Part 36

NUMBER AND PAY OF GERMAN RAILWAY EMPLOYES BY PRINCIPAL DIVISIONS FOR THE YEAR ENDING DECEMBER 31, 1908.

==========================+==========+==============+=========+======== Division | Employes | Compensation |Average |Increase | Number | (Total) |per year|over 1907 --------------------------+----------+--------------+--------+--------- General administration | 31,996 | $25,167,240 | $787 | $34 Maintenance and guarding | | | | road | 177,633 | 42,891,753 | 241 | 5 Station service and train | | | | crews | 302,343 | 116,219,657 | 384 | 24 Switching crews and shops | 187,183 | 75,328,084 | 402 | 18 +----------+--------------+--------+--------- Total | 699,155 | $259,606,734 | $371 | $19 | | | | Increase over 1907 | 3,598 | 14,216,875 | -- | -- --------------------------+----------+--------------+--------+---------

Combined with a falling off in revenues and an increase in the cost of materials this increase in the compensation of employes had the effect of raising the operating ratio of German railways from 69.01 in 1907 to 73.56 in 1908. It also increased the proportion of wages to gross earnings from 37.25 to 40.1% and had the effect of reducing the net revenues from 5.60% to 4.51% on the cost of construction.

How railway labor fares under government ownership in a republic as compared with its pay in an empire may be judged from a comparison of the following statement as to the number and pay of the railways of Switzerland with the like classes in the preceding table for Germany.

NUMBER AND PAY OF SWISS RAILWAY EMPLOYES BY PRINCIPAL DIVISIONS IN 1907.

==================================+==========+==============+========= Division | Employes | Compensation | Average | Number | (Total) | per Year ----------------------------------+----------+--------------+--------- General administration | 1,631 | $ 780,715 | $478 Maintenance and inspection of way | 10,308 | 1,459,977 | 142 Transportation and train service | 17,815 | 6,829,426 | 383 Porters and laborers | 12,219 | 3,209,810 | 262 +----------+--------------+--------- Total | 41,973 | $12,279,928 | $292 ----------------------------------+----------+--------------+---------

The wages paid the employes of Swiss railways in 1907 amounted to only 31.9 per cent. of the gross earnings, and yet they added enough to the cost of operation to help increase the telltale ratio of expenses to revenues from 64.99 in 1906 to 67.29 in 1907. The result was increased operating expenses per mile and a decrease in the amount available for interest in dividends from 3.26% in 1906 to 3.23% in 1907.

As the Swiss republic has to pay 3½% on government loans its investment in railways does not appear to be a very profitable one.

EMPLOYES OF FRENCH RAILWAYS.

The employes of the railways of France are divided into the following classes:

================================================== General administration | 3,119 Transportation and traffic | 128,823 Traction and material | 80,732 Way and structures | 81,897 Auxiliaries | 82,809 Female employes | 29,178 |--------- Total | 406,558 --------------------------------------------------

The official statistics only give the compensation of employes in the division of traction and material, where the 80,732 men employed get an average of $187 per year.

On the state railways of Belgium, firemen receive from $15.20 to $22.80 per month, the higher wage only after 15 years' service; enginemen begin at $22.50 per month and at the end of 24 years' service work up to $38.00 per month; conductors earn from $15.97 per month up to a maximum of $34.70; brakemen, beginning as shunters (switchmen) at 45 cents a day, when promoted get a minimum of $17.10 per month, from which they are slowly advanced to a maximum of $22.00. The average railway worker in Belgium gets 2.22 francs (43 cents) a day.

Whole classes of American railway employes get more in a month than Belgian railway employes average in a year.

THE COST OF LIVING.

What and how great the virtue and the art, To live on little with a cheerful heart.--Pope.

Not because it has any legitimate place in fixing the standard of railway wages, which should be relative to the part capacity, intelligence, industry, loyalty and experience play in railway service, but because in recent years the steady increase in the cost of living has been made the fulcrum on which every lever to advance wages works, is it proper to refer to the subject in this report.

Now there is nothing in the whole wilderness of economics so utterly illusive and misleading as this same cost of living. It is as incapable of statistical expression as the airy imaginings of a dream and yet it broods over the domestic happiness of nations with all the disquieting effects of a nightmare--and like every nightmare it comes from eating too much and wanting to eat more.

In economics, beyond the barest subsistence, the cost of living is not ruled by necessity but by individual choice. Each person and family settles it along the lines of abstinence or indulgence. It ranges from the "dinner of herbs where love is" and the virtues of self-denial are nourished, to the feasts of Lucullus and Pompeian profligacy in whose indulgence whole peoples have perished.

In every discussion of the subject first consideration is given to the price of food. This amounts to measuring the cost of living with an elastic string. The proportion of the cost of food to the cost of living varies in every land, in every occupation and in every household. It amounts to less than 40% in an average American family, but each family fixes it for itself. Following certain well recognized economic laws the percentage for subsistence increases as the income decreases. For instance, in France families with an income of under $4.80 per week spend 63% of it for food alone, whereas those with $9.60 a week spend 53%. In England, families averaging $5.12 a week spend 67% on food, while those of $9.60 spend 57% or less. In Germany, a similar inquiry showed that families with an average income of $4.23 per week spent 68.7% on food (excluding beer), or 69.5% (with beer); whereas families with an income of $9.60 per week spent less than 57% on food "excluding beer."

The exhaustive investigation made by Commissioner Carroll D. Wright when head of the Bureau of Labor in 1903 anticipated for the United States these results of more recent European inquiries, as appears from the following table showing the per cent of total expenditure made for various purposes in normal families according to classified incomes:

PER CENT OF EXPENDITURE FOR VARIOUS PURPOSES IN 11,156 NORMAL FAMILIES, BY CLASSIFIED INCOMES, 1901.

========================+======+=====+========+======+========+======== Classified income |Rent |Fuel |Lighting| Food |Clothing|Sundries ------------------------+------+-----+--------+------+--------+-------- Under $200 |16.93 |6.69 | 1.27 | 50.85| 8.68 | 15.58 $200 or under $300 |18.02 |6.09 | 1.13 | 47.33| 8.66 | 18.77 $300 or under $400 |18.69 |5.97 | 1.14 | 48.09| 10.02 | 16.09 $400 or under $500 |18.57 |5.54 | 1.12 | 46.88| 11.39 | 16.50 $500 or under $600 |18.43 |5.09 | 1.12 | 46.16| 11.98 | 17.22 $600 or under $700 |18.48 |4.65 | 1.12 | 43.48| 12.88 | 19.39 $700 or under $800 |18.17 |4.14 | 1.12 | 41.44| 13.50 | 21.63 $800 or under $900 |17.07 |3.87 | 1.10 | 41.37| 13.57 | 23.02 $900 or under $1000 |17.58 |3.85 | 1.11 | 39.90| 14.35 | 23.21 $1000 or under $1100 |17.53 |3.77 | 1.16 | 38.79| 15.06 | 23.69 $1100 or under $1200 |16.59 |3.63 | 1.08 | 37.68| 14.89 | 26.13 $1200 or over |17.40 |3.85 | 1.18 | 36.45| 15.72 | 25.40 +------+-----+--------+------+--------+-------- All classes |18.12 |4.57 | 1.12 | 43.13| 12.95 | 20.11 ------------------------+------+-----+--------+------+--------+--------

While it is scarcely believable that many American families with incomes under $200 spent less than $100 a year on food--the European percentage in such cases being more credible--there is no reason to question the general economic law reflected in this table, that "the proportion of income spent on food diminishes as the income increases." But it is governed more by individual tendencies, character and taste than by any rule or principle. Each family works out the problem on its own account.

According to the evidence presented at recent arbitration hearings in this city, American switchmen, as a body, belong in the classes whose family expenditures are $1,000 or over. Irrespective of the incomes of other members of their families, the arbitrators found "that the actual monthly earnings of switchmen in the Chicago district, for those who worked full time _runs from about $80 to $100 per month_." This means over $1,000 yearly compensation. Therefore they are in the class which spends less than 39% of its income on food.

The average income for all railway employes engaged in train service, that is, enginemen, firemen, conductors and other trainmen, is probably above the highest figure in the foregoing table and therefore the proportion of their income spent for food would be approximately 36%.

But accepting 40% as approximately the proportion of the pay of all railway employes spent on food, it follows that it takes only two-fifths of one per cent increase in wages to take care of an increase of one per cent in the price of food.

With this in mind it becomes instructive to follow the retail prices of the various articles of food as selected by Mr. Wright in his inquiry into the cost of living in 1901 and adopted by the Bureau of Labor in subsequent Bulletins. These for thirty articles of food for the eighteen years 1890 to 1907, as given in Bulletin No. 77 of the Bureau of Labor, and for the two years 1908-1909 as computed from Bradstreet's index and other sources of commodity prices, are given in the following statement relatively to the average price for 1890 to 1899 == 100:

RELATIVE RETAIL PRICES OF THE PRINCIPAL ARTICLES OF FOOD IN THE UNITED STATES, 1890 TO 1909. (Average price for 1890-1899 == 100.0.)

=====+======+======+======+======+======+======+======+======+======+====== | | | | | | | | |Chickns| | | | | | | | | | (year | |Apples|Beans,|Beef, |Beef, |Beef, |Bread,|Butter|Cheese|or more|Cof- Year |Evapo-| Dry |Fresh,|Fresh,|Salt |Wheat | | | old) | fee | rated| |Roasts|Roasts| | | | |dressed| -----+------+------+------+------+------+------+------+------+------+------ 1890 |109.0 |103.3 | 99.5 | 98.8 | 97.5 | 100.3| 99.2| 98.8 | 101.3| 105.4 1891 |110.3 |106.2 |100.0 | 99.4 | 98.3 | 100.3| 106.4|100.3 | 104.0| 105.2 1892 | 99.3 |102.4 | 99.6 | 99.3 | 99.5 | 100.3| 106.8|101.5 | 103.8| 103.8 1893 |107.0 |105.0 | 99.0 | 99.6 |100.3 | 100.1| 109.9|101.8 | 104.2| 104.8 1894 |105.8 |102.8 | 98.3 | 98.2 | 98.9 | 99.9| 101.7|101.6 | 98.6| 103.3 1895 | 97.4 |100.5 | 98.6 | 99.1 | 99.6 | 99.7| 97.0| 99.2 | 98.4| 101.7 1896 | 88.6 | 92.7 | 99.1 | 99.5 | 99.8 | 99.9| 92.7| 97.9 | 97.1| 99.6 1897 | 87.8 | 91.5 |100.3 |100.2 |100.9 | 100.0| 93.1| 99.0 | 94.0| 94.6 1898 | 95.4 | 95.9 |101.7 |102.0 |102.1 | 99.8| 95.1| 97.5 | 96.8| 91.1 1899 | 99.5 | 99.7 |103.7 |103.9 |103.2 | 99.6| 97.7|102.4 | 101.8| 90.5 1900 | 95.2 |110.0 |106.5 |106.4 |103.7 | 99.7| 101.4|103.9 | 100.8| 91.1 1901 | 96.8 |113.9 |110.7 |111.0 |106.1 | 99.4| 103.2|103.3 | 103.0| 90.7 1902 |104.4 |116.8 |118.6 |118.5 |116.0 | 99.4| 111.5|107.3 | 113.2| 89.6 1903 |100.8 |118.1 |113.1 |112.9 |108.8 | 100.2| 110.8|109.4 | 113.5| 89.3 1904 | 99.2 |116.8 |112.8 |113.4 |108.3 | 103.9| 109.0|107.4 | 120.7| 91.8 1905 |106.0 |116.3 |112.2 |112.9 |107.9 | 104.5| 112.7|110.9 | 123.6| 93.6 1906 |115.6 |115.2 |115.7 |116.5 |110.8 | 102.3| 118.2|115.5 | 129.1| 94.7 1907 |124.6 |118.8 |119.1 |120.6 |114.1 | 104.5| 127.6|123.2 | 131.4| 95.0 1908 |126.4 |138.9 |126.2 |131.5 |116.4 | 124.5| 123.5|121.3 | 128.6| 94.7 1909 |128.6 |141.2 |132.6 |134.1 |128.2 | 124.5| 134.8|142.0 | 150.2| 108.6 | | | | | | | | | | -----+------+------+------+------+------+------+------+------+------+------ | | | | | | |Milk, | | | Year | Corn | Eggs |Fish, |Fish, |Flour | Lard |Fresh,|Mola- |Mutton|Pork, | Meal | |Fresh | Salt |Wheat | |unski-| sses | |Fresh | | | | | | |mmed | | | -----+------+------+------+------+------+------+------+------+------+------ 1890 |100.0 |100.6 | 99.3 |100.7 |109.7 | 98.2| 100.5|104.7 | 100.7| 97.0 1891 |109.7 |106.9 | 99.6 |101.7 |112.5 | 99.8| 100.5|101.7 | 100.6| 98.7 1892 |105.2 |106.8 |100.1 |102.2 |105.1 | 103.6| 100.6|101.2 | 101.0| 100.5 1893 |103.1 |108.1 |100.1 |103.4 | 96.1 | 117.9| 100.4|100.6 | 99.9| 107.0 1894 |102.2 | 96.3 |100.4 |101.5 | 88.7 | 106.9| 100.2|100.3 | 97.8| 101.8 1895 |100.8 | 99.3 | 99.8 | 98.9 | 89.0 | 100.1| 100.0| 99.0 | 98.7| 99.7 1896 | 95.0 | 92.8 |100.2 | 97.5 | 92.7 | 92.5| 99.9| 98.7 | 98.7| 97.4 1897 | 93.7 | 91.4 | 99.8 | 95.2 |104.3 | 89.8| 99.7| 97.7 | 99.6| 97.6 1898 | 95.0 | 96.2 |100.5 | 98.8 |107.4 | 93.9| 99.4| 97.9 | 100.4| 98.6 1899 | 95.1 |101.1 |100.2 |100.2 | 94.6 | 97.1| 98.9| 98.2 | 102.6| 101.7 1900 | 97.4 | 99.9 |100.4 | 99.1 | 94.3 | 104.4| 99.9|102.2 | 105.6| 107.7 1901 |107.1 |105.7 |101.4 |100.9 | 94.4 | 118.1| 101.1|101.3 | 109.0| 117.9 1902 |118.8 |119.1 |105.0 |102.8 | 94.9 | 134.3| 103.3|102.1 | 114.7| 128.3 1903 |120.7 |125.3 |107.3 |108.4 |101.2 | 126.7| 105.8|103.8 | 112.6| 127.0 1904 |121.5 |130.9 |107.9 |111.7 |119.9 | 117.3| 106.3|104.0 | 114.1| 124.0 1905 |122.2 |131.6 |109.9 |113.8 |119.9 | 116.6| 107.0|104.4 | 117.8| 126.6 1906 |123.2 |134.2 |116.2 |116.8 |180.1 | 128.0| 108.9|105.3 | 124.1| 137.7 1907 |131.6 |137.7 |120.6 |121.6 |117.7 | 134.2| 116.8|107.7 | 130.1| 142.5 1908 |154.0 |140.2 |116.2 |118.4 |140.0 | 132.1| 115.4|102.2 | 126.4| 141.6 1909 |160 |142.2 |120.4 |122.6 |154.4 | 153.8| 141.6|106.4 | 134.8| 168.2 | | | | | | | | | | -----+------+------+------+------+------+------+------+------+------+------ |Pork, |Pork, | Pork,|Potat-| | | | | | Year |Salt, |Salt, | Salt,| oes, |Prunes| Rice | Sugar| Tea | Veal |Vine- |Bacon |dry or| Ham |Irish | | | | | | gar | |pickled| | | | | | | | -----+------+------+------+------+------+------+------+------+------+------ 1890 | 95.8 | 95.3 | 98.7 |109.3 |116.8 | 101.3| 118.6| 100.0| 98.8| 102.9 1891 | 96.6 | 98.9 | 99.3 |116.6 |116.5 | 102.5| 102.7| 100.4| 99.6| 105.5 1892 | 99.1 |100.5 |101.9 | 95.7 |113.5 | 101.3| 96.2| 100.2| 100.0| 102.7 1893 |109.0 |108.7 |109.3 |112.3 |115.6 | 98.4| 101.5| 100.1| 100.0| 99.5 1894 |103.6 |103.4 |101.9 |102.6 |100.9 | 99.0| 93.8| 98.7| 98.7| 99.8 1895 | 99.4 | 99.2 | 98.8 | 91.8 | 94.2 | 98.8| 91.8| 98.5| 98.5| 98.9 1896 | 96.7 | 95.5 | 97.6 | 77.0 | 86.8 | 96.7| 96.6| 98.8| 99.5| 97.2 1897 | 97.4 | 97.3 | 98.2 | 93.0 | 84.3 | 97.9| 95.7| 98.5| 99.9| 97.4 1898 |100.2 | 99.1 | 95.1 |105.4 | 86.3 | 101.7| 101.3| 100.7| 101.2| 97.9 1899 |102.9 |101.8 | 99.2 | 96.1 | 85.1 | 102.4| 101.7| 104.4| 103.7| 98.3 1900 |109.7 |107.7 |105.3 | 93.5 | 83.0 | 102.4| 104.9| 105.5| 104.9| 98.5 1901 |121.0 |117.5 |110.2 |116.8 | 82.6 | 103.5| 103.0| 106.7| 108.8| 98.9 1902 |135.6 |132.5 |119.4 |117.0 | 83.4 | 103.5| 96.1| 106.0| 114.9| 99.1 1904 |137.9 |125.8 |118.4 |121.3 | 79.6 | 101.6| 101.9| 105.8| 115.5| 98.9 1905 |138.8 |126.0 |118.5 |110.2 | 81.4 | 102.6| 98.2| 105.5| 123.2| 102.6 1907 |157.3 |141.2 |130.7 |120.6 | 88.4 | 108.5| 99.6| 105.3| 125.0| 104.5 1908 |142.4 |137.4 |112.0 |138.4 | -- | 105.1| 100.0| 108.6| 124.2| 112.4 1909 |180.0 |151.2 |145.0 |120.0 | -- | 103.3| 105.0| 109.0| 130.2| 113.0 | | | | | | | | | | -----+------+------+------+------+------+------+------+------+------+------

No authority is claimed for the prices in these tables for the years 1908 and 1909. They merely represent the tendencies in those years, as found in official and unofficial wholesale prices of the several commodities, and there are often striking divergences between wholesale and retail prices over short periods. Eventually they follow the same course, although not always in the same proportion.

Now let us see how the average retail price of these 30 articles of food compares with the average daily pay of the four representative classes of railway employes in train service for the ten years 1899 to 1909.

=====================+========================================+========= | Average Daily Compensation |Relative +---------+---------+----------+---------+Prices of | | | | Other | Food, Year |Enginemen| Firemen |Conductors| Trainmen|1890-1899 | | | | | = 100 ---------------------+---------+---------+----------+---------+--------- 1899 | $3.72 | $2.10 | $3.13 | $1.94 | 99.6 1900 | 3.75 | 2.14 | 3.17 | 1.96 | 101.5 1901 | 3.78 | 2.16 | 3.17 | 2.00 | 105.5 1902 | 3.84 | 2.20 | 3.21 | 2.04 | 110.9 1903 | 4.01 | 2.28 | 3.50 | 2.27 | 111.6 1905 | 4.12 | 2.38 | 3.50 | 2.31 | 112.5 1906 | 4.12 | 2.42 | 3.51 | 2.35 | 116.2 1907 | 4.30 | 2.54 | 3.69 | 2.54 | 120.7 1908 | 4.46 | 2.65 | 3.83 | 2.64 | 117.7 1909 | 4.46 | 2.67 | 3.76 | 2.60 | 127.7 +---------+---------+----------+---------+--------- Per cent. increase | 19.9 | 27.1 | 20.1 | 34.0 | 28.2 ---------------------+---------+---------+----------+---------+---------

Here it will be observed the percentage of increase in the average daily compensation of "Other trainmen" exceeds the relative increase in the price of food, that of firemen almost equals it, while that of enginemen and conductors is below it by approximately 8 points. But, as demonstrated in the table from the Eighteenth Annual Report of the Commissioner of Labor (1903), a smaller percentage of the income of enginemen and conductors is spent on food than of those employes receiving lower pay.

Moreover as only two-fifths of all expenditures is spent on food an increase of 20% in wages would take care of a 50% advance in the average price of food--provided the increase in wages was not attended by a corresponding increase in every other item entering into the cost of living.

And right here's the rub with any attempt to measure wages by the cost of living. Which is the egg and which is the hen, in the matter of precedence. Does the cost of living lay the income or does the income hatch the cost of living?

Economically and theoretically it is not up to the railways to solve this world old conundrum. Practically they are called on to meet every advance in the cost of living of their employes to which in twenty years they have not added a nickel, and they are denied the privilege, enjoyed by every other employer of labor, to add its increased cost to the price of their only commodity or service--transportation.

Today the advances in the scale of railway wages awarded, proposed and demanded mean an increase of from $60,000,000 to $75,000,000 in the annual "cost of living" of the railways. The advance made in 1906-07 added $120,000,000 to the pay roll of 1908. Combined, these two advances within three years mean an increase of approximately $200,000,000 a year to the operating expenses of the railways without adding a single unit to efficiency of the labor factor in railway operation.

_This is equal to an annual first charge of 5% on $4,000,000,000!_ Imagine the hue and cry from the press, the immediate injunctions from Washington, the despondent wail from Wall Street, if the railways proposed to pour that much "water" into their own cost of living without getting a mile of track, a single engine, car, or coach, a cubic yard of ballast, one untreated tie or any semblance of improvement or new facility to show for the vast expenditure!

And yet the railways have their increased cost of living to meet just as the rest of us. Nothing they need and must have can be purchased at the prices of a few years back. When you mention steel rails you have named about the only railway necessity that has not advanced its cost of living in recent years, and the railways have to buy 100-pound rails where five years ago 80-pound rails sufficed, and ten years ago 70 pounds was heavy enough for the lighter cars and engines of the time.

But at the first suggestion of advancing rates to meet advancing prices of commodities the Commissions were overwhelmed with protests from shippers and the paring of freight rates down went on as the prices of the goods they carried went up.

In ten years the price of lumber advanced nearly 50%. As a cheap bulky commodity it had enjoyed a low rate in order to move it and it was moved at the expense of other commodities. When it was able to pay a little more toward the cost of getting it to market the proposal of an advance was met with indignant protests from lumber shippers and dealers and reversed thumbs by the sympathetic commissions.

The railways pay more for their lumber and other material today than they did ten years ago but they will have to fight for any advance in rates to meet this part of their cost of living. It is said to be a poor rule that will not work both ways--but the cost of living seems to have only one way of working so far as railway economics are concerned.

Just as a straw to indicate that high prices of food are the result and not the basis of high wages the following table of comparative prices in London and New York from the New York _Times_ of March 27, 1910, is instructive:

COMPARATIVE RETAIL PRICES OF ARTICLES OF FOOD IN LONDON AND NEW YORK IN MARCH, 1910.