12 Geo. 5 ENGINEERING AND Economic Frarures. R ii

number of thousand feet of timber he has to haul out. The result, be it at a rate of 2 cents or
$1 per ton-mile, he will add to his cost of production, and if there is still a chance to sell the
product at a profit the road will be built; that is, the traffic must bear the expense of operating
plus the cost of construction. If the operation was to be continuous, then the traffic would have
to bear the cost of operation plus the interest on the capital invested. If he finds that the
traffic will not bear the expense the road is not built. Is there any business-man who will argue
that the cost per ton-mile is the same on all or any two of these yarious roads that go to make
up 1,000 miles mentioned above? Is there any logical argument that can be put forward to
prove that because the New York Central Railway can operate at a profit at 1 cent per ton-mile,
a four-track road between Buffalo and New York with over 100 trains per day, with light rates
of grade, with capital charges per mile for construction not much, if any, greater than that of
the Pacific Great Eastern Railway, that the rates on the Pacific Great Bastern Railway, with
heayy grades and light traffic, should not exceed 1 cent per ton-mile?

What were the conditions before the Railway was constructed? ‘The rate, I am informed,
from Ashcroft to Barkerville was 11 cents per pound. This, I compute, amounted to about
80 cents per ton-mile. This was over a highway built by the Government on which the freighters
paid no toll or any item to defray interest charges and at a time when the dollar was worth
much more than it is to-day. The freighters, during the construction of the road, hauling
construction materials, oats and other farm products, using modern motors on roads constructed
and maintained without any cost to them, charged from 75 cents to $1.25 per ton-mile. Now
when the road is in operation they complain because they have to pay a rate of 1.2 cents and
for short haul or less than car-load lots up to 10 cents or more per ton-mile. I fully realize the
difficulty in making satisfactory rates or equitable rates. ‘There are certain commodities that
cannot moye if they had to bear a rate to pay the cost of operation plus interest. These com-
modities, I know, will haye to be moyed at low rates. Providing the rate is not actually below
operating cost, no railway management, either private or public, is justified in carrying any class
of freight at less than cost, thereby imposing an unjust burden on the other patrons of the road
or upon the taxpayers, as the case may be. Another factor is competition that you must meet,
providing the traffic can be carried at a rate not less than the cost of operation. Let us put the
question in this light: Would any sane business-man build a factory where the construction costs,
on account of adverse conditions, were from three to five times what they would be in more
favourable locations, where the operating costs would be from 50 to 100 per cent. greater than
in more favourable conditions, and where the production would be limited to one-tenth or one-
twentieth of the capacity of the plant, if under all these adverse conditions he would be compelled
to sell his products at the same price as his competitors who were working under the most
favourable conditions? On the other hand, if the expediency demanded the construction of the
plant under these adverse conditions, what would he think of those who would argue that the
products of this plant be sold to local patrons at the same price local patrons of the more
favourably located plant would pay?

When the price charged for motor-haul running on a Government-constructed highway is
from 50 to 100 times the rates charged by a railway with an operating ratio of 191.6 per cent.
and the deficit made up by the taxpayers, there is created an injustice that should not be tolerated.

If the Eskimos are discussing the railway question, they cannot blame their small amount
of trade on railway rates, as they have no railway. Their adverse condition which restricts their
trade is location. Now, if railway connections were made with all parts of their country and
the possible trade of that country was required to bear the cost of operation and interest on
inyestment, trade would not be increased because the traffic could not bear the expense. We
might then, however, hear the Eskimo join in the popular ery that they were victims of unjust
freight rates. There is one objection to raising freight and passenger rates on the Pacific Great
Bastern Railway—namely, that those who are opposed to Government ownership and operation
of railways will use the fact as an argument to further their ideas, but such an argument will
not be a logical one or a just one. It has nothing whatever to do with Government ownersbip
or Government operation. It is a business matter, pure and simple. A road is constructed over
mountains involving very heavy construction charges, very heavy rates of grade involving heavy
operating expense, and the traffic is very limited. For argument’s sake, we will assume that the
trafiic is sufficient to pay interest on fixed charges plus operating expenses at rates of 50 per cent.
of these charged by the railway’s competitors (freighters). Is it not an economical proposition
to build the road and reduce transportation charges by 50 per cent.? Mave the people of that