The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1921-04-15
HUGE DEFICIT OF CANADIAN
GOVERNMENT RAIL WAYS

The Railway Age publishes in it's
current issue an article by J. L. Payne,
formerly controller of statistics of the
department of railways and canals of
Canada, which shows that with the
same, advances in wages and rates in
Canada as have been made in the
United States, not a single one of the
railways composing the system owned
by the Canadian government earned
It's operating expenses last year,
and that the government system
has incurred a deficit per capita which,
applied to the population of the Unit
ed States, would be equivalent to over
$500 100000 a year.
Mr.. Payne's article says the Rail-
way Age, "discloses a situation which
should be very interesting and ex-
tremely instructive to the people of the
United States at the present time
Owing to the excessive operating
expenses and the unprecedented de-
cline of freight business, the railways
of the United States have been doing
very badly financially since the pres
ent freight and passenger rates We're
fixed. Many persons have persuaded
themselves and are trying to persuade
others that the only solution of the
problem presented is to return our
railways to government control.
I'm Canada, SO per cent of the rail-
way mileage is owned and operated
by the government. and the other 48
per cent, which is made up almost en-
tirely of the mileage of the Canadian
Pacific, is privately owned. The same
advances in wages and increases of
rates have been made in Canada as in
the United States. The Canadian rail-
ways, fortunately, have not had APP
piled to them the national agreements
with the labor unions that are in eff
feet in this country.
feet in this country. Under these con-
ditions as Mr.. Payne shows, not a sin
gle railway of the system owned and
operated by the Dominion governments
earned it's operating expenses. Their
expenses were from 109 cents to 40
cents for every dollar they earned.
While the minister of railways has
conceded that the government system
had deficit last year of over $40
100000 Mr.. Payne, who was formerly
controller of statistics of the depart
ment Of railways and canals shows
that a proper allowance for interest on
the total cost of the railways would
make the deficit $140 900 900. This is
$3.50 for every man, woman and child
of the cOuntry's population. An equal
" large deficit per capita for the rail-
ways of the United States would be
81, 1900. 900. 1t must be borne in mind
also, that this deficit was incurred by
only half of the railways of Canada.
"AIl railways of Canada have been
very adversely affected by the increase
in operating costs, Unaccompanied by
advances in rates. The Canadian Pa
cific, however, under private operation
succeeded in keeping it's expenses down
to IS cents for each dollar of earnings,
and had net earnings of $4,000. 900.
The present mana cement of the Cana
dian government lines is not RESPONSE
Bile for the bad financial results. They
are partly due to unfavorable c0ndi-
lions which are affecting all the rail-
WAYS of the United States and Canada.
and partly to the extremely unwise
policy which the Canadian government
has followed for fifty years in building
and operating state railways in disre-
gard of sound business principles. Ger
tainly, however, the comparative re-
suits of government and private opera
ton in Canada suggest anything but
the desirability OF cOnsiderati ton Of a
return to government operation in the
United States. What they do very
forcibly suggest is the imperative need.
in both countries. Of government aid
to the railways. whether under public
or private management, in bringing
about a reasonable relationship be-
tween operating costs on the one hand
and earnings on the other hand"