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On Monday, February 16, 1914, the General Committee of Adjustment of the B. of L. E., and the Joint Protective Board of the B. of L. F. and E., representing the engineers, firemen and hostlers on the Georgia and Florida Railway, assisted by Assistant Grand Chief Engineer Burgess of the B. of L. E. and Vice President Wark of the B. of L. F. and E., entered into negotia tions with Vice President and General Manager Duer of that railway, with a view to the betterment of the wage and working conditions of those employes which in comparison with those prevailing on other roads in the same competitive territory, Brothers Burgess and Wark report as exceedingly inferior and sadly in need of improvement. These negotiations extended over a period of many days but the company's officials absolutely declined to grant any concessions with the exception of an increase of twenty-five cents per day at two or three points, basing their position on the ground that the company could not afford to increase the wage rates. Vice President Duer proposed that the matter be submitted to arbitration. To this the representatives of the engineers, firemen and hostlers objected on the ground that under previous arbitration proceedings railroad companies had failed to make proper application of awards reached. Mr. Duer, however, continued to urge arbitration and promised that an award handed down by an arbitration board in settlement of the differences would be honestly applied by the company. He also offered his personal bond that this would be done. In fact he pledged himself that any award reached through arbitration would be equitably applied.

Notwithstanding that the engineers, firemen and hostlers were strongly in favor of an issue because of the very low rate of wages being paid, the defective employment conditions and the fact that they had waited three years for an improvement in the financial condition of the road in the hope of securing an adjustment of these grievances and because of the further fact that they had no confidence in arbitration owing to the failure of certain roads to apply awards handed down in connection with our Eastern Concerted Wage Movement and other arbitration cases-notwithstanding all this arbitration was finally agreed upon under the federal law-the Newlands Act-the positive assurances given their representatives by Mr. Duer being directly responsible therefor-and the members of the arbitration board were selected as follows:

For the employes, Mr. L. S. Davis, General Chairman of the B. of L. E. on the Georgia Railway.

For the Georgia and Florida Railway, Mr. A. W. Anderson, General Manager of the Charleston and Western Carolina Railway.

The third arbitrator (who was selected by the United States Board of Mediation and Conciliation), was Judge Stanton J. Peelle, of Washington, D. C. The board convened in Augusta, Ga., and the hearings commenced on the afternoon of April 28, 1914, and were concluded on the afternoon of May 2, 1914, and on May 9, 1914, an award was handed down which granted the employes about a twelve per cent increase in wages, a dissenting opinion being subsequently filed by Mr. Anderson under date of May 22, 1914. The company brought suit in the United States District Court, as above stated, to have this award set aside, filing a bill of exceptions, and the court handed down its decision in the case on July 18, 1914.

Because of their special bearing on the question of arbitration and on the economic and industrial interests of the employes represented by the two brotherhoods, we reproduce herewith in full the arbitration award, the bill

of exceptions and the decisions of the U. S. District Court and the U. S. Circuit Court of Appeals.

Award.

The Arbitration Award is as follows:

The Board of Arbitrators, consisting of A. W. Anderson, selected on behalf of the Georgia and Florida Railway Company; L. S. Davis, selected on behalf of the Brotherhood of Locomotive Engineers and the Brotherhood of Locomotive Firemen and Enginemen, and Stanton J. Peelle, appointed by the United States Board of Mediation and Conciliation, met pursuant to notice therefor in the court room of the Federal Building in Augusta, Georgia, April 28, 1914, at 3:30 p. m. The Board was organized by electing Mr. Peelle as Chairman, and Mr. George C. Sutton of the Law Reporting Company as Secretary and Stenographer.

The Board having examined the agreement between the parties, set out in the record, to arbitrate certain questions relating to rules and rates of wages respecting locomotive engineers, firemen and enginemen on the Georgia and Florida Railway Company, proceeded to hear the evidence adduced in relation thereto, consisting of oral testimony and certain tabulated statements submitted by the respective parties, showing the services performed and the rates of wages paid by other roads to their employes in the same territory, compared with the rates paid by the Georgia and Florida Railway Company, and also showing the financial condition of said road, which latter is interposed as a vital defense to any increase in wages.

The Board after modifying the rules in controversy and in lieu thereof unanimously adopted the same, as follows:

1-Engineers and firemen attending court, or appearing before proper parties to give evidence for the company, will be paid the amount they would have earned had they remained on their engines, plus $2.00 per day for expenses when required to go away from home terminal.

Engineers and firemen required to attend court during their lay-over will be allowed a minimum day's pay for the class of service in which engaged.

Extra engineers and firemen will be allowed a minimum day's pay for the class of service in which engaged, plus $2.00 per day for expenses when required to go away from home terminal.

All engineers and firemen will be furnished transportation and the company will be entitled to witness certificates in all cases.

2-Engineers and firemen in unassigned service held more than 28 hours at other than designated home terminals without performing service are to be paid overtime rates as follows:

Ten hours for the first 28 hours; 10 hours for the first 24 hours after the lapse of 28 hours, and 10 hours additional time for each complete 24 hours so held thereafter, provided that this regulation does not apply to engineers delayed by reason of compliance with the law or obstruction of the line through an act of Providence. 3-Engineers and firemen may claim 10 hours' rest after they have been on duty 12 hours and completed their run, providing they ask for it. Rest time to be computed from the time they register until they are relieved.

4-A change of time-table does not create a vacancy or change conditions, unless there is 20 miles added to or taken from the mileage of the run or terminal or layover of such run changed; in such cases, engineers will be allowed preference of runs in accordance with their seniority.

Engineers or firemen run around through no fault of their own, except to protect wreck-trains, will be paid for time lost.

The remaining question is shall the Board award to the several employes, for their respective services, a rate of pay above that they are now receiving, and if so, upon what basis?

Our brother Arbitrator, Mr. Anderson, is of the opinion that because of the inability of the Railway Company to meet its operating expenses, the rates now being paid should not be increased, so that the reasoning respecting the rates, and the rates which may be determined are concurred in by the other members of the Board only, Mr. Anderson reserving the right to file a separate opinion.

The employes contend that the rates of pay they are now receiving, as well as the rates for which they are asking, are below those paid by other roads for similar service in the same section of country, known as the Southeast District.

On the other hand, it is contended by the Railway Company that while the rates of pay of the employes are less than on many other roads in this section, the physical conditions on its road, and the responsibility upon the engineers as well as the conditions of service are not the same. That is to say, in the size of the locomotives, size of the trains, the number of tons hauled per train and per car, etc., for verification of which conditions reference is made to the tabulated statements filed by the company; and it is urged on behalf of the company that all of the elements of difference therein shown in the service on the various roads should be taken into consideration in fixing what would be a reasonable rate of compensation for said employes. The rule universally recognized, both by the Courts and by Boards of Arbitration,

is that the rate should conform as nearly as may be to the rates paid by other roads for similar service in the same section of country.

When the Board has ascertained the reasonable rates, based on said recognized rules, it cannot say that such rates are minus some vague and indefinite sum by reason of the financial embarrassment of the company. If the Board in fixing the rates should accept the inability of the company to meet its operating expenses, as controlling, then it is clear that no increase in wages could be allowed the employes, because that element would of necessity exclude all others. Such course would put the Board in the attitude, not of arbitrating the differences between the company and its employes, but of requiring the employes to yield a portion of what must be conceded would otherwise be a reasonable rate of pay.

This the undersigned majority of the Board believe would render arbitration, under the Act providing therefor, futile, because so long as such conditions exist, the employes could not hope to receive a reasonable rate of wages. We have, therefore, arrived at the reasonable rates to be paid upon the basis of the rules recognized by the Courts and by other Boards of Arbitration to the effect that,

"The recognized test in this matter is that of comparing the rates of pay, as proposed, with those in force upon ‘other lines operated through similar country and under like conditions,' so far as the same can be done." U. S. Trust Co. v. Omaha and St. Louis Rwy. Co., 63 Fed. R., pages 737-740."

A receiver in the execution of his trust, the Court holds, must not reduce the wages of employes beyond a reasonable and just compensation for their service. "They must be paid fair wages, though no dividends are paid on the stock, and no interest paid on the bonds. Ames, et al, vs. Union Pacific Rwy. Co., 62 Fed. R., pages 7-13."

The Board of Arbitrators, under the Act of June 1, 1898, known as the Erdman Act, in adjusting the rates of pay of engineers on the Eastern roads, five of whom were appointed by the Chief Justice of the United States, seem not to have considered, as controlling, the financial embarrassment of certain of the roads there involved. The question was one of rates of pay for engineers on the roads East of Chicago and North of the Potomac, involving perhaps one-fourth of the mileage in the United States. Some of the roads interposed the defense of inability to pay a higher rate than they were then paying and urged such condition as an element to be considered in determining rates. But the Board in respect thereto, after months of deliberation, said:

"The Courts have declared in various cases in administering the receivership of railroads, that the public safety is the paramount consideration, and that a railroad's financial embarrassments not only do not warrant reducing the pay of employes below what was paid before the receivership, but have ordered the receivers to pay the 'going' rate of wages for the different classes of employes.

"Therefore, considering all of the facts, the Board cannot recognize the smallness and weakness of the roads as a controlling factor in fixing wages. The Board believes that the proper policy is rather to consider the character of the service without respect to ownership, and regardless of whether we have to do with strong roads, with minor branches of a large system, or with small independent roads. If because of the meagre traffic at any place the work of the engineer is either physically or mentally easier than it is upon the trunk lines, there is adequate reason for considering this factor, but not on account of the smallness of the road. In short, the Board hold to the view that the nature of the service rendered is the paramount factor, and that if any standardization takes place, the fact must be recognized that where there is greater responsibility or greater strain there should be larger pay, and this without respect to whether the division operated belongs to a large system, or is controlled by a large system, or is independent."

Still later the Board of Arbitrators, under the same Act, of which Hon. Seth Low was Chairman, considered the question and reached a like result respecting a reasonable rate to be paid conductors, and trainmen, on the various roads there involved. The question was raised by the railroads that their freight and passenger rates were inadequate for the services they performed, and the Board was asked to consider the financial condition of such roads as an element in reaching its conclusion as to what would be reasonable rates, but in response to that contention the Board said:

"This Board has no authority to determine the passenger and freight rates to be paid in the Eastern territory; neither is it in a position to determine whether such an increase is justified, as a matter of fact, by all of the circumstances. This Board, however, believes that it must make its finding as to what is a proper rate of pay to be awarded to the conductors and trainmen as a result of this arbitration. without any reference to the dilemma in which the railroads are evidently placed by the laws which make it impossible for them to increase passenger and freight rates without the authority of the Interstate Commerce Commission or of the Railroad Commissions of the various States. To take any other view of the question would be to decide that no increase of pay, while the laws remain as they are, can ever be made except voluntarily by the railroads. Such a decision would render arbitration like this, valueless; and it would be in effect to hold that railroad service in the Eastern territory must continue to be rendered at existing rates of pay, even

though this were to condemn the employes of the railroad to work for rates of pay which have been determined by the most careful inquiry to be inadequate.'

We are also advised that Circuit Judge Pritchard made a similar ruling when the Seaboard Air Line was in the hands of a Receiver, though he rendered no written opinion in the case. No doubt other like decisions in receivership cases have been rendered, but we have gone into the question sufficiently to indicate the rules which must be applied in the present case.

That the road is not making enough money to meet its operating expenses is unquestioned, but we do not deem it necessary to analyze the figures tabulated with respect thereto, for whether they show a loss in operating expenses, as understood in railroad accounting, or whether the receipts are inadequate to meet the operating expenses, plus taxes and interest on its indebtedness, the same cannot be considered by the Board as a controlling element in fixing the reasonable rates of wages.

The employes have the first claim on the earning of a road for a reasonable wage to be determined not by the financial condition of the company, but by the rates paid by other roads in the same section of country for like services.

Respecting the wages of employes we see no difference in principle between the inability of a road to meet its operating expenses, and its inability to pay dividends on its stock and interest on its indebtedness. In either event, as above stated, the employes, for the services they render, have the first claim on the earnings for a reasonable and just compensation.

Therefore, in reaching the conclusion we have in determining the reasonable rate to be paid the employes, we have not considered the inability of the road to meet its operating expenses as an element entering therein.

We have examined the evidence and analyzed the tabulated statements respecting the rates of pay of the engineers, firemen and enginemen on the Georgia and Florida Railroad, compared with the rates paid by over twenty roads operating in the Southeast section, mainly in Georgia and in the Carolinas, of which number six roads, in addition to the Georgia and Florida Railway Company, enter Augusta, and we find that the average basic rate per 100 miles paid by such roads is over 15% higher than the rates now paid by the Georgia and Florida Road to said employes. Considering all the conditions respecting the character of the service, size of engines in cylinder inches, tonnage of trains shown in the tabulations, number of trains to guard against and orders in respect thereto, together with all recognized conditions confronting engineers in the operation of their respective trains, we find no material difference between such conditions and those existing on the Georgia and Florida Road, except on the latter there is less tonnage in freight service. For these reasons and in conformity with the rules we have announced we find and award to the employes named the following rates of compensation as reasonable and just, viz. :

Passenger Service:

Article One.

Rate per mile-All engines, 3-40/100 per mile. Overtime, 50c per hour. A miniruum of $4.00 will be paid engineers in passenger service and $2.00 for firemen in passenger service when miles allowed at the prescribed rates per mile for passenger service do not exceed the minimum.

Through Freight and Mixed:

Rate per mile-All engines, 4-15/100 per mile. Overtime, 50c per hour. A minimum of 100 miles will be allowed.

Local Freight Service:

Rate per mile-All engines, 4-95/100 per mile. Overtime, 50c per hour. A minimum of 100 miles will be allowed.

Work Train Service:

Rate per day-Twelve hours or less, $4.15. Overtime, 40c per hour. Switching Service:

(Exclusive of meal hours)-Ten hours or less, $3.50. Branch Line Service:

Overtime, 35c per hour.

Broxton Branch, per day-Twelve hours or less, $3.85. Branch Line Service Continued:

Overtime, 45c per hour.

Overtime, 45c per hour.

Millen Branch, per day-Twelve hours or less, $4.65. Branch Service Continued:

Moultrie Branch, per day-Twelve hours or less, $4.65. Overtime, 45c per hour. Hostlers, 12 hours or less, $3.00. Overtime, 25c per hour.

The rates for firemen we fix and award at 50% of the rates awarded to the engi

neers.

The rates of increase requested by the firemen, if allowed, in whole or in part, would to such extent be a double increase since the rates of the engineers have been increased practically 10%, except in switching and hostler service, which we fix at a somewhat higher rate in order to equalize the same with the rates paid for the other service.

The foregoing award pursuant to the agreement of the parties to arbitrate shall become effective as of March 1, 1914, and shall continue in force for one year therefrom.

We, the undersigned Arbitrators, hereby certify that the foregoing awards and the transcript of the evidence accompanying the same, together with the exhibits subinitted therewith, are to our best knowledge and belief correct as therein set forth. STANTON J. PEELLE, Chairman, L. S. DAVIS,

A. W. ANDERSON,

Arbitrators.

I concur in the rules but not in the increase in rates and will file my reasons there. for within the 30 days provided in Act under which this case has been heard to which no objection is made by the majority of the Board as to time of filing.

A. W. ANDERSON.

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The Bill of Exceptions is as follows: "And now comes the Georgia and Florida Railway, through its General Counsel, William H. Barrett, and, availing itself of the right provided by law, presents and files the following exceptions to the award of the arbitrators, found and awarded in the matter of the arbitration between the Brotherhood of Locomotive Engineers and the Brotherhood of Locomotive Firemen and Enginemen with the Georgia and Florida Railway, submitted under the Act of the Congress of the United States of America, entitled "An Act providing for mediation, conciliation, and arbitration in controversies between certain employers and their employes." Approved July 15th, 1913, which award was filed in the office of the Clerk of the District Court of the United States for the Northeastern Division of the Southern District of Georgia, at Augusta, Georgia, on the ninth (9th) day of May, nineteen hundred and fourteen (1914), together with the record in such arbitration, such award being signed by all arbitrators, viz., Messrs. Stanton J. Peelle, A. W. Anderson, and L. S. Davis, as to the rules, and being signed by only Messrs. Peelle and Davis as to wages, Mr. Anderson dissenting as to that portion of the award.

First Exception:

The Chairman of the Board announced at the close of the arguments as a matter of law: "All matters of arbitration are matters of compromise. If there is no compromise, there is no arbitration." (Stenographers' record, p. 454.) To this there was no dissent expressed by either of the other members, and the Chairman and Mr. Davis were clearly governed by this principle in their award. This principle of law, as announced and employed, is error for the following reasons:

A-Arbitration and compromise instead of being the same are in principle opposite. Arbitration is not invoked until compromise fails. Arbitration determines the rights of the parties in accordance with law and justice and evidence; compromise yields ones' rights to avoid controversies and the possibility of strikes or discord or litigation or arbitration, as the case may be.

B-If arbitraion and compromise mean the same, it will oftentimes be impossible for a Board of Arbitration to find an award in accordance with their own conception of justice. Though convinced that plaintiffs are entitled to all they may ask, this must of necessity be denied, because both sides must yield something in a comprowise; though convinced that the defendant has properly and justly denied all the claims, yet something must be given for the same reason.

C-If compromise always controls in arbitration, the plaintiffs must always win, the amount they win each time depending upon the amount of their demands; and the aggregate of what they may win depending upon the frequency of their demands. All that is necessary for them is to ask and they must get.

D-The very Act under which this arbitration arose recognizes the difference between arbitration and compromise, because it is not until after the attempt to effect a compromise through mediation and conciliation has failed that an effort is made to have a submission to arbitration.

E-Arbitration was at common law, and is under all statutes a method of determining rights in lieu of the machinery provided by the Courts. Compromise is settlement by agreement and not a determination of one's rights.

F-Frequently the issue submitted to arbitration is indivisible and there can be no yielding forced; the property or right must wholly belong to one of the parties to the controversy to the exclusion of the other:

Second Exception:

The issue was stated by Mr. Burgess, representing the plaintiffs, thus: "The petitioners or plaintiffs desire to state that, to our mind, this question is devoid of any complex or intricate features. It is a simple problem as to whether the engineers and firemen on the Georgia and Florida Railway should receive the same compensation for similar services rendered as obtained on other railroads in this Southern territory.' (Stenographer's report, p. 30.)

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The Board stated at the outset of the arbitration: "As the employes of the road named are seeking an increase of compensation and the formation of certain rules, the burden will rest upon them." (Stenographer's report, p. 25.)

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