danger is that these opportunities will be lost.

The country has a vital interest in this matter, but no one has a greater stake than those who own and those who work for the railroads. In many ways their interests are identical, and they ought to be able to work together for a common end. Certainly this is true of better and less costly service which will enable the railroads to lead, or at least keep up with, transportation progress. What disturbs me is the apparent inability of the managements and the men to cooperate in working out such common problems. Issues which ought to be settled by friendly negotiation are being fought out in the battle grounds of Congress and the courts. Legislation has its place. Often it has been necessary for the welfare of labor or capital or both, but it is a remedy to be taken with great caution or it may prove worse than the disease.

A critical situation prompts this letter. It is common knowledge that there is much waste in railroad operation, caused by the great number of railroad companies, and that much of it can be avoided, either by consolidations or by greater cooperation and coordinated use of various facilities. This waste hampers railroad progress and is a burden on the rate-paying public. It ought to be eliminated for the good of all concerned, and conditions favorable to its elimination are now developing. I say this because the tide of traffic is rising. Under such conditions unnecessary and wasteful work can be avoided with least hardship to employees, because new work comes in to take the place of much that goes.

In the long run, the employees will surely gain from maximum efficiency and economy in railroad operation. With competitive conditions what they now are and promise to become, this is the only path to the increased traffic and revenues which the railroad future will require. But sudden steps in this direction may cause temporary hardships. The employees are fairly entitled to protection against such hardships.

The Emergency Railroad Transportation Act, 1933, undertook to promote the elimination of railroad waste and at the same time to protect the employees. This protection is now satisfactory neither to the companies nor to the employees, and by the terms of the Act it will, unless extended, terminate on June 16th, next. It is a matter which is capable of being settled to better advantage by negotiation than by legislation. Given sufficient time, the managements and the men ought to be able to agree, in their common interests, upon a reasonable plan of protection.

If they do not agree and legislation is sought as the only solution, I fear harm to the railroad industry. Both sides will take extreme positions. The effect of such legislation may be to discourage and prevent progress. Litigation will ensue. The courts may strike down what is attempted, so that the battle ground will again shift to Congress. The relations between the managements and the men will be embittered, with unfortunate results in many different ways.

All this can be avoided if the contending parties will confer with each other in a spirit of reasonableness and moderation. The employees ought not to forget what they will gain if the railroads can progress as transportation agencies and what they will lose if the railroads retrogress. They ought to bear in mind that the principle of protecting employees against undue hardship from economy projects is only beginning to gain ground. It is not as yet applied by most industries, nor by the other transportation agencies, nor even by the Government. The railroad industry has always taken the lead in the establishment of good working conditions and labor relations, but it cannot safely get too far in advance of the procession. Nor ought the employees to overlook the fact that if unnecessary railroad costs are not avoided, much desirable work that creates employment may not be undertaken. This has happened in maintenance work especially, and may easily happen again.

On the other hand, the managements ought to bear in mind that the principle of employee protection is steadily finding acceptance among responsible employers. It has been applied on the British railways and utilities. It has been voluntarily applied by certain large industries in this country, including several railroad companies. It is sound and right, and leading railroad executives have so stated. The railroads and their owners have much to hope for employee good-will and morale if an amicable adjustment of this matter can be reached. They have even more to hope for if they are able to develop among themselves the capacity for collective action and a willingness to subordinate pronounced individual views in the interest of effective cooperation.

Convinced, as I am, of the great benefits which will accrue to the railroad industry, to its employees, and to the country if this matter can be adjusted satisfactorily to both parties, I address you, as representatives, respectively, of the managements and the men, to express the hope that no effort will be spared on either side to reach such an adjustment. May I suggest that before you permit such an effort to fail, you confer jointly with me?

The Federal Coordinator of Transportation, acting under the mandate of the Emergency Railroad Transportation Act, 1933, is. proposing certain orders directed toward the unification of railroad terminal facilities. As above stated, the protection to railroad employees which that Act affords is now satisfactory neither to the managements nor to the men. In view of the proposed negotiations, I have asked the Coordinator, and he has consented, to defer these proposed orders for a time.

Very sincerely yours,

Mr. J. J. Pelley President,

Association of American Railroads,

Washington, D. C.

and

Mr. J. A. Phillips Vice Chairman,

Association of Railway Labor Executives,

Cedar Rapids, Iowa