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BIG DONALD at the Throttle

All Donald Gordon knew about railroads when he took over the CNR in 1950 was that the berths weren’t long enough. Now, in spite of what he himself regarded as a dismal beginning, he’s using his shrewd ignorance to highball the biggest railway in the world out of the red

BLAIR FRASER August 15 1952
Articles

BIG DONALD at the Throttle

All Donald Gordon knew about railroads when he took over the CNR in 1950 was that the berths weren’t long enough. Now, in spite of what he himself regarded as a dismal beginning, he’s using his shrewd ignorance to highball the biggest railway in the world out of the red

BLAIR FRASER August 15 1952

BIG DONALD at the Throttle

All Donald Gordon knew about railroads when he took over the CNR in 1950 was that the berths weren’t long enough. Now, in spite of what he himself regarded as a dismal beginning, he’s using his shrewd ignorance to highball the biggest railway in the world out of the red

BLAIR FRASER

MACLEAN’S OTTAWA EDITOR

ON NEW YEAR’S DAY, 1950, Donald Gordon, a large moon-faced nearsighted Scot who had just turned forty-eight, stepped off the elevator on the third floor of the Canadian National Railways Building on McGill Street, Montreal, and into the office of the president.

He sat down at the big mahogany desk and looked at the panel of buzzer buttons that confronted him. Of the CNR’s fourteen vice-presidents eight normally reside in Montreal: there was a button for each of them, as well as for several other senior officials. Gordon wondered which one to push first. On reflection he didn’t push any. As a junior in the Bank of Nova Scotia thirty years before he had disliked being summoned in that way and he had never himself used a buzzer except to signal his secretary. He decided he wouldn't start then.

That was Donald Gordon’s first decision as chairman and president of the biggest railway in the world, and it was a typical one. Gordon had no knowledge of railroading at all and no firm opinions on it except that railway berths are unsuited to men of six feet four inches and two hundred and forty pounds. He had been brought in over the heads of astonished and resentful men who had spent their lives in the CNR and on whose advice he would now have to rely.

“All my life I had learned things from the bottom up,” Gordon said recently. “Now I’m learning from the top down and I find it’s a lot harder.”

Certainly he found plenty to learn. The CNR has more than twenty-three thousand miles of track, but less than half of it is consistently self-supporting and about a quarter loses money all the time. The CNR is bigger than its rival the Canadian Pacific (or, for that matter, any other railway anywhere), but its bulk is made up of five trunk railways originally built to compete with each other, whereas the compact CPR was built according to a plan often enlarged but never abandoned. The CNR earns a tidy sum on operations but, because of its colossal debt charges, it has never shown a profit.

Obviously a tough job for anybody to tackle, but it was no surprise to anyone that Donald Gordon was tackling a tough job. He had been doing that ever since he got his first one at thirteen —six dollars a wreek in a Toronto box factory. During the war he became internationally famous for doing what most people thought couldn't be done —clapping on an over-all price ceiling and making it stick. The CNR presidency at a rumored fifty thousand dollars a year looked merely like the climax to a Horatio Alger success story.

Maybe it was. Already his brief regime can be chronicled as if it were another chapter entitled, Gordon the Miracle Worker. CNR revenues are the highest in history. CNR debts have been cut in half by a recapitalization plan for which Gordon

gets a large share of credit. CNR methods have enjoyed a healthy exposure to the critical gaze of a man who knew nothing about railroads, but had a lifetime’s practice in sizing up unfamiliar situations and figuring out the best way to deal with

But this pretty picture, though true as far as it goes, is the less important fraction of the truth. These first two years at the CNR, and more particularly the first year, have been the hardest in Gordon’s whole life, full of discouragement and, occasionally, despair.

Trouble began even before Gordon took office. When he got to Montreal on Dec. 29, 1949, newspaper headlines told him of a coal shortage in the CNR which might prove to be calamitous. That was the first Gordon had heard of a problem on which he had to make decisions two or three days

He soon found the shortage was real enough. His predecessor R. C. Vaughan, who started his career as a purchasing agent, had balked at the prices demanded for American coal in the fall of 1949. He figured the market would ease off before long, and didn’t buy. Instead John L. Lewis called „ strike, coal became very scarce and the CNR stockpile dwindled to the vanishing point.

Gordon did the only thing possibleemdash;cut CNR passenger service twenty-five percent. He had no choice, but the public didn’t know that. The rumor went around that the coal shortage was nothing

but a smoke screen (after all, the CPR had lots of coal, hadn’t it?) and that this hard-boiled banker was already slashing the services that didn’t pay their way.

Nothing could have been farther from the truth. Actually Gordon had gambled on a quick settlement of the coal strike when he kept the level of service as high as he did, and he nearly lost the gamble. Another twenty-four hours or so and he would have had to bring the CNR almost to a standstill.

Even before he was out of that mess, calamity struck again in a graver form. Vice-president in charge of operations was Norman Walton, a railroader of great experience on whom Gordon had expected to lean very heavily. Ten days after he took over the job Gordon got a call from Walton late in the afternoon “Could I see you first thing in the morning? I’ve something very important to discuss.” Gordon made an appointment for nine a.m. At two a.m. his telephone rang Walton had died of a heart attack.

Gordon didn’t know what to do. There were four men in the CNR’s senior ranks who appeared to be logical successors to this big job, but he knew nothing about them except that three were near retirement age and would have to be replaced again before long. So he appointed the youngest of the four, Stanley Dingle. It turned out to be a good appointment, but that was just luckemdash;one of the

very few strokes

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of luck that came Gordon’s way in 1950.

All this time he was busy preparing for his first big test as CNR president: the hearing of the Parliamentary Committee on Railways and Shipping, slated to open in March. For this he had to know everything about the railway from the details of its capital structure down to (actually and literally) the location of a new privy in a rural New Brunswick station. Gordon got through the grilling without a stumble and astonished the members with his grasp of CNR affairs. How or when he acquired it is still a mystery.

For the Gordons were leading a breathlessly busy social life at the same time. A few months before, his wife had been desperately ill but she had made a good recovery and was throwing herself with feverish energy into Donald’s new career. Almost their first official act was to hold a giant reception at which the new president, his wife and his two sons (then twenty and thirteen) met all the CNR officials stationed at headquarters, and their

One day in February Mrs. Gordon remarked that they seemed to have engagements for every night in the next six weeks except February 29.

“Maybe that’s because this isn’t Leap Year,” said her husband. “There is no February 29. The day after February 28 is the first of March.”

It was on the first of March that Maisie Gordon died, alone in the hotel room where they were then living.

To Gordon this was an utterly shattering blow. When he first met Maisie Barter, on a branch-line train in New Brunswick about twenty-five years before, Donald was still “the youngest inspector the Bank of Nova Scotia ever had.” She had been an active partner in his every forward step since then, at once a spur and a prop to him. With Maisie gone he felt, and told many friends, that life had lost its purpose and meaning.

Nevertheless he plunged into work as if it were an anaesthetic, which it probably was for a time. Parliament would have postponed the railway committee session, but Gordon preferred to go ahead as scheduled. No sooner was that over than he set off on a tour of all CNR lines. Back from that he found the last bleak stages of a protracted labor dispute facing him. It ended in the first railway strike Canada has ever had. To Gordon the strike brought the sting of personal failure, the first he had known in all his life.

At the Wartime Prices and Trade Board he had prided himself on a rare ability to tell people they couldn't do what they wanted, or must do what they didn’t want, and make them like it. Gordon, handling what looked like a highly unpopular job. came out of it one of the most popular men in Canada. His method was to make i himself thoroughly familiar with both sides of any argument and then work out a solution as fair to all parties as possible. Lsually the disputants recognized it as fair. But in any event they had to accept it. because Gordon was boss. He tried to say it in a nice way, but what he said went.

Looking back now at the wage negotiations of 1950 even the friendliest observers think Gordon didn’t fully realize how different his position had become.

Railway presidents don’t always intervene personally in wage negotiations and. this time, W. A. Mather, CPR president, was inclined to refuse tne unions' request for a meeting.

Gordon would have none of that: “We’ve got to see them, Billy. We can’t let this thing go to a strike without doing everything we can think of to settle it.”

So the meetings took place and went over the same ground which had been covered in previous negotiations and conciliation board hearings for more i than a year. Early in August, Gordon and Mather agreed on a “final offer” which Gordon, as spokesman, would put before the union leaders. Gordon still thinks the men would be better off if that offer had been accepted, but he ¡ admits that “final offers” are not good psychology or strategy in labor reíaj

To make matters worse, Gordon added a few remarks which are still being quoted against him: “Have a care that in winning an apparent victory you don’t damagë your own organization. If you force this issue to a conclusion through imposing on the Canadian public the disaster of a strike then we predict you will live to regret it.”

Gordon meant that merely as a warning against compulsory arbitration by the government. To the union men it sounded like a threat.

Soon afterward, when negotiations had reached an obvious impasse, Gordon suggested they adjourn for lunch and then hold one last meeting on the off chance that some new avenue of compromise might open up. Union men agreed.

During the luncheon adjournment Gordon said to Mather: “Let’s get a statement ready for the Press. Usually it’s the union that makes the statement and puts management on the defensive. This time, let’s take the initiative ourselves.”

So they prepared a statement and had it mimeographed, all ready for distribution to reporters after the expected breakdown of the afternoon meeting. Gordon didn’t realize how his tactics looked to the labor men. how clearly they implied a closed mind on the possibility of further bargaining. The meetings had been friendly enough in tone and Gordon had thought himself j a monument of patience. He was I genuinely shocked at the storm of criticism that descended on his head the minute the strike began.

“Donald rationed food, now he’s ' rationing hours" a typical picket sign read. Labor leaders and rank-and-filers alike denounced his “dictatorial" technique—“Telling us what we’re going to do and what hours we’re going to

Today, even though they are in the middle of new negotiations which may lead to another rail strike, railway labor leaders admit that the 1950 criticism was unfair to Gordon. The worst of it came from people who had not even been present at the bargaining table, and it was aggravated by an internal feud in railway labor unions which tempted rival leaders to outdo each other in invective.

Men like Frank Hall, of the Railway and Steamship Clerks, and other union leaders now speak of Gordon with personal respect and no rancor. But ' they do still reproach him for what they call "rigidity" in collective bargaining, and they hope he has profited by the experience of 1950.

One veteran railroader on the management side, a friend and admirer of Donald Gordon, says: “I think he'll succeed in his new job but if he doesn't, this (labor relations) is the rock on which he’ll founder.”

Be that as it may, Gordon would probably have agreed with this pro! phecy when the strike took place in j August 1950. He felt it wets his job to ! prevent a strike; therefore the str&e !

itself was his fault, his failure. It shook a self-confidence which had never really been shaken before.

His discouragement was linked in a curious way with his grief for his wife. Maisie Gordon used to say to him, only half joking: “I’m your luck.” And Donald, only half joking, believed her. In 1950 it certainly did look as if luck was against him.

But the blackest moment in that black year was one which most people have forgotten, or remember as a relatively trivial and amusing incident. His elder son, Donald R. Gordon, is a Queen's University student who works for the Canadian Press during summer vacations. Just before Christmas 1950 a CNR train was nearly wrecked outside Montreal and the neophyte reporter earned his first by-line with an eyewitness story “By Donald R. Gordon” of the misfortune of a CNR train. Donald Sr. still gets his leg pulled about that.

At the time, it wasn't funny.

Gordon had assigned his elder son to do the Christmas shopping for the family. He himself was frantically busy but he wanted, for the younger boy’s sake, to make this first Christmas after Maisie's death as nearly a normal one as possible. He was very angry (lost his temper, in fact) when Donald Jr. rang up to say he’d changed his plans and wouldn’t be coming to Montreal until late Christmas Eve, too late to buy Chrismas presents. After listening to his father’s blistering comments on this change of plan Donald Ji. said, all right, all right, he’d take the night train.

Hanging by a Hair

About six o’clock next morning the president of the CNR was awakened by a phone call from a distraught station agent: “Number Sixteen has gone through the bridge at Vaudreuil.”

At Vaudreuil the Ottawa River runs fast and deep. If the train had gone through, all four hundred passengers would almost certainly have been drowned and this was the train Donald Gordon had insisted that his eldest son

It was half an hour later, probably the worst half hour Gordon will ever have to go through, when vice-president Stanley Dingle called to say it was a near thing, the train seemed to be hanging by a hair beneath the ties. Its locomotive had ripped away, but it hadn’t gone through and not a single passenger had been hurt. Gordon’s relief was positively painful, like the first breath of a man who has barely escaped drowning.

In view of all this emotional wear and tear it is hardly surprising that Donald Gordon, chairman and president of Canadian National Railways, is not quite the same Donald Gordon so well known as chairman of the Wartime Prices and Trade Board, or deputy governor of the Bank of Canada.

Superficially he hasn't changed a bit. The huge figure with the odd shambling gait (Ottawans used to call him “the man who walks like a bear”), the broad quick smile, the endless fund of Scottish songs and almost-proper stories for convivial occasions, the vast enjoyment of food and drink—all these make you think he’s exactly the same. But men who know him intimately say he's a different man. At Ottawa he was “Donald” to senior colleagues in the prices board and the bank, and indeed to practically everyone he knew. At the CNR he is Mister Gordon to everybody, including vice-presidents.

He was always a stickler for punctuality, but lately he has been known to refuse to see people who turned up a few minutes late for appointments. He

can be impatient to the point of petulance. A month or so ago he was scheduled to broadcast on the CBC, an engagement his own public-relations department had requested. Gordon couldn’t work out a speech that satisfied him, so at the last minute, after publicity on the program had already been sent out. he canceled it.

But among the Gordon qualities which haven’t changed are the tireless industry, the astonishing capacity to ¡ digest new facts, the keen eye for j appraising a new situation, which were famous in the Wartime Prices and j Trade Board. One CPR executive admitted, somewhat ruefully, that Gordon’s experience has probably been more useful to a man in charge of a railway than a lifetime of actual railroading.

“I love to show my ignorance.” Gordon often says. The truth is, he learned long ago to make ignorance a weapon and a tool. Gordon’s persistent “Why do you do it that way?” may sound naive to some, but is wonderfully effective in exposing the obsolete.

Not long after coming to the CNR Gordon noticed an old dilapidated plant which manufactured gas for CNR dining cars and old-style lights. It belonged to a small supply company and it was located bang in the middle of the CNR’s Turcot yard, Montreal, where it created a variety of traffic problems and nuisances.

“Why don’t you buy that place and tear it down?” Gordon asked.

“Well, the owners wanted too much money for it.”

“How much money?”

They told him.

“Why is that too much money? What’s your standard of measure-

Come to think of it, nohody quite knew. It just seemed a high price, that’s all, higher than a fair market

Gordon said: “Give me an estimate as soon as you can of how much it is costing the CNR to have that building right in the way of its operation like this.”

So they prepared an estimate. It turned out that the CNR was paying out every year, in extra unnecessary expenses, seven eighths of the purchasing price of the old gas plant.

Gordon is the first to point out, of course, that this fairly typical incident doesn't prove the CNR is stupid and he brilliant. It merely shows the attitude which twenty years of forced economy has beaten into the average CNR man’s head. Ever since Sir Henry Thornton left it has been a capital crime to spend a nickel, even for the purpose of saving a dime. CNR officials have been taught not even to ask for things unless they’re absolutely necessary.

Gordon is trying to break that tradition. “Stop trying to be president,” he tells his department heads. “Your job is to tell me what you need to run a railroad, not what you think you can get by with. It’s my job, not yours, to decide whether or not we can afford it.”

One of the first things he had to do as president was order some new boxcars. He asked at once how many boxcars were required to give the road all the equipment it needed for ideal operation.

Nobody knew. The idea was not how many boxcars they wanted, but how many they couldn’t get on without. Finally, after much prodding from Gordon and much incredulity from the freight traffic department they came up with an estimated requirement of two thousand cars.

Gordon ordered five thousand. He thought, rightly, that this might help them realize times had changed.

Eighteen months later he was astonished to find on his desk another

request for new boxcars. He asked for details. Why did they need more when they'd got twice as many as they asked for last year? It turned out on investigation that eight percent of all CXR boxcars were out of service, awaiting repair. Gordon kept on looking until he located the bottlenecks that were delaying the repair job, and cut the percentage of out-of-order cars down to three percent. The effect was the same as if he had ordered several thousand new cars, and everybody was happy.

One reason why Gordon finds it easier to spot these things than many

an older hand, perhaps, is that the CXR has never trained men to be allround railroaders. They start in one department and stay there until, in the course of time, they end up as vicepresident in charge of that particular function. They never do acquire any experience in other departments—or, at least, they didn't until Gordon

"It isn't just our company,” c veteran CNR man explained. "The whole railroad industry suffers from what you might call chief-clerkism.” You would look a long time before

finding anyone less like a chief cleik than Donald Gordon.

Fundamentally his attitude is still that of a customer. At his first press conference as CX'R president-elect late in 1949 the six - foot - four Donald Gordon was asked by six-foot-four Ross Munro whether he could do anything to lengthen railway berths. Gordon grinned and said he'd try. He hasn’t been able to fix that particular item, but he has kept an eye on what the public

Not long ago one sleeping car on the overnight Toronto-Montreal run had

trouble with its heating and ventilation system. The car got so hot nobody could sleep: passengers ended the night riding in the baggage car. Gordon made no great fuss about the breakdown itself (accidents happen in the best regulated railways) but he did enquire what the company was doing to soothe the ruffled feelings of those passengers. Had anyone offered them their money back? Had anyone even written them a letter of explanation and apology? If not, why not? Please look after that kind of public relations in the future.

Gordon is also « banker by trade, with a shrewd and sceptical interest in what the public is willing to pay for. He was dismayed to find that railways take no systematic steps to survey their own market, find out what kind of travel accommodation people want badly enough to meet its cost. Instead, they tend to set standards for each other which competition then forces both to meet.

Dining-car service is a case in point. Railways lose about a dollar on every meal served aboard trains. Even at that, they have to charge such high prices that they serve only eight percent of the traveling public: the rest take box lunches or buy sandwiches. Gordon is already trying out a dining-car service which offers no frills, no linen napkins or gleaming tablecloths: instead, plastic dishes and steel cutlery, with a single menu and no choices. It will pay its way. He is also planning an even cheaper cafeteria service for coach passengers. So far. the public’s reaction to the experiment seems favorable. They’d rather be fed rapidly and cheaply than queue up for a luxuryhotel-type meal.

Gordon's reputation as a big man who makes big decisions is nationwide. Late one evening, a year or so ago, the doorbell rang in the fairly luxurious apartment where he lives alone. He answered it himself and found in the hallway an elderly woman whom he had never seen before but who said she had been a friend of his wife.

“I’m in great trouble,” she said, “and I want your advice.”

It turned out she was a Christian Scientist: she had developed some sort of growth which she desperately feared was cancer and she wanted to see a doctor. Her fellow religionists were urging her not to. What should she do?

Gordon was bewildered. “I know absolutely nothing about it,” he said. "I’m not a doctor. I'm not a clergyman, I'm not a Christian Scientist. Why on earth are you asking me?”

"You’re a man who is used to making decisions,” the woman replied, "and that's what I want you to do for me.”

Gordon did. "If I were you I’d go to the best specialist in internal medicine I could find," he said. "I wouldn't let anyone persuade me out of it.”

A few months later his visitor rang him up to say she had taken his advice, had an operation, was completely cured and felt better than she had in years. She was grateful.

Canadian National Railways, having hired Gordon under somewhat similar circumstances for somewhat similar reasons, may already have begun to feel a somewhat similar satisfaction. ★