Evening star., 1926-10-22
MEN AND MONEY
BY NJ. S. Rukeyser.
(Copyright. 1920
Copyright. 1920

months of 1926, for example, the Cana
dian National Railways, which is the
largest railroad system in the world
from the standpoint Of mileage, report
ed net earnings of s14,S56, ,661. COM
pared with $3.742, ,346 in the some pc
riod of 1925, andA deficit of 81, 869 ,596
in the corresponding six months OF
1922. The. extraordinary enhance
ment of earnings reflects both an i'm
provement. in gross business handled
and also a conspicuous change in the
economy and efficiency with which
traffic is moved In 1922 it took
$1O2.S2 to handle every 500 of busi-
ness in 1926 1t takes only $S7.72, leav-
ing enough over to pay interest on all
the obligations of the railroad nj the
hands of the public. though not
enough to pay the government re-
turn on the obligations which it holds
Sir Henry Has Done 1t.
In four years, Sir Henry. a native
of the United States, who spent many
years In the employ of the Pennsyl-
vania system, has, as president and
chairman. taken the huge government
owned railroad system out of the red
ink column of deficits. Though, of
course, he has not yet made the road
profitable for it's single stockholder.
is still moving upward. Transporta-
ton men and government officials
throughout the world have their eyes
focused on the illuminating expert
ment which Sir Henry is directing.
Running a railroad Sir Henry
told me, as we sat in his offices In
Montreal and chatted about the i'm
provement in earning power In the
G. n. R., lis based on a study of ma
terials and men. And in the past we
didn't give much attention to the hui
man side of the people. I find people
a lot more interesting than materials.
THE chief job in running a railroad
is not merely to produce a service, but
produce it and then sell 1t. NWe act
as though the customer is always
right. We do our utmost to inveStl-
gate complaints and to correct unin-
territorial sources of dissatisfaction.
We have particularly endeavored to
win the good will of localities through
which the railroads pass. Formerly
there was Ill feeling between COM
munities and the railroad. We want
cities and towns to be as proud Of
their railroad as they are Of their
base ball team.
Belongs to the People.
I'VE ask the people Of Canada to
remember that this railroad belongs to
them, but we do not ask them to
patronize 1t for that reason. We COM
pete with the privately owned Cana
dian Pacific all along the line. and So
licit traffic only On the plea that we
can give good service.
I'VE have increased our gross busi-
ness by turning over $4,000 employees
into traffic solicitors. We have told
men outside Of the traffic department
that just because they were playing
in the outf1eld was no reason why
they should not back up the second
baseman. AS result, every one is
helping to create business. Although
half the tips which we get In this
way do not result in business, the
other so per cent are productive. If
only 10 per cent were fruitful it would
be worth while. For example, a brake
man in the West was pointing out
the interesting scenery to a passenger
in the observation car. He happened
to learn that the man was a shipper
and was about to ship 100 tons Of
freight. The brakeman expressed such
enthusiastic interest that the business
man readily agreed to ship over our
lines and let the brakeman get credit
for creating the business"
/ asked Sir Henry whether he
thought government ownership of
railways, which had been adopted as
an emergency policy after the war,
was to be regarded as permanent.
THE Canadian people" said Sir
Henry, did not consider the the
oretical merits of public versus pri-
vate ownership and operation Of the
railroads. The government stepped in
to meet an emergency and prevent dis
integration and wholesale bankruptcies
OF the railroads outside the Canadian
Pacific system.
Government Holds Bag.
THE financial problem of the Cana
dian National Railways is not the ef-
feet Of government ownership. 1t
represents the same type Of difficulties
which resulted in widespread reor-
ganizations Of railroads in the United
States west Of the Mississippi River
namely, the fact that the railways
were built in anticipation of the
growth Of the country. One-third Of
the total mileage Of the Canadian Ma
tional Railways is for colonization
purposes, rather than to serve a de-
veloped territory. Rather than per-
NIT railroad abandonment and the
blow to the credit Of country that
widespread bankruptcy would involve,
the government decided to hold the
bag. 1t has not only lent its credit
by indorsing our bonds, but has also
made good actual deficits.
Having held this 4-year-old railroad
system during It's collie days. the pub
lie won't want to let go when the7
system becomes a lusty youth. fore ,
see the time when the obligations of
the Canadian National Railways will
stand on their own merits and attract
investors without the necessity Of a
government guarantee.
"Our experiment does not give the |
United States any information about |
It's own railroad problem. Our work |
has been merely an attempt to meet |
a special set Of circumstances. Each |
situation must be judged in the light |
Of special facts. Our activities neither |
prove the value nor the evils of gov
ernment ownership as a general doc |
trine.
Has Not Hurt Initiative.
I'm our case, government ownership |
has not hurt initiative because we
have not let It. have seen rundown |
privately owned railroads in the |
United States which dominated their |
field and had little competition. Our |
competition with the Canadian Pacific |
is helpful. and I favor the continuance |
Of two competing systems. I think |
the Canadian idea Of competition be- |
tween a government owned and pri- |
vately owned system is good"
The Canadian National Railways is ,
waiting for the country to grow up to |
its so, 900 miles of tracks. I asked Sir |
Henry whether any new construction |
was needed or contemplated.
THE main trunk lines" he an
swered," will be adequate for several
decades. but in the next few years ex-
tensions and short lines to open up
new territories will be necessary"