Application of the business men and farmers of Alvinston, Ontario, and the township of Brooke for a re-hearing of the application of the Canadian National Railway Company for an Order recommending to the Governor in Council the abandonment of the operation of the Alvinston subdivision of its railway and of the Order made thereon.

Heard at Glencoe, Ontario, January 8, 1932.

Judgment

Fullerton, Chief Commissioner.

On October 28, 1930, the Canadian National Railway Company applied to this Board under section 19 of the Statutes of Canada 9-10 George V, c. 13, for an order recommending to the Governor in Council the abandonment of the operation of the Alvinston Subdivision of its railway.

On December 7, an order was made recommending for the approval of the Governor in Council that the Canadian National Railway Company be permitted to abandon the operation of this subdivision, except that portion northwest of Glencoe to Gillies Siding, a distance of 4-22 miles. This exception was made to ensure service to the Dominion Petroleum Company Limited for shipping crude oil in tank cars from that point.

Protests against the closing of the subdivision having been received from farmers and others living in the vicinity of the line, the Board decided to grant a rehearing which was held at Glencoe on the 8th day of January, 1932.

The Alvinston Subdivision which is sought to be closed extends from Glencoe on a line of the Canadian National Railway Company running from London to Windsor in a northwesterly direction twenty-one miles to Kingscourt on the line of the Canadian National Railway Company running from London to Sarnia. Alvinston, a village of about 700 people, situate about half way between Glencoe and Kingscourt, is the only station on this line. There are, however, five sidings at which freight may be loaded or unloaded. These sidings are located at the following respective distances from Glencoe:—

		Miles
Gillies	. . . . . . . .	4.22
Shields	. . . . . . . .	5.74
Grays	. . . . . . . .	7.67
Armstrong	. . . . . . . .	15.70
Souterville	. . . . . . . .	17.99

In considering the question of whether or not the order recommending the abandonment of this line should be upheld one naturally looks first at the position in which it will leave the present users of the line in regard to railway service. The situation in the present case will be as follows: They will still have the two Canadian National main lines above referred to, a Canadian Pacific Railway line running between London and Windsor and crossing the Alvinston Subdivision about two miles north of Glencoe, and the Michigan Central Railway running in an easterly and westerly direction through Alvinston.

In making his case Mr. LeSueur, who acted for the parties opposing the closing of the line, directed his evidence mainly to the sugar beet industry which he claimed will be destroyed by the closing of the line. His important witness in this connection was R. Williamson, who has been engaged for some years in getting sugar beet acreage in Brooke township. His evidence showed that 90 per cent of the sugar beets in this district was shipped from Alvinston, Armstrong and Souterville. From 1927 to 1929 inclusive, there were shipped from these points 11,367 tons of sugar beets of which 34 per cent was shipped from Alvinston.

Souterville is between four and five miles and Armstrong about six miles by wagon road from Kingscourt, on the line of the Canadian National Railway Company running from London to Sarnia.

Deprived of service on the Alvinston Subdivision the shippers of sugar beets from Souterville and Armstrong will be obliged to carry their product a longer distance than at present, but there is no justification for saying that the sugar beet industry will be destroyed.

An attempt was also made to show that farmers in the vicinity of the line would be handicapped in shipping hay. The witness called on this point was one Munroe, who stated that he shipped 750 tons of hay and straw in 1931, that if the railway line were closed it would make it very inconvenient and that in all probability all hay would have to be shipped by motor trucks. The witness, however, admitted that a large quantity of hay was at the present time being shipped by motor trucks and that he himself had recently purchased a motor truck which he was now using to ship his hay to market.

Taking all the evidence into consideration, I have arrived at the conclusion that the former shippers on this line will be left with ample railway facilities to enable them to get their products to market. In some cases it will mean a little longer haul by truck or wagon to reach a railway but they will still be in a much more favourable position with regard to railway service than thousands of other shippers throughout Canada.

Now let us turn to the railway company's side of the question. They say that they have been losing money every year in the operation of this line. The gross system receipts for the years 1927, 1928 and 1929 were as follows:—

1927	. . . . . . . .	34,679
1928	. . . . . . . .	27,969
1929	. . . . . . . .	23,463

A statement was put in the evidence showing the revenue received from the operation of this line for October and December, 1929, and February, April, June and August, 1930. The total gross system revenue received during these six months was $12,333.75. Doubling this amount gives a total of $24,667.50 for the year October, 1929, to October, 1930.

We must add to this amount $2,035.93, the average yearly earnings of Gillies Siding, which were inadvertently omitted from the general statement, revenue from express $5,078, and revenue from mail $137.72, making a grand total of $31,919.15. It must be remembered that these are system revenues and only a small portion of them, say about one-sixth, can properly be allocated to the Alvinston Subdivision.

Mr. LeSueur having questioned the method adopted by the railway company in arriving at the figure $31,919.15 shown above, it was arranged at the hearing that the railway company should prepare and file returns showing the exact amount of revenue received for the years 1930 and 1931. These figures have now been filed and show the following:—

Total receipts for 1930	. . . . . . . .	32,258
Total receipts for 1931	. . . . . . . .	36,646

Of these amounts the following are credited to Alvinston:—

1930	. . . . . . . .	25,588
1931	. . . . . . . .	22,940

It will be seen, therefore, that the great bulk of the traffic for this line is shipped from Alvinston which, as above stated, is served by the Michigan Central Railway.

The annual cost of operating the line is as follows:—

Maintenance of way and structures	20,000
Wages of agents, station fuel, etc	2,000
Train service	8,520
Expenses—Canadian Pacific Railway Interlocker	1,475
Total	31,995

Not only is the line being operated at a loss but if its operation is to be continued, the railway company say it will be necessary to make considerable capital expenditure to keep the line in condition to handle traffic. For example, they say that a bridge must be replaced at an expenditure of $150,000. Mr. LeSueur in his written argument contends that this amount is excessive, and he says that the railway company previously gave the figure at from $40,000 to $60,000. The fact, however, remains that in either case the capital expenditure involved is substantial.

Another capital expenditure which it is said will have to be made shortly is in connection with an automatic interlocker at the crossing of the Canadian Pacific Railway. Mr. LeSueur contends that inasmuch as under the order of the Board the portion of the line from Gillies Siding to Glencoe is being continued this capital expenditure is out of the picture. Mr. Spencer, the head of the Board's Operating Department, advises me that the line retained between Gillies Siding and Glencoe will furnish only a switching service and as such will not require the expensive interlocking device necessary if the road were being operated in the ordinary way.

Mr. LeSueur has made some very ingenious calculations in connection with revenue and operating costs of the line with a view to showing that it is not really losing as much money as the railway company claims. For example, he says that Gillies Siding is 4-2 miles from Glencoe, or exactly one-fifth of the total length of the line and, consequently, that in calculating expenditures you must deduct one-fifth of the cost of maintenance of way and structure and of train service. Providing merely an infrequent switching service between Gillies Siding and Glencoe would not in my opinion modify the figures to anything like the extent claimed by Mr. LeSueur. The railway company would be delighted to cut out the service between Gillies Siding and Glencoe along with the rest of the line, but the Board felt that if this were permitted it would entirely destroy the investment of the Dominion Petroleum Company, Limited, at Gillies Siding, and for this reason required the railway company to continue a switching service to this company.

After carefully studying all the material filed, together with the evidence and the argument submitted, I can come to no other conclusion than that the Alvinston Subdivision is being operated at a heavy loss, and in my opinion the operation of this subdivision has become unnecessary and inexpedient by reason of the economic considerations involved and the Order recommending its abandonment should stand.

Ottawa, January 28, 1932.

Commissioner Stoneman concurred.