CHAPTER XVI.
Narrating several occurrences which made huge Canadian National deficits inevitable.
Comparisons may be odious; but they are sometimes illuminating. To many sincere well-wishers to the experiment of nationalizing about twenty thousand miles of Canadian railways, the clearest remaining impression of the earlier years of that regime is of enormous deficits. Apprehension of the causes of these deficits is not clear. It certainly could not be among those who once advocated turning over this national property to a competitor for a dollar a year, leaving the nation to carry all the fixed charges on a capital obligation four or five times the size of the national debt before the war, and about two-thirds of that interesting burden in this tranquil era. Before discussing the purely Canadian situation it is worth while to look at what happened across the line.
When the United States entered the war, all the railways were taken over by the Government, under the supreme direction of the Secretary of the Treasury, Mr. McAdoo, and with a guarantee of pre-war profits to the owners. The so-called national administration lasted twenty months, and lost one billion, four hundred and forty-three million eight hundred and ten thousand dollars, or more than the total fixed assets of the Canadian National Railways before the inclusion of the Grand Trunk. Besides this loss, the Government advanced, during its control, one billion one hundred and forty-four million dollars for equipment, additions to, and betterments of properties which the nation does not own. The chances for complete recovery of that money are probably nothing more than chances.
That was nationalization in the United States, under the autocratic control and operation of a politician.
Nationalization in Canada began under vitally different conditions, as to the properties taken over, and the character of the management. When in 1920 the effects of the American experiment were being acutely felt in Canada, I happened to speak to the Ottawa Canadian Club. This comparison of conditions on both sides of the border was made; and I think its fairness is still beyond question:
| IN UNITED STATES. | IN CANADA. | |
| 1st. The Reason. | War measure. | For economic causes. |
| 2nd. The object. | Unified service regardless of cost. | Adequate and efficient service. |
| 3rd. Duration. | Temporary; this very condition being quite unsettling. | Permanent; due to conditions on which the policy was based. |
| 4th. Method of Management. | Political—Mr. McAdoo. | Non-political; board of management of business men. |
| 5th. Competition. | Eliminated; practical monopoly of the worst kind; over 265,000 miles. | Preserved; strong competition assured. |
| 6th. Result on Staff. | Indifference. | On their toes. |
| 7th. Result generally. | Guaranteed return to Railways on investment. | Recognition of efficient service. |
| Dictator McAdoo wages award proved to be a thirty-chapter serial with supplements. | Promotion from merit alone. | |
It would be a signal failure of duty here if one did not offer the warmest tribute of gratitude and admiration to the Board of Directors, which the Government appointed in September, 1918, to serve with me, and which administered 17,478 miles of railway, formerly the Canadian Northern, Intercolonial, National Transcontinental and Grand Trunk Pacific. The directors were:
A. J. Mitchell, Toronto.
G. A. Bell, Ottawa.
Robert Hobson, Hamilton.
E. R. Wood, Toronto.
F. P. Jones, Montreal.
Sir Hormisdas Laporte, Montreal.
R. T. Riley, Winnipeg.
C. M. Hamilton, McTaggart, Sask.
Col. Thos. Cantley, New Glasgow, N.S.