The Nonpartisan Leader Newspaper, November 24, 1919, Page 10

The Plumb Plan and the Cost of Living Railroad Brotherhood Proposal of Line Ownership Eliminates Wasteful Finance Juggling—Causes of High Prices ' BY W. G. ROYLANCE 771Y FAR the most significant thing 7| about the present agitation over the high cost.of living is the attitude of the railway brother- hoods. In presenting their de- mands for wage advances they have made it plain that it is the purchasing power of wages with which they are concerned, not the merely nominal wage level. They recog- nize the futility of wage increases which are al- ways more than neutralized by advances in the prices of all things that the worker consumes. In other words, they have made their demands in terms of fundamental wages; and by doing so they have placed themselves in a position to speak for all who are unjustly suffering from the effects of high prices. The principle upon which the claims of the brotherhoods rests is that every worker shall receive the fruits of his labor, and that in the ex- change of products the purchaser shall be able 1. buy at cost, cost to include all the labor, of every . kind, put into the thing bought. This is the principle that underlies the plan formulated by the brotherhoods for the conduct of their own industry—the national railroads. They propose to fix a wage scale, which will in effect establish a minimum wage for each class of employes, based upon known present efficiency, as measured by railway earn- ings, with due regard for liv- ing conditions, and then to make additional rewards de- pend upon the actual develop- ment of a higher efficiency by the workers themselves. They do not, however, propose to take to themselves the whole of the gain from the higher ef- ficiency developed, recognizing the fact that such higher effi- ciency is not due wholly to their own efforts, but in part to general industrial causes. They propose that increased earnings shall be partly ab- sorbed by decreases in rates, until the relation between rates and wages shall be so stabilized that the charges for railway service will accurately represent the labor-service of the men in that employment, relative to the labor-service of workers in all other industries, It is significant that the brotherhood plan elimi- nates the capitalist entire- ly. The holder of railroad securities is to be paid the actual value, on the basis of investments in the rail- roads “honestly and pru- = dently made.” The government is to pay this value, in cash or in bonds, at the option of the security holder, and is thenceforth to retain the absolute ownership of the roads. PUBLIC AND WORKERS TO GOVERN ROADS A corporation is to be formed, governed by a board representing the classified railway employes, the appointive employes (general and division superintendents, managers, etc.), and the public; the roads are to be leased to this corporation; rates are to be.fixed by the interstate commerce commis- sion, and wages by a wage board. The wage and salary payrolls will be a fixed charge upon oper- ating receipts. Until finally extinguished, the in- terest upon the bonds issued for the extinguish- ment of private interests in the roads will be another fixed charge. Nothing will be charged off for rent or for the payment of dividends, as the wage-dividend proposed is essentially an increase in wages, proportioned to the increased efficiency of all the railroad workers. This plan reduces the cost of transportation to a labor basis, considering labor in the broadest sense. There will be no rent charge, because all the land used will be the rights-of-way and the shop, yard and station sites retained or condemned for those purposes. After the private interests have been T N £ e e B e VA N O TN AN 1 50 extinguished, capitalization will be for the sole purpose of transferring needed materials or labor from other industries; or, in other words, for the apportionment to the railway service of its proper share of accumulated industrial facilities. The essential features in this plan are that it provides for a living wage and for the division of any surplus above a living wage between the rail- way employes and the public—that is, between the railway employes and all other workers, if all other industries be organized on the same basis. Hereto- fore the surplus has gone to vested interests—as rent, interest or profits. This takes us to the very heart of the problem of the cost of living. The cost of living ought to be measured by the amount of expenditure of human energy necessary to pro- duce the things which sustain life; that is, all the products of all the workers should go to all the workers. These products should be divided either share-and-share-alike or proportionate to group and [ndividual efficiency. The brotherhood plan looks %o the latter method of sharing, and thereby directly challenges its opponents, who have always so insistently held that good service depends upon adequate rewards to those responsible for efficiency. . The brotherhoods maintain that it is the brawn and brain of the men and women operating; the roads, organized as a great industrial unit, that alone ]- : THE WHITE HOUSE . | An unusual view of the official residence of the president, looking across Pennsylvania avenue. can produce the efficiency of our, transportation lines, The brotherhood plan recognizes the need of cap- ital for the running of the railroads; but it denies the justice or the necessity for their control by groups of men who, by financial hook or crook, may be able to dictate the terms upon which the people’s utilities may obtain that capital. They admit that where the savings of a part of the people are em- ployed in further production-for the benefit of all a fair return should be made, as interest upon such savings; but they deny that these savings may rightly be assimilated by credit monopolies, and doled out to the industries of the people at such times, ir such manner and at such rates as will best serve the conscienceless profiteering .purposes of those monopolies. The brotherhoods hold that the greatest of our public utilities should be able to go into the open market for its money, backed by the credit and confidence of the entire country. This proposition involves no overturning of ac- cepted economic principles.: According to the most orthodox of economic writers, the capitalist’s share in the products of industry is interest on the amount of capital invested. They make as clear a distinc- tion between capital and rent, on the one hand, as between capital and wages or profits on the other. It would be a complete negation of the very essen- tials of economic science to say that the rate of in- terest may be arbitrarily determined. An open o PAGE TEN market is assumed, where borrower and lender meet on equal terms. In such a market the lender. would not be able to say to the borrower: “I will lend you the money to build and run your railroad, at the market rate of interest, plus 80 per cent of whatever profit you are able to make.” Confronted with such a proposition the borrower would sim- ply go to another lender until he had. satisfied him- self that he was securing the lowest possible rate that existing financial conditions would yield. If that lowest rate proved too high he would curtail his operations to the limits of his present capital, or abandon his enterprise entirely, in which case the money offered would go into some other industry that could pay the rate. In no other way can differ- ent industries be placed upon an equal footing with regard to the use of the capital that all industry has accumulated. PLAN WOULD PRESERVE CAPITAL, DECLARATION It has been repeatedly asserted or assumed that the brotherhood plan proposes to destroy railroad capital, and that if extended to all in- dustry it would' destroy all capital. On the contrary, it would preserve capital, and would provide for its easy flow to the industries where it is needed. Nor would it injure the man who by his skill and energy or his thrift has accumulated "and saved facilities or ma- terials useful for further production. It will injure none but those who have stood between this ulti- mate capitalist and the in- _dustry into which his sav- ings would go, and who, as bonus, interest or divi- dends, have taken a toll for merely passing those savings on that has nearly wrecked our railroads and threatens the present ruin of all industry. The three great factors in all production are labor, equip- ment and organization.. An effective organization is one which applies labor and equip- ment to the job in hand, with the least possible friction, du- plication or- waste, so as to achieve the highest possible production at the lowest possi- ble expenditure of labor, and the least possible waste of equipment. Equipment in turn is produced by labor. For ex- ample: Iron ore is mined, transported to the smelters, the metal extracted - and " moulded into shapes conven- ient for handling and trans- portation; is manufactured into rails, cars and engines, and the numerous other structures, tools and machines that make up the equipment of a railroad. These processes themselves required equipment, organization and an available supply of intellectual and manual skill, all of which represented an accu- mulation of the products of other organized and equipped labot. This may be traced back to where the primitive workman fashioned his first rude tool with his bare hands; so that, in the last analysis, all production comes from the application of labor to the materials supplied by nature. Capital is material shaped by man for the uses of production—that and nothing else. A capitalist is one who owns, contracts, hires or rents out such - materials or equipment. There is no ground for a quarrel between labor and capital, nor ever has been. The quarrel is primarily between the men who work and the men who have seized upon the organization and the instrumentalities of produc- tion, and will allow the men who work to use them only under their direction and control, so that the worker is always a subordinate, and his employer in a position to dictate both wages and hours and conditions of labor. Under such conditions there can be no such thing as freedom for workingmen. And since most men must always work, that means that under such conditions most men will be indus- (Continued on page 21)