The Barre daily times. (Barre, Vt.) 1897-1959, 1915-07-12
Canadian Railroads Face a
State Ownership Prop
osition
THE CAUSE OF
:. BORDEN'SsTRIP
Grand Trunk Pacific and
Canadian Northern May
Be Taken Over

Ottawa, Ont July l2,-Canada IS fac
ing a railway crisis. As result, sr
Robert Borden has gone to London to
confer with British financiers-i ,ondon
has nearly $500 100000 invested in Ca
madam railways.
A commission composed of the best
financial and railway brains available III
England and the United States is to be
appointed to report upon the situation,
and the naturalization OF at least two
transcontinentals with their subsidiaries,
such as express and telegraph lines and
terminal elevators, is practically certain.
The undertaking under the existing
conditions is an audacious one, but to
hesitate over assuming the responsible
ity would probably produce conditions
that would materially affect the domin-
ions credit and prosperity.
Fifteen Years ago Canada, in the pic
turesque phraseology of an Ottawa SEN
ator. went on drunk and built railways
indiscriminateiy, with the result that
the dominion has three great transcon-
tinental systems for 100000 people, and
two of them are hard pressed.
The Grand Trunk Pacific, closely al
lied with the Grand Trunk system of
eastern Canada, was a Sir Wilfrid lau-
rier project, begun in 1904 and Just com
pleted The government built the road
from Moncton, n. B., through Quebec to
Winnipeg, and it was to be leased and
operated by the Grand Trunk Pacific for
so years. The Grand Trunk Pacific ex- !
tended from Winnipeg to Prince Rupert !
on the Pacific coast, with a branch line |
to Fort William on Lake Superior, and |
numerous branches on the prairie.
So expensive was the government Sec
ton from Moncton to Winnipeg that the
railway company repudiated its bargain
and left the road on the governments !
hands. Estimated to cost $5l 100000,
the expenditure thus far has been almost
Sl50,000.000, and more is required.
recent investigation by federal
commission showed that nearly $4,000
900 had been wasted. The government
has begun to operate this road. but no
hope of even paying the cost of opera
ton is entertained. 1t has also leased
the Grand Trunk Pacific line to Lake
Superior to get an outlet to the Great
Lakes in order to participate in the
western grain traffic.
Nor is the Grand. Trunk Pacific
much more prosperous enterprise. Built
on federal credit and its branch lines on
provincial guarantees of bonds, there
seems little possibility of its being an
immediate paying proposition. In all, Ii
there are bond guarantees of nearly I
S20O,000,000 by the federal and provin.
cial governments, and the road earnings ,
give little hope that il will be able 20 ,
meet its interest liabilities. Much OF
the bonded indebtedness falls due the +,
latter part of the present month. and ]
Il is considered doubtful in railway and !
financial circles whether the company
win be able to cope with the situation. !
Default in payment would be extreme
~ dangerous for the dominion's credit. :
A. Canada is, and will be for years TO =
come, a borrowing nation, and the Eu-
ropean investor would be driven from ="
the country If such failure came about. ,
he provincial governments could not as. =,
sumo their bond liability, and the whole :
burden would fan upon the federal treas :
nry.
The Canadian Northern railway i not
IN a much better position. although If u
hat system can tide over the present
oppression. its low capitalization and ex. 6
Silent territory which it serves give 2
promise for future success denied the q
,ther new transcontinental with its bur I,
iensome fixed charges. lis keen competi- =
ors and lack Of feeders which preclude a o.
treat traffic.
More than a year ago the Canadian
Northern was in financial straits, and in !.
eturn for a bond guarantee the federal a
government took 80 per cent. Of the stock