The sun., 1919-07-22
NEW CABINET GIVES
HOPE TO RAILROAD
Grand Trunk Expects to Es-
cape Government Owner
ship Threat.

| Special Correspondence TO the Canadian
| Section Of THE Sun.
| MONTREAL. July Entertainment has
| risen, and the existing Borden Cabinet
has performed its last official act; for
| 1t Is definitely known that within week
or two a reconstructed and greatly al
! tered Cabinet will take over the bust
/ ness OF the country and send its new
members. according to constitutional
DIT actice, to seek election or reelection
at the hands of the most promising con-
| stituencies that can be found and made
vacant.
The old Government having thus
come to an end without taking any ac-
! ton about the threatened nationalist
tion of the Grand Trunk Railway, there
Is distinct hope that the new Cabinet
which Is expected to contain pretty
strong sprlnkling OF real business men,
will prove less addicted to public own
ership practices, and will allow the
Grand Trunk to remain in possession OF
its property and effect some reasonable
compromise of its liabilities under the
Grand Trunk Pacific guarantees.
The question OF an increase in rail-
way rates, based on the present operat-
ing cost (Which shows no signs of pros
pcctlve abatement) is beginning to oC-
cupy the minds of the financial COM
munity again. Unfortunately ii Is not
altogether under Canadian captrol. So
long as the United States continues to
carry on the business OF land transpor-
tation at the expense Of the taxpayers,
and not OF the users of transportation.
so long will Canada be under strong
lat. to- To-
ether words, the influence Of American
railway rates upon Canadian railway
rates is about as potent as the infiu-
ence of American railway wages upon
Canadian railway wages-and the lat
ter is absolute. II was not of much
use, therefore. for Canadians to begin
considering a general and pronounced
Increase in railway rates until the
United States showed signs of consider
ing the same thing. Canadians are con-
sequently much interested in dispatches
which suggest that the question is
again coming up in Washington.
The railway deficit in this country oc-
ours wholly at the expense OF the tax
payers and OF the various classes of
share holders (almost all Rritish) of the
Grand Trunk Railway. The deficit on
the Government lines-after payment of
the bond interest of the Canadian North
ern and the Grand Trunk Pacific, but
without any ether allowances of interest
on capitals estimated for the current
fiscal year at S2S,000.000 Any addi-
lions to the revenue of the Canadian Pa
cifc Railway resulting from increased
rates. would. under the ingenious taxa
ton law Of year ago. pass into the
national treasury instead of into the
pockets of the railway or it's share
holders. up to the point where the opei-
atoms OF the special tax are exhausted
The Grand Trunk alone and a few very
Insignificant local roads would produce
any benefit for private owners from an
increased rate schedule, and possibly
even the Grand Trunk could be induced
to surrender a portion of its benefits
through an agreement for the settlement;
OF the Grand Trunk Pacific problem.
Tie announcement of the s2S.000,000
Government railway deficit has perceptl-
hly slacllened the enthusiasm for extern
sion Of Government ownership. especially
In the east OF Canada-which. be il
noted. pays most of the taxes, while the
west, with its ''long haul" gets most OF
the benefit from low freight rates