Banker at the Throttle

The Western Hemisphere's biggest railroad* got a new boss last week. To succeed retiring President Robert C. Vaughan, the government-owned Canadian National Railway Co. picked Donald Gordon, 47, deputy governor of the Bank of Canada, whose only direct connection with railroading had been as a passenger.

The top job no longer called merely--or mainly--for a railroad operating man. Canada's most imposing example of government-operated business had become too big for that. Since C.N.R. was formed in 1923 out of the ruins of five separate lines, it has grown into a $2.4 billion empire which operates 24,178 miles of main track, twelve hotels, three steamship lines, an airline (TransCanada) and a nationwide telegraph service. It has become Canada's biggest employer (some 111,000). In recent years, C.N.R. has earned money on its operations, but, except for the war years, has seldom shown a net profit. Last year's earnings ($26.5 million) were not enough to meet even half the interest payments on C.N.R.'s longstanding debt--a whopping $1.3 billion.

An Early Start. To get around this financial track block, most Canadians agreed that hearty, burly (6 ft. 4 in., 240 Ibs.) Donald Gordon was probably the best man to have at the throttle. A Scottish immigrant boy, he got a job at 15 as a clerk in the Bank of Nova Scotia. At 34 he was picked as first secretary of the new Bank of Canada, became deputy to Governor Graham Towers three years later.

Gordon's first big public job was to set up a foreign-exchange control system at the beginning of World War II. He did so well that the government borrowed him for the much tougher job of running the Wartime Prices and Trade Board.

A Wartime Rise. In a role that seemed sure to make enemies all around, Price Boss Gordon won friends by calmly explaining the need for controls in hundreds of speeches and press conferences, then firmly enforcing the policies that had been set to harness Canada's economy. Though labor and industry grumbled at his straitjacketing of wages and prices, the rise in the cost of living was only 18%, compared to a U.S. rise of 25%.

Essentially, the C.N.R. presidency is a job of selling the public. Many a Canadian has criticized the road as a white elephant and urged that it be joined to the privately owned Canadian Pacific. Gordon, who will take over on Jan. i, is expected to drum home the theme that C.N.R. is a national necessity (e.g., it maintains services vital to national development), and to follow through with changes that will lighten its financial load.

* Next three: Canadian Pacific, Southern Pacific, Atchison, Topeka & Santa Fe.

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