STATE CONTROL

Shannon News, 1 July 1927, Page 3

STATE CONTROL

Its Application to Railways COSTLY LUXURY (By Taxpayer.) 'ln the days of iny political youth —many, many years ago—l should have laughed to scorn such a statement as the one made by the president of the Canadian Pacific (Railway Company a little while ago in a communication to one of the business magazines of his own country. The slogan of my Socialist friends — the nationalisation of the means of production, transportation, and exchange—had seemed to me the very foundation of just and effective legislation and administration. Wider experience and closer observation, however, have satisfied me that, human nature being what it is, and politicians what they are, it is only in rare instances, and in exceptional circumstances, that the public can be as well served in the, ordinary activities of life by “State Enterprise” as it can be by "Private Enterprise.” In tlio public utility services, so to speak, the Post and Telegraph Department. the life and Fire Insurance Departments, and the Public Trust Department are the only, exceptions to this general rule that ■ come readily to mind. Tho Rail- I way Department probably would be included in this list of exceptions by many 1 observers, simply because .the means of transportation must not be left to the whim of individuals and companies; but the experience of older countries has shown that ' with adequate safeguards this service may be left safely to private enterprise. A Lesson From Canada.

In this connection it may be helpful to examine for - a moment what is happening - in Canada.’ The Canadian Pacific Railway Company owns and operates 20,000 miles of track across the Dominion of Canada. The Canadian Government owns and operates 22,000 miles of track (the National Railways of Canada) across the same wide stretch of territory between the Atlantic and the Pacific Oceans. These two railroads are competitors for the transcontinental and for much of the local transportation business of the Dominion. They both are operated for the basic purpose of making a profit for their owners. The Canadian Pacific is privately owned by its shareholders, the National System is publicly owned by the taxpayers of the Dominion. The statement of the president of the Canadian Pacific Railway Company, which I have just mentioned, deals with the outcome of the competition between, these two great undertakings. The Canadian Pacific (it runs) is the largest taxpayer in Canada. Thus, the greater the deficit of the National Railways, the greater the tax-burden on tho Canadian Pacific. On the other hand, if the National Rail-ways prosper by the diversion of traffic from the Canadian Pacific, from the Canadian Pacific’s loss will be greater than tho taxes -would have been. Again, the greater the Canadian Pacific’s profits, the greater will be its taxes, and hence tho larger its contribution to. its rival. The public enterprise gets the private enterprise coming . and going. Through the power of taxation, to meet the cost of Government, private enterprise, private industry and private thrift are compelled to pay for public enterprise, public mismanagement, and public extravagance.

And notwithstanding all this, the Canadian Pacific- is regularly paying dividends to its shareholders, while file National System is as regularly declaring deficits. Evading Responsibility.

There is no very close resemblance between the "railway position in Canada and (he railway position in New Zealand; but hero, in spite of the absence of competition from any rival system, deficit is following' upon deficit with depressing regularity. Since the financial year 1920-1921, with the exception of the year 192324, the/'expenditure has exceeded the receipts, and the year just closed will show a deficit of over half a million. Changes of management and changes of methods, have followed upon one another with almost bewildering frequency and yet none of them seem to have stayed tho downward' tendency. A couple of years ago the authorities conceived tho idea of charging tho iosses on the non-paying branch lines to the Consolidated Fund and Parliament, probably without understanding what the whole business meant, meekly passed a large slice of the troubles of the management on to the shoulders of the taxpayers, great and small, without regard to their ability to pay. In the first year the tax —as the "subsidy” as well may be called — amounted to £359,546, in the second to £445,222, and, with the railway authorities relieved of responsibility, is not likely to develop a downward trend in the near future. These nonpaying lines are heritages from former generations of politicians, and the present Government, at any rate, is not responsible for the straits into which . they have fallen; but

tlmre still are on tho list of railways authorised by Parliament a number of" lines which inevitably would fall Into the same category were the present Government, or any succeeding Government duv<ng the next twenty years, foolish enough to proceed with their construction. Half Way. If tho sale of the State railways is a too startling proposition for the Dominion to entertnin at the present time. Parliament at least might take some steps, apart from the appointment of Commissions ' and the preparation of reports, towards the construction of a scheme of management that would eliminate tho Importunate policician, restpiin the aggressive deputation, and fortify the beseiged Minister of the Department. The appointment of a highly qualified board, freo from ministerial control and with the full powers and responsibilities possessed by 'the management of a privately owner railway system, would be a long step towards placing the lines on an efficient and a money-earning basis.