Transport: Dismissal Pay

“He asked us to do this, and we simply reported that it had been done,” explained Chairman George M. Harrison of the Committee of Railway Labor Executives as he left the White House one morning last week with a party of men in two groups. One group represented 85% of U. S. railroad operators; the other, 20 of the 21 standard U. S. railroad unions. What President Roosevelt had asked for and what the two groups had after months of difficult negotiation given him was the first national agreement ever made in the U. S. governing the disposition of employes who lose their jobs or are otherwise adversely affected by technological improvements and increased efficiency in industry. Virtually all the nation’s major railroads had agreed to pay financial compensation to all such employes in forth coming consolidations of railway terminals and other facilities. When Joseph B. Eastman became Federal Coordinator of Transportation in 1933, the Emergency Transportation Act which created that post urged that he encourage consolidations for economy, but at the same time practically prevented them by forbidding the railroads to employ fewer men after such mergers than they employed in May 1933. This froze the situation so that virtually no railroad consolidation has been effected at all. All Coordinator Eastman could do was to offer suggestions, which usually tended in the direction of eventual Government management of U. S. railroads. One of Mr. Eastman’s favorite proposals is the consolidation of railway terminals in many cities for economy and improved service. In Cedar Rapids, Iowa, for example, he wants to route all six railroads serving the city into one terminal, causing the abandonment of two passenger stations, four freight depots. To compensate terminal employes who would lose their jobs, he suggested that the railroads pay them a dismissal fee, varying with length of service, but equal on the average to a year’s pay. The railroads did nothing about it.

Meanwhile the railroad labor unions, which had also been trying to persuade the operators to sign a dismissal agreement, decided to force the railroads’ hand by making a great squawk in Congress. It took the form of a bill, which proposed that the matter of railroad consolidation be put under the jurisdiction of the Interstate Commerce Commission and provided a dismissal compensation scale more drastic than Coordinator Eastman’s. Prodded by the powerful union lobbies, the bill made favorable progress in Congress, seemed likely to become law. The railroads began to rant and roar in protest. Into this bad-tempered deadlock stepped President Roosevelt last March with a calm letter to both sides pointing out that it was silly for them to fight over a bill which neither wanted, that both would profit more by a voluntary agreement. The railroads finally agreed to talk turkey. At the negotiations in Washington their group, under Chairman Herbert Alexander Enochs, chief of personnel of Pennsylvania R. R., began seriously to cooperate with the labor group under Chairman George Harrison. A big, heavy-faced man of 40, Chairman Harrison began his rail road career as a clerk with Missouri Pacific, left in 1918 to become a union representative. Now chairman of the Brotherhood of Railway Clerks and a vice president of the American Federation of Labor, he is a middle-of-the-roader with a flair for diplomacy. Chairman Enochs has had a similar steady rise on the other side of the labor fence. A thin six-footer of 61, he joined the Pennsylvania in 1895 as a baggage master, worked up as brakeman and conductor to superintendent of labor and his present job as chief of personnel. Following President Roosevelt’s letter in March, he and his committee dickered steadily with Chairman Harrison’s group for eight weeks. Last week, by mutual concession, they came to an agreement which apparently satisfied both sides completely. The few railroads which did not sign indicated they would probably do so eventually.* Going into effect for five years on June 18, the Enochs-Harrison pact provides several types of compensation for employes: 1) When because of a consolidation an employe is placed in a position paying less than his old job, the railroad must pay him the difference for five years or until he is promoted again. 2) If an employe has to change the location of his home because of consolidations, the railroad must pay traveling expenses, take over unexpired leases, buy owned property at full value. 3) When an employe loses his job because of consolidation, he will have the choice of a lump “separation allowance” or a “co-ordination allowance” in payments spread out for several months. Both allowances vary with length of service. A clerk, for example, who has served a carrier for one year would have a choice of three months’ pay in a lump or 60% of his pay every month for six months. A five-year employe would have the choice of a year’s pay in a lump or 60% every month for three years. A 15-year or more oldster would have a choice of a year’s pay or 60% for five years. In return for this settlement, the unions planned to drop their special bill in Congress. Just what the actual effect of the pact will be remained in the realm of guesswork. If all the consolidations and terminal mergers Coordinator Eastman has proposed are carried out in the next five years, some 1,000,000 employes may be partially affected, possibly 150,000 let out. Since the average service of railway men is notably long, this would put a heavy burden on the railroads. Another possibility was expressed by President John Marcus Davis of Delaware, Lackawanna & Western: “If traffic increases as much as 10%, the railroads will be able to take care of most of their men and there will be little need for displacing them and applying to them the terms of the agreement.”

*Important ones: Delaware & Hudson; Atlantic Coast Line; Louisville & Nashville; Nashville, Chattanooga & St. Louis; Southern; Bangor & Aroostook.