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Unemplo ment--Freight Rates--
l I HE indicatoi' of true pi°ospei‘ity is employment The presence ot'
' unemployed men, unemployed machinery, uneinployeil railway
Unemployed equipment and railwayin Canada is reason enougli, tliei-et'ore,
for every large Canadian business interest to study its relation to the gen-
eral problem-to see whether anything' in its power remains to be clone to
advance the general prosperity of the country.
I` N this connection the Railway Cotiipaiiies have been specially inter-
ested. Freight rates touch everyone", and, because tlii-y tlotich, :_.ire
always close to the public consciousness and more coiiveiiii;-iitly attai-lieil
than the true causes of depression which are less 1;-.\:a<,-tl_v 1_|is1,»ei'iii.-il and
more difficult, if not indeed impossible, to control.
I ' .
F URTHERMORE_, the Railways while joinin_i-; \\-ith 1-vi-ryone else in
- 1 ; the general agitation for deflation ol' prices and \\'a;»;es~l'oiiiitl
_tlfieinselves recently in the seemingly anomalous position ot’ cleiniiri-ing
i  -- nd the   ailways 1 
1. »»-i-
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- 1
though they were endeavoi-ing' with one hand to put wages _down and with
when it was proposed to lower railway rates. They were made to appearas
the other hand _to keep rates up, thereby sec_u'ring for t_h_eir own treasuries
instead o'l"1iassingon to the Canadian public, any saying eftected on the
wage rolls. They were placed in the equivocal position ot liaymg urged
blanket increases ol' rates when wages went up--and of opposing blanket
ileci-ease when wages were seemingly deci-eased. ,
- ' -°°.':siir~
T HE following statement is offered, therefore, with a view to exhibit-
ing what the Railways believe to be the true relation of Railway
freiglit rates to the question ot'-uneniploytnent, outlining the histoi-°y_ of
tfanadian rates, explaining solnething of the groundwork of ratemaking
and clearing up the seeming anomalies referred to, so that none may re-
main as possible causes for future weakening of confidence between the
public and the cai'i'iei's. , -
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, .- Freight Rates and Unemployinei_i_t_ -
_\1Vith a large part of the \vorlil’s popttlatiiiii iilli-. ni- only
l3_"m3uY_fm¢lfm1 Owing to wars or ilistnrlicil political ciiiiili-
I0ttSf-W,ith_inventors in many parts of thi- wiirlil :ilniiist iifriiiil to
exfposetheir inventions, orgaiiizers afraiil to orgaiiize, capital lii-~i-
§»_1°!\n_g to-invest-a corresponding proportion of iviirlil priiiliiitiiiii
is missing. Ihe total of goods zivailablc for the ii-orlil is li-ss thiiti
normal. Those who do not produce spealting geiicitillvf- ciiniiiii
buy. _Few purchasers-fe\v`sales-little eniploynic-iii. 'l`liis is thi-
great world-wide fundamental of the uiteinployiiiciit sititiition.
2'- '_l`he_ condition is internrition-al, not local, tn<Cati:i`-il:i. lf t`iiii~
` -Qian railway rates were a determining factor iti niziliing the sali-
_ §f5fl€'€Sigf our eicport goods; in other worgl_.~1, i\f Caiiailian prici-s
; .~  higher in triterriatioiial |narl<_t-ts than the goods of nur cunt-
,__,_v,NJ_R:1»‘it0_r5,' then t'2t\l\\'Z\y rates \v0tild he coii'tril1iitiiig lo iiii1»iiipli»_y-
‘.\" ¢tit`in Canada by depressing our sales :ilu-i1;iil_ lint-i~i-ing i|,,~ ppm.
ber of our customers, :ind the orili-rs coaiiin-g to our pmiliii-i-1-,~_
But in the first place the real effect of ftriglit i':iti-(nit prii-i-~
making is :i debritablc point. 'l`his is proven.
(1). By the fact that prices fi-ll l-:ist fall :if-ti-.r the rates \\'L-tc
increased intsead of rising as the retail trailcs hail proplii-sii-il.
(2). By the fact that a io per ct-nt. ri-ilitctioii on tves-tt~i'ii
coal rates, offered in order to stiniiilit-tc coal iniivi-iiiciit in "Ilii-
» Summer months was followed by a drop in the coal toiiiizigi- of-
-fering instead of an increase. ` '
In the second place, as-siiining for the piirposcs of iirgitini-itt
they did have serious el`fi-ct, Laiiailian export raii-s are lowi-i' :intl
* -Knbt higher than the rates in cotititries with which (":i't1:iila‘in;iv .ln-
' "compared Mile for mile the lianl froiii \\'i-str-rii tiiiiiiiliaii
points to the head of navigation is clit-a-per than- in the L`niti-1l
1 States. The export rate on grain is loiver ‘than it watt last .-\tii_;itst.
In other words, in intcrnzitional i~oinpi-ti-rioii on hi-r rliii-f
items of export, Canada is helped hy hi-r railway rates, -io fat' a-i
intemzitional trade is concerned. 'l`hey are iillevt`atiiig niii-iiipl11\'~
ment rather than aggrrivatiitg it. '
Inside Canada the same is true, :illhongli it is a vi-ry dillicitlt
point to prove or disprove 'l`hi- railways of (.`:iti:iil-a tiri- siiii`i-i'i- iii
claiming that, by and large, goods :ire cxirrit-il more clii-:iply in (fan-
- ada than in the United States. Catizida had one ltliinlii-t reiliictioti
of 5 per cent. last january, ivlii-rc-:is there is still no dect'i-:i-it-.
nor immediate prospect of a blanket decrease, -in the United
States.
The Trend of Fi-eight Rates
With the exception of war and post-war coiiili-iioits, the whiili-
tendency of freight rates iti this coiiii-try, as in any other |1t'i1;gr1-~;-
sive country of its kind, is downwaril. As (`attada’s population
rises, as our industries multiply and the den-iity of trallic lit-t-otitis
more nearly like that of older countries, some of the principal
costs of railway service can be sub-diviili-cl :imoiig a greater mini-
bh' of shippers and travellers, levying on each, tliergforc, ;i sinaller
fraction of these costs than before. For twen-ty years prior iii
the war, traffic was on the iiicrea.-it-_ For twenty years, tlieri-fort-,
the railways have been adjusting rates dowtiwa-i'd»~qiii-ti- apart
fi‘bm'special decreases put in effect by -the Board of Railway Coin-
ltllssioners. These revisions have -bi-i-ii skillfully applied by ex-
perienced, practical economists-that is, hy thi- fi-ciglii traffic 1-it
pert! of the railways, whose business it is tn know all lit'.'iticlit-s
of industry intimately, so that bf-neli-t of these voluntary rate ail-
justments would go to "key conirnoditit-s,’ thus itiiiitilatiii-g fiirrlii-r
lwvdh ofthe country increase in trallic, and iii the end, further
_ 1
T e Railway Ass
iiilitrtiiitis of rates, 'l`lir- il-iil'i-i'i-tire hi-l\\'i-eii giving :i ri'iliti`tii'ni
ti: ii "lit-_v inilii\ti‘\"' rziilii-i‘ tliziii -.|111-:itli|igi1\'i~i' :ill liiiiils .of giioil-=
i-» illit~tri|li-il iii thi- raw iii ii ri-tiiiiii .~=iii:ill t':iil\\':i_\' \\'liirh liv sini-
iiiiitititiiitg riiti- ii-iliii-ti1»ii< on littiihi-r, 1-i\:il1li~il ilii- iiiill~ of that
ri-tgiiiii to ri-inziiii iipi-ii :iiiil the |11-iviplv to ri-iii.'iiti :it \\i»t‘l\'. \\lii-i'i-ri.
il' thi- i-llii-rt tif thi- ri-1liii`liii|i~¢ hail lit-vii ~i'.'itti-ri-il i1\'i-1' all tht-
igiiinls \':itt'ii-il li_\' thzit |'ii:iil t-:tilt izittiily \vi1iilil li:i-.'i- hi-rn zilili-
lii -:i\‘1- :i snifill liiiiitlfttl of sil\it iii :i \t-:ii'. {|>i'i1\iih-il thi- rli--
i-'i-;1~i~il riiti-~ hail hi-i-ii p:i~\i-/l on :is ili-fri-:i~i-il h_v ~tiii'i-lit-i-pi-t'-s.)
hill thi-ri' \\riul<l li;i\‘i- lici-tl :iliiiirl iiii i-itipltiyiiii-tit.
So ittuclt for thi- il:i_\'~t<i-il:i_\' ri-iliii‘tioii< zirrziittii-il iiirtlioitsiitiil-;
of iirlicli-s hy the ti‘;illii‘ ili-pzirltiii-tits i1f the riiaiils. lit HKJ7 ii
~iih~.t;ititi:il ri-iliti-titni in utiisti-rii i':\ti-s \\'-as niiiili-. ln ml.; it vi-r)\'
tnziti-i'i;il ,rtit \\'ii< :ipplii-il in thi- \\`t-st, _-.ii that thi- tr:itisci»titinl;il
lint-~. i-iiti-ri-il thi- wat' pi-rioil witli a ili-pu-,<.-;i.~tl cariiitig poivi-r.
\ti\\', \\hili- :ill 1-\i‘ti llii- -r:iil\\'.'iv\'< »`i~i- thi- ili--it‘:iliilil\' for
lt1\-.' lr:-i_elit rfiti-\_ llivri- :ire ii"-tl:iiii litiiiI~ li-'_\<1tiil \\’liii`li iiii tiiii'
itigi-s ri-iltii-tiiiit<, ill i~oiii'~i-. th<~i'i° art- ilii-oitists .~i\i‘h :is .\lr.
lii-rnziril .\`li:i\\', who lirlic-\'i-il ili:it :ill r:iil\\`:i_\- .si-t'\'ii'i~ .siioiilil hi-
iri-i~_ litit li-:iviiig .'i~itli- vii-\v.~- ro lar iii :iil\':iti,i`i-_ as _\'i'l. tif piililic
iipiniiiti, il is iisstiittt-il hy niiisi pi-iiple th.-it :i i';iil\\'.'i_v \\'ill give hi-st
.\i~|'\'ii‘i‘ :it li<:i~t i'o~;I---l>i'i‘;iit\t- ot i`fiti’t\i- i-vrii fri-i- i`:iil\\':r\\ iiittsl lil'
piiiil fi1i‘h\' tht' t:ix|r:i_\'et‘-- \\‘lit'i\`tlit'ii' iii;it\:i;`fi~tiii-ills :irr ;illii\\'\'il to
slimv thi-ii' ini-ttlr h_\' nit-i-liti;_-_' thi: i»l1li_tg:it'ii»n~ iif thi-ir priipi-rlii--i
iiitt of lhrir i-:it‘tiiii_t;.-. lt i~- ii~iiiilly i'i-riiigiiizi-il llizit tlii-,~i-i1l»lig.'i-
i`11ii“ faill iiitii ini; ix-i'<1it|is.
lirititp tint-, to pity thi-ir i-ti\|1li»_\'i-is i~; iii p;i_\' for i‘i\t'i'i-tit stip-
plirs of tii:iti~t'i:il-s -.itch as i-iizil, ~-ii~._i- to p;i_v for ri-p.iii'-. :intl rr-
_pl;ii'i-iiii-ii\~`. 4_”___-“_ _`__, __
_ ,liriiitp t\\ii, Iii p:i_\' -ui-li ii \\'.ig_;'i- of liiri- for thi- ttsi- iil thi-
iapilal \\'liii‘li_l1uilt thi-sr i'.'iil\\ii_vs :is \\ill iiizilii- (`.'iti;iili:iii i‘iiil\v:i_\-
~i-i'iti'iii<-~ .'il\v;r\~ ili-siixilili-. :iiiil i'1ij\il_\' iitai'l<t-ti-il \vlii-lhi-r as l'itt|iil~»
or ~.ii»i‘l<~, '|`lii~ iiiiiilvi-- iititi'i»~ than thi- nii-t'i- p:i_\'|iii-in of thi-
i--t:ihli\lii~il r;1l<- of iliviili-iiil iii thi- t‘:i~<t- of priviiti-l_\ i1\\'ni-il riiiiils..
It iiiviilvi-.~ thi- i-ziriiiiig' zil~ii iii' stunt- sttrplits-~ :i s:ifi-ty iti:it'giti til
iiiciitite iivi-i' i-x|ii-iiilitiirr, \ilii<'h _will assiiri- iii\'i-slim; of i'i1tnpl(-li-
-sift-ty. 'l`hi~» pritiritili- iilsiit'plii.~: \v.'i-4 ili-l`initi-ly i-sliililisliril hv
thi- juilgnii-iit of the lhiiiril tif l\':iil\\';i\- (`i1iiitili.-sii1tii-r.s in lull,
tiiiili-i' thi- ili:iitin:iii~liip of Sir lli-iiry l)i'.'i_\'ti>ii. and itplii-lil h_v its
jiitlgillvnl of l<i_’ti, \\'lli-it thi- iiiiilti-i' \\:i< :ipiiiii i't»ii-itli-t'<-il rxhiitis-
tivi-lv. tin this prii\i'ipli: i'1-~l-.`(`aii:iil:i`~» :il>ilit_v to i-itti-i' the iiiiiiiey
ni:irl<i-ts \\'lii-ri-\-1-1' -.lie in:i_\' iii-i-il :itiil li-1-l riniliili-iit of liriiigiiig
liiicli' fittiili; fiii' i».\'ti~iiilii\g lit, r iail\\';i_\'s :is -lie niay i'i.-tp|ii'i- in thi-
liitiiri-, , -
\\`:i|' ri-i|i1liliniis_ follii\\iii;( thi- \\'i-vii-i‘ii :intl <-ii-.-ti-rii rtili- :itl-
jtt-ftiiii-iit-a, liroiiglit thi- r.iil\\;iy tiiaiiiigi-iiit-iits ~iliiir|»|_\- up agiaili--l
thi--.r fiiiiiliiiiiriitiil priihli-tii-, -tiniipiirittg thi- tiovertitiif-iit’s
ligitrirs fiir ioiij iiigiitiist into -Ihr last _vi-:ir for ivhiiili thi- l':iil\\'.'i}'
hini- liiiiili is :i\:iil;il1li' llii- \\.'it;i- hill i1l thi' i':\il\\'1iy> rirsi' ju pi-i‘
ii-nl ;i-i1:il,,§.;5 pi-r vi-iit.. tii»~ _1_-0111-t' 1-i-ut ; hiit iii-illii-r thi- vohtnii-
of ti':illi\' noi' thi- sriili- of lrvigltt rxiti-~. iiicri-:ist-il in ciniipiirnlile
ili-gri-r iluriiig that pi-iinil; thi- ficittiil i‘i-vi-iiitr pi-i' ion per niile
i\\"hii‘li is llic rt-:il printf in ili-.|1roof of thi- |ii:itli-r) iiilviilici-d
only Jo pi-i'1~i-nl. nvi-r liitif. llii- _\'t-ai' |f)_-ii 1-iil.'ir;(i-il thi- ilisi‘i'e|i-
:itit‘_\'. iillliuttgli :in iiiri-1-ii--v nl 35 |11-r ri-in, on wi.‘:»ti-i'ti liiii--a iitiil
.iii pet ri-in. iii thi- i-.i:.i -.iii-, -~iippi1si-il lu _vii-lil 1-tioitgli ailditionxil
ti-\-i'niii» to int-1-l thi- iiii'i'i;i.i-<l \\'ii;§~--L 'lhi- iiicri-;i:.<-il ivziggi-s
\\¢-rr i-l`l`ci‘li\'¢- lriitit .\l:iy I--t ~ thi- iiii'i'i-a-1-il rali-s init until Si-p~
\i'i-rc i-lf1-<'tivi- ftiitii .\l;iy i~.t -th iiir|'i-:i~i'il rali'-1 not ittitil .Si-|1-
ti-iiih:-r 1:11. 'Ihr i»l`t`1»i'ti\1-1i1- tif- that itiiiw-:t-.1~ 1|i-pi-nili-il iiii tlti-
rolitiiii- of ti':illii‘ reiniiiiiitig .it ;i"fati'|y high hfvi-l. lt ilid so for
ti tinii-. ilirn licgaii to ilriip. lkiilny it is vi.-r_\‘ liiiv. .\'evertliclcs>,
Y ,
_ i-
.- 
a 5 pi-r cet-f. ilecri-rise was applied in _lann:iry. For I/if Hrs! sir
1,-‘:111i/.':,i 1if`l<).!l im' iiiwifiitrifil it-il/1 II/1’ /irsl .ii.i' mini//1_1 ii/ |020 thi'
fi./i//itv of /r1i_)fi`1‘ on ll1i‘ u11»_\‘l fi»rIi'11n1iI1‘1\' .riliiittril (`1tt|i11li'im mild
j1~// _-11.7.' /-iv' mill., utiil ilx ri'i'i'1ii1i' ilu I/tix /1iiivi1i1'i'.\`, in .\`/i1`li- of I/ii'
/1/11//11-1' rii/1'.i` frll I l.|.| /-1'r i‘1'nl.
'l`h<- nrt ri-siilt of tlicsc vliziiiges li:isl1ceii n .static of i-niergency
in thi- iilliri-s nl ci-rn the iiiost. fiirtiiiiziti-l_y sititxiti-il of all (`:in-
ziiliiin riiziils; \\':igi-s ciiulil hi- paid and hills niet on t'in\t‘, even the
ti~tt:i| iliviili-nd wits paid, iiliil it vt-t'_v .slight siirplits inte of tht'
t:ii`ti1|'< in iiiiiiiilziiiiiiig thi- i'i-piit:it'ioit of ,L`:iii-ailiitti railway S¢'rtir~
ities, \\':is czirm-il. lin/ //ii'.i‘ it-11.\‘ 1»i1l_\- ilimi’ l1_\t dt'f1'rriu_11 'iifor/i'
1/iii/ iiiiixl i1[li1iti1l1'I_\_- 111' ilirtn- ini 1'/irri°i|I 11i'1‘1»|11i!. Such ecoiioinies
i-ainiiiil Y- inf hi- coittitttii-il ivithout i-ating too ffir into the broad
;~;ifi-ty iiiargin ivhicli the L`an_ailiaii roads inztintain; nothing bitt
.~liii‘l<ciii-il spi-i-il of trxiin-s and reduced (fanadiaii industrial effici-
ency .iran result if thi-sc savittqs have to hi- lung continued. Falling
tizillii' still fin-tlii-r :iggi':i\':iti--4 thi- cotiilitimi. .\fl:iinti-niiiicc cannot
riiiititiiii- to he s:i1'i'it`ici-il to priili-ct thi- cri-dit of our railway
-_-i-i‘iti‘iiii-s: nt-itlti-r can hi- in-glcctrtl. f ,
ln .\l:i_v thi- nixitiiigt-tii<-tits :ippi'o:ii-lic-il the task of reducing
their \\'a_i;i- hills. lfor the Iirst tinii- in innny years it was the ninn-
:i_t;ciiii-tits and not the nten \\'ho wi-re taking the iitiliat-ive. 'l`hey
had hi-i-n fori'i-il to ailopt the \\'ar-t'itite iiicri-uses grziiitcd in the
l`iiiii-il Stiiii-s, ivlii-rc 1).: pt-r ct-nl. i1l thi- nit-iiilliersliip of the rail-
\-':i\' utiioiis lic. '.l`lici'i-fore, \\'hi-ii the t't-verse canic they :it once
ggiivi- ihii- tiiitire :ind a prii\'isimitil and conditional ilccrt-asc of
i'nitg'lil_v to pi-r ci-nt.~~-ciirrt-sponilitig to the saint- niovenient in the
l nitcil .\'t:iti-.s --\\':i> pin itl cllccl, tt-iitiili\'t-ly as from july l5tli.
'liliii i'i-iliictioti has not hi-i-ti iicci-ptcil hy the l'nitcd States meni-
l.~i;r~Iiip of tliettiiiiiiis, wlii-rc :i viitt- is hi-ing taken on the qtiestion
nor l»_v thi- (`:in:uli:iii tiii-iii-licr.sliip, \\-ho ltitve :ipplied for it lioaril
ol' i-oiii~iliiitioti.‘ l-Zvi-ry ri~si>iit'cc of the nizitirigeint-tit will be used
ti, sits-iiiiii this iiiipi-ttilively iii-i'i-s.<:ii'_\' and only tivo tnoilerate re-
iltii-tion of thi-ir wage l»ill.~i----\\'liicl\ :iccoiiiii for (ioper ci-nt. of tlit-
i~i>~t of iipi-ration~ they ziri- cniiipi-lli-il to ri-garil the ntatter as still
ntisi-tlli-il, and llii-ri-fi1t'i- not in he cotisiili-re<l as a basis for the
ri-ilitiitioit uf railwziy riitc-4, :i view wliicli a majority of the Board
oi' l<ailway totntitissioiii-i's h.iv<- just 1-xpri-ssi-il in its jnilgiiient.
In Conclusion
'l`hi- t‘:iilwa_v iiiriniigi-tiii-itts \\'i-Ii~ottti- di-flation of t'ailwn_v rates,
:intl :irc ivurliitig sit-:i<lil_v towiiril that und. Un two grounds, how-
:-vt-i'_ thi-y aslictl that any gi-iii-ral di-crease he deferred.
l~`1r,\-/ - lh-caii.<1- thi- sii~i-iilli-il wage clt-creases are not yet assur-
i-il :intl i-:innnt hi- until thi- piiralli-l di'ci't-:ist-s in the United States
v.'lii-rc 11.! pi-t' i'i~iit. of thi- iiniiiii nit-iiihi-rsliip lies, (Kind Where no
gi-tti-ral fi'i-ight riili- ri-iliirtions have bet-ii ordered,) are settled.
- .S`1-riitiil-» Iii-ciiiisr the viiliitiii- of tral`lii' in the iininediati: fitttiri'
is prolili-tti:itii'.'il :iiiil any si-i'ioit~i tlculiiie, if coupled with it de-
crease in rates, wiiiilil ht|vt‘ very grave effect on even the most
tnvoriilbly sitiiatcil iiiiiiirigi-itiriits.
'l`hi- railways htivi- spolit-ii against lilatikct decreases on the
grimtiils that il woiilil he iii thi- inti-ri-sts of the coniitry as :i whole
to i`i»iii~i-i\li'iili- any lie-iii-liviiil 1.-l`t`i-i't lobe ex-pected on "key own-
iiiiiditii-.~" ratlii-r than iltisirihnti- thi-ni over all classes of goods,
tliei'i-hy l1i-nt-littiiig only thi- ilisli'i-liiltiirs.
'lllri' have hi-1-it arltiiiti-il tliriiiigltiittt hy the di-sire to assist
in thi- |ii'i1t~i-ss tif dt-lliitioiiv~i1liji-ctiiig only when that profess
niiglii si-rin to tliri-atcn their solvt-tii~_v and- iii-jnrc tlii-in-aiiil
through ilii-iti~-tlie iili'iin;1te interests of thl>.‘L`aiiadian public.
' 1
ociation of Canada
263 St. James Street, Montreal, P. Q
pi., `
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1
1
5
fi
1
ru:-aw-I
-.-
8