Evening journal., 1916-06-15

lonial by the Dominion government
has covered AZ years. The official fig
ures show that in 22 of these its earn
ings have exceeded its operating ex-
penses its combined net earning in
these years having been 81 .967, 900. In
the other 25 years its operating eX-
penses have exceeded its earnings
and its combined deficits from opera
tion in these years have been over
81, 100000. Therefore, under govern
ment management its net deficit-al-
lowing nothing for taxes nor interest
has been $9.500,000. Still worse
has been the plight Of the Prince Ed
ward Island. The deficits from op-
Grafton Of the two roads under gov,
ernment management have been $l2'-
100000.
There is in Intercolonial history a
minor illustration of the fact thai
government ownership is less fatal tc
financial success than government
management. The Windsor branch, a
part of the road 30 miles long, Is
owned by the government, but has
been operated under lease by private
companies since 1881. Since 1911 II
has been operated under lease by the
Canadian Pacific. In every year bui
one since 1881 the government ha
received net earnings from it. The
net earnings OF the branch in the ag
gregate from 1881 to 1914. were 1862.
555; and they account for more thar
one-third of all the net earnings the
Intercolonial has made since 1867
The average rates per mile
Of the Intercolonial are showr
to be lower also than those
are shown to he lower ais othan those
Of the Grand Trunk and the Canadian
Pacific, which operate in the same
territory. but the. road was built II
such a location that its mileage be
tween points at which it cOmpete'
with the other lines is so mucf
greater that its average rates pei
mile are less than those of the othel
lines that charge the same rates.
Because of the original location o
the Intercolonial," Mr. Dunn says
"and the persistent error made in no
reducing it's length, its mileage be
tween Halifax and Montreal is S37
while that Of the Canadian Pacific Is
only 75S miles From st. John t.
Montreal by the Intercolonial is 74'
miles by the Canadian Pacific, only
4S3 miles The IntercolOnial in NOV
ing a ton OF freight from Halifax t'
Montreal carries it 10.4 per cent
more miles than the Canadian Pa
cific: and in moving ton from st
John to Montreal carries II 53.2 pc
cent. more miles.
'"The losses of the lntercolOnial arr
due partly to the lowness Of its rates
but more largely TO other causes. Th'
conclusion that at least two-third
of its losses are not due to its rate
/ suggests that they must be due to un
economical management. In this con
nection stress must be laid on tn
fact that the cost of providing rail
way service necessarily includes cap
ital expenses, as well as operating eX
penses. In 1914 the cost Of construc
ton of the Intercolonial was OFFICIALLY
recorded as S70,S15 mile. lnteres
on this at 4 per cent. is S2.S33 Adde'
TO operating expenses Of SS.7lS, TN
makes a total expense per mile, as al
ready indicated, Of s11,541. Taxes oi
the same basis as those the Canadian
Pacific paid would increase this Il
S11.671. The Canadian Pacific east
ern lines. for each mile of line op
Grated, collected Is per cent less thal
this from the public, while handlini
only 6.5 per cent. less traffic pc
mile; they paid taxes; and they earn
ed s1,573 net operating income pc
mile: and the Canadian Pacific sys