Excerpt from Papers and Proceedings of the Thirty-Third Annual Meeting of the American Economic Association: Atlantic City, New Jersey, December, 1920 Moreover, net earnings are further threatened by the falling off in traffic. Part of this decline is seasonal and, so far as it is due to other causes, it may be short-lived. But it raises very definitely the ques tion whether net earnings can be sustained and possibly enhanced by reductions in operating expense. It will therefore be enlightening to consider the elasticity of the main expense items. There has been some fall in wholesale prices, but this has been largely confined to foodstuffs, clothing, and the like, and has not influenced materially the commodities that the railways buy in quantity. Coal contracts have largely been made, and a fall in prices cannot benefit the roads in the immediate future. As for labor, the item that constitutes over 60 per cent of the total railway expenditure, there is opportunity for economy only in increased efficiency or in the discharge of men, not in a lowering of wages. The recent increase in wages granted by the Railway Labor Board has been in effect scarcely six months, and it is idle to discuss actual decreases in wages for many months to come. As for the discharge of men, this can of course be done as traffic declines, (it has been done actually to some extent in the shops), but it is not at all likely that the saving through laying of labor can keep pace with the loss in earnings through decline in traffic. The only other source of labor saving is in greater labor efficiency. The morale of the men so seriously impaired during federal operation, is being gradually re stored. The reintroduction of piece - work in the shops is strongly urged by the managers as an incentive to greater efficiency, but there is little probability of any immediate restoration of this method of wage payment. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.