=U
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Eastern grains
move to the world markets at
fairly advantageous rates won
after years of bitter struggle,
the situation is very different
with respect to livestock and
dairy products. The Saskatche-
wan Government’s Brief to the
Rowell-Sirois Commission point-
ed out, “To reach the Toronto
or Montreal market, butter from
Regina in carloads must pay
$2.05 per 100 pounds. The aver-
age on butter in carloads from
stations in Gntario and Quebec
to Montreal is about 60 cents;
egses from RHegina pay $1.851,
from stations in Ontario and
Quebec 45 cents; dressed poultry
from Regina $2.05, from sta-
tions in Qntario and Quebec 60
cents.” .

Even more serious is the tri-
bute paid by the Western farmer
to the railroads on those things
which he requires to carry on
production. Here are a few ex-
amples showing the difference
paid for various articles by a2
farmer in Ontario as ompared
to a farmer in Saskatchewan:

Low priced automobile Gn
Sask), $1145, (in Ont.) $1021.
Light delivery truck, (Sask.)
$910, (Ont.) $790. Eight foot bin-
der (Sask.) $281, (Ont.) $256.
Tractor, 2641 hp. (Sask.) $1442,
(Ont.) $1360.

These are pre-war prices but
the difference is certainly no less
today.)

© would be a great mistake to

imagine that these aiffer-
ences in prices and freight rates
are due simply to the distances
Separating the West from its
Markets and sources of supply
for manufactured goods. The
Standard Mileage Scale of Rates
for the Prairies is substantially
higher than that prevailing in
the Fast, as are practically all
commodity rates. A comparison
Can easily be made of the rates
Charged on goods moving out
from distributing centrés in
Eastern Canada, as against the
tates charged on goods moving
cut from Western distributing
centres over the same distance.
Such a comparison will reveal
that the charges in the West
are much higher than those in
the Fast, for example:

Article 7e higher
Lumber. ............. 39 to 69
Cement .2..0.2 2.0). . 20 to 30

Petroleum products . 35
Canned goods 60 to 80%

PACIFIC TRIBUNE — PAGE 11

ECC 0 oT MANERA

Billion d

iti OEE RETREA Hi

ollar

Ss

NELSGN CLARK
Saskatchewan provincial
leader.

LPP

It is not to be wondered at

that -the Railways have done
very good business, in the West
throughout their history. The

brief of the Saskatchewan Gov-
ernment to the MRovwell-Sirdis
Commission points out that in
the formative years of the west
from 1906 to 1925 the CPR’s
earnings from Western lines
amounted to’ $534,661,398 as com-
pared with only 250,996,267 dol-
lars earned on Eastern lines, On
the other hand, operating ex-
penses per mile of line have
been substantially lower west of
Fort William at all times, and
operating expenses-on the Sas-
katchewan District of the CPR
have always been the lowest of
the entire system. In his author-
itative “History of the Canadian
Pacific Railway”, Professor H.
A. Innis pointed out, “The ex-
istence of a large surplus on the
balance sheet of the Canadian
Pacific Railway and the con-
sistent payment of large divi-
dends, accomplished é through 2
high dividend rate and relatively
large issues of common stock
have been shown to be largely
the result of the freight situar
tion in Western Canada.”

“Oh, yes,” the Railways will
reply, “but things are different
now. Our costs are much high-
er.” And then they will pro-
ceed to tell a long, hard luck
story about how greatly their
expenses have gone up because
of the higher wages they are
paying. It is true railway wages

are somewhat higher than they
were before the war, although
they are still not as high as
those earned by workers in
many other branches of indus—
try, and the recent 10-cent in-
erease doesn’t begin to make a
dint in the higher costs of liv-
ing which the railroader- and
his family must now face. But
it Simply isn’t so to say that the
railways have to -be given new
hand-outs at the expense of the
public in order to meet higher
labor costs. The facts are that
labor costs have gone down
greatly im recent years, as a
result of the use of more
powerful locomotives able to
handle longer trains made up
of bigger box cars. The Canada
Year Book, 1945 has some int-
eresting things to Say about in-
ereased railway efficiency:

T= average tractive power
of modern Canadian locomo-
tives is 32 percent higher than
that used in 1920, and the aver-
age carrying capacity of freight
cars has been increased from
25.141 to 43.419 tons per car...
The speed of freight trains be-
tween terminals has been in-
ereased by 60 percent as com-
pared with 1917, thus making
possible a quicker turn-around
of freight trains. These com-
bined factors have increased the
utilization of freight cars by
70 percent.”. Thus, at the close
ef the war the railways were
able to handle twice as much
traffic as in 1938 with only one-
third more men. Consequently,
salaries and wages are becom-
ing “an increasingly less import-
ant factor in operating expenses.
The ratio of operating salaries
and wages to operating expen-
Ses on Canadian railways actu-
ally dropped from 60.7 percent
in 1939 to 62.5 percent im 1943,
the latest year for which the
Canada Year Book gives credit.
The railways are well able to
pay much higher wages without
receiving any increase in freight
rates.

T then is the real reason
behind the clamor for higher
freight rates. The real reason
is that the CPR and CNR wish

to be in a position to continue
to pay the big dividends and
interest charges which their
Shareholders and bond holders

‘have been accustomed to receiv-

ing over the years. The answer
to the problem of railway costs in
Canada lies the squeezing of the

water out of the capitalization
of the roads.

In 1932, the Duff Commission
found that the capital liabilities

of the Canadian railways especi—-

ally the CNR needed to be
“heavily written down.” How-
ever, they added that they did
mot consider that the time was
then opportune for such action.
Certainly, the time is opportune
now, and the job should be

EXC CC CT TATA TTT

yS—have opened a néw attack on the well-being of the people with their

Or permission to increase freight rates by 30 percent.
f their natural monopoly over transportation

For more than

in the west to reap huge

tackled immediately and effect-
ively despite all the anguished -
wails that will go up from the
investors. After such a recapi-
talization there will be no need
for higher freight rates. in-
stead, the Board of Transport
Commissioners can turn its at-
tention to wiping out the long
standing injustice to the West
that is represented by the pres-
ent freight rate structure.

-From 1940 to 1945, CPR
profits after income tax,
amounted to $341,894,507.

Of this amount, approximate—
ly $137,000,000- was paid to
bondholders as interest. About
83,000,000 was paid out in divi-
dends to shareholders, and 121,-
419,000 was accumulated as un-
distributed profits.

Apart from the above prot
its, $240,650,201 was set aside
for depreciation, contingency
reserves and so forth.

Assets increased by $221,042,-
T78. :

Net Profit After Tax

19390 ° 5 32 $35,288,620
1940 hs ee 46,331,601
POA a he ee 59,339,595
949 ae, 64,048,723
1043) te 65,482,318
1O44 ee ee 55,530,979
HOSS cess ee 51,161,291

Assets of CPR, 1945, $1,605,-
895,632. ;

The CPR has $1,447,223 on
Joan from the government
without interest. It has had
this loan since 1932 without
interest. 'Fhis is not the only.
toan’ the CPR has hag in
the form of a gift

eS.

Excerpt from National
War Labor Board. Deci-
sion dated Oct. 16, 1946,
on the company’s plea that
they couldn’t ‘afford’ wage
increases:

“The Companies presented
their financial statements cov_-
ering operations during the
years 1939 to 1945, inclusive,
together with an estimate con-
cerning the operations for the
year 1946. On the basis of
those statements they argued
that it would be impossible
for them to assume greater
labor costs in the face of de-
eclining revenues.

The statements of the Cana-
dian Pacific Railway. show
enormous increases in £TroOss
earnings from 1939 to the peak

High profits, low wages
guiding CPR maxim

year 1944, $141,280,700.00 to
$318,871,034.00.
“In 1945, gross earnings

amounted to $318,109\358.00 and
it is estimated that the 1946
earnings will amount to ap-
proximately $278,409,000.00. Thus
a downward trend in earnings
is indicated. :
The statements on operating
expenses were not in detail,
and we are, therefore, unable
to ascertain whether the Ca-
nadian Pacific took any ad
vantage of its favorable rev-
enue position to “write off”
on a basis which would not
be possible in more difficult
times. Nevertheless, we do
know that such is good busi-
ness practice, and we are also
aware of the Company’s rep-
utation for efficient manage-
ment and the maintenance of
sound business practices.

During the years 1939-1945,
inclusive; the total assets of
the Canadian Pacific. increased
considerably as we have re-
Serve and profit and loss bal-
ances. The liquid position ,of
the Company has been main-
tained and, indeed, improved.
Funded indebtedness is down
substantially thereby and to a
commensurate extent, freeing
the Company from certain ree
curring * fixed charges. Of
course, share capital and con-
solidated debentures stock re
main unchanged. It was also

shown that during the said
period provision was made for
dividends.

In cases of this kind, it has
been the practice of the Board
to consider a Company’s over-
all financial position, rather
than the financial position of
a part only of an employer’s
undertaking. In this case re_
gard must be had for a sub-
stantial item shown as “other
income” in the Company’s fi-
nancial statements. Such item
is not included in the operating:
revenues above referred to.”

—Compiled by the Trade
Union Research Bureau.

ERIDAY, NOVEMBER I, 1946