New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-09-11

moro thickly settled sections Of Cam
ada where land values ane high. where
high standards Of railway building are
necessary and where yards, station
buildings. sidings, etc., are more nearly
comparable to some of the United
States railroads in the East than to the
Canadian Northern. However, there
stu remains the contrast between q
funded debt of $4,000 a mile and one Of
$4,000 a mile.
The arbitration board which has just
made the award in the Grand Trunk
case consisted of Sir Walter Cassels,
chairman; Sir Thomas White, chosen
by the Canadian government, and Will
liam Howard Taft, chosen by the Grand
Trunk stockholders, now Chief Justice
OF the United States Supreme Court.
The majority of the report was signed
by the chairman and Sir Thomas White,
and Mr.. Taft wrote a dissenting opin-
ion 1t would have been difficult to
tind three men better qualified to act
as impartial, fair judges in matter of
this kind. Sir Walter Cassels is q
Canadian lurist of the highest reputa-
ten, and Sir Thomas White, former
Finance Minister of Canada, is GEN
orally considered a statesman rather
than politician, In his minority
cific value for the Grand Trunk stock
but dissents in general from the
methods and findings Of the majority
members of the board Mr.. Taft was
IN favor OF valuation of the property
and. OF course, due weight to replace
ment value, whereas the majority re-
pert lays the principal stress on earn
ing power of the property.
one OF the principal claims Of the
Grand Trunk is the moral obligation
which they tried to fix on the Canadian
government. AS an Offset to this the
government urges, with considerable
snow OF reason, that any moral obliga-
lions which may have existed were
cancelled through the failure Of the
Grand Trunk to live up to it's agree
ment to operate the National Trans
continental and to meet it's guarantees
on Grand Trunk-Pacifc bonds.
Question Of Policy
Whether or not Canada would be
wise in carrying out the award of the
Arbitration Board and refusing to al
low the English stockholders anything
is question which will presumably be
fought out in Parliament. Involved
thereln IS first a question as to the eff
feet such q decision would have on
Canadian credit in England and sec
ondly, the effect that it would have on
Canadian credit in the United States.
While probably some Of the claims of
English security holders of the Grand
Trunk have some justification at least
IN SO lar as they relate to Canadian
politics, these claims ignore the history
OF the relations between the Grand
Trunk and previous Canadian govern
nnents. The Grand Trunk has been
managed from London since President
Hayes lost his life on the Titanic and
it is pretty generally conceded even Yer.
by nglish holders Of Grand Trunk
stock that the management has been
arbitrary and has not been free from
the evils attendant on any absentee
landlord management. Whatever the
facts in the case may be, however,
English financial opinion is said to be
generally in favor Of the claims of the
Grand Trunk stockholders. That be-
ing go, 1t is quite possible that Cana
da's credit would be temporarily hurt
by treatment Of the Grand Trunk
be just, would not be particularly
generous.
1t does not follow that 1t would have
the same effect on New York finacial
opinion. 1t is believed pretty generally
in downtown New York that the finan-
cling that Canada has done in respect to
Dominion issues, Dominion guaranteed
issues and issues Of the provinces has
been on a fair, businesslike basis and
has met with favorable reception from
American investors, especially in COM
petition with other foreign government
financing in this country.
Whether Parliament will eventually
decide to pay Grand Trunk stockhold-
ers or not, such Grand Trunk Equipment
trusts, etc, that are held in the States
will not in the least be adversely af
fected by the arbitration boards de-
cision. The purchase act and agree
ment make the Canadian government
responsible for these securities.