CNR Otterville Subdivision

• Consolidate its acts of incorporation;
• Assume rights of the W&LER; and
• Confirm by-laws granting aid.

• Provincial: $765
• Municipal: $173

The Board of Railway Commissioners for Canada

Application of the Canadian National Railways for an Order granting leave to abandon the operation of its Otterville Subdivision in the Province of Ontario, between Burgessville (M. 31.0) and Woodstock (M. 40.2)—a distance of 9.2 miles.

File 39310.12

Judgment

McLean, Assistant Chief Commissioner:

An application was made by the Canadian National Railways under section 165A of the Railway Act, section 2, subsection 3, of the Canadian National-Canadian Pacific Act, 1933, and all other appropriate statutory provisions, for an order granting it leave to abandon the operation of the following line of railway, namely:—

A portion of the Otterville subdivision in the province of Ontario, between Burgessville (M. 31.0) and Woodstock (M. 40.2)—a distance of 9.2 miles.

The line in question was opened for operation in 1875. It was built under the charter of the Port Dover and Lake Huron Railway Company under the following statutory authority Ontario, Act 35 Victoria, Chapter 53 of 1872. In 1881, the Port Dover and Lake Huron Railway Company, by an amalgamation, formed the Grand Trunk, Georgian Bay and Lake Erie Railway Company of Canada. The Grand Trunk Railway of Canada amalgamated with the Canadian National Railway Company in 1923. The portion of track involved was laid with rail which was mostly 60-pound steel, and is noted to be in poor condition. The ties are 90 per cent untreated, and are stated to be in poor condition. No train service has been operated over the line in question since September, 1932 nor has there been any maintenance. It is now used for storage purposes. The district is served by an improved county highway which parallels the railway line and connects with main highway at Woodstock. The only stopping place on the line is Currie's, which is five miles from the nearest railway station. From October 1, 1930 to September 30, 1931, the total earnings at this point amounted to $276.

Exception was taken at the hearing by the Board of Trade of Woodstock to the proposed abandonment. The city of Woodstock expressed, through its mayor, the opinion that there was some justification for the abandonment of some of the railways on the ground of economy, and that this might be applicable in the present case. The Purina Mills (Ralston Purina Company, Limited) of Woodstock, took exception to any change in the present system of mileage rates claiming it would be detrimental to them. It is stated by this company that—"As the freight rates on live stock and poultry feed are based on mileage rates—any increase in published mileage would increase the freight rate ... and while the abandonment of the line referred to may save the railway the upkeep—we trust your Board will see fit to continue the present mileage scale of rates, as these rates have been in effect for many years, and industry has relied on these mileages when locating their plants in this territory."

In its application, the railway in describing the territory involved states—"this line passes through a prosperous, well settled farming territory; there are no industries. There is a good improved county highway ... Snow conditions are rather bad at times, but as a rule roads are kept opened all through winter. Although there are no regularly operated bus lines serving this territory, there are a large number of independent truckers operating every day of the year and taking the traffic wherever it is offered."

The representative of the Purina Mills Company states in evidence that until recently their shipments to nearby points had been handled in truckload lots by the dealers. Reference as made to the railway having published rates on a lower basis to meet truck competition. These low truck competitive rates were established April 15, 1935, and have been tariffed to continue in effect until April 14, 1936, unless sooner cancelled or extended. They are still in operation.

Mr. Marsh testified that the freight rates in question, coupled with the transit allowances on grain, of which their feed is largely composed, had enabled the company to ship feed to a good many local points by freight at a considerable reduction under what they were able to do by truckload. He stated that comparatively little grain had been moved to nearby points.

There is no passenger traffic moving; the line is closed for traffic. The latest figures of earnings at Currie's show a negligible volume of traffic. On the evidence, truck competition plays a very considerable part in the territory in question. All things considered, I think the application of the railway is justified.

November 23, 1935.

S.J. McLean

I concur,
T.C. Norris

Garceau, F. N., Deputy Chief Commissioner (Dissenting):

This application for abandonment is similar as to circumstances to the application (file 39310.11) of the Canadian National Railways for leave to abandon the operation of a portion of its Iberville subdivision, between Noyan Junction and Iberville, a distance of 21.9 miles.

In both cases, service has been discontinued for years and the field left to motor vehicles.

With due deference to any conflicting opinion, I believe the following considerations embodied in my minority judgment in the above-mentioned case ought to prevail.

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The transportation problem in Canada was studied by a Royal Commission in 1931-32; the necessity of the railways being maintained and of a control of highway carriers was insisted upon. Paragraph 43 of the report, at p. 102, reads thus:—

"Relief to the railways from the inroads being made by trucks into freight earnings will come by restriction and regulation of truck traffic as distinct from taxation, and by some form of co-ordination with rail traffic."

Paragraph 46, p. 103, says:—

" ... there is a growing realization that conditions of operation must be equalized as far as, possible between the railway and the truck. The truck cannot replace the railway and it must not be allowed to completely strangle its competitor and leave the country without an essential transport service."

I would also refer to paragraph 49, p. 103.; paragraphs 55, 56 and 57, p. 104; paragraph 63, p. 105.

As railways are essential, it is urgent that the transport by trucks, busses or water be controlled in exactly the same manner and by the same authority as, the transport by rail, so that, instead of competing ruinously with each other, the various means of transportation would complement one another and furnish the public with transportation facilities at the lowest possible prices.

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The plight of the railways is uncontrolled competition by other public carriers, motor vehicles, etc.

Mr. Rand, C.N.R. Counsel, blames cessation of railway service on truck competition (Evidence Noyan Junction-Iberville Case, vol. 621, part 2, p. 650).

I would also refer to the dictum of Mr. B. T. Chappell, General Superintendent of the Canadian National Railways at Vancouver (see Ottawa Citizen, September 3, 1935):—

"There are those who think the railways are backward in failing to go into the truck business, but the railway company, no matter how efficiently it operated trucks, would lose money competing against operators ignorant of costs and rates. In the meantime, the trucks are using the highways practically free of charge as compared with the railways' enormous investments in right-of-way, all of which is taxed.

"The people of Canada intent upon getting transportation at the cheapest cost, do not realize the effect of unfair truck competition upon the railway industry, which is not only a basic necessity, but with which they are deeply concerned because of their investments in both the publicly-owned and the privately-owned systems."

Mr. T. E. McDonnell, of Toronto, President and general Manager, Canadian Pacific Express, said at Québec before the Kiwanis Club, on the 17th of October, 1935:—

"Railways were produced on their own rights-of-way and are maintained and operated for the sole purpose of commercial transportation. Highways were not built for commercial transportation, but having been built for another purpose, their use is permitted under varying conditions in different provinces.

"Their use for commercial transportation is of the nature of a by-product and it is suggested that to the extent this by-product threatens the commercial life of the country, it must be controlled not in the interest of the railways, but in the interest of Canada."

Mr. McDonnell stressed the fact that when control and co-ordination are accomplished, it will be done not to help the railways but to protect the people of Canada who must use the railways.

" ... Canada is entitled to have a complete transportation system made up of all proven methods, so co-ordinated that each method will function in that sphere in which it is most efficient and economical."

Mr. McDonnell defined "transportation" as the commercial movement of people and their goods from where they are to where they want to be.

The control of transportation agencies is also urged by the automotive industry. On the 12th September last, Mr. J. B. Baillargeon, of Montréal, President of the Automotive Transportation Association of Québec, insisted on the necessity of regulation of highway carriers.

Mr. W. L. Best, Vice-Resident and National Representative of the Brotherhood of Locomotive Firemen and Enginemen, in his memorandum of January 20, 1935, developed that same proposition.

The above quotations and the evidence given by various witnesses heard by the Board at sittings held at St. Johns, Farnham, Montréal, Victoriaville, Nicolet, Mansonville and elsewhere, show that public opinion acknowledges the necessity of a unique control over transportation agencies by rail or highway.

"The truck cannot replace the railway," says the report of the Royal Commission above quoted. Experience has proven the truth of this dictum.

"Excepting for local carriage in terminal areas, railroad service is not only faster but cheaper than highway transport," asserts the report of experts after two years of study of all forms of transportation (see Labor, Washington, D.C., July 18, 1933).

Even if trucks could be satisfactorily substituted to the railway, it would be against public weal to consent ta an abandonment of a line in the actual circumstances, until such motor carriers have become real public carriers, under as efficient a control as that to which the railways are subject.

The Board, the authority constituted by Parliament to safeguard to the public a system of transportation, ought not by a declsion to expose a section of the country to be deprived entirely of transportation facilities, at the option of the carriers, or to be charged prohibitive prices.

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The Interstate Commerce Commission, in the United States, relying on the services provided by motor vehicles to serve the community, two years ago allowed the abandonment of a fifty-mile branch line between Sioux City and Wynot, in Nebraska. The tracks disappeared, railway employees were separated from their jobs; and now, the Grain and Feed Review summarizes the economic results, as follows:—

"First of all, the grain rate by rail to Sioux City and the East was 3 cents per hundred from the farthest point on the line. Now the rate is 10 cents a bushel to Sioux City. Coal was laid down in the farthest town for 20 cents a ton, while at present truckers are offering to deliver coal to close-in points at $2 a ton.

"Farm values have depreciated from 50 to 75 per cent ... ."(See Labor, Washington, D.C., November 12, 1935).

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It is true that this line was not operated during the last few years, but the motor vehicle operators knew that the line was not abandoned. If to-morrow this line were dismantled, the inhabitants of this region might face the experience of the Nebraska people.

It is all very well to say that motor transportation is a substitute to the railways but we must not forget that this substitute can cease to exist on the morrow.

Relief to the railways' difficulties lies not with tho Board but with the Parliament of Canada. The co-ordination and control of all carriers so as to constitute a national trqnsportation system, all agencies completing one another, would be a work for the general advantage of Canada.

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I would dismiss the application as being premature.

December 2, 1935.

F. Nap. Garceau.