Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1905-09-27
When. ecvernn ent Ownership Fails.

nanciaI failure of the government own
ership of railroads. The statement is
made by the Canadian minister of rail-
ways, Mr.. Emmerson. that the lntercol-
onial Railway, owned and operated by
the Canadian Government, was run
during the past fiscal year at net
loss of about 81. OOO. 600, and that amount
will have to be made good out of the
revenues of the Dominion, imposing an
additional burden on the taxpayers.
Mr.. Emmerson was not able to express
the hope that deficits can be avoided
in the future, but seemed to regard
them as inseparable from the govern
mental management Of the line.
On account of the similarity of eco
Eomic conditions in Canada anu III the
United States, and of the advocacy OF
governmental ownership and operation
| in this country, Mr.. Emmerson's state
ment has unusual interest. especially in
so far as it throws light on the reasons
why the Intercolonial Railway has fail
ed to earn enough to pay expenses. He
attributed the deficit in part to in
creased operating expenses and partic-
ularly to increased wage cost. Aside
from the question as to the relative ef-
fciency of labor on the Government
road and on other lines, Mr.. Emmerson
said:
THE very moment you increase by
even d farthing, the wages of any of
the employees, you have what is prac-
ticLlly not controllable element: that
is to say, it becomes fixed charge.
lou can never reduce. A government
railway never could
Mr.. EmmerSon has found that the
compensation of government employees
OH the Intercolonial Railway. lust like
the compensation of government en-
pioycs generally, can be changed in on
ly one direction. Their compensation
can be increased but it cannot be cut
down. That has certainly been the OK
perience in the United States with all
classes of public servants. and there is
10 reason to believe that employees oil.
government railways would be an ex-
ception if the policy advocated by Mr..
Bryan should be adopted. In times Of
of men in all lines Of business is cur
tailed. the government employe alone is
exempt. There is neither any reduc-
| ton in the working force nor any seal
| ing down Of wages. This would be the
condition on government railways.
| Traffic might fall off and the general
| level of wages might be such as TO war
| rart reduction in force and in wages.
| but there would be neither on a govern
mcnt line, and the wage cost of oper-
| ating it would be the same as in times
| of the greatest prosperity when the
line was working to the fullest capaci-
", while the deficit to be made up by
the taxpayers would he swelled in pro.
portion. The government line could not
| reduce freight charges in such times
| for the reason that its managers would
be under obligations to keep the deficit
| down to the lowest possible level and
| they would have to earn as much us
possible on the decreased volume of
| traffic.
| Mr.. EmmerSons statement well il
Illustrates the tendency of all transport
tation charges made by governmental
agency to become petrified. whether the
government actually operates the rail-
way line or only rrescribes the charges
He said: Il think l can say frankly
that there is no subject upon which the
people are more sensitive that that OF
increasing freight rates on a govern
ment railway. From one end of the
railway to the other, from the Sidneys
to St John. and from Halifax to Mon
treal. the very moment the suggestion
of an increase is made. that moment
you meet with opposition. That is nee
| tSSdlEy tIS oulIoIit VI
operation of railways" A writer III tn,
| New York Journal Of commerce dis
cusses the report of Mr.. Emmerson
concluding as follows:
Where rates are made by govern
mental authority il is next to impoSSi-
bic to advance them, even though
| commercial conditions are such as t.
Justify such advances. 1t is almost as
difficult to reduce governmental rates
as it is to advance them. This has beer
the experience of Germany. where
since the government acquired the rail-
way lines. rates have remained at the
same high level that prevailed when
the lines first passed under government
tai control. and where much of the
traffin that would otherwise go by rail
has been driven to the rivers and ca
nails.
"In slightly less degree the same
difficulty has characterized the expert
ence Of Great Britain since the passage
| of the Acts of 1891 and 1894. These
| Acts have left the British railways abb
solutely free to lower their charges. but
| eIery increase is subject to review by