STATE CONTROL

Evening Post, Volume CXIII, Issue 141, 18 June 1927, Page 8

STATE CONTROL

ITS APPLICATION TO

RAILWAYS

COSTLY LUXURY

(By Taxpayer.)

In the days of my political youth —many, many years ,go—l , horn have laughed to scorn such a •tatement as the one made by the president of the Canadian Pacific Bailway Company a little while ago in » communication to one of the business magazine* ot him own country. The slogan of my Soc■ialjst friends-the nationalisation of the means of production, transportation, and exchango-nad seemed to me the very foundation of just »nd effective legislation and administration. Wide" experience and closer observation', however, have satisfied me that, human re + ? emg Wh^ St fa» aßd politician what they are, it U only in^are instances, and m exceptional circumstances, that the publi£ can be v well w?Qf"f *? °/ iin? ry activities of life by State^Enterprise" as it can be by "Private Enterprise." In the publte uti hty swviees, so to speak, the Post and Telegraph DepartmenOhe Life Vu I 'It Illsurttnc« Departments, and hePubhcTruat Department are the only exceptions W this general rule that come readily to mind.* The BailwaV Department probabjy would be included in this.list of exceptions by many observers, simply because the meaii of transportation must not be left to the whim of individuals and .companies; but the experience of older countries lias shown that mth adequate safeguards this service may be left safely to private enterprise. . '

A LESSON FBOH CANADA. .'.. In this connection it may be helpful to examine for a moment what is hanpenmg in Canada. The Canadian Pacion nnn -7 Coffi Pany °w»s and operate* 20,000 roiles of track across the Dominion of Canada. The Canadian Government owns and operates 22,000 milee of trac< (the National Bailways of Canada) across the same wide stretch of territory between the Atlantic and the Pacific Oceans. These two railroads are competitors for the teuwcontinental and for, miich of tnc local transportation business of- the Dominion. • Theyboth are operated tor the basic purpose of making a,profit for their owners, The Canadian Pacific Jr pnvately owned by its BhareholAen; the Natwnal System is pnbUcly owned by the taxpayer* of the Dominion; The statement of the president of the Canadian Pacific Baifway Company, which I have just mentioned, 4eajg with the outcome of the competition between these two great undertakings.

The Canadian Pacific (it run*) i* the largest taxpayer in Canada. Thus, the. greater the deficit of th« National Bailways, the greater the tax-burden on the Canadian Pacific On_the other hand, if the National Railways prosper by the diversion of traffic from the Canadian Pacific, the Canadian Pacific's loss will be greater than the taxes would have been, Again, the greater the '-Can*. ■a«tt'. Pacific's profits, the greater will be >ts taxes, sad hence the larger its contribution to it« rival. The public enterprise gets the private enterprise coming and going. Through the power of taxation, to meet the cost of government, private enterprise, private- industry,.and private thrift are compelled tp pay for pubhe enterprise/public deficit, pnbiia mismanagement, ami public extravagance. it- ■

And notwithstanding all.this, the Cana. dian Pacific is regularly paying dividends to its shareholders while.the National System is as regularly declaring ■deficits, ".-•; ■ ; . *

EVADING RESPQNSIBiiITY. There is no very cjose resembjanetf between the railway position in Canada and the railway position, in New Zealand; but here, in spite if the absent v /°fPe^ J, qa Pom a»y r»v»» system, deficit ls.followwg upon'deficit with depressing regularity. Sines the financial year 1920-21 r with the eingle exceptipa of the year 1923-24, the espendituwi ba# exceeded the receipt*, and the year just closed will show a deficit of over half & million. Changes pf management and changes pf methods have -tab lowed .upon one another with almost bewildering frequency, »nd yet none of. t]iem seems to 1 have stayed the downward tendency. A couple pf yearn ago the authorities conceived the ides of charging the losses on the non-pay, ing branch lines to the Consolidated -Fund, and Parliament, probpbly without understanding what the whole business ©cant, meekly passed a large sliet of the troubles of the msn«gement on to the shoulders of the taxpayew, grert and small, without regard to their ability to pay. In the first Year the tax—> as the "subsidy" as well" may b« called—amoauted to 16359,545, in the second to £445,222. andj with the railway authorities relieved of responsibility, is not likely to develop a downward trend in the near future. These nou' payijig lines are heritage from toimtr generßtjons of politicians, and the pre, sent Government, at any rate, if not responsible fpr the straits into which they hays fallen; but there still ar« on the list of railways authomed by Parliament « number of lines which inevitably would fell into the same category werp the present Government, or any succeeding ■ Government during the next twenty years, foolish enough to prpceed with their construction. HAW WAT. If the sale of the State railways is a too startling proppsition for the Dominion to entertain at the present time, Parliament at least might take poms steps, apart from the appointment of Commissions "and the preparation of ! reports, towards the construction of a scheme of management that would eliminate the importunate politician, restrain the aggressive, deputation, mni fortify the beseiged Minister of th« Department. The : appointment of * highly qualified board,, free from win* istcrial control and with the full powers and responsibilities possessed by the management ] of a privately, owned railway system, would be a long stop towards placing the lines oa an efficient and a jnpney-earning basis.