How the railroad and lumber monopolies got away with millions of dollars mag The story of the Esquimalt and Nanaimo Railroad By MAURICE RUSH ‘e AST week the newspapers reported a meeting of the provincial Cabinet with representatives of the raitway and lumber interests. Although the public knows very little about what went on at that meeting, it is known that its purpose was to discuss the B.C government’s case to the Privy Council on whether logging Operations on former Esquima!t and Nanaimo railroad lands should have to pay timber royalties. The modest x : | - lie treasury, gg of the richest coal bags is that they be given a y wording of the question to be put to anxious to get a ruling from the cou petuate their tax-free land em- pire. What is the E. & N. case about? A fact which is not com- monly known is that the largest logging companies from Alberni to Victoria have not been pay- ing timber royalties as is pro- vided for by the laws. This nas been going on since the i1880’s, According to the deputy minis- ter of forests these companies would have paid nearly $8,000,000 into the public treasury in the last ten years if they had been paying the prevailing rates. The fact is that every year eight hundred thousand dollars, which Should go into our provincial revenue for services to the peo- ple, is withheld by the big log ging Monopolies, That is part of what the E. & N. Railway Tax case is about. But that is not all. Back of it lies a sordid story of corruption and politics, land grabbing and large scale exploitation in which not only the iogging interests are involved but also railroads and coal mining. it all began away back in 4884 when the Esquimalt and _ Wanaimo Railroad Bill was Shoved through parliament and the government handed over the Tights of the cempany to the Dunsmuir family and associates. This was the period in our his- tery. when governments were corrupted by railroad money, and vast lands abounding in natural wealth were being turned over in large portions to aspiring capitalists with in- fluence. The Dunsmuir family, which in later years featured prominently in our politics (James becoming premier and later lieutenant governor of BC.) had money and influence. the charter Se s Cea terms of ‘ were these. The company was to build 82.9 miles of rail- road from Esquimalt to Nanai- mo, this was done at a cost of $3,250;000. In return for this the company was to receive a sub- Sidy of $750,000 from the pub- plus nearly two Mmillion acres of land, which was to be exempt from taxation as Jong as they retained owner- Ship of it. Hence, for a mere $2,500,000 the Dunsmuir family acquired a railroad and a vast tax-free Iand domain, The railroad was incidental in their plans. What they really wanted was the land, because this area contained some fields in the west, also some of the fin- est stands of Douglas fir on LT CECA @ Feature Section oice in request of the big money- “determining the exact the courts.” They are tts which would per- the continent. At that time log- ging had not yet come into its Own. Coal was the main jewel Dunsmuir and his associates wanted to wrest from the pes- ple. These rich deposits with their adjoining territories were estimated as being worth $800,- 000,000 by a member of rarlia- ment in 1890. 2 continent became main. a CPR do- The importance of this belt of land for logging purposes was rapidly growing. By 1944 the railway company had sold 763,- 500 acres to the logging mon- opolies for $14,800,000 six times as much as the original cost of building the railroad! Commissioner Accord- ing to Sloan’s report on “Forest Resources” the act which makes the following provision in Section 22: “The Jlands to be acquired from the Dominion Government for the construction of the railway shall not be subject to taxation, un- less and until the same are used by the company for other than railroad purpeses, or leas- ed, occupied, sold or alienated.” According to this provision the E, & N. lands were no longer Subject to tax exemptions once 49 j2S° 124° : 51° @ 50 EG PACIFIC aS 5 io Su OCEAN Dunecw! T= lize ES he) Cart VICTORIA 126° i2Q The Esquimalt and Nanaimo Railway land grant, representing over 300,000 square miles of the finest mineral, timber and land resources in British Co- lumbia. (Scale equals 50 miles to 11-inch). This deal evoked widespread protest. In July, 1891, John Gharlton, M.P., speaking in par- liament condemned the grant as 3, huge job, a swindle on the people.” : Out of this deal the Dunsmuir family accumulated a fortune es- timated at $30,000,000. The EB. « WN. Railroad finally was taken over by the CPR about 1909, while the coal mines were bought out by Canadian Col- Jeries Ltd. in 1910. The CPR acquired all the rights to the land which the E. & N. Rail- road formerly held, which meant that 3,000 square miles of the best timber land on the SEE =. ; BUSHWORKERS CPR still owns timber lands worth $12,000,000, a VER since 1884, when the BE. & N. Railroad was giv- en the land grant, railroad and timber interests have escaped government taxes. The CPR to this day does not pay the fire protection tax, yet it receives protection on its vast grant from public funds. Commis- sioner Sloan draws attention in his report to the fact that at present all crown granted lands other than BE. & N. B., are cov- ered by provisions of the Taxa- tion Act. The timber monopolies have escaped taxation by hiding be- hind the original charter grant- ed the HE. & N. Railroad. Their high-priced legal help have in- sisted that since the federal gov- ernment granted the charter the provincial government cannot collect timber royalties. Using this argument the timber inter- ests have robbed the public of huge sums of money. The laws of B.C. are very elear on the question of lands sold by the BE. & N. R. In 1884 the B.C. government passed an used for other than railway purposes. The CPR and timber monopo- lies chose to ignore this pro- vision in the B.C. Act. The CPR continued to sell thousands of acres of the best timber land for high prices, and the logging companies swarmed over the land like locusts cutting the best timber and failing to observe the laws of the province. This situation evoked much public criticism, and finally the Railway Lands Timber Royalty Act was passed in 1901 which stated that timber was not a tax, and that tax exemption privileges (even where held) did not carry exemption from roy- alty. This act was never ap- plied to the E. & N. R. Lands wecause of the influence and power of ,the railway and log- ging monopolies, MAURICE RUSH B.C. Provincial Organizer, LPP The Sloan commission which was set up to investigate the logging industry could not es- cape dealing with the problem of the E. & N. R. Lands. On the basis of the information presented to Commissioner Sloan he was forced to the con- clusion that “. . . it is in the public interest that a severance tax be imposed upon all timber cut upon lands of the railway Company after the same are sold or otherwise alienated by it’ HH monopolies have chal- lenged Commissioner Sloan’s position and the whole matter is now being taken to the Privy Council by the Provincial Govy- ernment. But this is not just @ matter for the courts. It is a matter on which the people of B.C. and especially the labor movement must speak out. The railroad and timber monopolies, which have been throttling the economic life of this province for decades are now seeking to perpetuate their wholesale ex- ploitation and domination. The public interest dictates that there be a showdown with the monopolies. The very least that must be demanded is that the CPR pay