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317
<br />
<br />operation,
<br />opposition
<br />
<br />March 26th, 1936, was received, setting-forth his views in
<br />quoted herein-below, and I assume is final:
<br /> 'Messrs. B.B. Ferguson
<br /> Vernon A. Brooks
<br /> E.B. Hawks
<br /> Sol Pass
<br /> Frank D~ Lawrence
<br /> John A. Morris
<br /> Jesse M. Overton
<br /> E.W.Maupin, Jr.
<br /> GO~aITTEE.
<br /> Portsmouth, Virginia.
<br />
<br />even to the limit of employing counsel in litigation for the Road's interests in
<br />to the protests of some of our good citizens.
<br /> Shortly after the conference with Mr. L.R. Powell, a letter from him, dated
<br /> the situation, which letter is
<br />
<br /> Gentlemen:
<br /> Following 9u~ conference with respect to the temporary
<br />discontinuance of the locomotive repair Shops at Portsmouth, I am.
<br />confirming briefly the statements made at that time, giving you the
<br />more controlling reasons which necessitated this action on the part
<br />of the Receivers of th9 Seaboard.
<br /> The property of the Seaboard was PlaCed in receivership
<br />on December 23, 1930. As Receivers it is our duty to conserve the
<br />receivership estate and to administer its affairs as economically
<br />and as effici.ently as it is possible, having due regard f~r the
<br />various interests affected. It is unnecessary, for me to mention
<br />the effect of the general depression upon the business as a whole,
<br />. upon the income of every individual and especially upon the rail-
<br />roads. In addition to these general conditions, the railroads have
<br />suffered to a far greater extent because of the unregulated charac-
<br />ter of competition by highway and water as well as other conditions
<br />which control in their operation. Their revenues and income have
<br />-been so greatly reduced that every possible means of effecttng econo-
<br />mies has been forced upon thee and it has been necessary for all rail-
<br />roads to drastically curtail the number of employees..
<br /> The situation confronting }he Seaboard duping this. period is
<br />one which has given the Receivers and the entire management the dee.~st
<br />concern. ~ney have enaeavored to ~ender the best possible service to
<br />the commmnities in the territory which they-serve and to conserve_as
<br />far as possible, the rights and interests of their employees, with du~
<br />regard ~o other obligations imposed upon'them.
<br /> During the five-year period for which the receivership has
<br />continued no net i-ncome .bas been available for paymen~of interest on
<br />~he general mortgage bonds of the company,_ which are widely held by
<br />the public. The holders of Receivers' Certificates, whose principal
<br />has matured have'been forced to extend these securities at greatly our-
<br />tailed rates of interest. Even the underlying b~ndholders have been
<br />forced to forego their interest and .to make other material concessions.
<br /> Tke Receivers have employed every possible method of reducing
<br />expenses consistent with the public obligation~of the Seaboard and con-
<br />sideratibn for the interests of their-employees and others affected.
<br />They have endeavored to avoid even the temporary closin~ of their shops
<br />or other activities, in the hope that conditions wo~ld {mprove. Even
<br />prior to the receivership, the decline .in earnings made it necessary at
<br />~imes to close the entire ~ortsmouth shops for~several months. During-
<br />the last three years, for a part of which period the employees accepted
<br />a. lO~ wage deduction, the management ha$~undertaken to keep the shoos
<br />open as far as possible, although the absolutel requirements of economy
<br />forced them at times to operate on ~ fou~-~ay-week basis in the smmmer
<br />months,-and in 1933 this was reduced.to, a thre~-day-week, but this was
<br />not produc%ive of operating efficiency.
<br /> Th? 10% wag~ dedpotion which was accepted by the employees in
<br />1933 was res~o~red during the past year, resulting in an increase in ex-
<br />penses of $1,860,000. per annum. For tb~ year 1936, expenses will Be
<br />further increased upwards of $1,~00,000,. as a:result of the enactment
<br />of certain Federal legislation, such as the Railrotd Retirement Act,
<br />the Social Security Act, and the increased price of coal, other mater-
<br />ials and commodities necessary in the operation of. the property; The
<br />Receivers are therefore faced With the necessity of effecting further
<br />economies to meet these increased expenses if the property is to con -
<br />tinue to operate in the public service.
<br /> After the most careful consideration of all elements involved,
<br />the Receivers have bee~ forced, with the greatest reluctance, to tempo-
<br />rarily close the locomotive rePa~ shOPs at Portsmouth, but at the same
<br />time have endeavored ~o' compensate fo~ this, aS far as possible, by cen-
<br />tering .its coach repair WOrk at Portsmouth, Inltaking this action, the
<br />Receivers have not only considered the interests of the communities af-
<br />fe~te~!.bpt ~ave ~iven ca~efuleonsld~m~tion tO the effect upon loyal
<br />aha ezr~czen~ emp±oyees who:se interests might be prejudiced thereby. We:
<br />have sought ~o make these adjustments in such way as to reduce to a
<br />minimum any hardships which might be imposed upon our employees and the
<br />community, and to this end we propose, as far as we consistently can,
<br />to give employment to, or otherwise Provide fo~, those of our employees
<br /> who are effected. -
<br />
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