Dáil Éireann debate -
Thursday, 11 Dec 1924

Vol. 9 No. 25

DAIL IN COMMITTEE. - RAILWAYS (DIRECTORATE) BILL, 1924—THIRD STAGE.

SECTION 1.

So long as the continuance of the concessions, allowances, and advantages, including special proportions in division of receipts from through passenger and perishable or other traffic passing to, from, or over the railways belonging to, leased, or worked by the Dublin and South Eastern Railway Company or any part thereof, hitherto allowed or granted to the Dublin and South Eastern Railway Company by the London Midland and Scottish Railway Company is provided for by agreement binding on the Amalgamated Company and the London Midland and Scottish Railway Company, the London Midland and Scottish Railway Company shall, notwithstanding anything contained in the Railways Act, 1924, or in any amalgamation scheme thereunder, be entitled to nominate a director of the amalgamated company who shall be in addition to and not in substitution for the directors or any of them to be appointed under the provisions of the Railway Act, 1924.

Mr. JOHNSON

I move:

"In line 2, page 3, after the word ‘Company' to insert the words ‘as set out in the Schedule to this Act.'"

The Bill refers in the Preamble to certain concessions that were granted by the London, Midland and Scottish Railway to the Dublin and South-Eastern Company, and to an agreement which had been entered into between the London, Midland and Scottish and the Great Southern Railway in respect of concessions of a similar kind, but there is nothing in the Bill to show us what the agreement is, only that it is to ensure the same kind of concessions, allowances and advantages as have hitherto been allowed by the London, Midland and Scottish and the Dublin and South Eastern. The amendment is to insert some words to ensure that the agreement should give some details of the concessions, allowances and advantages, so that the Dáil would know what was the worth of these concessions, or what the new company was to be bound to receive, and what the London, Midland and Scottish were bound to give in exchange for the right to appoint a director.

The Minister said that he would make public the terms of the agreement, or, to be more correct, that he believed the terms of the agreement would be made public. An agreement has been circulated to Deputies. The meaning of it, I am sure, is clear enough to the two companies concerned, but I doubt whether any single Deputy, outside Deputy Davin and the Minister, knows anything about the agreement, notwithstanding the fact that it has been placed in our hands. We have not been informed what these concessions, allowances and advantages are, and I think the Dáil is as much in the dark, having this agreement before it, as it was before it was circulated.

The non-publication of the terms of the concessions, allowances and advantages actually given by one company to the other simply means that we are asked to pass this Bill in the dark. It is assumed, provided it is quite satisfactory, and that the two companies agree that it should be quite sufficient for us as a legislative chamber, and to say, "You two companies having agreed on a certain thing, then we are bound in all reason, considering who we are in comparison with these two great companies, to confirm, ratify and implement the agreement they have entered into without any disclosure of its terms."

I had anticipated when putting down this amendment that the Minister would have disclosed the details of these concessions so that we could weigh them and examine them. By accepting this amendment, it will be made imperative that we should have as a schedule the actual terms, value and description of the concessions, allowances and advantages that are referred to in the Preamble. This is with a view to having that complete disclosure and to have on record in the Act, which it is proposed to pass, what the agreement actually involves. Therefore, I move the amendment.

General MULCAHY

I share very much Deputy Johnson's opinion with regard to this agreement. I doubt that we are going to get very much more information with regard to it than we have here. The whole matter suggests to me that there is more behind this movement to put a director of the L.M. and S. on our Irish board than we know anything about. We know that there is to be a director on our board of a company that has done everything it possibly can to prevent and obstruct the amalgamation of our railways. That should raise serious questionings in our minds as to what exactly we are doing. I do not know that the passing of this amendment is going to do any good, or if we can get any further details than we have got. The whole matter is very unsatisfactory.

Mr. DAVIN

Deputy Johnson has been good enough to do me the injustice of assuming that I know everything, as well as the Minister, about how this figure is arrived at. I can tell him quite frankly I do not.

Mr. JOHNSON

I do not want Deputy Davin to be under a misapprehension. I was not referring to any figure. I simply thought he knew what the agreement was, by virtue of his general experience and knowledge, because it refers to present routes and arrangements for the interchange of traffic between the London, Midland and Scottish and the Dublin and South Eastern section of the amalgamated company; the existing modes of division and the terms upon which the use of the Westland Row Station is made by the London, Midland and Scottish Company; and that these shall remain in force. I assumed—perhaps quite wrongly— that that technical phraseology was understood by those having a knowledge of technical phraseology in railway circles, but was not understood by the ordinary Deputies.

Mr. DAVIN

Perhaps I might plead a certain amount of knowledge. I understand what is meant by routes and interchange of traffic, but if I were asked to prove to the Dáil that this agreement is what it pretends to be, I would have to ask Deputy Johnson to summon before the Bar of the House the railway-rates experts and chartered accountants who have checked, I believe, and gone into this agreement, for expert knowledge of its full meaning. I do not propose to go into that aspect. I think the Deputy has thrown upon me unconsciously a responsibility I am not prepared to shoulder. I do not intend to explain the technical phraseology of the words in the agreement, which I think should be understood by anybody capable of interpreting ordinary legal phraseology, as it is put into any ordinary Bill.

MINISTER for INDUSTRY and COMMERCE (Mr. McGilligan)

Deputy Johnson places me in the position of the person who being blind, was searching with an unlighted candle, in a dark room for a black cat which was not there; and putting me in that position he seeks to put the black cat there. An agreement, which is absolutely incomprehensible to him, and which he believes will not be comprehensible to anybody, save only Deputy Davin and myself, is to be put in as a Schedule, and Deputy Johnson will then wash his hands of the Bill and believe that it is properly amended. Deputy Mulcahy gave him the counter in that, and said that the agreement will not make any difference; and that the agreement, being of a particular type, shows there is something more behind it.

We must view this in a proper light. Certain concessions as described in the Preamble have been considered by the Railway Tribunal. The Tribunal have set on these a certain value, and, in consideration of that value, have granted a certain exchange value of stock in the amalgamation scheme. It is provided that these be continued. Now, the experts in the matter—the Railway Tribunal, the people whom we set up to judge in this matter—have decided that these things are worth a certain amount; that worth being shown in the value of stock given. This Bill, in its Preamble, sets out that, whereas these concessions used to be given, and whereas an agreement has been entered into in this form for their continuance, in consideration of that a director shall be granted. Whether, therefore, I say it is £20,000 or £19,000—and it may turn out to be £25,000 or £17,000—if I gave the most explicit assurance that I had looked into this and judged it and could give my word that it was worth so much, that would not be worth anything. The people who have been set up to judge in this matter are the railway tribunal. They have passed judgment. They believe that an agreement of this sort is value for a certain amount of money, which they have translated in terms of stock.

Mr. GOREY

How many more directors do they give on the same terms?

Mr. McGILLIGAN

When other Bills are brought in giving other directors we will find out. This is dealing with one director on foot of one agreement. I am trying to deal with one amendment. The amendment is set out in a schedule to the agreement. I want to call the Deputy's attention to the place where he intends to put this. If it is going to be put in at all, I think it should come in the fourth line rather than the second. If it is to be put in at all, I would urge, for a reason I am going to indicate, that if this schedule is required—I think it is entirely unnecessary—or if it comes in properly,. it comes in in the Preamble in line 31—"Whereas, an agreement, as set out in the schedule to this Act, for that purpose has been, etc."

I want to call the attention of the Deputy to the fact that Clause 2 does not say in the second line "provided for by the agreement," but "by agreement"; that so long as the continuance is provided for "by agreement," a better agreement may be made. The Deputy may answer that a worse agreement may be made, but the directorate of the company will be there to see that no worse bargain is struck. A better bargain might be struck. The continuance, as set out in the first clause here, is not a continuance as provided for by this agreement. It is, so long as the continuance of these concessions is provided for "by agreement."

Mr. JOHNSON

How have they been valued by the Tribunal? How has that possible new agreement been valued by the Tribunal?

Mr. McGILLIGAN

I do not say it has been. I say the present agreement has been. I say that Section 1 of the Bill does not specifically refer to this agreement. The Preamble does. It states that this agreement has been entered into.

Mr. DAVIN

The Minister speaks of a better bargain. Does he not realise that the greater value of the concessions that are now fixed at a certain figure depends upon an increase of traffic passing between certain points?

Mr. McGILLIGAN

I admit anything the Deputy likes to put to me. He speaks with greater knowledge, but, no matter what the Deputy has said, a better bargain still might be made in the future. A better agreement might be made.

Mr. JOHNSON

I do not want to interrupt unnecessarily. There is a misunderstanding in my mind, or in his. Section 1 refers to the continuance of concessions, allowances, and advantages so long as they shall continue by agreement. It is these concessions, allowances and advantages that we want to have disclosed—not the agreement but the concessions, allowances, and advantages.

Mr. McGILLIGAN

That comes back to another point, that the Deputy deliberately prefers to have the words as set out in the Schedule inserted in line 2 and not line 4. That makes a difference, I think. If the Deputy puts his amendment where he proposes to put it, it is so long as the concessions hitherto allowed are granted, as set out in the Schedule. If he changes it, as I propose, and as I think he intended—I may have been mistaken in that; I seem to have been mistaken—it would be so long as the continuance is provided for by agreement binding as set out in the Schedule.

Mr. DAVIN

And binding on both parties.

Mr. McGILLIGAN

Yes.

Mr. JOHNSON

The emphasis I would like is on the word "continuance." That is to say, of certain concessions, allowances and advantages at present existing, and that have been granted; and that these concessions, allowances and advantages are to be named in the agreement, presumably. It says: "So long as the continuance is provided for by agreement binding." That may be a verbal or a written agreement. We do not know. What I desire is a detailed record of what these concessions, allowances and advantages, which are to continue, consist of.

Mr. McGILLIGAN

If I may take what the Deputy has said, I do not think it is so much the continuance really that he is providing for or making clear in the Schedule. It is the concessions that are being continued that he sets out in the Schedule.

Mr. JOHNSON

Exactly.

Mr. McGILLIGAN

That is one thing. The second is that—and I may have brought this on my own head by trying to put something into the Deputy's mind that he had not thought— I think what the Deputy wanted to provide was, not a statement of the concessions, but a statement of the binding agreement. If it is a binding agreement he is insisting on, not concessions, then the words he proposes to insert should be put in after the word "company" in the fourth line.

Mr. JOHNSON

I did not know there was a binding agreement capable of record of this kind. I knew it was alleged that there were concessions and I wanted them stated.

Mr. McGILLIGAN

The Deputy must see in the Preamble, "Whereas an agreement has been made between." This is in fact the agreement. Therefore, this is the agreement binding on——

Mr. JOHNSON

That is not what I wanted.

Mr. McGILLIGAN

That is it. The Deputy wants details and he admits that they are very befogging rather than clarifying.

Mr. JOHNSON

I do not know what they consist of.

Mr. McGILLIGAN

The Deputy wants something, which to him is a blank sheet, put in as a Schedule.

Mr. JOHNSON

I want in writing what the D. and S.E.R. Company understood they were obtaining from the L.M. and S. when they became conscious of the fact that they were getting concessions, allowances and advantages.

Mr. McGILLIGAN

Might I clarify it in another way? It has been stated that Amendments 1 and 4 run together. What does the Deputy propose to add as a Schedule?

Mr. JOHNSON

We are not dealing with the Schedule at present.

Mr. McGILLIGAN

If we are going to set out something in the Schedule, I want to know what it will contain.

Mr. JOHNSON

I want the House to declare that it requires to know what these concessions, allowances and advantages consist of. When it has declared that, it will be for someone responsible to supply the Dáil with that information. The Minister says it has been laid before the Tribunal and valued. Surely if it has been laid before the Tribunal it can be laid before the Dáil.

Mr. DAVIN

Deputy Johnson wants, first of all, some information to show the nature of the concessions, and then he wants sufficient information to enable himself and members of the Dáil to check the figures upon which the present fixed value of the concessions was arrived at. In other words, he wants to put before Deputies the number of passengers that travel between Gorey and Timbuctoo via the North Wall, via Dun Laoghaire; merchandise, perishable traffic, and all other kind of figures that would enable him to check them minutely. I can tell Deputies that if they want that information they would want what is more important, sufficient time to check it, and they would want to have a good deal more time than is allowed between now and the adjournment for the Christmas holidays. Even if Deputies had the figures, I am quite certain, from my experience of the administrative side of the railways concerned, they could not convince themselves that the figures are right, unless they had experts and chartered accountants with railway experience to explain them in detail. Does Deputy Johnson want the figures in detail? I might be able to go into it at some length, but in my opinion no one in the Dáil, not even the Minister, could prove that the value of the concessions, as assessed by the Tribunal, and chartered accountants, is the figure mentioned by the Minister.

Mr. JOHNSON

I am sorry that I am unable to explain my meaning in this matter. We are referred to the letter from Mr. H.G. Burgess, of the London Midland and Scottish, to the Dublin and South Eastern Railway. In that letter there are references to the existing modes of division, and the terms on which the use of Westland Row Station is made by the London, Midland and Scottish Company. I take it, an accountant or someone has given guidance of some kind as to how they are to make the division.

They are given some terms of reference, shall I say, as to whether it is a greater or lesser proportion. Surely, it is possible to put down in language that the layman can understand apart from figures what the purpose of the agreement is. Is it to give a lesser or a greater sum than would exist if there was no agreement? Surely there must be an agreement whether in writing or not, or an understanding whether the Dublin and South Eastern Railway Company are to get anything which can be measured in terms of cash. That can be defined without going into the figures, and I submit that we are hopelessly left in the dark unless we get some information.

Mr. McGILLIGAN

Deputy Davin has clearly set out the difficulties of evaluating what those things are worth.

Mr. JOHNSON

Which things?

Mr. McGILLIGAN

Concessions.

Mr. JOHNSON

What are the concessions.

Mr. McGILLIGAN

The concessions set out in the Preamble. It is all very well to get disgusted, and to say there is nothing before us, that apparently this is an attempt to gloss over in vague language something that cannot be disclosed. That is the actual terminology used in this agreement, and on foot of that agreement the Railway Tribunal were able to find out what those concessions were and to put a certain value upon them. That value has been indicated and stereotyped in the figures they had before them, and on foot of the total calculations of it they made their exchange of stock. There is a definite value which has been arrived at, but to arrive at that value and to put into the Schedule all the things of which it is composed, would mean putting into the Schedule all the traffic returns for a sufficiently long period of years to enable one to strike a general average as to what they are worth per annum, and that is an impossible task. You could not schedule those things.

Those concessions have a value. The continuance of that value is agreed upon, and in consideration of the continuance of that a director is to be given. The agreement has been entered into, and that is the agreement. It is not fair to say that this is acting in the dark. It is no more acting in the dark than to say to the Railway Tribunal that they have a right in the year we are coming into to fix rates on a certain basis without scheduling what those rates were to be between every station. It would be quite as sound to ask in the Railways Act that there should be a schedule setting out all the points between which traffic should pass, and that they could then base their view on what the new rates and charges are to be. It is quite as reasonable to ask that to be put in the Railways Act as here.

Mr. JOHNSON

I feel that the Minister is, without knowing it, evading the issue.

Mr. DAVIN

Only one thing might be said as to the necessity for this concession. The London, Midland and Scottish gave those concessions to the Dublin and South Eastern Company in the past. They have agreed to give them to the amalgamated company in the future for the sole purpose of inducing traffic to come through the port of Dublin instead of other ports. It is competition from which the port of Dublin derives advantage as well as the trader who pays a lower rate. The concessions are given in order to increase traffic and induce it to go through the port of Dublin as well as through other ports.

Mr. HEWAT

This is a very interesting discussion, but I fail to see what particular bearing it has on the legislation. This House, in its wisdom, or otherwise, passed a Bill to amalgamate the railways, and in doing so, it put up its best fight for directorates and such like conditions as between the companies. Then the Government would step in to dictate the terms on which each railway was to be amalgamated in the general amalgamation scheme. I respectfully suggest to the House that the terms on which the companies come to agreement amongst themselves are not matters for this House at all. The Dublin and South Eastern Railway, in negotiation with the amalgamated railways, put up a claim that the value of their stock was so much. An agreement was not immediately reached, and the bone of contention between the two bodies was an agreement entered into between the Dublin and South Eastern Railway and the London, Midland and Scottish, by which the latter benefited to a certain extent, getting a director on the Board of the amalgamated company.

It certainly is a question for this Dáil, in connection with this Bill, to authorise that a director nominated by the London, Midland and Scottish Railway should get a seat on the Board, but I submit respectfully to the House, that the question of the terms as between the two railways is a matter for the procedure laid down. In other words, although the tribunal here is working, it is not working on an arbitrary basis, but in furtherance of an agreement voluntarily come to between the companies. As regards the value of the concession given to the London, Midland and Scottish, originally to the Dublin and South Eastern Railway Company, that is not for us at all, because this House will not be called on to bear the burden. It is the amalgamated company, and if they make a bad bargain, the amalgamated company will suffer. It is a private agreement between the two companies, and all the Dáil is concerned with is not the £20,000, or whatever sum may be placed on the service, but the question of the director, whatever the consideration may be.

Mr. O'CONNELL

No matter what it is.

Mr. HEWAT

Deputy Johnson seems to question whether the amalgamated concern made a good bargain or otherwise, which, I think, is outside the purview of this House. The question whether they made a good bargain or otherwise is a matter for themselves. I think Deputy Davin is right in saying that the amalgamation of the companies means the nationalisation of the railway.

Mr. DAVIN

It would be well to be correct about what Deputy Davin did say.

Mr. HEWAT

Perhaps I was wrong and I apologise to the Deputy. He only said that it was leading to nationalisation, which, in my opinion, does not make much of a difference.

General MULCAHY

I do not agree that the financial side of this business is a small matter. I do agree with Deputy Hewat that the directorate side is a most important matter, and that but for the directorate side we would not have the Bill before us at all. We understood that as a result of this agreement a certain value of stock is being given to the Dublin and South Eastern shareholders. Now, we are concerned with the agreement in this particular Bill. If the position is that after a year or two years' working and with more information at our disposal as to the effect of having an outside director on the amalgamated board of the railways, and more information as to the financial side of this question, the Dáil reviews the matter and considers that from the point of view of this country, it is wrong to have an arrangement as regards this particular directorate, and if it withdraws the rights that it is proposed to give under this Act, what is going to be the position of the value of the stock transferred to the present Dublin and South Eastern shareholders?

Amendment—Section 1, line 2, page 3, after the word "company" to insert the words "as set out in the Schedule to this Act"—put and declared lost.

AN CEANN COMHAIRLE

The second amendment deals with railway servants, and is outside the scope of the Bill.

Mr. DAVIN

I tried in drafting the amendment to make it a condition of this concession, so far as the directorship is concerned, that he should take steps with regard to appointments the same as the other directors, and should share responsibility with the others.

Mr. McGILLIGAN

May I point out one effect which may not be understood if the amendment was acceptable and passed. At the present time there are no officials of the Great Southern Railway Company. It is a name suggested for the new amalgamated company. There is nobody appointed to the staff of the Great Southern Railway Company. The Deputy referred to people to be appointed. Now, there are no people appointed yet to the new amalgamated company.

Mr. DAVIN

What is the proof of the Minister's statement in that respect?

Mr. McGILLIGAN

That the company has not yet come into being and nobody can be appointed to a body not yet incorporated.

Mr. DAVIN

Is the Minister aware that instructions are being issued in Mr. Keogh's name affecting a large number of the staff, without the board being completed?

Mr. McGILLIGAN

It is quite impossible for me to believe that a gentleman can be acting for a company which is not yet in being. At any rate, the amendment goes on the assumption that some officials are still to be appointed. If the director nominated likes to absent himself no further officials can be appointed because he is not there, according to this amendment. It would mear putting a tremendous power into the hands of this director, to whose appointment some people object, because it would be giving him power to stop any other officials being appointed if he was simply absent.

AN CEANN COMHAIRLE

That is not to the point of order. I am not allowing the amendment.

Amendment not moved.

Section 1 agreed to.

SECTION 2.

Mr. JOHNSON

I beg to move: "At the end of the section to add the words:—‘Provided that such director shall not be entitled to vote on any proposal to cancel or alter the agreement referred to in Section 1.'"

AN CEANN COMHAIRLE

That point should be raised on the Preamble on the discussion which we have just had. In the Preamble, line 31, there is a reference to "an agreement" whereas in the section it is "by agreement." I take it Deputy Johnson's amendment refers to the Preamble rather than to Section 1, as we now understand it.

Mr. JOHNSON

If that agreement, referred to in the Preamble, is the agreement referred to in Section 1, then it does not matter.

Mr. McGILLIGAN

There are no words "an agreement" in Section 1.

Mr. JOHNSON

Section 1 says: "so long as the continuance of the concessions, allowances and advantages... is provided for by agreement binding on the amalgamated company." That is referred to in the Preamble as "the agreement" that provides for the continuance of this concession.

Mr. McGILLIGAN

Most likely it will be, but not necessarily.

Mr. JOHNSON

I will, if I may be permitted, alter this to the Preamble, paragraph (2). I want to submit to the Committee that if there is any question of altering the agreement as between either of the companies, and the question arises within the board of the new company, and there is a difference of opinion as to whether it is desirable that any such agreement should continue, then that director ought not to have a voice which may be the deciding voice in that decision. I am, of course, assuming that the railway company, the British railway company, the London, Midland and Scottish—is for persuading the Irish company against its better judgment by virtue of certain threats to oblige the company to accept its directors. If there is any question of policy which may involve difference between the directorate and between the companies, then this particular director may have the deciding voice, and ought not so to have. I think it is important that the power of the director should be limited in this respect, and that he should not have powers that might be exercised by any directors, such other directors having been appointed on the board because of other qualifications.

The Minister, at an earlier stage in the discussion on this Bill, said that the director was not being appointed on the same basis or for the same qualifications as had obtained with respect to the Dublin South Eastern directorship. In that case, the Dublin South Eastern appears to have allowed a director of the London, Midland and Scottish Company on its Board by virtue of certain stockholdings. Now, it appears that the process of thought has not been quite as the Minister indicated in the early stages, has not been quite that certain concessions of value were to be given to the new company, and by virtue of those concessions, year by year, they were to be allowed a director. These concessions have been valued and capitalised. The new company's capital is increased accordingly and, presumably, the contention is: "We have provided this new capital by our concession; it is the value of our concession that has increased the capital of the new company, and therefore, we are stock-holders in that new company to that extent, and that is ensuring us a right to a director."

That appears to be the course of reasoning now, which is very much like the proposition that the Minister was inclined to frown upon when we were discussing the Railways Bill originally. He would not consent to give a directorship because of stock-holding without election, but now he is prepared to support the position that concessions are worth stock, stock is worth a directorship. That is now the position that the Minister has taken, and it is rather an illuminating point to see the kind of pressure that the Ministry has succumbed to, when they have in fact succumbed to pressure from the London, Midland and Scottish Railway. In any event, this amendment would limit to some extent, possibly, shall I say, the power of the London, Midland and Scottish Railway, whom the director will represent when any question is involved as between the two companies in the matter of the continuation of these considerations. I therefore move the amendment in my name.

Mr. McGILLIGAN

I am not clear as to whether this amendment is really in order, because the principle of this Bill, that in consideration of certain concessions a director—not a limited director, with any degree of authority taken from him——

Mr. JOHNSON

Why did you out in Section 2?

Mr. McGILLIGAN

Is there anything incompatible in Section 2 with what I have said?

Mr. JOHNSON

No, but it would not be necessary to put in Section 2 if what you have said was obvious.

Mr. McGILLIGAN

What I have said, at any rate, was passed by the Dáil on Second Reading. This is to cut down that, and is a breach of the agreement. I would like a ruling on that point.

AN CEANN COMHAIRLE

Section 2 sets out that the director shall have the same rights and authority as any other director of the amalgamating company. An effort may be made to amend that section. I think the Minister's point might be valid if that section were not there.

Mr. McGILLIGAN

On the merits then.

Mr. JOHNSON

It has no merits.

AN CEANN COMHAIRLE

I am afraid the Minister has not time to deal with the merits to-night. When will this matter be taken up again?

Mr. McGILLIGAN

It is a very difficult point. I am put in a very awkward position. The Seanad is meeting to-morrow at my special request to deal with the Unemployment Insurance Bill, and I impressed on them the necessity to meet for that purpose, hoping that they would not have to be called back again later in the week to discuss this Bill. I have to offer an explanation to them. I will take this Bill the first thing to-morrow.

AN CEANN COMHAIRLE

You can arrange with the Vice-President to take this matter as first business after Questions to-morrow.

Mr. McGILLIGAN

I move to report progress.