IN A BAD WAY

Evening Post, Volume CXIII, Issue 2, 4 January 1932, Page 8

IN A BAD WAY

RAILWAYS OF CANADA

ROYAL COMMISSION

MONOPOLY FORECASTED

(From "The Post's" Representative.) VANCOUVER, 9th December. If every year was a boom year, like 1925, there would bo room in Canada for two transcontinental railway.", each with its individual hotel, telegraph and express system, and its service of ships in the Atlantic and Pacific. For only in the year 192S did the Canadian Pacific and Canadian National pay their way, the one declaring it's usual dividend of 10 per cent., the other just meeting its fixed charges. But lean years have followed, until the C.P.E. was forced, for the first time, to suspend its dividend, and the Canadian National reached a stage which in commercial circles would be regarded as bankrupt. Here is the position to-day:— ■ From 1928 the revenues of the two Canadian railways dccliued £.40,000,000. A revenue decrease of £16,000,000 in the two systems this year is expected. The complete disappearance of the C.P.R. dividend is foreseen; the C.N.E. is expected to pay little (if any) toward £11)000,000 interest charges this year. HUGE CAPITAL INVESTMENT. The two railways in Canada represent an investment of £440,000,000, which ten million, population must sustain. There is one mile of railway for every 250 persons in Canada. The cost of the C.N.B. to date is £531,000,000 —more than one and twothirds the cost, of the war and demobilisation to Canada. Those facts wore bared in all their stark, significance by the Minister of Hailways, Hon. Dr. Manion, before a Federal Royal Commission whoso members include the best railway experts of England and the United States. It would not be difficult to forecast the principal findings of the Commission at the commencement of their investigation. The facts imply their judgment:- it is impracticable to have a State-owned and a private-owned system Th "competition with each other. The country is therefor© ready to learn that the two systems must be merged. How such merger may be consummated, in fairness to all the interests involved, one leaves to the Commission to suggest. Assuming both railways to be an economically sound proposition, their problem is threefold: over-production, under-consumption, and competition by motor buses and motor trucks. Canada is, at the moment,' over-equipped' with railways. Competition, Government subsidies, and exuberance of the contractor type of railway magnate have provided her with more miles of line per head of population than any country in the world. The Dominion has less than 250 people per railway mile, compared -with 500 per mile in the United States, 1700 in. Germany, and 2000 in Great Britain. This overproduction presents a curious problem, for, while it might pay to abandon some of the existing lines, public opinion would oppose such a course. The under-consumption lies in the fact that the railways are receiving 40 per cent, less revenue to-day than they did in 1928. The competition of the motorvehicle leaves the railways on a losing side. They are subject to heavy charges that do not affect the motor bus or truck. An equitable system nrnst be devised, or the- railways must run their own highway transport service. A HISTORIC BLUNDER. A historic blunder was made when the Federal Government took over the defunct Grand Trunk Pacific and ran it as the Canadian National as a publicowned utility. It paid no taxes, and competed with the C.P.E., which is the highest taxpayer in the Dominion. Parliament voted its funds out of the public purse. The C.P.B. must look to shareholders for new capital. The anomaly grew worse when the C.N. went into the steamer and hotel business. It built steamers and hotels— "white elephants" in these distressing days—from, funds provided by thn Treasury. No one is to blame. Both Liberal and Conservative Governments continued the liability. If the C.P.K. had been allowed a monopoly, there would have been no railway problem to-day. It was, mainly, tho fear of such a monopoly being created that drove successive Governments to boost the Canadian National Eailway at the expense of tho people. The C.P.E., whose rail and steamship equipment is among the world's best, considers it has not had a fair deal in competition with the Government. But the end is in sight. There will be one system in future. How this will be brought about, no one ventures to suggest. . ..__,___;___