April 1954 — Vol. 35, No. 4 — Railroads in Canada
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Canada uses more railway transportation
per person than any other country in the world, and Canada
s unit cost of transportation is the lowest of all the hard
currency countries.
Our standard of living and economic development depend upon
abundant sources of transportation. Dr. R. W. Miller, of the
Graduate School of Business Administration, Harvard University,
has said that the United States and Canada would cease as
organized, civilized communities within one month if transportation
were to suffer a severe paralytic stroke.
As has been remarked so often in these Monthly Letters,
our treasures of natural resources have been in existence
through countless thousands of years, but it took the genius
of human invention and the energy of human endeavour to make
them available for the use of mankind.
The backbone, and many other important bones, of Canada's
transportation today is 43,000 miles of railway. These railway
lines opened up our west for agriculture, brought Canada together
as a vigorous nation and made available for use the forests
and minerals of eastern and central Canada. Today they carry
the goods we produce to seaports for shipment to all the world
and to market places on this continent.
Railways are one of the factors in establishing the relative
economic condition of various areas. Montreal, Halifax, Saint
John and Vancouver have the natural advantage of being seaports,
but the railway lines extend this advantage to inland cities
like Winnipeg, Regina and Edmonton, to the ore—producing
fields of northern Quebec and Ontario, and to agriculture
everywhere.
Besides the material benefits wrought by railway transportation,
there are moral and intellectual advantages. Men cannot live
by going quickly from place to place, but the exchange of
views and the dispersion of culture and thought tend to remove
national and provincial antipathies. Ideas, like goods, have
to be spread abroad upon the earth.
Canadian Railroads
What railways have we in Canada? Because of their size the
Canadian National and the Canadian Pacific constitute the
country's railways, for all practical purposes, but there
are several important regional railroads operated independently.
These lines total 5,400 miles.
When we boast that Canada has more miles of railway per
capita than any other country it is a wholesome exercise to
look backward toward the beginning. Only six years after the
opening of the first railway in the world, the Liverpool and
Manchester, a charter was granted to a group of business men
in Montreal for construction of the Champlain and St. Lawrence
railroad. This 14½—mile line, connecting the St. Lawrence
with the Richelieu, went into service in 1836, and for ten
years it was the only railway in British North America.
There were three great periods of railway construction:
the 1850's, when the Grand Trunk and the Great Western were
built; the 1870's and 1880's, when the Intercolonial and the
Canadian Pacific were built, and the 1900 to 1917 period which
saw construction of the Grand Trunk Pacific, the National
Transcontinental and the Canadian Northern.
In 1867 the colonies that came together in Canada's Confederation
had 2,529 miles of railway which had cost about $160 million.
The Canadian Pacific
The first lonely railway arm reaching westward was an audacious
challenge to nature and to fortune. It had to be driven through
the rocks, bridged across the muskegs of Northern Ontario,
carried across trackless plains for over a thousand miles,
and it had to breach four separate mountain ranges to reach
the Pacific Ocean. For nearly two thousand miles there was
not in sight - nor even in early prospect enough traffic to
pay for operation of its trams. It had nothing to recommend
it except the visions of men.
But it was tackled with such spirited energy that the last
spike was driven five—and—a—half years before
the contract said the job should be done. The first train
from Montreal to the Pacific reached Port Moody in July, 1886.
The "great wilderness" so much feared by detractors of Canada
had passed from existence.
We mentioned the "last spike" in the C.P.R. transcontinental
line. There is a "last spike" ceremony in every railway extension
(only a few months ago the C.N.R. president drove the last
spike of the Lynn Lake extension into the open spaces of Northern
Manitoba) but actually no real last spike can be driven, for
railways must keep growing or die. During 1952 the C.P.R.
spent $60 million on improvements and additions, and it plans
capital outlays of $475 million during the succeeding five
years to replace worn—out facilities and to continue
the programme of improvements and additions needed to keep
pace with our expanding economy.
The Canadian National
In mileage, the Canadian National Railway is the largest
in North America, and it is the only railway serving all ten
provinces. To its 24,150 miles of first main track must be
added about 9,000 miles of secondary track, yards, sidings
and spurs, making a grand total of 33,046 miles. It has more
than 5,000 stations, nearly 6,000 bridges and 64 tunnels.
It is Canada's largest employer and Canada's largest buyer.
The Canadian National system had its beginning in Canada's
first railway, which became part of the Grand Trunk in 1852
and hence part of the Canadian National in 1923. The C.N.R.
came into being when the Canadian government was trying to
create a unified system out of a transcontinental mass of
unco—ordinated lines which it had acquired to prevent
their collapse through bankruptcy. The formation of the Canadian
National Railways did not represent a deliberate experiment
in socialism. It was a device to protect the people of Canada
from a disastrous breakdown in transportation. All sorts of
expedients were tried before government ownership was resorted
to.
The lines were, for the most part, poorly equipped and in
bad physical condition. Many of them had been constructed
into areas which did not develop trade. Not only did the new
management face the problem of rehabilitating plant and equipment,
building morale, and unifying the crazy—pattern mileage,
but it had to bow its back under the indebtedness of the lines
it took over, shouldering a quite fantastic burden of interest.
Today, the C.N.R. can boast of many things. It was the first
railway in North America to put a diesel—electric road
locomotive into service. Its rolling stock has improved steadily.
Its property investment account expenditures in the year 1952
amounted to $125 million, including $82 million for new equipment.
The C.N.R. and the C.P.R.
No exact comparison can be made between the two railways.
It would be unrealistic to criticize side by side a railroad
that was built as a single integrated unit and one which was
a conglomeration of roads, not only. not co—ordinated,
but in many instances competitive.
The majority of the provincial representatives and of the
representatives of other bodies who appeared before the Royal
Commission on Transportation favoured continuance of the present
system of two large railways, with the necessary corollary
that the Canadian Pacific must be allowed to live and to operate
as a privately owned railway.
Amalgamation has few friends. Various forms of joint operation
have been carefully considered and condemned. Unification
has been strongly opposed by labour unions (which fear loss
of jobs), by shippers (who question whether the quality of
service could be maintained without competition), and by communities
(which would, many of them, suffer if the necessary efficiency
of operation demanded abandonment of lines).
There is a real measure of co—operation between the
railroads. Efficient transportation service is being performed
by both C.N.R. and C.P.R. through pooling arrangements. Much
wasteful competition has been eliminated and better schedules
have been arranged. Standardization of freight car design,
carried out as a joint effort, has benefited both lines.
Railroad Services
These two Canadian railroads are engaged in a country—wide
service. The business done at Halifax on the Atlantic and
at Vancouver, 3,500 miles away on the Pacific, ends up in
the same ledger. A haul of 4,506 miles is possible between
two points on one railway: St. John's, Newfoundland and Prince
Rupert, B.C. The average haul between east and west is about
1,800 miles; the average haul of all traffic in 1949 was over
400 miles per shipment. In the United Kingdom in 1948 it was
only 72 miles.
The ability of the railroads to move vast quantities of
raw material to central locations for fabrication and then
to distribute finished commodities to the far ends of the
nation and to shipping points is the key to Canada's industrial
health. With the exception of pipelines for the transportation
of liquids, no other instrument of land transportation can
compete with the railways for low cost.
The railways are constantly bringing in improvements and
supplementary services such as expedited movements, fast freight
schedules, and 'specials" for livestock and perishables. Striking
evidence of improved efficiency is found in the C.N.R. performance
figures over the past 25 years. Comparing 1952 with the boom
year 1928 it is found that the C.N.R. furnished 67 per cent
more freight transportation with six per cent fewer locomotives
and five per cent fewer freight cars, while the average speed
of freight trains increased by 27 per cent.
Both companies now operate services which link the shipper's
shipping door with the addressee's receiving door. These truck
and rail routes for less—than—carload or package
freight are no longer novelties, but are part of the regular
railroad schedule. They not only speed up and make more convenient
the service between cities, such as Toronto and Montreal,
but they provide tributary service to smaller places.
Passenger service, too, is receiving attention, though the
railroads are inclined to look a little glumly at their passenger—traffic
ledgers. Less than eight cents of every dollar earned by the
C.N.R. comes from passenger fares.
The Royal Commission which reported in 1951 came to the
conclusion that "freight and passenger services are essential
and if the passenger fares cannot be raised to produce sufficient
revenues to enable the passenger traffic to pay its own way
the freight traffic must bear the burden."
Both railways operate many subsidiary services: hotels,
telegraphs, express, steamships, airlines; both conduct research,
assist in agricultural development, and participate in immigrant
settlement. Each railroad has a department devoted to assisting
Canada in developing its industries and natural resources.
Problems
Like all other businesses, the railroads have their problems,
and, as is usual, these have mostly to do with making financial
ends meet. An absorbing analysis of Canada's transportation
problems is given by Dr. H. A. Innis, one of the commissioners,
in his memorandum printed as an appendix to the Report
of the Royal Commission on Transportation, February 9,
1951, obtainable from the Queen's Printer, Ottawa.
Donald Gordon, C.M.G., Chairman and President of the Canadian
National Railways, said in an address: "The railways must
justify their existence by rendering the kind of service the
public wants at a price they are prepared to pay. Freight
shippers, the travelling public, and other customers of the
railways do not extend their patronage and support for mere
reasons of sentiment, nor do they do so because they have
no other choice. Indeed, the growth of competitive forces
in the field of transportation has marked a significant change
in the economic climate and presents a continuing challenge
to railway management and railway men generally."
The Royal Commission referred directly to motor truck competition
as a factor making it increasingly difficult for railroads
to maintain service at a charge that pays. "Truck competition
in Central Canada has grown to such a size as to eat into
the railways' revenues by capturing a great portion of their
most profitable traffic and by making it necessary for them
to reduce their rates to what looks like a dangerously low
point in order to retain some of it." The Commission went
on to say that the difficulty of the problem is added to by
the fact that truck traffic, in by far its largest form, comes
under provincial, instead of federal, control, and the trucks
are divided between private vehicles carrying the goods of
their owners and the trucks that work for hire.
W. A. Mather, President of the Canadian Pacific Railway,
touched upon the matter in an address in September. He pointed
out that the railways have no longer a monopoly of land transport,
but are in competition with trucks which run on highways built
and maintained by the state, with air transport and with pipelines.
Public and politicians alike continue to act as if trucks,
airplanes and pipelines did not exist, and the railways remain
under old regulations.
Mr. Mather's solution is stated in these words: "'No competing
transportation service must be put, deliberately or inadvertently,
in the position of being burdened with a service or an obligation
at a rate or on terms which demonstrably do not cover the
costs of providing the service. Such a principle, I suggest,
carries with it the obvious corollary that no transportation
service can continue to be subjected to an obligation from
which, if it should clearly constitute such a burden, it cannot
escape either by raising its price or by withdrawing the facility,"
It is time for all concerned to reconsider their attitude
toward railroad economies, in the opinion of the Royal Commission,
in whose report it is said: "Our railways should be allowed
to practise similar economies (to those in the U.S.A.) in
cases where operations are shown to have become substantially
unnecessary or to be definitely unprofitable, especially,
of course, when it is shown that reasonable service can be
assured by other agencies."
Progress
Notwithstanding their problems, the railways continue to
press ahead in their attempt to improve the service they give.
The changeover from steam power to diesels is making steady
progress, and this change may well go down in history as one
of the most significant developments of this mid—century
period.
The diesel makes faster starts under full load and hauls
greater tonnage; it can be available for service for more
than 90 per cent of the time compared with the 50 per cent
of the steam locomotive; its maintenance costs are lower.
The diesel car offers opportunities for developing new sources
of profitable traffic and for reducing the costs of branch
lines and local runs.
Another mark of progress is the provision of better facilities
for the handling of cars and their freight at terminals and
reshipping points. Most spectacular development is the C.P.R.'s
push—button retarder yard outside Montreal. An 85—car
train can be switched in about 25 minutes, with its cars directed
by push. buttons on to the proper one of 48 tracks ready to
be made up into trains for as many destinations. The average
number of cars handled in a day is 2,300.
Speed
Speed is not an obsession in Canada as it is in some other
countries. Claims about how fast one can go from here to there
on "ultra—speedy" or "superspeed" trains form little
part of the Canadian railroad picture.
There is good reason for this. Canada is served by two great
railroad systems, whereas the United States, for example,
is served by several hundred shorter regional railways. The
Canadian railways seek sustained accomplishment over all their
trackage, rather than bursts of speed over segments of the
route.
We have not gone in for fast through trains. There is not
enough "terminal" traffic, that is, people travelling between
say Montreal and Vancouver, to Justify special trains. The
stage of our development demands the sort of service we now
have. Canadian trains, stopping at many stations, have a great
deal of express carrying to do - what the railroads call "head—end
work." This is increasing, rather than diminishing, because
the flag stops of a few years ago have become more than that,
and the increasing population clustered around them must be
served.
It would be a bad thing for the country's development, the
railway companies believe, to play up quick runs from city
to city and ignore the thousands of small communities that
lie between them.
Transportation Policy
Each form of transportation has its advantages and its disadvantages,
each can function economically and advantageously in certain
particular fields. If a shipper wants a small amount of goods
moved for a short distance with quick delivery, the trucks
should be at his command. If he must have light articles from
a distance in a hurry, air cargo space would be available.
Water transportation, where it is to be had, is efficient
for bulk cargo if there is no demand for speed. Pipelines
are obviously best for conveying petroleum. And if the shipper
is interested in moving commodities at low cost, with reasonable
expedition, he will use the railroads.
The history of the legislation in Canada indicates that
Parliament has always felt that the government should take
an active interest in the railways. In fact, Canadian railways
have been projected and built as manifestations of public
policy, often with financial assistance recommended by the
government, agreed to by Parliament and paid for by the people
of the country. They were part of a deliberate, patient effort
to create a country that was not a natural outcome of economic
geography. The great railroad systems "stitched it together"
from sea to sea. The national policy which actuated them is
told in detail in the Report of the Royal Commission on
Transportation.
An important feature of the national transportation policy
is that the two great railway systems shall have the opportunity
to operate side by side, providing needed services to the
country and serving as a check and a balance on each other
without destroying the opportunity of the privately—owned
road to live and progress and to earn a fair revenue.
The Royal Commission report remarked that while the C.P.R.
is entitled to an opportunity to earn a fair return on its
railway investment the C.N.R. as a publicly—owned enterprise
operating certain properties and providing certain services
irrespective of their commercial merits should be expected
to do the best it can at rates fair to the Canadian Pacific.
The attempt to establish comparability, either to excite emulation
or to make one railway a check on the other, should be definitely
abandoned. "It is not practicable," said the Report,
"to arrange suitable handicaps for such a race."
Regulation of Railroads
In an address to the Railway Club in February Mr. N. R.
Crump, Vice—President of the Canadian Pacific Railways,
said: "The division of work between road, rail, water, air
or pipeline should be governed by the consumer, but each of
the competitors should be governed by similar conditions,
rules and regulations. Then the consumer would best be able
to pick the service fitting his needs and his pocketbook."
Many persons have no conception of the extent to which railways
are subject to outside authority. As Mr. Gordon pointed out
in an address, the regulations are so minute as even to specify
that a conductor, ejecting a passenger who refuses to pay
his fare, must first stop the train!
Representation in behalf of the railroads in recent years
have not wept over the amount of competition there is, or
the degree of regulation, but have deplored the fact that
the several classes of competitors are not required to observe
the same rules.
These railroads, looking back upon their remarkable record
of building and serving the nation during the last hundred
years, have a keen pioneering outlook for the world of tomorrow.
They know that the average ton miles of freight handled each
year for each citizen is about 1,500. They know, too, that
the increase in population of 3½ million between the last
two censuses demands increased carrying of that many times
1,500 ton miles. They are, in their plans to cope with the
new needs of the country, moving along with technological
advances in railroading, and at the same time seeking ways
to economize without sacrificing the high quality of their
service.
Canada has reached a stage of maturity in which its economic
existence depends increasingly upon its facilities for the
sure and speedy and economical transport of raw materials
and finished products.
One end of steel is found in the distant places where Canadians
are tapping the natural resources of their country - the wheat
fields, the oil fields, the mines, and the forests m and the
other end of the track is at a warehouse, a factory or a shipping
dock.
The problem in transportation is to provide adequate modern
services at the lowest possible cost, without unnecessary
or uneconomic consumption of labour and materials.
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