The Duncan Prescription

Press of Atlantic Provinces satisfied with Royal Commissioners’ diagnosis of Maritime complaints. Other editors dubious

January 15 1927

The Duncan Prescription

Press of Atlantic Provinces satisfied with Royal Commissioners’ diagnosis of Maritime complaints. Other editors dubious

January 15 1927

The Duncan Prescription

Press of Atlantic Provinces satisfied with Royal Commissioners’ diagnosis of Maritime complaints. Other editors dubious

IF THE daily press of the Maritimes is any criterion, the Royal Commission appointed by Prime Minister Mackenzie King to investigate the grievances, claims and conditions of the Atlantic Provinces has done its work with thoroughness and skill. The report of the commission, of which Sir Andrew Rae Duncan was chairman, will be considered by Parliament when it reassembles next month. It was received by the Cabinet a month or two ago, and the summary of the findings has been freely discussed by editors from coast to coast.

In appointing the commission, the Halifax Chronicle reminds us, Mr. Mackenzie King stated emphatically that it was the desire of the Government that “the commission should not interpret its instructions or its duties in any narrow or technical sense, but should take every opportunity for the fullest and frankest discussion of the economic difficulties facing this part of the Dominion, the endeavors which have been made to overcome them, the causes of any shortcomings in these endeavors, and the most effective and practicable remedies.”

And that the commission has done its work in this spirit is the consensus of opinion. Thus, for example, the Glace Bay Gazette, generalizes in an editorial on the subject:—•

‘The report of the Royal Commission on Maritime grievances, which was presented yesterday to parliament, does not belie the favorable forecasts published since the document was handed to the government three months ago. If anything, it is more thorough than the public had been led to expect, and on the whole more favorable to the views and desires of the Maritime provinces. Substantial recommendations are made in connection with every important phase of the subjects dealt with.’

After itemizing the principal findings of the commission the Glace Bay Gazette waxes further laudatory:

‘There is thus every reason for congratulation on the Duncan Commission’s report, and it must be admitted that the Mackenzie King government conferred a boon on this province when it set this enquiry on foot. Whatever happens the recommendations—and the government is committed to their fulfilment—the report stands as a document setting forth in clear and precise terms the disabilities under which the Maritimes suffer under Confederation, and the methods by which they may be relieved as far as they can be relieved by the federal. government. In brief, if its recommendations are given effect by the parliament of the dominion, it may well come to be regarded as the great charter of the maritimes as regards their economic relations with the Dominion.’

Railway Rates

WITH certain cautious reservations, prompted, largely, by local considerations, the Maritime press agrees with the journal just quoted.

Of course, the most important, and the most controversial, section of the commission’s report is that relating to railway rates. The prologue to this section of the report is as follows i—

‘The Maritimes case on railway rates was'put to us in very considerable detail. The Railway Commission is at the present time dealing with these same details, and we have not formed any opinion on these matters so far as judgment on their merits would involve consideration of railway administration and policy. On the broader question, however, of the incidence of the existing rates as a whole upon industry and employment in the Maritimes, we have come very definitely to the conclusion that the rate structure as it has been altered since 1912 has placed upon the trade and commerce of the Maritime Provinces, (a) a burden which, as we have read the pronouncements and obligations undertaken at Confederation, it was never intended it should bear, and (b) a burden which is, in fact, responsible in very considerable measure for depressing abnormally in the Maritimes to-day business and enterprise which had originated and developed before 1912 on the basis and faith of the rate structure as it then stood.’

The report then recommends that an immediate reduction of twenty per cent, be made on all rates charged on traffic which ‘both originates and terminates at stations in the Atlantic Division of the Canadian National Railways (including export and import traffic by sea, to and from that division), and that the same reduction be also applied to the Atlantic Division proportion of the through rates on all traffic which originates at stations in the Atlantic"Division (excluding import traffic by sea),

and is destined to points outside the Atlantic Division.’

If ‘silence gives consent,’ it might well be argued that the press of the maritime provinces regards this particular recommendation with approval. Beyond stating, as does the St. John Glole, that ‘the commission finds that the increase in freight rates on the Intercolonial since 1912 has placed an excessive burden on the Maritimes, in view of the terms under which they entered Confederation,’ and like comment, the Maritimes are content to accept the recommendations.

Seeing that any move which cuts into the revenues of the Canadian National Railway also makes demands on the purses of those citizens of the Dominion who do not happen to profit by it, it is small wonder that the commission’s proposed rate concession to the Maritimes has come in for some sharp criticism. The Montreal Gazette, for example, reads some sinister implications into it. It concludes a resume of the matter thus:

‘It will be seen that the rate remedy proposed by the Commission affects the status, and limits the functions of the Railway Board, so far as the eastern provinces and their carrying charges are concerned. What is considered good for the Maritimes in this regard will be considered equally good for some other provinces by the people in those provinces, whether the same historical reasons are present or absent. The report does not deal with this probable result, but it does have something to say regarding the effect upon the Railway Board. The reduction, it is stated, will not withdraw from the Railway Commission the detailed claims now before it in respect of Maritime rates, but it will bar any review by the Board based upon what are called the broader considerations which appealed to the Duncan Commission. The report then goes into a discussion of the Railway Board’s functions and thé conclusionreachedisthattheBoard,in considering appeals made to it, does not feel itself empowered to pass upon the trade and commerce of the Maritimes a burden which the framers of Confederation never intended should be borne. Business and enterprise in these provinces had originated and developed on the basis and faith of the old rate structure, and have suffered abnormally by the change made in 1912.

‘The unsoundness of the old structure, from the standpoint of railway economy, is virtually acknowledged in the provision that the difference between the former and present rates must be borne by the Dominion, ‘who will make the necessary reimbursement to the Canadian National Railways . . without impairing the financial results of the operation of the system’ and will protect, in like manner, the interests of the privately-owned railway. These recommendations are made ‘in a broad spirit,’ and the Commission looks upon them as equitable, having regard to the physical character of the Intercolonial and the purposes for which it was constructed. The Commissioners themselves say that the solution separates considerations of national public policy from considerations of railway policy proper; that is, of course, the purpose as well as the effect, and it will be for Parliament to say whether or not such a principle can be adopted with safety, and, having been adopted, where and how it is to end. It is easily recognizable as the principle which western rate-reformers have been endeavoring to establish with respect to all railways and all railway rates in Canada.’

Defends National Railways

THE London Advertiser rushes, likewise, to the defence of the government railroad:

‘Such concessions would go perhaçs the full way toward meeting long-continued Maritime complaints as to railway discrimination, complaints which have become intensified since the merging of the Intercolonial in the Canadian National system. The commission recommends that the cost of the relief afforded by rate reduction be borne by the Dominion Government. If it is to be carried at all, it should not fall on the Nacional Railways, now struggling to make both ends meet, but in either event the favor, which the Maritime people prefer to call a right, would be paid for by the rest of the country. It would be equivalent to a direct Federal subsidy. On this point the Commission says it has come definitely to the conclusion that the railway rate structure as it has been altered since 1912 has placed upon the trade and commerce of the Maritime Provinces a burden which it was never intended they should bear, and which is in very considerable measure responsible for the depression in

those Provinces to-day. It does not appear how rates can be lowered on the National lines without a corresponding reduction on the C.P.R. in the same area. The Commission says the C.P.R. is entitled to equitable consideration if it finds itself prejudiced as the result of rate reductions. It is evident that the C.P.R. will file a claim if the proposal goes through.’

The proposal that increased subsidies, to the tune of $1,600,000 be paid to the Maritimes is satisfactory to the Atlantic provinces. The Fredericton, N.B., Mail says:— ‘The very sensible view is taken that the deficits accumulating against them (the Maritimes) in their ordinary revenue and expenditure, should not be left in suspense until a reassessment is made by the Dominion Government and the Commission recommends that an interim lump sum increase should be made at once. If Parliament acts promptly in the report the revenue of New Brunswick will next year be augmented to the extent of $600,000, and the direct taxation bugaboo, now staring us in the face, will be relegated to a back seat. It will be pretty generally conceded now that Premier Baxter acted wisely last session when he enacted legislation providing for the augmentation of the revenue to the extent of approximately $600,000 by means of direct taxation. At any rate the Royal Commission seems to have taken the hint and acted accordingly.’

But the Montreal Gazette again in critical mood, does not view the granting of the proposed subsidies with undue complacency. It says:

‘The Maritime Provinces are held to have established a genuine claim for a readjustment of financial arrangements. No final recommendation is made in this regard, but the Commission proposes the payment of immediate interim lump-sum increases to the provincial grants, as follows: Nova Scotia, $875,000; New Brunswick, $600,000; Prince Edward Island, $125,000.

‘The aggregate of these increases is not a very formidable amount, as Federal expenditures go nowadays, but they are the beginning and not the end; they are to be regarded as a minimum, to be paid annually until a full and final revision has been made. They will be, to the Maritimes, an assurance of sympathy, and they will also ‘enable the provinces to undertake the more extensive programme in relation to agriculture, colonization, education and other spheres of administration, which they represented to us, they were precluded from undertaking now because of the inadequacy of their assistance from the Dominion Government.’

‘It will be seen that this is a different thing from making ends meet as between present provincial revenues and expenditures. There seems to be an inconsistency in this regard, in the conclusions of the Commission, and it is made even more conspicuous by later paragraphs in which responsibility for the backward condition of agriculture is found to rest ‘primarily upon the industry itself and upon the provinces,’ and the migration from farms in the Maritimes is referred to as the result rather than the cause of agricultural stagnation.

‘These are aspects of the report which clearly demonstrate the necessity of the closest possible parliamentary scrutiny. By all means let us deal fairly and sympathetically with the Maritime Provinces, but let us know what we are doing, and why.’

Self-Help Needed Too

IT IS impossible, obviously, to discuss a report which is couched in some 30,000 words in any great detail. In an editorial headed ‘Looking Forward’ the St. John Telegraph-Journal sums up the whole question of Maritime ‘rights’ with point and good taste.

It tells us that ‘two questions in relation to the Maritimes have been asked many times during the last two years. The first is: What do the Maritimes want? The second is: What may the Maritimes do for themselves?’ And continues:

‘These questions have riveted public attention. The first was answered by the Charlottetown resolution, presented at the Winnipeg Conference, and by the representations made before the Railway Commission and the Duncan Commission. The report of the latter is before Parliament and the country, and the report of the former is expected at an early date. The attitude of our people in relation to both and to what will follow is one of hopefulness, based on the strength of the representations made and the terms of the Duncan report.

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‘There remains the question of what we may do for ourselves, and since it must be indicative of the state of public mind it is of the most vital importance to the future of the provinces. There are several obvious needs. These are greater agricultural production, associated with the settling of more people on the land; the development here and there of such small industries as may be succesfully established; the investment of more capital and a more rigorous development of our fishing wealth; as rapid as possible a conversion of our forest industry into the production of pulp and paper; a survey with prospecting enterprise to determine our sources of mineral wealth; and an effort to secure large industrial plants having an overseas as well as a local market for their output.

‘Everything cannot be accomplished at once. The agricultural outlook is perhaps the best at the moment . . .

‘With regard to manufacturing, there are possibilities in connection with agriculture and the fisheries and our hardwoods, as well as pulp and paper. There are other lines. Care must be taken not to make investments which would be wiped out by the competition of the Central Provinces, but there must be some fields of investment in industry which with prudent management and loyal support would attain success. To discover these is the task of alert men of affairs.

‘As already noted, much depends upon the state of mind. There has been too much of pessimism. Recalling all these provinces have suffered since Confederation, one may readily excuse even a large degree of despondency; but a new era has dawned. The outlook has vastly improved Our people may go forward with a new spirit of confidence, in constructive effort

to attain greater prosperity than has been possible for half a century past.’

AS A whole, the press of Western CanD ada has been unexpectedly silent about the Duncan Report.

Twitted by the Ottawa Journal on its advocacy, on the one hand of revision of the Crows Nest rates and criticism, on the other, of the Duncan reports’ recommendation of rates decrease, The Manitoba Evening Bulletin defends itself with not a little vigor. It says:

‘The proposition made by the Maritimes Commission is in no sense parallel to the existing set of conditions in Western Canada. The western lines of the C.P.R. pay all operating costs and make a relatively large contribution to the surplus out of which the road meets its charges. The western section of the Canadian National, despite hundreds of miles of duplicate mileage, pays its operating expenses and will turn in this year ten or twelve million dollars of surplus which will go a long way to meet the interest on the cost of construction. In the Maritime provinces the present scale of freight rates creates a fund which does not pay a cent towards the carrying charges of the capital cost and falls four million dollars short of meeting operating expenses. The proposition is to increase this operating loss by a horizontal decrease in rates of twenty per cent., the railways (both C.P.R. and C.N.R.) being recouped for the loss involved by the reduction in hard cash out of the Dominion Treasury.

‘We have said this is an innovation and a very serious one. We have said that this introduces a new principle in rate making which calls for very careful consideration.’