_Speaking some truth about the difficulty of operating a railway for
the nation._
On this continent there surely never was such a weird phantasmagoria
of railroad changes as occurred during and immediately following the
war.
Canada led the Western Hemisphere into the fight that was to save
freedom, and was to magnify Canning’s saying about the New World
redressing the balance of the Old. The cost of the war in economic
disturbance, during its progress, and since the delusive peace, was
as little foreseen as its immediate cost in blood and treasure. What
Armageddon did to North American railways is not yet appreciated by
the millions who use them.
As the war worsened, the Canadian railway situation worsened with
it. The penalties of overbuilding were felt on every side. There was
extraordinary development of war industries; but the cessation of
immigration, the attendant drag upon agriculture and commerce; and
the curtailment of ordinary measures of maintenance and betterment
made it inevitable that very heavy expenditures must be faced as soon
as peace returned.
The war brought a grievous end to the Canadian Northern as a
Mackenzie and Mann enterprise. It also demonstrated beyond a
peradventure the hopelessness, from the beginning, of the Grand
Trunk’s fathering of the Grand Trunk Pacific, by throwing that
western system into the hands of the Government, under a receivership.
Then, as if these difficulties were not aggravating enough, the
entry of the United States into the war, at a time when wages across
the line had soared almost beyond trade unionist dreams of avarice,
threw the railways into a Government pool, with a confounding result
on Canadian railway administration. The McAdoo wages award on the
railways which came under control of the Secretary of the Treasury
raised expenses on all Canadian railways to a point which, though
they compelled rate increases, still could not adequately be met
by any charges which the Railway Board deemed fair to the public
interest. The policeman’s lot in the Pirates of Penzance was indeed
a happy one compared with the Canadian railway executives’ job
towards the end of the war, and during the period of re-construction
immediately following the armistice.
In such circumstances it was fated that we should carry through
one of the strangest phases of the history of transportation--to
change two great systems of privately projected and privately
controlled railways, into public ownership properties, to join them
with a network of Government railways already in existence; and to
prepare the way for the speedy incorporation with these three main
ingredients, of the senior system of Canadian railways--the Grand
Trunk.
One had travelled a long way from the tiny line between Gladstone
and Dauphin, although it was less than twenty-two years from the day
I left the old Manitoba North Western to the period during which
the new directors of the publicly-owned Canadian Northern Railway
took over the Intercolonial and the National Transcontinental, and
“Canadian National Railways” was first used as a name that was to
represent the legal unity of the largest system in the world.
Perhaps, if we were hunting for records here, something unique might
be discovered in one’s service. A little pioneer railway came into
existence; grew to a system of nearly ten thousand miles, passed from
private ownership to a national enterprise; carried on for four years
under its former statutory identity, during which period there were
associated with it, first all the Government railways whose building
was fundamental to Confederation; and, secondly, the Grand Trunk
Pacific, launched as a semi-public enterprise with the intention of
dwarfing its existence. Only one general officer was concerned with
every phase of that kaleidoscopic story.
His experience involved a multiplicity of responsibilities which,
viewed from a comparatively restful contact with less exacting
business, seem now to be chiefly remarkable for the fact that
they did not entirely swamp his sense of personal identity. An
advantage of being away from it all is that one may obtain a
clearer perspective of what happened, and of the trend of its
public importances, than was possible when one was encompassed by
administrative labour.
There were eight years between the outbreak of war and the departure
of my colleagues and myself from the Canadian National Railways.
That fateful period seems naturally to divide itself into three
distinct phases: the labour immediately attributable to the war;
the measures required to make the best of the general situation
left by the war, and the methods by which it was endeavoured to
reconcile the efficiency of private management with the essentials of
responsibility to Parliament. The last first.
As far as public policy was concerned, the situation into which
a Board of Directors, newly appointed by the Government, entered
was made for them by events which happily, perhaps, for them, were
part of the war, as well as part of a railway problem of the first
financial and administrative magnitude. We came into office when
members of Parliament had something to think about besides jobs.
Even if the word “politics” were not used here, readers would use it;
for, after all, you cannot have a revolution in a nation’s railway
affairs which depends on Parliamentary action, without political
considerations entering into it. Besides the great interest of the
whole body politic, which is statesmanship, the pull of the hungry
partisan is sure to be felt, sooner or later.
Except for the infinitesimal proportion of men to whom nothing in
public service is so important as the chance to get their hands on
some public post or property, I think the public sentiment west of
Montreal was, and is, all for keeping politics out of all the railway
administration for which Parliament became responsible by the taking
over of the Canadian Northern, and the receivership of the Grand
Trunk Pacific.
During private ownership, the few attempts which were made to
influence appointments by friends of Governments which had given
guarantees had failed ignominiously. When the Canadian Northern
became a National liability altogether, the war was almost at its
worst. The acquisition of the system meant so much obligation that
few supporters of the Government felt like making a party holiday
out of the transaction. The war had for three years been the
universal preoccupation, when, in 1917, party considerations were
subordinated to the formation of a Union Government. From the point
of view of starting with a clean slate, as far as the attentions of
old-fashioned machine politicians were to be apprehended, conditions
could not be more favourable for nationalizing thousands of miles
of railway, hitherto privately directed. Indeed, the Government
exercised its authority over the Canadian Northern, before the Union
Government arrived, by appointing as directors: Mr. W. K. George of
Toronto, Mr. William Christie of Winnipeg, and Mr. Harry Richardson
of Kingston. This happened almost without Parliamentarians or the
public waking up to its significance.
Mr. Richardson was appointed to the Senate. Senator Nicholls of
Toronto had been a director of the Canadian Northern from the
beginning. While the final transfer to the Government was still in
the future, certain legislation was pending affecting the railway,
and these two senators resigned their directorships so as to avoid
every appearance of political advantage being associated with the
railway.
It was in the spring of 1918 when the complete surrender of the
Canadian Northern to the Government was announced. On May 15th Sir
Robert Borden described to the House of Commons the administrative
policy of the Government:
“As to the immediate future, I have already said that we do not
intend to operate the Canadian Northern system directly under a
department of the Government. It is our intention to operate it
at present through the corporate machinery by which it has been
operated in the past. There will be a reconstituted Board of
Directors. We shall endeavour to get the best men we can; and we
shall not interfere with them. We shall leave the administration
and operation of the road to be carried on absolutely under that
Board of Directors, and we shall use every means available to the
Government (and, if necessary, we shall come to Parliament for that
purpose) in order that anything like political influence, political
patronage or political interference--I am using the word ‘political’
in its narrowest sense--shall be absolutely eliminated from the
administration of that road.”
This was the only policy which could be laid down with adequate
appreciation of the magnitude of our task. It would be less than
justice to Sir Robert Borden to refrain from saying that he and his
Government lived up to that declaration. The same is true of his
successor, Mr. Meighen. Neither directly nor indirectly did either of
these Prime Ministers make a single communication to me, or intended
to reach me, as far as I have the slightest inkling, with a view to
influencing any decision likely to affect any man’s good will towards
the Government.
Up to that time Government railways to the north of the St. Lawrence,
had not been operated on the basis of political advantage which
had affected the Intercolonial management from the beginning. The
National Transcontinental, between Quebec and Winnipeg, except for
the grain traffic to Fort William, was a sort of waif, with so
scanty a revenue that, with the war occupying everybody’s mind,
nobody interested in votes seemed to pay it any attention. It found
practically nothing for idle political hands to do. Satan was busy
elsewhere.
Between the Ottawa and the Pacific, members of Parliament had not all
their lives seen the section men of the only railway in their region
changed with every change of Government, because they were friends of
the departing Administration, and friends of the incoming Government
had been promised their jobs.
The election of December, 1917, was followed by limitations of
patronage which the old-style politicians did not like; but which
they knew it was futile then to attempt to revoke. Sir Robert
Borden’s declaration was received without vociferous enthusiasm and
without audible complaint from his supporters.
Parliament prorogued eight days after the Premier notified the
politicians to keep off the track. In September the complete new
Board of Directors of the Canadian Northern was appointed. Not one of
them knew anything of his contemplated appointment until he received
the direct offer of a place. Not one of them was considered because
he had any political influence. Every one of them was chosen for his
potential value to the board as a man of wide experience in business,
in most cases as a large shipper of freight; and in one case because
he was of the foremost financiers in the Dominion. Every man hated
the idea of political influence being injected into the railway
business. If it be of interest to such as love to look minutely into
such matters, it was found later that a majority of the Board were
old-time Liberals.
We were a real Board of Directors, and I think no more harmonious
body of business men ever worked together--I don’t mean in the sense
that there were no differences of opinion; but in the sense that
there was unity of aim, and a single-minded desire to do the best
that was in us for vast properties, in the success of which the
national prosperity was very heavily at stake.
The Board had not been at work very long before it discovered that
it had been given the task of fusing ancient and modern, and that
one of the elements in the projected fusion was not in love with
the operation. There was, indeed, some temptation to feel that the
situation was expressed by:--
For East is East and West is West
And never the twain shall meet.
Our appointment as the Board of Directors of the Canadian Northern
system was followed by an order-in-council appointing us to
administer all the Canadian Government Railways, and to that extent
removing them from the immediate oversight of the Minister of
Railways and Canals, who was liable to be changed as some section men
were.
It is as well to copy here the letter which Dr. Reid, the Minister
of Railways, wrote to me when he had parted with the direct
responsibility for administering the Government lines:
“Now that the Board of Directors has been appointed for the Canadian
Northern Railway and that the Transcontinental Railway and the
Intercolonial Railway and all other branch lines of railway owned by
the Dominion Government are being placed under your Board for the
management and operation, I wish to impress on you the understanding
that I had with you here last week, namely: The Board must operate
the railways without any interference or influence from anyone
connected with this Department or any influence outside of it.
“The future of the Government ownership of railways in my opinion,
depends entirely on their operation being carried on free from any
political or other influence. The operation should be carried on the
same as a private corporation, keeping in view at all times economy
and the interests of the shareholders who of course, are the people
of Canada.
“If you desire any information from the Government or consideration
of any matters in connection with the Government Railways, then I ask
that you submit it in writing, so that I can lay all matters before
the Governor-in-Council in the proper way. I shall then forward you
the reply officially. In this way a proper record will be on file.
“This in my opinion, is the way to carry out the operation of the
road, and if you agree with me, I hope you will see that this is
done.”
The name Canadian National was used, as already said, for general
convenience, but legal identities were then in no way affected. The
Board’s first duty was to see the property it was to manage. There
was a trip to the Pacific coast and then one to the Atlantic seaboard.
Since before the war the West had known the disadvantages of hampered
operation and delayed completion of branches that were urgently
required. It wanted service; and it had no hoary traditions,
practices, or hopes to recover or maintain. No old war horses had
been running loose for ten years expecting that when next the
fortune of political battle turned out a Minister of Railways they
would be turned into the paddock.
The East was as different from the West as chalk is from cheese--it
could not be otherwise. For nearly fifty years the Government railway
had been an unquestioned engine of political patronage. The oldest
inhabitants when they gazed at a time-table saw in it the covenants
of Confederation. The attitude of many men who are not so grey
was and is: (1) That the Intercolonial being named in the British
North America Act, and projected and promised as a political link
between eastern and central Canada, must so remain; (2) That, taking
not the most direct route from Montreal to Halifax, and therefore
giving rates to shippers based sometimes less on mileage haul than
on the shippers’ desire, the Intercolonial must not be treated as a
commercial railway; but as a sort of douceur to induce the maritime
provinces to remain confederated with the Canadas.
This view has been advocated with great fervour by deputations that
have come to protest against the ruthless administration that had its
head and offending in Toronto. It is not unanimously held, down east.
Even some politicians have said openly to their friends that there is
nothing worth fighting about in the views of the departed fathers of
Confederation, and that the East must look for business connections
with the West only on businesslike bases.
A few days after the armistice the Board reached Moncton for a
Saturday afternoon and Sunday acquaintance with the Intercolonial
headquarters. It found the atmosphere as chilly indoors as out,
after the President had given to a representative meeting the
Board’s assurance of goodwill, and appreciation of the need for the
local officers to have large jurisdiction; and had sketched the
possibilities of interchange between Eastern and Western officers
with a view to broadening the experience of the whole staff.
A gentleman of much ability and intense local patriotism presented
us with a picture of an Ontario we had never seen before; and
generally left the impression that something like a Western pirate
was determined to prey on an Eastern victim.
Plainly, we were not as welcome as the flowers in May. The archangel
Gabriel could not have become popular down by the sea if he had
undertaken the job of co-ordinating the services of the railways
which the Dominion of Canada now possessed. With all the good will
in the world, it can be said that it was too much to expect that
excellent men, habituated to party control of a railway, would
discern the least beneficence in the revolution which had come upon
the ancient institution.
There never was anything substantial in the objections to control
from Toronto, as compared with the former conditions. Actual conduct
of the Intercolonial centred in Moncton, as much as it always did.
What really happened was that Toronto was substituted for Ottawa;
and a President and Board of Directors succeeded a Minister. The
local superintendents’ proposals for the year’s betterments, as
passed upon by the general manager, formerly reached Ottawa, and
were there approved by the Minister or rejected, in readiness for
the estimates to come before Parliament. Now, by the like process,
proposals reached Toronto, before being incorporated in Parliamentary
estimates. Fundamentally, that was the change. But, there was the
difference that existed between the President and the Minister--as to
coming into office and going out, they weren’t both subject to the
same powers as determined the choice of the section men.
It would have been vain to look for the instantaneous disappearance
of a temper which, during two generations, had been deeply embedded
in the political consciousness of three provinces and of half
of a fourth. Sir Robert Morier, who was regarded as the ablest
British ambassador of the later Victorian era, used to say it
was the business of the statesman to be five per cent. ahead of
public opinion. How far Sir Robert Borden’s policy was ahead of
public opinion in the maritimes--or rather the opinion of the party
stalwarts--one cannot say. But as session succeeded session it became
clearer and clearer that, in the East, the administration of the
National Railways would be regarded from a very different point of
view from that which actuated the West.
In the House of Commons there were criticisms of my former relation
to the Canadian Northern, and demands for more plentiful financial
details of our work. Nothing was ever alleged, or could be alleged,
on the first count, of which dignified notice could be taken. The
second criticism did raise a question of public policy; and it is as
well to say one or two things about it.
Against Parliament’s right to control the expenditures of
Parliamentary money no word can be said. But there are limitations,
for instance, when competitive contracts and commercial services are
concerned. There is, indeed, a question of the use of ordinary common
sense, which must not be jettisoned by a railway president, and ought
not to be abandoned by a politician.
Look at imperial naval defence for a minute. The House of Commons is
asked to vote say two million pounds for a battleship to be built by
Vickers-Maxim. Every member of the House, therefore, has the right
to inquire into everything relating to the contract. But honourable,
experienced, trusted servants of the Crown have been employed to
formulate a proposal on which their character, skill and experience
are staked. Suppose one member, not to say twenty, began to inquire
meticulously into the prices for all sorts of materials--the House
would become tired of and then furious with him, and he would be
suppressed as a nuisance.
Parliament’s attitude to a national railway must be based on one
of two assumptions--that the management is worthy or is unworthy
of confidence. The efficiency of its management, like that of any
other public management, is to be judged from the methods employed
to carry on its business. The first test of these methods belongs
to the known character of the administrative chiefs of the railway.
On this point I have nothing further to say. The second is in the
processes by which financial demands reach Parliament. What were
these processes?
In the old days, I believe, the estimates for the Intercolonial were
well sifted, first through district officers, and finally by the
Minister with whom a committee of the Cabinet was associated. But,
based on too abundant experience, there was always the fear, in the
railway officials, of political interference from the constituencies;
and always the possibility that somebody with a real or fancied
grievance would get access to the Minister.
The Board’s method was for the local superintendents’ suggested
appropriations to be refined by the officers above them, passed on by
the President, submitted by him to the directors; revised by them,
and then by the President carried to the Minister and a strong and,
as I can testify, a vigilant committee of the Cabinet. Finally they
were brought to the House by the Minister, with whom sat his deputy,
who was also a director of the railways. Then they were open to the
criticism of two hundred and thirty-five members, and were entirely
subject to the approval of the House of Commons, which could demand
all our reports.
Now let us take a concrete case, not of permanent betterment, but of
contracts for one of the most important operating supplies. In 1922
we were summoned before the Public Accounts Committee. What took
place is on the record. Inquiry was made by a member for the current
cost of a commodity for the supply of which known friends of his were
also in the field. I took the position that it would be against the
national interest to disclose prices, which, I knew from experience,
were apt to be taken by certain firms desiring to get the business,
the duty and freight added, and a tender put in for a few cents per
ton below the price obtained by absolutely strict competition. I
instructed my subordinate not to bring the information demanded.
The member demanding the information is one of the most expert in
all the forms of the House. When we pointed out that the subject of
his demand had to do with the current year’s expenses, with which
Parliament was concerned only as estimates; and did not touch the
year’s business then before the Public Accounts Committee, no further
effort was made to get the information. It would be inaccurate to say
no further effort was made to get me. The episode was typical of many
things, as to which men of affairs will need no further elucidations.
Heaven preserve me from expressing political opinions; but there is
a temptation to say that the Conservative party may regard itself
as fortunate in the Borden Government’s double experience of war
and railway administration. From the point of view of observing the
conditions which Sir Robert laid down in May, 1918, the war stress,
and the necessity for respecting the non-partisan avowals of the
Union Government helped greatly to wean old fashioned politicians
from the ancient customs. Whatever their private feelings about the
loss of patronage and the helplessness of pull, they could not launch
bitter complaints to Mr. Speaker without harming their own side of
the House. Some of them had the mortification, though, of seeing
their traditional opponents making attacks, which, naturally, were
received with intense interest and favor by some of the folks back
home.
During the session of 1921, strong attacks on us were made; and were
continued in the campaign that preceded the election on December 6th
of that year. The Board was assailed on the ground of interlocking
directorates. Intimation was given that there would be an alteration
if the Government were changed. Evidently we were to be the section
men to retire with the Minister of Railways.
One of the most vehement critics of our administration was Mr.
Kennedy, of Windsor, who became Minister of Railways. There is no
reason why I should not tell of my first meeting with Mr. Kennedy.
Naturally, I had taken note of what had been said in the House by Mr.
Kennedy. When he sent for me I took along the Hansard report of his
speech. Though I had heard good accounts of how he was shaping as a
railway administrator, it seemed best to be ready to let humility
wait upon candour.
We had never met. As soon as I entered his room, and before there
was time to say anything, Mr. Kennedy opened with a speech of which
this is a fair summary: “Mr. Hanna”, he said, “before we begin
our official relations I want to say something to you. You know,
politicians in opposition often make criticisms and say things which,
if they bore the responsibility of office, they wouldn’t say. You may
have read some pretty strong things I said about you. I want you to
forget them entirely, if you will. I know nothing about the railway
business; and you have spent your lifetime in it. I want your help in
mastering my job, as freely as you care to give it me.”
To such frankness only one reply was possible. I offered to prepare
for him a survey of the work we had done since 1918, the head of each
department setting forth its activities.
When that had been done Mr. Kennedy was extremely appreciative
of a very voluminous document, all of which, I came to know he
had read. Mr. Kennedy won my entire respect, for the speed and
comprehensiveness of his grasp of whatever was put before him; for
his desire to give the Board all the support to which we had become
accustomed, and for the openness and confidence with which he treated
me personally and officially.
It is characteristic of an old politician that he cannot believe
his fellow on the other side has changed his habit. The persistence
of the partisan attitude towards the Intercolonial manifested
itself speedily after the election of 1921. It must have been
assumed by many veterans of hustings and committee rooms that
all the talk inside and out of Parliament about the abolition of
political considerations from the National Railway management was
so much bunkum. Letters soon began to arrive from Parliamentarians
the substance of which was “Now that we are in power, of course,
our friends will have consideration.” Hundreds of such letters
went on file, some of them from men high in the nation’s service.
Surprise was great when it was found that the talk about political
eliminations wasn’t merely gas.
In July, 1922, the resignation of the whole Board of Directors was
asked for by the Minister, I believe with sincere regret. It was made
known that besides myself, Mr. A. J. Mitchell, the vice-president in
charge of finances, would be forgotten when the new executive was
formed. We carried on until October, when the execution was publicly
performed, and one life, at least, was appreciably lengthened.