CONFLICT AND RECONSTRUCTION 69 
revivify and stimulate production and trade. Moreover, 
the union representatives declared that the earnings of 
workers in manufacturing and transportation at rates of 
pay then prevailing were inadequate from the standpoint 
of the physical and social well-being of employees, even 
on the basis of reduced living costs, and should be increased 
rather than decreased. 
The representatives of the unions further argued that 
the difficulties of the railroads were not due to high wages 
and, as a consequence, to high labor costs, for the reason 
that because of the increased productive efficiency of rail- 
way employees during recent years, labor costs per unit of 
traffic handled had actually declined. What the railroad 
really needed, it was asserted, was additional capital in 
order that their inadequacies in roadbed and equipment 
might be remedied, and their operating costs reduced. This 
much-needed capital, it was declared, should be furnished 
by the investment bankers and financiers, who were pri- 
marily responsible for the then existing financial plight of 
the railroads because of their practises in former years of 
over-capitalizing the companies or unwisely distributing 
their productive gains. Those in financial control of the 
transportation industry, it was concluded, wished to reduce 
wages, and thus secure a margin of net revenue as a basis 
for obtaining credit, when as a matter of sound policy they 
should secure credit and capital directly without attacking 
wages. 
By these economies and efficiencies, it was pointed out, 
railway management could make possible large revenue 
gains and at the same time maintain and even increase the 
rates of pay of employees. Finally, it was asserted that 
the Transportation Act had guaranteed a fair return to 
capital invested, and likewise a just and reasonable wage 
to labor, and inasmuch as the wages then paid to the great