Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1916-06-15

other lines that charge the same rates.
Because of the original location OF
the Intercolonial," Mr. Dunn says.
and the persistent error made in not
reducing its length, its mileage be-
tween Halifax and Montreal is S37
miles, while that of the Canadian Pa
cific is only 75S miles. From st. John
to Montreal by the Intercolonial is 740
miles, by the Canadian Pacific only
4S3 miles. The Intercolonial in moving
a ton Of freight from Halifax to Mon
treal carries it 10.4 per cent more
miles than the Canadian Pacific; and
| in moving a ton from st. John to Mon
treal carries it 53.2 per cent more
miles.
The losses of the Intercolonial are
due partly to the lowness of its rates,
| but more largely to other causes. The
conclusion that least two-thirds OF its
| losses are not due to its rates suggests
that they must be due to uneconoml-
cal management. In this connection
stress must be laid on the fact that
| the cost of providing railway service
| necessarily includes capital expenses.
as well as operating expenses. In
| 1914 the cost of construction of the
| Intercolonial was officially reported as
| S70,S15 a mile. Interest on this at 4
per cent is 1888. Added to operating
expense per mile, as already indicated,
of 81, SAL. Taxes on the same basis
as those the Canadian Pacific paid
would increase this to $l1,671. The
| Canadian Pacific eastern lines, for
each mile of line operated, collected
Is per cent less than this from the
public, while handling only 6.5 per
cent less traffic per mile; they paid
taxes; and they earned S1,575 net op
Grating income per mile; and the Can
adian Pacific system, as already lndl-
Gated, not only paid interest, and dlVl-
dends, but had surplus. To have PAID
4 per cent interest, and paid taxes and
put aside surplus in the same proper
ton, the Intercolonial would have had
to collect from the public $1,000 for
each mile of its line, or IS per cent
more than the Canadian Pacific east
ern lines did.
ut is clear that the service of the
Canadian Pacific, while profitable to
its owners, costs the public much less
in proportion than that rendered by
the Intercolonial And the expense of
it is more equitably distributed. 1t is
all paid by those who receive the ser
vice, while only from one-half to
three-fourths of the total expenses in
Cured by the Intercolonial are borne
by those who receive its service. The
rest is borne by the taxpayers.
The question naturally arises as u
why the total expenses of the Inter
colonial are so great. Its cost of con-
struction investment in it's ex
cessive according to the standards of
!. Canada and the United States. The
!, average capitalization of the railways
: of the United States in 1914 was only
s66, 1851; and an average mile of Their
line was much better piece of prop
) erty and handled substantially more
traffic than an average mile of the
IntercolOnial The average capitali-
| cation of the private railways OF Can
F. ada, excluding Implications, was $53,-
SO The explanation OF the intercol-
onials large cost Of construction mus
! be that expenditures on it have been
: made wastefully, or that its accounts
have not always distinguished accur-
ately between expenditures for con-
: struction and operation
Analysing the operating expenses of
: the Intercolonial, Mr.. Dunn finds that
while its traffic was about SIS per cent
greater per mile than that of the Can
adam Pacific, it spent less in 1914 on
the upkeep of its tracks and structures
inthan the Canadian Pacific, but 13.J
per cent more for maintenance OF
j, equipment" 16.5 per cent more for
traffic expenses" 1875 per cent more
for conducting transportation" and
80 per cent more for general ex-
5 penses" per mile. One of the surest
indications of uneconomical and ineffi
= cient management" he says, lis that a
road is spending a relatively small
; part of its earnings for maintenance
and relatively large part for con-
Quoting transportation and for general
: and traffic purposes. What is spent for
maintenance goes into the physical
: property and helps to keep up or i'm
prove the service, while what is spent
for conducting transportation and for
general traffic purposes adds nothing
to the physical property, but is gone
forever
The major cause of these results,
says Mr.. Dunn, has been the influ-
ence of politics. The prevailing low
rates have been made as sop to the
people, and especially to the French
population, of the eastern provinces
1t was formerly customary for the
party in power to buy railway sup
plies only from its supporters. 1t was
common practice largely to increase
: the number of employees some weeks
before election, and every officer OF
the road frequently had the expert
ence of coming to his Office and find
ing among his subordinates the faces
of men he had never seen before, and
who had been put on his payroll at
the instance of politicians. Political
influence was used not only to secure
excessively large and expensive pas
senger stations, but also unnecessary
and Improbable passenger and freight
service"
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