|The Canadian National Railways (CNR) was created between 1918 and 1923, comprising several railways that had|
become bankrupt and fallen into federal government hands, along with some railways already owned by the
government. In response to public concerns fearing loss of key transportation links, the Government of Canada
assumed majority ownership of the near bankrupt Canadian Northern Railway (CNOR) on September 6, 1918,
and appointed a "Board of Management" to oversee the company. At the same time, CNOR was also directed to
assume management of Canadian Government Railways (CGR), a system comprised of the Intercolonial Railway
of Canada (IRC), National Transcontinental Railway (NTR), and the Prince Edward Island Railway (PEIR), among
others. On December 20, 1918, the federal government created the Canadian National Railways (CNR) through a
Privy Council order as a means to simplify the funding and operation of the various railway companies. The
absorption of the Intercolonial Railway would see CNR adopt that system's slogan "The People's Railway".
Another Canadian railway, the Grand Trunk Pacific Railway (GTPR), encountered financial difficulty on March 7,
1919, when its parent company Grand Trunk Railway (GTR) defaulted on repayment of construction loans to the
federal government. The federal government's Department of Railways and Canals took over operation of the
GTPR until July 12, 1920, when it too was placed under the CNR.
Finally, the bankrupt Grand Trunk Railroad itself was placed under the care of a federal government
"Board of Management" on May 21, 1920, while GTR management and shareholders opposed to nationalization
took legal action. After several years of arbitration, the GTR was absorbed into CNR on January 30, 1923.
In subsequent years, several smaller independent railways would be added to the CNR as they went bankrupt, or
it became politically expedient to do so, however the system was more or less finalized following the addition
of the GTR. Canadian National Railways was born out of both wartime and domestic urgency. Railways, until the
rise of the personal automobile and creation of taxpayer-funded all-weather highways, were the only viable
long-distance land transportation available in Canada for many years. As such, their operation consumed a great
deal of public and political attention. Many countries regard railway networks as critical infrastructure and at
the time of the creation of CNR during the continuing threat of the First World War, Canada was one of the
many countries to engage in railway nationalization.
In the early 20th century, many governments were taking a more interventionist role in the economy,
foreshadowing the influence of economists like John Maynard Keynes. This political trend, combined with
broader geo-political events, made nationalization an appealing choice for Canada. The Winnipeg General Strike
of 1919 and allied involvement in the Russian Revolution seemed to validate the continuing process. The need for
a viable rail system was paramount in a time of civil unrest and foreign military intervention.