Sir Thomas Shaughnessy Explains His Ideas to an Interviewer
 
Sir Thomas Shaughnessy, president of the Canadian Pacific Railway (CP), with his immense energy and grasp of detail, combined with a profound practical statesmanship, is probably the ablest living railway executive.
 
His opinions with regard to the government ownership of railways as here detailed were given to a representative of The Outlook and have especial reference to the present feeling of unrest and dissatisfaction prevalent in the United States with regard to the railways of that country:

A nation, however, always gets what it really wants, not what everybody wants, but whatever meets the composite of general public demand.
 
So, if you really want Government ownership of railways, I am sure you will have it.
 
It is all a matter of making up your mind.
 
And here perhaps I can be of some real service to you, because, while an outsider can never have the native sense of national tendencies, he always has the one advantage of disinterestedness.
 
There is no reason why he should not be impartial if he wants to be.
 
So I can at least put before you what I think are the general advantages and disadvantages of government ownership as seen by one who has worked on railways all his life and become familiar with railway policies.
 
Perhaps, too, you will permit me to say a word for fairness and good temper in the discussion of your railway problems, and for avoidance of the punitive spirit that I see comes out strongly sometimes in some of your publications and speeches.
 
I do not deprecate this particularly because it is directed against railways, but because it always hurts the national spirit.
 
No nation can be great whose citizens conceive of it only as a battle-ground for perpetually warring special interests.
 
Even if some interests have abused their privileges, there is a right way and a wrong way of bringing them to terms.
 
But I will return to this later.
 
I confess I was never able to see any principle of fundamental democracy involved in government ownership.
 
When people say, as some do, that it is a priori essential to democracy that the government own and run the railways, I merely ask, why?
 
To me the question is one of pure expediency.
 
Will government ownership give all-round better service, and give it cheaper, or as cheap?
 
To my mind, the answer to that question settles the matter.
 
I do not see that any principle of democracy is at stake, one way or the other.
 
Another thing must be kept in mind.
 
That government ownership, or private ownership, works well in one country gives no assurance that it will work well in another.
 
The success of government ownership in Prussia, for instance, or Switzerland, does not guarantee its success in Brazil.
 
Private ownership may succeed in England and fail in Spain, Italy, Canada, the United States.
 
There is no forecasting these things.
 
The human element enters into them too largely.
 
Some of the Objections
 
There are some objections to government ownership, and I may as well begin by getting them off my mind, and afterwards I will mention the points I see in its favor.
 
First, a government does not move in the railway development of a new district with anything like the promptness and enterprise shown by a private concern.
 
I am not saying that it cannot, but only that it does not, and this is a point seriously to be taken into account by any country that is not fully developed.
 
In the second place government administration does not show the same economy and efficiency as a private company.
 
A dollar goes further with a corporation than with a government.
 
Again I am not saying that it must be so, but only that it is so.
 
I am aware that these two objections are only the echo of the old complaint that democracy is inefficient, and obviously the answer is for some democratic system of government like yours to come forward and be efficient.
 
If you vote upon government ownership I hope you will do that.
 
I hope you will show us the most enterprising, economical, and best-managed railways in the world, and then I will be the first to congratulate you and take back everything I have said.
 
Then a third objection coming out of the foregoing, is that for a time at least, long enough to disappoint popular expectation and set up some more or less serious political reactions, rates would probably rise, and moreover, they would tend to remain fixed with too great rigidity.
 
Few are aware, I think, of the immense difficulty and labour involved in making and adjusting railway tariffs.
 
Rate-makers cannot foresee everything.
 
Mistakes are bound to occur and errors of judgment resulting in hardship are inevitable.
 
Under private ownership a rate that is onerous or unjust can be quickly readjusted and a sudden change in conditions in a given locality can be promptly met with an appropriate rate.
 
My impression is that it would take longer for a sense of these urgent day-to-day necessities to penetrate to government rate makers, and also longer for the indicated changes to be made.
 
A fourth disadvantage is in the sinister possibilities of political organization implied in so large and sudden an increase in the number of government employees.
 
What this would actually amount to in your case I do not know.
 
Personally I think not much, and yet this is one of the very points about which a foreigner can never be quite sure.
 
The Advantages
 
So much for the general objections to government ownership.
 
Now, on the other hand, railway property being the most easily socialized body of wealth, and one of the largest as well, if the twenty billion dollars of railway property were taken away from private control, your enormous and distressing inequalities of wealth would no doubt be largely limited.
 
This is the first advantage, and it is considerable.
 
Second, railway investment, which employs so much of your capital, would lose its speculative character by the substitution of bonds bottomed on the Government's credit for bonds bottomed on the credit of a private company.
 
This would remove one of the chief grounds you have for complaint against your railways as hitherto managed.
 
Unfair discrimination, in the next place, another just ground of complaint, would also disappear under government ownership.
 
It is hard to conceive of a government in your country that would not administer its railways impartially.
 
The impersonal and general nature of government, which in other respects is rather against its efficiency in railway operation, is in favor of it at this one point.
 
A government is raised above the temptations to favoritism which have beset private companies in the throes of competition, and also above the temptation to narrow and local views of industrial and commercial development.
 
Therefore, too, this is the fourth advantage, and very important, under government ownership rates can be adjusted with reference to a maximum development of the country as a whole.
 
Germany gives an excellent example of what can be accomplished in this way.
 
The privately owned railway is bound to be most of all interested in the development of the section that it serves, but if the government took its railway work seriously and intelligently, no section would thrive at another's expense through conflict of transportation interests.
 
There would be a harmonious and balanced development of all sections, because the government is able to view the country as a whole, and is indifferent to a forced or unrelated development in any part.
 
I think the case for and against government ownership can be pretty well summed up under these eight points, four in favor, and four against.
 
There are one or two minor points besides, possibly, that might be mentioned, such as the advantages of government-owned roads for military purposes, but to a non-military country like yours this scarcely counts.
 
If we in Canada have any advantage over you, as some think we have, it is only because almost from the beginning we have seen and held to this newer theory, that, no matter how privately owned a railway company may be, it owes its existence to the public through its charter, and therefore it owes its first duty to the public.
 
The shareholders who constitute the company have undertaken, in consideration of the charter, to perform certain services for the public for which they are to receive compensation, but the public by its legislation has reserved the right to determine what the compensation shall be.
 
Clearly, the interests of the public must rank first, but the very fact that the public accepting the service is also to be final authority in the matter of compensation, would make it as unfair and inequitable to have that compensation established at a figure below its value, to the detriment of the shareholders, as it would be if the transaction were between two business men of recognized integrity.
 
Thomas George Shaughnessy.