Maclean’s Editorial

No Santa Claus in This Case

December 15 1934
Maclean’s Editorial

No Santa Claus in This Case

December 15 1934

No Santa Claus in This Case

Maclean’s Editorial

THE PEOPLE'S Railway will hang up its stocking again this year.

In this case there is no Santa Claus. The filling will be done by the Taxpayer.

Taxpayer does not mean someone else. It means you. Even if you do not pay an income tax, every time you buy anything you contribute to Government revenue.

Out of that revenue this year the Government will pay out not far short of $100,000,000 of the People's Money in interest charges on Canadian National Railways debts.

Nowhere else in the world is there a community of ten million people who have collectively to raise ten dollars per person per annum in order that there shall lie two competing transcontinental railway systems.

Two years ago, a Royal Commission, appointed at great expense to suggest remedies for this extraordinary form of self-sacrifice, reported that failing the adoption of courses suggested, THE VERY STABILITY OF THE NATION'S FINANCES AND THE FINANCIAL CREDIT OF THE CANADIAN PACIFIC RAILWAY WILL BE THREATENED. WITH SERIOUS CONSEQUENCES TO THE PEOPLES OF CANADA AND TO THOSE WHO HAVE INVESTED THEIR SAVINGS IN THAT RAILWAY.”

Whatever your politics may lie, however much you may like or dislike the idea of owning a railway, whether you draw' w'ages from the C.N.R. or whether you contribute to the wages of someone else, that still is the fact to be faced.

The situation at the close of 1934 is much more serious than it was in 1932.

V\7HAT WERE the remedies proposed by the Duff Commission? The report states that certain of its members would have preferred “a plan which would have established a complete disassociation of the Government of Canada from the responsibilities of competitive railway management or of any direct interest therein.” But they concurred in the following recommendations :—

Drastic measures of economy imperative.

Identity of the two railway systems be maintained, “the time not being opportune for giving serious consideration to complete amalgamation of the two systems.”

Management of the National Railways should lie emancipated from political interference and community pressure.

Machinery should be provided for co-operation between the two systems for the elimination of duplicate services and facilities and the avoidance of extravagance.

The attainment of a scale of economies which will bring the burdens of the National system within reasonable dimensions and effectively check extravagant and costly operation.

Reasonable protection for the privately owned undertaking against arbitrary action by the publicly owned undertaking which might unfairly prejudice the interests of the privately owned undertaking.

In the case of ancillary services such as express services, telegraph systems, hotels, etc., aggressive competition should cease, and the board of trustees of the C.N.R. and the board of directors of the C.P.R. should formulate and agree to schemes which will permit of the “working in harmony” of these services.

VVfHAT HAS the Board of Trustees appointed by vv the Government, and the Government itself, done in the way of carrying out the recommendations of the Duff Commission?

Certain co-operation in the operation of the roads has been achieved, but the savings effected are a drop in the bucket.

The Financial Post in compiling a record of cooperative measures, estimates that, through pooling passenger trains, joint freight haulage, switching facilities, etc., the total annual joint saving in effect November 1, 1934, was $1,220,510.

In the matter of express services and telegraphs, in

June, 1934, Dr. Manion, Minister of Railways, introduced two bills to Parliament.

One, “A Bill to Incorporate the Canadian Railways Express Company,” was for the purpose of “enabling the Canadian National Railways and the Canadian Pacific Railway to effect economies.” The other, “Canadian Communications Company” was to have the same effect in the matter of duplicate telegraph services.

Both bills were withdrawn by the Government. The Minister’s explanation was:—“No agreement (by the companies) has as yet been reached, or is in prospect of being reached at an early date, if at all. Therefore, the matter cannot be said to be one of immediate urgency. For this reason the Government does not intend to proceed with these bills.”

The recommendation of the Duff Commission in the matter of auxiliary services, as well as its recommendation that the management of the National Railways should be emancipated from political interference and community pressure, went by the board.

The measures may still be reintroduced by a private member, but as government bills they are out.

'“PHE RAILWAY problem in its essentials is no nearer solution than it was when the Duff Commission was appointed.

Judge Fullerton, chairman of the Board of Trustees, has full authority to effect any economies or to introduce any measures of efficiency or co-operation necessary to “bring the burdens of the National system within reasonable dimensions.”

But, judging from recent speeches he has made, the Judge is not persuaded that any further economy is necessary. Instead of “do” he prefers “if.” “If the railway could secure a gross revenue of $250,000,000 a year,” says he, “there would be nothing to worry about.”

Wouldn’t there? On the present operation ratio, it is likely that the C.N.R. would require $264,000,000 gross to earn the interest due the public and approximately $408,000,000 to earn the interest due both public and Government.

During the past decade, the average revenue of the C.N.R. has been approximately $238,000,000.

Even were revenues increased to Judge Fullerton s $250,000,000—and goodness knows where regular increase is coming from for a long time to come—the situation would not be materially relieved.

T IS IMPERATIVE that the whole basis of the problem be reviewed without delay.

The railway board was charged with the responsibility of giving effect to the recommendations of the Duff Commission. Its accomplishment to date is far from adequate.

If the reason has been political influence, the chairman of the board could have made the fact known to the public.

If the reason is that the board feels itself not technically able to decide the direction of further operating co-operation, it has the power, and should use it, to appoint independent experts who can report on how to do it.

If the reason is that the board or its chairman are not strong enough to get things moving, the Prime Minister, who, by his office, holds primary responsibility, should appoint a new board or a new chairman.

Mr. Bennett knows the havoc wrought on Canadian credit by the railway mess.

It is his move.