CANADIAN DEBT

Evening Post, Volume CXVIII, Issue 21, 25 July 1934, Page 18

CANADIAN DEBT

THE RAILWAY BURDEN

IMPOSSIBLE OUTLOOK

WRITING OFF PROPOSAL

(From "The Post's" Representative.) , . VANCOUVER, June 6. The proposal by the Auditor-General that steps be taken to write off portion of the 'debt on tho Canadian National Railway has opened up a ripe field of discussion, reminiscent of the Grand Trunk debacle, which is still in the British Courts. The Auditor-General stresses the impossible outlook of the railway, burdened with a debt that causes an annual deficit of £10,000,000. The strongest opposition comes from the president of the Canadian Pacific, Mr. Edward Beatty, who describes it as "a calculated deception of the Canadian taxpayer, as to the extent of the yearly contribution he must make to meet railway losses." , Tho railway debt, at the end of 1933 was £579,160,000, and is increasing daily. < As Mr. Bennett pointed out recently, it constitutes the greatest obstacle to the re-funding of national, provincial, and municipar obligations, which: re-funding is so necessary to keep taxation within endurable limits. "It is not a phantom debt, which can be disposed of "by bookkeeping entries," says Mi\. Beatty, "but an undischarged mortgage on the industries and resources of the country." Those who favour writing off a proportion of tho deb.t opposed the .construction of the Canadian Pacific, supported the building of the Grand Trunk, and also supported the acquisition of all railways.by the Government, except the C.P.R., whose president charges that they are now supporting the co"ntinuance of duplicating and triplicating railway facilities/ The policy of compulsory co-operation between the two major railways, laid down by the Bonnettt Government,, is not a success, according to Mr; Beatty. . : .;.'•' - : CASE FOR UNIFICATION. "A saving of £15,000,000 a year would result from unification of the two railway administrations free of political' control, with all its costly implications," he says. "The policy of the Canadian National, in its early years, refrained from challenging the Canadian Pacific, where that line had pioneered, but, in 1923 (at the appointment of Sir Henry Thornton), that policy was discarded. 'A. rude awakening came with the depression, and it was discovered that, while the debt on the Canadian National 'assumed astronomical proportions as the largest single taxpayer in Canada^ it had helped to pay the bills of a campaign organised for its own discomfiture." The Royal Commission declined to accept Mr. Beatty's unification proposal, on three grounds: monopoly, fear of unwieldinoss, and consideration of. future conditions. Whether the people will be content with tho huge annual loss on the Canadian National, its steamship services and hotels, some of which aro built, but are not likely to open; or whether, as an alternative, they will give Mr. Beatty a lease on Canadian National, to see if ho can prove his undertaking to balance tho railway budget, is a question that ii gradually ncarintr fin answer.