God damn the CPR ?

Discussion in 'The Real Thing- North America' started by Biased turkey, Sep 24, 2007.

  1. railwaybob

    railwaybob Member

    Hello Glen. You are absolutely correct. One cannot look at the history of Canadian railways without looking at the politics - whether it's national transcontinental railways such as the CPR, Canadian Northern, Grand Trunk, Canadian National, Intercolonial, or local railways such as the Kingston & Pembroke, the Brockville & Westport, the Bytown & Prescott, Grand Junction, Midland Railway, etc, etc. Politics was involved every step of the way. And without the politics, the railways would have never been built.

    Which is one of the reasons why I liked "Lords of the Line". Pierre Berton brought the national politics to life in the "National Dream" and David Cruise and Alison Griffiths managed to bring the politics of building the railway into broad daylight. One of the parts that I like is Van Horne's ventures into the US and the Messabe range iron ore deposits when Van Horne was President and Stephen was chairman of the CPR. Van Horne didn't know the extent of the iron ore deposits. Stephen kept information from Van Horne while arranging for Stephen, Smith, Hill to put pressure on Van Horne and to take up all of the land in the Messabe range. Who would have thought that Stephen, Smith, Hill et al would have been plotting behind Van Horne's back to take over the Messabe Range iron ore discovery that produced over a billion dollars in profits for this trio!? It is said that Stephen and Smith made more money from James J. Hill's railroads than they ever made from the CPR. And that Stephen was muttering under his breath for the rest of his life "Goddamn the CPR!" or words to that effect.

    In doing historical research into some of my railways, I'm always fascinated by the local politics. Burton did a very good job in recreating the politics of the day - who would have thought that the one person, Donald Smith, who defeated the MacDonald conservatives in 1872 over the Pacific Scandal would be driving the last spike in 1885 on the CPR. Now, did Smith do this out a sense of ethics, or did he do this in order to one day take the opportunity to build a major business from which he benefited greatly?

    Yes, politics is what makes the world go round. Unfortunately, the media and a whole bunch of cynical people have given politics a dirty name. And we are looking to be entertained but not necessarily informed.

    Bob M.
  2. Squidbait

    Squidbait Recovering ALCO-holic

  3. MasonJar

    MasonJar It's not rocket surgery

    I have a copy of the 1931 Report of the Royal Commission on the State of Transportation in Canada. Given the time, it focusses mainly on the railways (CPR and newly formed CNR), but does give a brief look at the "up and coming" trucking and airline industries. Comparisons for bulk transport are made with shipping and the canals, as there were only a few thousand heavy trucks in Canada at the time!

    In any case, the subsidies given to the CPR, while substantial, pale in comparison to those afforded CNR and its predecessors (Intercolonial, GT, CNor, etc, etc). We're taking billions. with a B, and this was 1931.

  4. Squidbait

    Squidbait Recovering ALCO-holic

    The difference being that by 1931, All the Canadian National Railways and subsidiaries had been nationalized. They were a Crown Corporation, and were propped up just as much as any other CC. In fact, they were providing much-needed service to areas where private companies dared not venture.

    CPR OTOH, was an "independant" privately-held company. Yet it still managed to suckle from the Federal teat very effectively, while causing people enough grief to prolong the curse "GDtCPR".
  5. railwaybob

    railwaybob Member

    The CNR was created to avoid a major financial disaster (recession/ depression) in Canada. The Government of Canada had been involved in railways long before 1867. It started first with the Grand Trunk back in 1854 with the union of Upper and Lower Canada (Quebec and Ontario). It continued with the Intercolonial Railway with confederation in 1867. It carried on with the CPR (land grants, cash, Louis Riel "saving" the CPR at the 11th hour. The penultimate (second last) involvement was government guarantees (Canada, British Columbia) of interest payments on bonds issued by railways - the most famous series of these guarantees being the Canadian Northern in 1893 - guarantees of interest payments on bonds over $500 million (convert that number to today's dollars!!).

    The Grand Trunk Pacific (lines west of Winnipeg) and the National Transcontinental (east of Winnipeg) resulted in too many railway lines to serve the small Canadian population. It all started to come to a head before 1914 and WWI. Most of these railway lines had been financed with debt - bonds owed to British investors - and not enough profit from these railway lines to even pay the interest.

    WWI brought it all to a head. GTP in 1917 followed by the CNoR in 1918. GTP, Intercolonial, National Transcontinental were all folded into CNoR - now owned by the Government of Canada. However, this new CNoR needed a network in Southern Ontario. So, in 1920, CNoR took over operating the GTR. The CNoR needed a "new name" so, from 1918 to 1923 "Canadian National Railways" was a "trade name of the new CNoR. It took a few years to repaint all of the motive power and rolling stock into the new paint schemes.

    One remaining question was how much to pay the GTR shareholders - mainly all British. They got $0.00 on the dollar which impacted Canada's ability to borrow on the London markets for decades to come.

    In 1923, "Canadian National Railways" became a "Crown Corporation" with a huge mountain of debt inherited from all of the railway lines that had been folded into the CNR. Bankrupt railway lines kept on being "rescued" by the Government-owned CNR, right up until the 1950s. One of the last ones brought into the fold was the Temscouta Railway that went from Riviere du Loup QC to Edmuston NB

    The proprietors of the CNoR, William Mackenzie and Donald Mann, got $25 million or so for their troubles - but only because this was the amount they had outstanding with the Canadian Bank of Commerce. The Commerce had lent them money to keep them afloat on the unwritten promises of Sir Wilfred Laurier. The money was used to pay off their bank loans so that in effect, they too got $0.00 on the dollar. After the dust had all settled, Mackenzie still owed money to Canadian Bank of Commerce which he eventually paid off. If these monies hadn't been paid, there would have been a financial crisis in Canada that would have been worse than our current non-bank ABCP fiasco.

    These bankrupt lines had been run into the ground. The CNR needed money to rebuild these lines, purchase new motive power (the era of the 4-6-2, 2-8-2, 4-8-4 was just arriving), and to buy modern rolling stock. So, the government paid for this by issuing more bonds - an obligation of the CNR.

    So, between inherited debt, and debt issued over the decades, the CNR was saddled with hundreds of millions of dollars of debt right up into the 1990s that was owed to the many original bond holders. From time to time, the Government of Canada "forgave" unpaid interest in the hundreds of millions of dollars. But it was still a noose around the neck of the CNR right up until it was privatized.

    Bob M.

    Bob M.
  6. Grain Baron

    Grain Baron A newbie to MRR

    The future of grain traffic...

    For those who are concerned about the facts in unit train shipments of grain to port or cross-border, here's a few details...

    The history of block shipments of hopper cars of grain started with small blocks and many elevators. Less crews, bigger iron, and shipping incentives created larger elevators with larger car spots. 26/28 car blocks became 52/56 car blocks, and currently, western canada is moving towards 112/104 car blocks. My experience is there will be very few viable grain elevators shipping less than 100 hopper cars per car spot.

    CPR unit train is currently 112 (4 blocks of 28) cars, any size. Future unit train is 132+ cars according to CP sources. Robots are likely going to be required. CPR is working with the large shippers of unit trains to build their siding long enough to allow the entire car spot to be reassembled into a continuous unit and leave room all for air tests and braking checks off the mainline. Nominally, 8400' of continuous siding will be required at each elevator to make this happen. This is all being driven by maximizing the uptime on the mainline.

    CNR unit train is currently 104 cars, again, any size hopper car. No mention of unit trains changing size. No mention of other changes. Many unit train shipping CNR grain elevators are on branchlines near the mainline.

    Hopper cars are generally from the hopper car pool, so 90 mt each of wheat, but larger cars from the US roads are now common and are larger. A unit train of hoppers is dropped off at a grain elevator, and in order to have preferential shipping rates, the car spot is loaded in a 24 hour window. If you do your math, a hopper car is loaded and moved every 5-7 minutes at the elevator. Conveying of grain is all about speed and large capacity.

    If anyone needs to know more on high throughput grain elevators, just ask...I can answer most questions.

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