Letter to Joseph B. Eastman on the Railway Wage Dispute.

Dear Mr. Eastman:

As you know, I have recently conferred with representatives of both the railroad managements and the railroad employees in regard to the wage controversy, and have given this matter further consideration. No one who knows the facts can fail to be moved by the suffering which the depression, in combination with the great increase in competition from other forms of transportation, has inflicted on the employees. The 10 percent deduction from basic wage rates, which the employees voluntarily conceded in 1932 for the good of the industry, has not been the major cause of this suffering. Furloughs, part-time employment, demotions, and pay below a reasonable minimum have been more important factors. Wage rates tell only a part of the story; the whole story is told by what a man has in his pay envelope at the end of the week or month.

Realizing this suffering as I do, I have felt that the welfare of the employees, and particularly the welfare of those at the bottom of the heap, is the vital thing to have in mind in this wage controversy. . . . I cannot avoid the conclusion that during the remainder of this year, it is very important that increased earnings should be used in the rehabilitation of the properties and in providing such added and improved service as the increased traffic may demand. This will not only decrease part-time employment but it will add materially to the total number of men employed. An increase in wages will help men now at work, but it will be of considerably less advantage to the employees as a whole, and it will also operate to defer the rehabilitation of the properties and the provision of good service which are essential to the good health of the railroad industry. The employees are part of the railroad industry and are tied to its future. . . .

After careful consideration of existing conditions, therefore, I am fully persuaded that the position which I took in my letters of February 14th and March 20th, addressed jointly to the railroad managements and the labor executives, was sound, and that an extension of the present wage status for at least six months is . what the welfare of the railroads, of their employees, and of the · entire country demands as the immediate and temporary disposition of this matter. This includes, of course, the recommendation in my letter of March 20th that the minimum wages of railroad employees should be brought into conformity with the standards followed by the National Recovery Administration.

I shall be glad, therefore, if you will undertake to effect a settlement between the employees and the managements along these lines. In that connection, however, I desire to emphasize three things:

(1) Everything practicable should be done to see to it that increased earnings of the carriers during the period of the extension are used to help the more unfortunate employees who have suffered from unreasonably low minimum pay, furloughs, part time, and demotions. . . .

(2) Provision should be made, so far as practicable, to avoid the renewal of the controversy next August or at any other time during the period of the extension. . . .

(3) Negotiations should be brought to an end, one way or the other, without delay, so that if a present settlement should prove impossible, which I sincerely trust will not be the case, there will be opportunity for a thorough investigation by a fact-finding commission prior to July 1st. . . . Such a commission would, I presume, examine into the merits of the wage rates of the different classes of employees, a subject which I have not considered. I have considered only the wise disposition of the immediate issue for a temporary period.

Very sincerely yours,

Honorable Joseph B. Eastman,

Federal Coordinator of Transportation,

Washington, D. C.