Evening journal., 1922-03-11
cANADls GOVERNMENT OWNERSHIP LOSSES.

Il the Railway Age in its current ISSUE us in seri-
danger Of having its credit destroyed by Its railroad
policy The Dominion is considering trying to float
large loan in the United States American investors
probably will consider Canadas railway policy before
deciding on the deslrabilty Of buying It's government
securities"
These statements are made In editorial commenting
on an article by Professor w T. Jackman, Of the Uni
verslty of Toronto entitled The Problem Of the Govern
ment Railways in Canada" which is published in this
weeks Railway Age.
In its editorial the Railway Age estimates that the rail-
ways owned by the Dominion OF Canada failed in 1921
by about S9OOOOOO to enough to pay their opera
ing expenses TO this should be added II says about
siOOOO0OOO for interest on the investment which was
not earned Therefore directly and Indirectly govern
ment ownership Of the railways last year added to the
burdens of the Canadian taxpayer around Si2OOOO"
The deficit officially admitted by the Canadian govern
men for 1920 was over s7OOOOOOO but this did not IN
cude interest the investment in large part oil the
railways j. L. Payne formerly controller Of statistics
Of the Department of Railways and Canals estimated te
total losses direct and Indirect in 1920 at about $780,
100000
The Dominion government now actually owns about
1900 miles Of railway. 1t is stll carrying on nesoua-
ons for the acquisition OF the Grand Trunk which woud
make the total mileage actually owned and operated by
II about 225OO miles IN view Of the enormous ucnos
which always have been incurred by every railway owned
ihy the Dominion government ollNo ~ "'H"'iN' VIZ
lcolonla over half century it would seem wise TOT
the neople OF Canada to very hard studying ana
thinking before hey finally take the title to the Grand
Trunk Not only the experience OF Canada but the eN
perence Of every democratic country In the world IN
dlcates that under permanent government ownership ue
Grand Trunk Itself would become and remain pro-
ducer OF large deficits.
Now the railway dencit OF Canada becoming an ex-
tremely serious thing Canada has only nine million
peope and the Dominion government has an annual
revenue OF only about SI5OOOOOOO It needs about Sio9
100000 year 10 pay expenses due to Its participation III
the war including interest pensions, etc. lts haVuna'
debt is heavy and instead OF declining has been ncreas-
ing since the ended. This increase IN us nauon1'
debt has been mainly entirely due to the delcis IN
Cured hy rs railways The government will be posi-
itvelv inviting bankruptcy II engages in any more
railway ventures
Government railway deficits not peculiar to
Canada Large deficits were incurred by the railways
of the United States 1918 and 1919 under government
operation. They not due to the official personnel
which was much changed but to the system OF man
agement which was radically changed. The orgauiza-
ton and policy always and always must be differ
ent under government from what they under private
management because the controlling influences are
different and these controlling influences always tend to
produce deficits Since tne government guarantees to
the railroads OF the United States withdrawn they
have incurred losses but the taxpayers have not had
| to pay mem
Most Of the government railways Of Australia Incurred
deficits before the These have been Increased since
then. The deficits in the year ending June 30, 1921 Of
the Australian railways for which we have statistics wer
las follows Queensland s769O OOO Victoria, S3i'i@O
New South Wales S2sOsOOO; Western Australia $1,000
loOO The total for the railways Of these countries wa
almost si6OOOOOO The New Zealand state railways haC
a dencit Of almost S6000O0
Since the war the German state railways have beer
mourning enormous doacs In 1920 their deficits ex
ceeded fifteen billion marks. OF course, this Is In
deprecated currency For 1921 the denclt was estimated
some time ago at seven billion marks, but we shall know
better what the deficit really when complete figures
for the years actual opepatsons are available.
There are six private railway companies In Germany
Inc is significant fact that between 1913 and 1920 inc
ratio OF their total expenses TO their total earnings IN
creased from only GO per cent to 96 per cent while ha
OF the state railways increased from 70 per cent to ia
per cent These figures mean that in 1913 the expenses
of the German state railways 20 cents for every
dollar that they earned, while in 1920 their operating
exnenses were si79 for every dollar they earned
The Dominion Of Canada cannot AFFORD 10 operate
railway system Of 225OO miles at chronic loss proper
Honate to that which has been incurred all It's rail
way ventures for over a half century. To do wou'
be to impose upon the business and the taxpayers OF tn
country an unsupportable burden