“STRATFORD EVENING POST.” MONDAY, JUNE 20, 1927. STATE CONTROL.

Stratford Evening Post, Issue 37, 20 June 1927, Page 4

“STRATFORD EVENING POST.” MONDAY, JUNE 20, 1927. STATE CONTROL.

From time to time the question of nationalising the means of production is brought before the Mf.mic as »*

solution of our economic problems and even as a remedy lor unemployment. On the face of ifc “nationalisation” seems to point to a pooling of all productive results and profits for the benefit of the people as a whole. It is one of the main theories in the socialistic and communistic creed and to the majority of people the scheme sounds full of promise. It is only in rare instances and in exceptional circumstances that the public can be. as well served in the ordinary activities of life by “State Enterprise” as it can by “Private Enterprise.” In the public utility services, so to speak, the Post and Telegraph Department, the Life and Fire Insurance Departments and the Public Trust Department are the only exceptions to this general rule that come readily to mind. The Railway Department probably would bo included in this list of exceptions by many observers, simply because the means of transportation must not be left to the whim of individuals and companies ; but tile experience of older countries has shown that with adequate safeguards this service may be left saieiy to private enterprise. The Railway Department is not a profitable one and for many years to come, at the present rat' e of development. it will continue to show ai loss. We have, previously drawn a comparison between our railways and those of France and Great Britain and m every instance it has been proved beyond doubt that private enterprise could succeed where a Government department showed a loss.

Another example is available from Canada. The Canadian Pacific Railway Company owns and operates 20.000 miles of track across the Dominion of Canada. The Canadian Government owns and operates 22.000 miles of track (the National Railways of Canada) across the same wide' stretch of territory between the Atlantic and the Pacific Oceans. These two railroads are competitors for the transcontinental and for much of the local transportation business of the Dominion. They both are operated for the basic purpose of making a profit for their owners. The Canadian Pacific is privately owned by its shareholders; the National system is publicly owned by the taxpayers of the Dominion. The Canadian Pacific being privately owned is a, tax payer and is the largest taxpayer in Canada- The competition between this Company and the National Railways produces interesting and instructive information. Tlie Statement of the pres-' jdent of the Canadian Pacific) Railway Company, which we have just mentioned, deals with the outcome of the competition between these two great undertakings. “The Canadian Pacific”, ip runs, “is the largest taxpayer in Canada. Thus, the greater the deficit of tlie National Railways, the greater the taxburden 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 Canadian Pacific’s profits, the greater will b e its taxes and hence the larger its contribution to its rival. The public

enterprise, gets ibliia private enters prise coining and going. Through the power of taxation, to meet the cost of Government, private enterprise, private industry and private thrift are compelled to pay for public enterprise, public deficit, public mismanagement and public extravagance.’’ And notwithstanding all this the Canadian Pacific is regularly paying dividends to Its shareholders while the National System is as ■ regularly declaring deficits. The position is remarkable. Under identical conditions private enterprise shows a profit whilst the Government effort shows a loss. There is no very close resemblance between the railway position in Canada and the railway position in New Zealand.; but here, in spite of the absence of competition from any rival system, deficit is following upon deficit with depressing regularity. Since the financial year 1920-21, with the single exception of the year 192321, the expenditure has exceeded the receipts, and the year jusf closed will show a deficit of over half a million. Changes of management and changes of methods have followed one. unou another with almost bewildering frequency, and yet none of them seems to have stayed the downward tendency. A couple of years ago

the authorities conceived Iho idea, oi charging. the losses on the non-paying liraneh linos to the Consolidated Fund, and Parliament, probably without understanding what the whole business meant, meekly passed a. large slice of the troubles of the management on to the shoulders of the taxpayers, great and small, without regard to their ability to pay. In the first year the tax—as the “subtly” may well bo called —amounted to £359,510, in the second to £-115,222, and, with the railway authorities relieved of responsibility, is not likely to develop a downward trend in. the near future-

If the sale of the State railways : s a too startling pronositiou for the Dominion to entertain ■■+ the present time, Parliament at least might take steps, apart from the appointment of commissions and the preparations of reports, towards the construction of a scheme of management that would eliminate the importunate politians. The appointment of a highly qualified board, free from Ministerial control and with the full powers ami possessed by the management of a. privately owned .railway system would be a. long step towards placing the lines on an efficient and a money-earning basis.