Canadian Transport Sourcebook

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Canadian Transport Sourcebook > All works> 52 Questions on the Nationalization of Canadian Railways > Chapter 1


Who Loses by Railway Nationalization?

The railway shareholders? No! They will be allowed to lose nothing. Shares will be purchased or expropriated and they are almost certain to command a better price from the Canadian Government than in the open market. For no nation, if I judge rightly, will knowingly offend the men and women whose money constitutes one of the three essentials of Production: Capital.

These people, receiving back their Capital undiminished, will reinvest it in other businesses just as vital to our affairs as railways, and probably more profitable. I say more profitable because I observe that the rates and the quality of Canadian railway service are regulated by a Dominion Board of Railway Commissioners, a court responsible to Parliament, while on the other hand many large and essential businesses are permitted to sell what quality they please and to take what price satisfies their fancy. This strikes me as important.

Indeed, the ex-shareholder may, I observe, lend back to the Canadian Government the very money received for his shares. The Government must borrow it from some one. Why not from the former shareholders? And if such be the case then the Shareholder becomes a Government bond-holder. In place of railway security he receives the bond of the Canadian people; in place of low return or none at all,* five or six per cent.! Certainly he loses nothing.

Nor will the great General Managers lose money. obviously their services must still be required by the Government. Changing allegiance from a Board of Directors to the People of Canada may mean for them a depressing psychological change, but no money loss.

This matter concerns, therefore, the man who owns no railway securities, who earns as much as forty dollars a week, and also his wife, his sister, his mother or his daughter. These, so far as I am able to see, are the only people who run any risk of loss in the nationalization of our railways.

Why am I, the Citizen, Touched Deepest?

Because my prosperity, like yours, depends on Canada's prosperity;

Because Canada's prosperity depends on the sale of goods;

Because the sale of goods depends, first, upon the cheapness with which a given quantity can be offered in the face of foreign competition; second, upon Speed in Delivery; third, upon Reliability in Delivery.

What Affects Cheap Production?

Cheapness depends on costs, and railway service enters at least five times into the cost of producing Canadian goods:

1. In the cost of freight on raw material to factory.

2. In the cost of freight on other supplies, such as fuel.

3. In the cost of freight in the personal supplies of workers—affecting wages.

4. In the cost of freight from producer to consumer.

5. In taxes incurred on Government railway account.

What Effect has Railway Speed or Reliability on Canadian Business?

Millions of dollars marching into the pockets of workmen in the United States during the winter of 1917-18 were lost, I learn, because the American railroads broke down under strain.

The flow of raw materials to American factories was interrupted.

The escape of the finished goods from the shipping rooms to the shops was prevented.

Deliveries were SLOW.

Promises of delivery became UNRELIABLE.

Orders came to Canada, whose railways had NOT, I find, broken down and whose deliveries were faster and more reliable.

* On the $60,833,333 of the G.T.R. "Guaranteed" stock a total dividend averaging 2.84% since 1880 has been paid; on the $16,644,000 "1st Preferred" since 1880 a total dividend averaging 3.29% was paid; on the $12,312,666 "2nd Preferred" since 1880 a total dividend averaging 2.45% was paid; on the $34,884,535 "3rd Preferred" since 1880 a total dividend averaging .46 of one per cent. was paid. On the total of $120,682,437 Common Stock actually issued—nothing has been paid.

[Public Domain] Copyright/Licence: This work was first published in 1964 or earlier, and the author of the work was anonymous. To the best of my knowledge, the author of the work was unknown at the end of the year 50 years after the work was published, meaning that this work would be in the public domain in Canada, per section 6.2 of the Copyright Act. Note also this link. See disclaimers.