Canada’s New Railway Board

February 15 1934

Canada’s New Railway Board

February 15 1934

Canada’s New Railway Board

FROM THE PAST administrative record of Charles P. Fullerton as chairman of the Railway Commission, it is possible to forecast with every confidence the main lines on which national railway policy will proceed during the next five years, “writes Owen Seymour in The Financial Post, commenting on Mr. Fullerton’s appointment as head of the Canadian National Railways. In The Financial Post, too, C. W. Stollery appraises F. K. Morrow', the second member of the trustee board of the railway, while the third member of the board, J. E. Labelle. is discussed by John Langdon.

Writing of Mr. Fullerton, Mr. Seymour says:

“The présent high efficiency of the Railway Commission speaks volumes for his administrative ability. Not counting the statutory cuts in civil sendee salaries, Fullerton pared nearly 20 per cent olT the cost of operating the commission. He did this byorganizing efficient, systematic control of expenditures; by challenging every cost item that appeared to him unreasonable. The audited accounts of the commission, in this regard, are an eye-opener, and if the Fullerton economy system could be applied throughout the government service, from 15 to 20 millions could be saved.

“There was the matter of the commission stationery office. The practice followed here was identical with other government departments. The storeroom was piled to the ceiling wdth all manner of supplies (they cost money) and the door wras left wide open. There was no attendant, nothing to prevent anyone going in and taking w hatever caught his fancy. Stock-takings were unheard of. Today there is a padlock on the door. It has been made a part of someone’s duties to fill all requisitions but these must be signed by ¡jersons in authority, and every six months the stock is checked over. Requisitions must be produced for all the supplies that have been issued.

“Or take the important item of operating the commissioner’s private car. The RailwayCommission moves about the country almost continuously. The accounts show that the cost of maintaining the chairman’s car (no capital or repair items included) w’as some $4.000 in 1930. If you care to look up the 1932 figures you will find the corresponding item $500. With Fullerton, economy, careful handling of money, is a characteristic bred in the very marrow of the man.

“As to his courage and integrity it is only necessary to point oui. what everyone who has first hand knowledge w'ell knows, that since 1431 the Railway Commission has ceased to be a handy club in the government’s golf bag. It fias ceased to be a semi-political organization dealing w'ith rates with one eye on the statute and the other on the next general election. It has reverted to the great tradition established by Killam, Mabee and Drayton and with the reversion it has claimed and won the respect and confidence of the railways and the ratepaying public.

In enforcing the Railway Act. Chairman Fullerton sought no favors and certainly gave none. He hewed to the line, notwithstanding that some of the chips fell in quarters w'here great influence and power reside.

“The real reason why Fullerton accepted his new position is that he does not care about money. He probably has saved enough to take care of his wants for the balance of his life. And, as will be shown, they are simple wants. The real reason is to be found in his conviction that he can make a contribution to the solution of Canada’s greatest problem. That he is thoroughly familiar, not only with railway law, but with the present position of both the National and the C. F. R,. goes without saving. He has not held his post on the commission for nothing. His acceptance, therefore, means that knowing the problem, he is confident that he can cope with it.

“What will his attitude be? Fullerton has I made no statements, refrained sedulously

from discussing the problem. But having regard only for the views he has laid down as chairman of the Railway Commission and by the characteristics he has displayed in his career, these things may be predicted with confidence:

“The management of the National Railways will be absolutely divorced from politics. The system will be run as a transportation company pure and simple and not as an annex to the two old political parties.

“Every expenditure will be subjected to the most rigid inspection and supervision. Economy of a kind never before apparent in National management will be enforced from the top to the bottom of that organization. This will take time and may involve retirements and dismissals but it will be carried through.

“Every prospect of saving money by cooperation with the C. P. R., will be carefully explored and if proved sound will be adopted, regardless of protests from the general public or the politicians.

“The emphasis w ill be upon making the present plant and equipment operate successfully and not upon additional capital expenditures.”

Frederick K. Morrow

’W'OUTH, energy and health characterize Frederick Keenan Morrow. His friends call him ‘an intense Canadian.’

“Since he is the only businessman member of the board, many are led to feel that his work for the C. N. R. will be peculiarly important. Right up to the time of his appointment, he was actively concerning himself in the affairs of more than a dozen corporations. Now he is going to spend four days a week in Montreal looking into C. N. R. affairs. His value to the C. N. R. may turn out to be that of the expert corporation manager and financier: making a profit. Llowever hard the C. N. R. may have been trying to make both ends meet, here is a trustee who has spent most of his life learning and practising the art of improving earnings.

“Apparently by chance, the fact that Mr. Morrow is serving the C. N. R. without remuneration has become public knowledge. What is less well known, however, is that he gave up emoluments from various corporations as well. These things he did, it is understood, so that there might be no conflict of private interests with C. N. R. policies, and activities of the trustees. Incidentally, although the Government gets the benefit of his free services, it loses a handsome income tax payment on corporation salaries that Mr. Morrow' is no longer receiving.

“Another striking fact about Mr. Morrow and his appointment is his impartiality. He has no dominant political affiliations. Perhaps. at last, the C. N. R. is going to be rid of the bedevilling influence of politics, because, generally speaking, all three commissioners are of independent mind.

The first thing he does is to put in a firm of accountants; the best available. In other words, his first idea has been to get a picture of what the business is doing; a new picture. He is not satisfied with the accountants which may formerly have been kept. Not that there is necessarily anything the matter with them, but because the new experts may see new' things. Often the old accountants will have been following a beaten path without developing new' information, without realizing some significant facts.

“There are those who claim that F. K. Morrow has a genius forreadingaccountants’ figures. But he is not a statistical bug. He knows what information he w'ants and he sends experts to get it for him. He’s not an accountant but you might say that is his business. His first introduction to accounting was as a bank clerk and in high school, and his practical training in reading figures has been gained in the cold world of dollars

and cents. Once he gets the accounting picture of a business the next move he makes is to try and increase volume. In this and other things, his action is positive, before it becomes negative. He would sooner push a business ahead than trim it down.

“ ‘Business is a matter of management and w'ho’s running your show’ is the Morrow attitude toward personnel. It is everything to him. He makes the personnel responsible. Some say he has a genius for getting the right man for the job. In any event Morrow would not hesitate to look in the ranks for the right man for a top job. The reason for this, in his business philosophy, is that often senior men have allowed themselves to get into a rut of old ideas. If a senior cannot fit himself to new ideas in his department, he must be moved into another branch of the business where his ideas will fit. With Morrow', like most captains of industry, merit counts. And he is sharp on character. He is said to be a congenial slave-driver, to get results w'ith a minimum of friction, to have the respect and support of personnel.

“ ‘In business, you should know' what ought to be done. If you know what should be done, even though it may be painful, do it. If you don’t do it, you lack the necessary courage.’ That is the Morrow' attitude toward tackling a tough business problem.

“In considering a new venture, his attitude is this: 'Would I do this with my own money?’ If the answer is “yes,” it is all right for the shareholders’ money, it is all right for the public’s money. If this attitide is adopted throughout the C. N. R.’s affairs, it will indeed be something new in a government-owned enterprise.”

J. Edouard Labelle

T. EDOUARD LABELLE’S appointJ ment as a trustee for the Canadian National Railways, was not surprising to those who know of his work as a director of the railway for the past three years, and his long and brilliant record in the legal and corporation fields.

“He combines two qualities which inspirational w'riters tell us are necessary for success—thoroughness and thrift. Thrift he acquired from his forebears on his father’s side and the other from his mother’s people, who bear the good Scots name of Armstrong.

“Labelle has the fine characteristics of these two nations w'ho have given so many builders to Canada. He is a small man w'ith iron-grey hair, a twinkle in his eye and still on the right side of 50. He has the Gaelic genius for friendship combined with the canniness of the Scot.

“From his experience in legal and trust work and directorships in several industrial corporations, he places economy and cooperation as two of the more important factors in the upbuilding of a successful enterprise.

“ ‘Extravagance has been all too prevalent in our private and business life. We must economize. There are many ways in which we can reduce expenses without impairing service. In the last four years w'e have learned many things w'ere unnecessary for our well-being. We have been able to bring about economies, but we are far from having exhausted the possibilities of further savings.

“ ‘Co-operation,’ he continued, ‘is an essential for success. There are few things w'e do which do not affect some person or group. It is essential that one give consideration to all factors. It is not necessary to ride roughshod over those in opposition. Their claims may be sounder than your own and it is only by getting the other fellow’s slant, or in explaining the reasons for your own action, that one can bring about the co-operation that will be best for all concerned.’

"Labeile’s administrative capacity has resulted in many calls on his services. In his new’ position of trustee for the C. N. R. he will have opportunities to bring into full plav all those qualities which have brought him ;o the front among French-Canadians.”