The Washington times., 1917-05-03
PLAN FAVORS MERGER
OF CANADA'S RAILWAYS


| OTTAWA, May 3.-Canada Is of.
fered a solution OF her railroad prob.
lem in a unique plan put forward BY
the Royal Commission appointed tC
inquire into the railways and trans
portation. which, was made public
here today. The plan provides for
uniting all Canadian railways. except
| the Canadian Pacific into a single
! system in the hands of a new com
| pany, to be called the Dominion Rail-
way Company. 1t is proposed tina,
the ownership shall be vested in and
/ the operation conducted by a board
| of public trustees on account of and
for the benefit OF the people OF Can
ada on a commercial basis under its
own politically undisturbed manage
ment
The report which analyses the
transportation situation of the Dom
inion in detail, is submitted by Sir
II. l.. Drayton and W. NJ. Acworth, as
majority members. but is not signed
by the third member. 4. II. Smith.
president OF the New York Central
lines, who will submit a separate re-
port differing in some conclusions
form his associates.
The report discloses a n unuual state
recommendations made. 1t finds that
more railways have been built than
are warranted on commercial grounds
under present conditions 1t points
out that while the development OF
Canada justified two trRnscontinental
lines il did not Justify three and
that the Grand Trunk and Canadian
Northern systems should have been
amalgamated.
Can't Meet obligations.
Although both roads are nominaIly
private companies. more than three
fourths Of the capital OF the Canadian
Northern and nearly two-thirds OF
that OF the Grand Trunk Pacific has
been either provided or guaranteed
by the Dominion and provincial gov
ernments and municipalities. In
spite of this lavish assistance these
Two companies cannot meet their H.
aollities from their resources and are
living from hand to mouth on public
advances made monthly as liabilities
accrue. The liability OF the Grand
trunk railroad under its guarantees
10 the Grand Trunk Pacific is found
10 amount to over $1,000. 900 a wear
ana It's accumulated arrears of main
tenance amount to S2I.OOO. 900.
Inc commission expresses its belief
thst much new capital expenditure
can be avoided. by combining thes.
three companies into a single system
II finds that the Grand Trunk needs
Immediately to expend S51 900 600 In
order to put its own system into p
position to provide adequate service
ana that it is entirely unable to carry
the burden which IL has undertaken
In respect of the Grand Trunk Pa
cine; further, that the Canadian
Northern. If IL remained as a separate
system. would require $4,000. 900 OF
new capital within the next Ave years
summary OF the financial re
quirements Of the companies men
toned shows an estimated annual
deficit OF S12,5O0.00O TO be met at the
present time. The report concludes
that It Is not possible to form a pri-
vste company or companies to carry
this burden.
Against Public OwnershIp.
The commissioners do not regard
government ownership of Canadian
railways as the solution of the prob
lem. On this subject they say:
"In our judgment 1t Is not in the
interests of Canada that the opera
tion of its railways should be in the
hands of the government We know
no country in the world where
state owns and operates
its railways, in which politics has not
injuriouSly affected the management
of the railways and the railways have
not had an injurious influence on
politics.
I'VE do not think government own
ership Of the Canadian railways would
tend tn reduction of rates. but rather
in the contrary direction. For the
carriage of one ton OF freight one
mile the Canadian shipper pays at
present on the average three-fourths
NJ cent. On the railways OF New
South Wales. the oldest and most i'm
portant Australian state, where the
railways have been in government
hands from the outset. the shipper
pays well over 2 cents. But we see
no cause to enlarge here on such gen
rral considerations. There are sew
eral reasons peculiar to Canadian con
iitions why state ownership and ope-
ration should be avoided"
One Of the special reasons against
the extension of Government opera
tion. in the opinion OF the commits
si0ners, IL tndt III lhlTHcbs II Noulu
require the Government to purchase
The Canadian Pacific. which otherwise
might be ruined by competition in
rates by a Government with the tax
payer behind II.
Lines 10 States.
Another strong argument against |
operation" the report |
continues, lis to be found in the fact |
that the three great Canadian COM !
panies amongst them either own, |
ease, or control, no less than 1000 |
miles of railway situated in the |
United States. And some at least OF |
these lines are necessary economic |
Of the Canadian systems. |
L is clearly impossible that the Do
ninion government should be subject
ID. not only TO the regulating au-
hOrity Of the Interstate Commerce |
and the several street /
commissions Of the United |
states. but also to the police regu-
ations Of all the States which these |
ines enter. We cannot think that
'uch a situation would cOnduce TO
harmony"
As the only feasible alternative the