New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-05-03

under present conditions. 1t points
out that while the development of
Canada justified two transcontinental
lines il did not justify three, and that
the Grand Trunk and Canadian North
ern systems should have been amalga-
mated.
Lavish State Assistance
Although both roads are nominally
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 governments
and municipalities. In spite Of this
lavish assistance these two companies
cannot meet their liabilities from
their resources and are at present liv-
ing from hand to mouth on public adj
vances made monthly as liabilities &C
crue. The liability of the Grand Trunk
Railroad under its guarantees to the
Grand Trunk Pacific is found TO
amount to over $5,OOO.OOo per annum
and its accumulated arrears Of main
tenance amount to S21 ,OOO, 900.
The majority members of the COM
mission express their belief that much
new capital expenditure can be avoided
BY combining these three companies
into a single system. Their report
finds that the Grand Trunk needs i'm
medately to eXpend s5l, 100000 in or
der TO put its own system into posi-
tion 10 provide adequate service, and
that il is entirely unable 10 carry the
burden which it has undertaken in re-
spect of the Grand Trunk Pacific; fur
Their that the Canadian Northern, il it
remained as a separate system, would
require s70,000,000 of new capital
within the next five years. A summary
Of the financial requirements of the
companies mentioned shows an esti-
mated annual deficit of s12 800 900 to
be met at the present time. The re-
port concludes that it is not possible
to form private company or compa-
MES to carry this burden. The major
ity do not regard government owner
ship of Canadian railways as the So
luton of the problem.
Government Operation Opposed
One of the special reasons against
the extension of government opera
ton, in the opinion of the commission
ers, is that in fairness il would require
the government TO purchase the Cana
dian Pacific, which otherwise might be
ruined by competition in rates by
government with the taxpayer behind l..
Another strong argument against
government operation" the report cor
tnues, "is to be found in the fact that
the three great Canadian companies
amongst them either own, lease o.
control no less than 1000 miles OF rail
way situated in the United States. And
some, at least, of these lines are nee
essary economic compliments of the
Canadian systems. II is clearly impos
sible that the Dominion government
should be subjected, not only TO the
regulating authority of the Interstate
Commerce Commission and the several
state railway commissions Of the United
States, but also to the police regula-
tions of all the states which these
lines enter We cannot think that such
situation would conduce to interna-
tional harmony"
AS the only ledhlDle TIC
report recommends that the Canadian
people take over the control of the
Grand Trunk, Grand Trunk Pacific and
Canadian Northern; that they be
united into one system, which IL is
proposed to call the Dominion Rail-
ways. and that they be operated by a
board of trustees, who would acquire
the stock Of the three companies and
maintain the rights Of bond and de-
benture holders undisturbed. The gov
eminent would enter into no direc-
relation with security holders, but
would undertake toward the trus-
tees the obligation 10 find any nee
essary margin between fixed charges
and net operating income. IL is pro
posed that the Intercolonial and the
National Transcontinental railways,
which are now operated directly by the
Canadian government, be handed over
20 the trustees and operated as part Of
the Dominion Railway. The report
recommends that the trustees be pro-
hibited by act of Parliament from
making any general reduction Of rates
until their property earns a reasonable
net return.
Against Public Ownership
The trustees would be named in the
first instance by the act Of Parliament
creating the board, which thereafter
would be self-perpetusting, except that
further nominations by the board
would require confirmation by the
Governor General in Council The trus-
tees would serve for periods Of seven
years and be eligible for denomination
and reappointment. The report sug-
gests that three of the five should be
men OF railway experience. while one
Of the others should be selected on
the ground OF experience in financial
and business affairs and the other as