Now on the Railways Bill I want the House to understand——
Public Business. - Railways Bill, 1933—Second Stage.
Might I now make my preliminary point that the Second Reading should be discharged on the grounds that this is not a Public Bill?
I am prepared to hear the Deputy on that point.
I raised it for your ruling, and your ruling will affect not only this but other measures. The new Standing Orders appear to be that if a Bill is promoted for a particular interest or for the interest of any individual or locality that that stamps the Bill as a Private Bill. A Bill having that character may become a Public Bill if it is taken up as a measure of public policy. For that reason it is not possible to say that this is a Private Bill. But there is this other characteristic about it that it is introduced as a measure of a public character. However, there is a provision in the Standing Orders on Private Bill procedure which deals with this matter. It is Standing Order 60 and the phraseology is peculiar. It reads:
When it appears to the Ceann Comhairle of the Dáil that the Standing Orders relative to private business may be applicable to the Bill, the Bill then is referred to the Examiner and the Order for the Second Reading is discharged.
Taking the line between the two principles it would appear to me to be this, that where a Bill interferes with private property and particularly when it affects the interests of another section of the community then the Bill is the type of Bill to which the Standing Orders relative to Private Bills should be applied. Clearly if it were introduced as a Bill on public policy then all Bills introduced by the Government cannot be Private Bills. It is not a Public Bill and it is not a Private Bill. It is a hybrid Bill. But we have precedents to the contrary. Again assuming that the distinction between either Public Bill procedure and Private Bill procedure is this, that once a question affecting private interests comes into a Bill, that would of itself enable the interests affected by the Bill to be heard. This Bill is clearly one that affects the debenture shareholders as far as I can understand by one Clause of the Bill, and that is supposed to be for the benefit of another class of shareholders. So that there is the element of public policy about it, inasmuch as there is interference with one class of the community and that interference with one class is intended for the benefit of another class in the community. It therefore seems to me that this is the type of Bill to which Section 60 of the Standing Orders should be applied.
The Deputy was good enough to give me notice yesterday on this point. That is a very laudable practice which I commend to the House generally. I have given the matter consideration in its various aspects, and I am of opinion that this Bill should be treated as a Public Bill. The Bill certainly appears to affect private interests but, in so far as it does, it affects them as a matter of public policy. This is clearly so, as the Bill is put forward by a member of the Executive Council. I am further fortified in the conclusion I have come to by the cases—to take a few examples—of the Shannon Electricity Bill, the Electricity Supply Bill, and the Creameries Bill, all of which affected private interests and none of which was treated as, or considered to be, a hybrid Bill. The Bill is preeminently a measure of public policy, and public policy, undoubtedly, overrides and outweighs any consideration of private interests that arises. For these reasons I am ruling that this Bill should be dealt with under Public Bill procedure.
Might I add a few words to what I have said, without appearing to question your ruling?
A ruling given cannot be questioned.
I am accepting the ruling completely but I should like to get a further point cleared up for our guidance in the future. You have been good enough to state, in a deliberate way, the reasons why you are ruling that this Bill does not come under Standing Order 60. The first of the two main points you have dealt with is, I think, that this is a public measure introduced in the interests of the public. Your test of that is that it is introduced by a member of the Government. I am taking that phrase to mean that any Bill introduced by a member of the Government is a Public Bill and can never have standing orders applicable to Private Bill procedure applied to it. There is a precedent to the contrary but it was before you occupied the Chair and I do not urge that you are bound by it. There is the precedent of the Dun Laoghaire Harbour Bill. It was introduced by a member of the Government and had Private Bill procedure applied to it. If, after consideration, that ruling is to stand as you have given it, it would seem to me to exclude the application of Private Bill procedure to any Bill introduced by a member of the Government. That may be right; I am not questioning that point at all. Secondly, you have founded your ruling on the precedents of the Shannon Bill, the Electricity Supply Bill and the Creameries Bill. So far as my knowledge goes, no point was raised on two of these Bills. A point was previously raised by a Deputy with regard to the Shannon Bill and so far as I remember—I am speaking completely and entirely from memory and the matter is somewhat old—the ruling was that it did affect private interests but that it affected them in the interest of the public generally. It seems to me that that ruling implied that if private interests were affected in the interests of another group of private persons, that ruling would not have been given. I am speaking now by way of giving notice that, with your agreement, we should have the ruling you have given—which I accept completely — developed at greater length for the guidance of the House in future proceedings.
Every case of this nature must be decided as it arises. I did not take as a test of this being a Public Bill that it was introduced by a member of the Executive Council but I suggested that that fact rather strengthened the conclusion I came to. I quoted some examples. I might have quoted others. It is not incumbent on the Ceann Comhairle to quote precedents or to give reasons for his ruling. I have ruled that this is a Public Bill and must be treated under Public Bill procedure.
I move:
"That the Bill be read a Second Time."
In the course of the discussion yesterday and to-day, considerable play was made on speeches delivered by me on other occasions. In fact, it became quite the thing for any Deputy rising to participate in the discussion to start off by quoting some speech made by me either in this House or at some political meeting outside the House. A speech that seems to have attracted the attention of Deputies to a great extent was that in which I described the Government Party as "a pro-railway party.." I am very glad to have it established here that we are all pro-railway, that no Party in the House will repudiate the description of "pro-railway." The only question that arises is whether the Labour Party is more pro-railway than the "pro-railway party." The claim of the Labour Party to be regarded as more pro-railway than the "pro-railway party" appears to be based upon a number of extraordinary ideas which I am anxious to get cleared up. Deputy MacDermot yesterday asked the Leader of the Labour Party a question which was very much to the point and which has not yet been answered. I want to repeat it, because the whole question of policy appears to me to turn upon this question. Are there any circumstances whatever under which the Labour Party would agree that a railway branch line should be closed down? The whole question turns upon that. Either the whole purpose of our policy must be to keep trains running over every ramshackle line in the country, no matter how uneconomic and no matter how costly it may be to run each train in relation to the traffic carried upon it, or else we have to fix a point at which we will say: beyond that, the particular line or section of line is not worth keeping in existence and the sooner it goes out of existence the better it will be for the country as a whole, for those who have merchandise to be transported and for the railway companies in particular.
This is a pro-railway Bill and any action that may be taken under this Bill to cut off the main railway system the uneconomic and non-paying sections of branch lines is designed to strengthen the railway companies, to increase the prospect of their providing employment for railway workers and to assure them a longer and more profitable life. So much attention has been concentrated upon branch lines that we are losing sight of the main lines. Again let me state the position with regard to the main lines. This year interest was paid by the Great Southern Railways Company upon their debentures only by devoting to that purpose money that should have gone, in my opinion, to the improvement of the system, to the repair of the rolling stock, to the bringing up to date of the carriages available for the conveyance of merchandise and to other matters designed to secure the improvement of the railways.
Do you mean that that was done by drawing upon the reserves this year?
No.
Because that was not done.
The position is that the railway companies are not earning enough on the traffic they are now carrying to pay debenture interest and provide properly for the maintenance of the systems. That, I think, applies to all railway companies here. It applies to railway companies outside this country. If we cannot modify that position in some way, if we cannot decrease the charges or increase the revenue, within the life of this Dáil we can contemplate these railways ceasing to operate altogether. We can contemplate the disemployment not of a few hundred men in some section of a branch line, but of the 14,000 men employed upon railways here. That is what we have to contemplate. The only reason why we contemplate and propose to facilitate the closing down of non-paying sections of the line is because by so doing we are helping to preserve the rest of the system. Deputy Norton stated something with which I fully agree. He said that the question whether a branch line is remunerative or not should not be considered apart from the broader question of whether the whole system is remunerative or not. In other words, he suggested that if the whole system was earning a profit a particular section of a branch line should not be closed down merely because the particular section is making a loss. I say, and I said it before, that so long as it is possible to do so we shall regard the railway system as a whole, and if the railway system as a whole is earning a profit sufficient to pay its working expenses, to provide for renewals, and for a return on the capital invested in it, then we should not permit, and we should take the necessary action to prevent the cessation of services upon particular parts of it, when these services were required by the public, on the plea that the services were not strictly remunerative.
But that is not the position. The position is that the railway system as a whole is not profitable, that we can contemplate a cessation of services on the system as a whole unless we can take action either to reduce charges or increase revenue or both. We are taking certain action under these Bills which will tend to increase revenue, but there is no possibility whatever of any action being taken which will increase the earnings of the railway company so as to provide for all the expenses that now fall upon them, plus the obligation of paying a return on the present capital. Consequently, if we cannot take action which is going to increase revenue, we have to contemplate action which will reduce the charges. What charges should be reduced? The directors applied to the Wages Board for a reduction in wages in order to effect a reduction of charges in that way. I do not want to express an opinion upon that because of certain developments that are going on at present, but I should like to say, arising out of Deputy Good's remarks, that it is producing an entirely false picture in the minds of Deputies and of the general public to refer to railway wages as excessive merely because they are 140 per cent. over the pre-war rate, knowing what the present rate of wages is and that a vast number of railwaymen are paid 40/- per week. If 40/- is 140 per cent. over the pre-war rate, the pre-war rate was scandalous. I think the railway company committed a serious tactical error when they associated their application for a reduction in wages with their pre-war rate, which nobody could attempt to defend.
Is the Minister aware that Deputy Good is paying his own unskilled workers more than most of the railwaymen in Dublin are receiving?
I am sure that is correct.
That is to his credit.
It is to his credit. I assert that these Bills in all parts of them are pro-railway Bills. I said that we could contemplate doing without the railways. I did not say that we could do without them conveniently. I said, on the contrary, that railways are the most economical method of transportation available to us. I repeat, however, that in an emergency we could get on without them. We would be inconvenienced, but trade and commerce and the ordinary life of the country would not be made impossible. They might be made dearer and more difficult, but they would not be impossible. Nevertheless, we want to preserve the railways in so far as they are serving a useful purpose for the country at present, and in order to preserve the railways, to enable them to maintain the present employment and increase that employment, it is necessary not merely to adopt the provisions of the Road Transport Bill, but also to adopt the provisions of the Railways Bill, including the provision relating to the closing down of unremunerative branch lines. The shutting down of these branch lines will, I think, in time have the effect of increasing and not decreasing railway employment and certainly, in so far as it might make available for renewal work money which is not available now, it should have the effect of increasing employment in Inchicore, and, consequently, Deputy Davin can be assured that I shall have no hesitation in facing my constituents there whether the Bill passes or not.
You are a very courageous man.
Deputy Davin quoted at length from speeches of mine which advocated public ownership of the nation's transport. I explained yesterday why it is that the Bill now before the Dáil is not a nationalisation Bill. It would give me personally great pleasure to be defending a nationalisation Bill, if it were only to hear the speeches that would be made about it by Deputy Good and other members who sit on the benches opposite. But the fact is that, in our opinion, there were difficulties and objections which made nationalisation of public transport at this time undesirable and less suitable to the present situation than the proposals in the Bill. That is why the proposals in the Bill before us are not nationalisation proposals.
On the question of the closing of the branch lines, I want to be quite clear. I do not want to get powers from the Dáil without the Dáil knowing quite clearly how it is proposed to use them. We have powers at present under the Act of 1932 to permit the railway company to close down branch lines, sections of the line, or reduce services on them. The powers we are proposing to take here are wider. I say definitely that if it is shown to me by the railway directors that over any substantial period a particular section of the line has not yielded in revenue enough to pay the working costs on it, then without hesitation I shall make an order for the closing down of that section.
Has the Minister seen any figures up to this?
I told the Deputy yesterday that we got seven applications for the reduction of services on particular sections of the line under the 1932 Act. These were applications to take off particular trains, not to close down the line. In relation to these trains, there were produced to me particulars of the number of passengers who travelled on the trains on each day of each week over a long period. I found the position was that a train frequently started out with more people working it than were travelling. There was frequently only one passenger, occasionally no passenger, sometimes two passengers, and only on very rare occasions more than that. The company was required by law to keep running these trains whether any one travelled or not and the order I made merely released them from that statutory obligation. It was quite clear not merely that these trains were running at a loss, that the obligation to run the train was imposing a charge on the company which was bound to affect railway employment upon that system and the general prospect of the company's survival, but also that the people in the district did not want the train, that it was not serving any public need; that there had been brought into existence an omnibus service or some other class of service which the people preferred to use and which, consequently, took away from the railways traffic which would have made them remunerative. I admit that there are a number of branch lines which were never remunerative, and which would never have been built except that grants were available from public funds, or that baronial guarantees were offered. There are a number of services which, from the day they were built many years ago, were never remunerative, and for which baronial guarantees had to be made good year after year. These services were very often started in the nature of relief schemes. I do not think it is right that the railway company should have the operation of its main system, which can be made a paying system, jeopardised by the obligation to run services which were not required by the public, and which could never be made profitable under any circumstances.
Deputy Keyes made a speech here yesterday. Deputy Cosgrave referred to it. It was a good speech and, as I think it was the first the Deputy delivered in the Dáil, I would like to congratulate him on it. It had, however, the glaring defect that the beginning contradicted the end. The Deputy referred to the Act of 1924 and condemned it. He said that that Act tied on to the Great Southern Company a whole lot of tin-can railways—these were his words—and that the main system was required to carry them dangling out of it for ten years. He had hardly said that when he proceeded to denounce the proposals in the Bill.
He was referring to the Lartigue.
The Lartigue was not in the amalgamation. It was not one of the tin-can railways tied to the main system. Deputies may like to know something about the Lartigue railway. I referred accidentally yesterday to a Ballybunion railway porter and I was told by Deputy Rice that there was no such thing as a railway porter in Ballybunion. There was at one time railway porters there. I want Deputies to appreciate what happened when the Ballybunion-Listowel railway was shut down. It had an ordinary capital of £22,000 and £9,500 debentures. That railway was not a paying proposition. It could not pay the debenture interest. A receiver was put in and he sold the railway as scrap, realising £1,500 or thereabouts. I have not the exact figures, but they were not much more than that. The lesson of the Ballybunion railway might be appreciated by Deputies who are inclined to take a particular line on this Bill. When the owners of the debentures put in a receiver he could only realise £1,500 on the assets.
I wish to say something on the question of compensation to be paid to employees made redundant by an order made under Section 8 of the Bill. It has been said that it will be possible for the railway company to evade paying that compensation. I am inviting Deputy Davin and his colleagues to produce any amendment which will make it impossible for the railway company to evade the obligation in that respect, and I will accept it.
Will cover be taken behind the Railway (Existing Officers) Act of 1926?
That has nothing to do with it. It was suggested that it would be possible for the railway company to transfer men from some other part of the system to a branch line before shutting that branch line, or subsequent to an order transfer persons to another part of the system for a period before dismissing them and, as there would appear to be no connection between the two things, consequently no compensation would be paid. I want, if possible, to make such action impossible. The intention is that the company should not have power to do that. The intention definitely is, where an order is made releasing the railway company from a statutory obligation to run trains on any section of the line, that the employees deprived of their employmen in consequence of the order should be compensated. The question of measuring the compensation is another matter.
Is the Minister aware that normally officers or servants of the company are subject to transfer and are obliged to go when and where sent.
Quite. That brings me to paragraph (d). That paragraph was not intended to, and I submit does not, in fact, break any agreement between the company and the trades unions. It is intended to ensure that any agreement relating to the order or dismissal of employees in the case of redundancy will not apply in respect to the railway or the section of the railway to which an order made by the Minister under the Act relates. In other words, it is intended to provide that if an order is made for the closing of a particular branch line it is the employees on that branch line should be regarded as redundant and compensated and not employees in some other part of the Saorstát. If that paragraph were not in the section the railway company under the agreement would be required to compensate, not the men disemployed by the closing of the branch line, but to dismiss a similar number of employees latest into the service on some other part of the system. It is precisely in relation to such manoeuvring that difficulties will arise, that is questions as to whether in fact particular employees were dismissed because of the closing of the branch line or not.
Is the Minister aware that the company could if they wanted victimise men by transferring them to branch lines a month before they were closed?
I am willing to put in any safeguard to prevent victimisation. I am sure the Deputy appreciates that if it is to be that it is not the men on the closed line who are to be compensated but some other men on another part of the system, there is every possibility of people disemployed in consequence of an order not getting compensation, because a plausible case might be made that they were dismissed, not because of the closing of the branch line but because of a general decline in traffic. It is much safer, to secure compensation for people entitled to it, that men, if it is a convenient way of doing it, should be disemployed and compensated who were formerly engaged on work on the branch lines. I am not going to enter into any argument as to the advisability on general grounds of maintaining the agreement that exists between the unions and the railway company. If I could express an opinion as a private individual, and not as a member of the Executive Council, my opinion might not be at all in support of the maintenance of an agreement of that kind. There is something to be said for it, but I think, as Deputy Davin knows, there is a lot to be said against it.
It is the fact that from time to time I have received representations from sections of the railway workers against the continuation of an agreement of that kind. Naturally the outlook and the point of view of the man who is going out first, in relation to such agreement, is altogether different to the man who is going out last. On general social grounds as well as on other grounds I think there is something to be said against it. It does not arise here. The only question is whether such an agreement should be enforced rigidly when the circumstances are different to those contemplated when the agreement was made, when dismissals are not due to falling traffic but to the closing down of a section of the line.
Could the Minister give any justification for interfering in any way by legislation with an agreement between the unions and the company?
Only in relation to a particular case when it seems to be the best thing to be done, not merely in the interests of the railway, but of the workers. If a strong case is made against it I am prepared to reconsider it. I may say in relation to the closing of branch lines that when baronial guarantees were operative, and when the ratepayers had to make good the guarantees in respect of these branch lines, there were very frequent demands that they should be closed down and that the services should not be maintained upon them.
Not from the cattle traders or the farmers in the area.
We have been told that this Bill does not provide for the unification of transport services——
Before the Minister leaves the point that he has just been dealing with, I wonder if he would enlighten us a little bit more about the principle of compensation and exactly as to why compensation should be compulsory in the case of railway workers when it is not compulsory in other cases and to compare, for example, the case of a redundant public house that might be shut down by legislation.
There is compensation there.
Is there compensation to the employees?
Not at all. Is the Minister not aware that there is not?
Yes, quite.
I feel that there must be something to be said for it. I am not saying that it is not justifiable, but I should like the Minister to explain why it is justifiable.
I think we can quite easily defend the paying of compensation to railway employees when a section of a line is closed down by Ministerial order, having regard to the general nature of railway employment, having regard to the fact that the services on which these people are employed were services the company were required by law to maintain and having regard to the general social question involved. It is quite easy to argue that there are other cases of persons who lost employment in consequence of State action that might, in some way, be held to be analogous to the case of railway employees, but there is an obvious argument in the case of railwaymen. Each case is considered on its merits. I think the same applies to employees of road services bought out under this Act. The principle of compensation for railway employees rendered redundant by the operation of national legislation was adopted in the Railways Act of 1924, and is one I think that should not be departed from.
I said yesterday that this Bill does not provide for the unification of the road and rail services owned by the Great Southern Railways Company, and I said that the only reason why it does not provide for it is because the directors of the Great Southern Railways Company told me that everything that was necessary in the way of preparation for the amalgamation of the three companies into one had already been done, and that it only required the stroke of a pen, and that they would do it as soon as they were requested to do so by the Government, and I said that, here and now, we were requesting them to do it. If there were other difficulties, legal difficulties, to be got over or other obstacles to be removed, there would be sections in this Bill providing for it. The only reason that they are not in it is that they are not necessary in our opinion. If we are getting it done voluntarily, why should we compel it to be done? It is my definite opinion that if there is going to be efficiency and, particularly, if there is going to be no reversion to the idea that the prime purpose of the railway directors is to make profits out of the railway, to force back on to the railway traffic that has gone, to stifle all forms of competition for the benefit of the railway, then these railway directors must have direct and immediate responsibility not merely for the operation of the railway system but for the operation of road services, and they should be under one general manager. The same general manager who directs the operation of the railways should direct the operation of buses and lorries so that there would be unified control and definite co-ordination of all the services. That is what I mean. I mean that the I.O.C. and John Wallis & Co. Ltd., as separate companies should be abolished, and that there should be a Great Southern Railways Company, which will, in fact, be a Great Southern Transport Company, operating these services.
On that very important point the Minister promised to introduce legislation if the promise given to him was not carried out. Does he fix any period within which that very necessary change should be made?
No. It can be done reasonably soon. There may be certain minor adjustments and alterations in the present position to be made, but I think it could be done before the appointed day contemplated by the Road Transport Act is fixed.
Why not put that in the Bill?
I will say this to the Deputy that it will be done before the date to be fixed as the appointed day under the Road Transport Act.
By this or by some other Bill?
It will be done by the voluntary action of the owners of the three companies.
And if they do not what happens?
If they do not, we have a new situation. Deputy Good asked why we did not concede the request of the railway company to be relieved from rates. I do not see why the railway company should be relieved from rates. The argument that the railway company should not be requested to pay for maintenance of the roads is to me quite fatuous and unsound. The railway companies would be quite useless without the roads. They are amongst the most extensive users of the road and the railways without roads would be very little benefit to anybody. A great part of the amount they pay in rates goes in maintenance of roads, undoubtedly, but it is the very fact that those roads are there which enables the railways to be availed of, as rail-borne traffic has to be carried by road at some stage. Deputy Good was also somewhat confused as to the position in respect of the sum of, approximately, £48,000, which has been paid to the Great Southern Railways Company for the past nine years and which will be payable next year, but not afterwards. That payment was made to the railway company because, by the Railways Act of 1924, the liability was also transferred to them of paying dividends on guaranteed stocks to which the baronial guarantees applied. It is quite clear that there is only an additional burden being placed on the company if, in fact, they do pay a dividend on the stock. If they do not pay a dividend, there is no burden. They have been getting £48,000 a year from the State funds and, in this year, they did not, in fact, pay a dividend on those stocks and, consequently, we must assume that that £48,000, made available from the Exchequer in order to assist in paying dividends on these stocks, was, in fact, used to assist in paying the debenture interest.
Deputy Moore asked why we were retaining the system of standard revenue. We are retaining the system of standard revenue because it seems to us that there must be some figure to which standard charges are going to be related. If standard charges are to be fixed there must be, in relation to those charges, some conception of the revenue to be earned from the railway company, having regard to the volume of traffic likely to be available during the year. It seems to me that the Deputy when he asked that question had a somewhat different question in mind, but, if we do not relate standard charges to standard revenue, we must relate them to something else, and I cannot think of any other system as suitable as the one now in existence. Certainly, the mere fact that it is in existence is an argument against changing it unless there are sound reasons for doing so. On the question of facilitating the railway company in taking up lines after an order releasing them from the obligation to run trains on them has been made, that can be considered, and I have already expressed the opinion that, if an order is made closing a branch line or a section of a line, it is unlikely that, at any future time, services will be resumed and, consequently, there need be no objection to the company removing the rails, but they must maintain fences and rails and bridges which they are obliged to maintain in the present situation. As to the turning of the permanent way into roadways, I am not at all sure that the suggestion is a feasible one, but it is something that will arise, in any case, in the future.
The question has also been raised here of the consequences to the company of the removal from the board of the member nominated by the London, Midland and Scottish Company. I said yesterday, and I repeat it here, that, no matter what the consequences may be, we should make that change. What the consequences are likely to be I do not know. I do not myself anticipate that they are likely to be serious. The concession was given to the London, Midland and Scottish Railway Company in return, we are told, for an agreement entered into which secured for the Great Southern Railway Company certain preferential distribution of receipts from through rates, involving a profit of £20,000 a year. Whether in fact they are getting a profit of £20,000 a year out of such preferential treatment now I do not know, but I said before and I say again that if the London, Midland and Scottish Railway Company are giving £20,000 a year to the Great Southern Railways Company they are getting the best of the bargain. I have never detected in the minds of those associated with that company the slightest desire to give an Irishman anything they could keep from him.
We had of course a lot of discussion about the proposals for reconstruction of the company's capital and we are going to have more discussion upon that. I do not propose to deal with it at any great length now, but the suggestion has been conveyed that in interfering with the rights of the debenture holders we are doing something without precedent, something that should not be attempted, and something the morality of which is open to question. I do not believe that. If we were proposing to acquire the railway companies and offering to buy out the rights of the debenture holders at double the present market price of their stocks, I am sure nobody would question our generosity. If we undertook to buy out those stocks at the highest price at which they were quoted on the Stock Exchange since the amalgamation took place people would consider it reasonable enough. The highest price at which debenture stocks have been quoted since the amalgamation was 75. We are proposing to reduce them to 85. The present market price, as I have mentioned, is £35. I have already pointed out, and I repeat, that a gilt-edged security earning four per cent. interest is worth more than £35 to-day. £100 stock paying regularly £4 per year return and secured upon valuable assets would be quoted in or about par at present money prices. The fact that Great Southern Railways Company debenture stock paying 4 per cent. interest, on which a default of interest payment has never occurred, is being quoted at £35 and not at £100 is an indication that the commercial community do not believe there is any sound prospect of the company being able to pay that interest for any prolonged length of time. If, therefore, by reducing the charge upon that stock by 15 per cent. we increase the earning prospects of the company, increase the value of its assets, and give it a reasonable prospect of being able to enjoy a long and profitable life, then we are, in fact, improving the position of the debenture holders and likely to increase the sale price of their holdings. What the position is likely to be in that respect I do not know. I mentioned the fact that immediately following the publication of the Bills the market quotation for the debenture stocks showed a considerable jump. It has gone down again, due possibly to a variety of causes, but the tendency should be for the value of those stocks to appreciate, because there is a better prospect of a dividend—even a dividend at the lower rate—being payable upon them for a much longer period than apparently was contemplated. I may mention here that the railway company probably could not in this year pay the debenture interest at all if adequate provision were being made to maintain the rolling stock.
This is the second time that statement has been made. Have you any authority for it?
Quite definitely so.
Engineering authority?
The admission of the company themselves that upon their branch lines there are considerable arrears of maintenance and that to bring those branch lines up to first-class condition would involve an expenditure of some £800,000; the fact that on the admission of the railway company and to the public knowledge the arrears of work to be done upon rolling stock are considerable; that railway stations have not been painted; that the general overhauling of carriages and other equipment which should take place has not taken place, apart altogether from the fact that more up-to-date equipment has not been secured. Even the maintenance of the present equipment in a reasonable state of repair would, in my opinion, not be satisfactory, because if the railway companies are going to attract and retain traffic they will have to give continuously improved services to their customers. The whole question of the equity of the scheme of reconstruction depends upon the provision made in respect of debenture holders. I have mentioned the origin of that scheme. It was prepared at the instance of the Great Southern Railways directors by a prominent firm of accountants. It was presented to me by those directors as——
As guess-work!
——as a proposal for the reorganisation of capital, with a view to discovering whether as such it was in accord with my ideas. I accepted it as being equitable, having carried out certain rough tests to check its equity. It is, of course, guesswork. Does Deputy McGilligan pretend it is possible for anybody to estimate the future earning capacity of the Great Southern Railways without engaging in a very considerable amount of guess-work.
Not now. That is why I think it should not be done.
Not at any time——
Oh, no.
Not at any time is it going to be possible for somebody to say that for the next ten years he could estimate with certainty what the earnings of the company are going to be. If it were possible to do that we could eliminate a lot of the guess-work, but the fact that it is impossible to do so makes it inevitable there must be guess-work. We did apply the obvious tests. We said that if we assume the same relationship between total capital and standard revenue to exist between present revenue and what the reduced capital should be we get a figure substantially lower than that contained in the Bill—about £3,000,000 less. If we take the market price of the stock, I think it was Deputy Good who admitted here to-day that assuming all the holders of stock were willing to sell at the market price you could buy the whole of the railway and all its debentures for less than £5,000,000. As he stated, if in fact there was any serious attempt to sell the stock, the prices would fall very considerably lower even than they are to-day. Consequently, considering the estimate which the commercial community of Ireland have fixed upon the value of the various classes of stock, considering the actual earnings of the company and their prospective earnings for many years to come, it seems that this proposal prepared by those accountants is equitable on the face of it. I am prepared to admit that there is a case for alteration in respect of some of the minor stocks set out in the Schedule. I think a very strong case could be argued against applying precisely the same considerations in respect of those minor stocks as in the case of the major stocks. If anyone produces strong arguments against the scheme set out there or produces another scheme which can be shown to be a more equitable distribution of the burden, I am quite prepared to consider it on its merits and if necessary to amend the Bill accordingly.
Those I think were the main matters which arose out of the discussion that took place yesterday and to-day. I do not know if it is desired to discuss at any greater length the detailed provisions of the Bill. If not, then the motion relating to the capital reconstruction will be moved and the discussion will be confined to it. I move: "That the Bill be read a Second Time."
Before the Minister resumes, I would like to know whether there is any statement made in regard to prohibiting buses plying on the same routes, side by side, with rail buses. I think it is a very serious matter in this particular Bill, and I would ask him to look into the question when dealing with the matter.
The Deputy will have an opportunity of speaking before the debate concludes.
At the end of the debate I am putting the question: "That the words proposed to be deleted, stand." The motion for the Second Reading and the amendment will therefore be debated together.
I move:
To delete all words after the word "That" and substitute the words "the Dáil declines to give a Second Reading to the Railways Bill, 1933, until an independent tribunal, after hearing the evidence of all interests affected, has considered and reported whether a reduction in the capital of the Great Southern Railways Company is necessary and, if so, what reduction in the various denominations of stock would in all the circumstances be fair and equitable."
That amendment relates mainly to clauses 3, 4 and 5 of this measure—the clauses which deal with capital reconstruction—and I propose to make whatever remarks I have to make and to advert mainly to them. At the same time I do not propose to confine myself to that and will deal with whatever is in the 1933 Railways Bill. First of all, I would like to ask members of the House now that they are fresh from the last jeremiad of the Minister with regard to the hopeless position of the railways to remember what has already been done, and I propose to read again the Minister's own view of the actual situation announced in January of this year.
I stated definitely that the report quoted by Deputy Good was not accurate.
I am going to read again that report and the Minister can submit what point is not accurate.
The whole report.
I am quoting from "Truth in the News" and from other papers not describing themselves thus but which generally give more truth. The best evidence, of course, is the Stock Exchange quotations, not the statement made here yesterday of a funny test that nobody would put a penny into any railway if railways were to be built up again and there was a public issue looked for. The Minister said that the railways, even though they are pretending to earn a certain amount of money and paying out debenture dividends, are, in fact, only doing that by terrible depreciation of their locomotives, their rolling stock and their permanent way—as black a picture as ever was painted. The Minister, when speaking on the other Bill, said that the situation had not altered in its essence in the past twelve months, and that these proposals now before us might have been made at any time in the last year. Of course, he had to say that because he wanted to avoid one item which occurred in the last twelve months, and which had seriously affected the railways. That is his statement. The situation has not altered in its essentials in the last twelve months, and yet he is reported as having said in January of this year:
"Though the railways' earning capacity had been diminished by excessive and uneconomic road competition, they were, nevertheless, in a position to pay all their working expenses, interest, wages and something more. If properly organised and conducted they had many years of useful and profitable life in front of them."
It does not sound like a make up. The "Irish Press" report is a little more detailed.
I am not contesting the accuracy of what the Deputy has just read, but it is a different report from what Deputy Good read.
This is the "Irish Press" account.
"Dealing with the railways, Mr. Lemass said unified control of all public transport services would be established as soon as possible with efficient direction and adequate maintenance. From the G.S.R. and other railways had been taken to pay interest upon shares, money that should have gone to the maintenance of the permanent way and rolling stock. Fianna Fáil was a "pro-railway Party." It was essential to the development of the State that the railways should work in harmony with Fianna Fáil's policy of industrialism. The position though serious was not hopeless. Though the railways' earning capacity had been diminished by excessive and uneconomic road competition, they were nevertheless in a position to pay all their working expenses, interest, wages and something more. If properly organised and conducted they had many years of useful and profitable life in front of them."
It is a serious situation but not hopeless, though the railways' earning capacity had been diminished by excessive and uneconomic road competition. And the reply we have just got is the reply of the Government and the best reply to the excessive uneconomic road competition. Take out these redundant services. Compensate the people who own them, and superannuate or give some sort of compensation to the employees. That is the way to deal with the excessive and uneconomic road competition. That is what the Minister said in January of this year. Now in this month I think the picture he has painted must be described as hopeless. The whole revenue of the railways gone, the rolling stock, permanent way and locomotives all depreciated and all in a bad state of repair, branch lines unsafe for anybody to travel on ....
I did not say that.
Sorry. "Stretches of branch lines unsafe to travel on except going at the rate of 15 to 20 miles an hour." But the man who was in a responsible position on 9th January of this year could say what I have read. And the organ of his Party on March 1st has this to say about the future of the railways:—
"The Bills to save the Free State Railways and to control road transport are published to-day. They propose many important changes."
Then there is a lot about the directorate. It then goes on to say:
"The new Bill strives to give better foundations for recovery. If, after fair trial it proves unavailing, the State can take further steps. But the eventual salvation of our railways will be the ruralisation of industry throughout the land. In the foundation of local factories and the widely distributed increase of population now in progress there are the elements of a brighter future for our railroads than they have known for generations past."
So bright that we are going to reduce the capital of these railways. In facing that bright prospect they will write them down from £26,000,000 to about £12,000,000. That is the test of the bright prospects the country has. There is a funny way the Minister can speak and then have the brazenness to even attempt attacking a Deputy like Deputy Davin for facing both ways. Of course the situation is clear. The Minister had said on a public platform on 9th January, and the Bill had been promised to us by 1st January, if he had published that Bill, he knew very well that his Party's prospects and his own personal prospects were not going to be enhanced. We got the statement from the Minister—I think nearly every statement he made that seemed to be beneficial to the railways was immediately laid-off with another statement which showed pessimism—in addition to what I have remarked upon that nobody would put a shilling into the railways if they had to be built again, and all the talk about depreciation of rolling stock. We are told that it must be recognised that there was traffic—the Minister had some phrase enlarging on that, but I have forgotten it—permanently and definitely lost to the railways. Later he gave a picture of the railways as outworn and obsolescent. I wonder is that the position that we have got to face up to? I think it is unfortunate that there has been so many expressions of opinion founded altogether on the present circumstances of the railways, leaving people outside to believe that there is a consensus of opinion in this House that the railways are doomed as the main carrying agency of the country.
There are three main classes of people affected in any discussion of measures that have to do with transport, particularly a measure dealing with the railways. These three classes which have certain peculiarities are: (1) railway servants; (2) the shareholders, and (3) the travelling and trading public. Deputy Davin talked yesterday of the seven thousand monuments to the 1924 Act, the seven thousand railway employees rendered redundant by the operations of that Act. The last time that I had figures from Deputy Davin was in December, 1931. He said that the employees, who previously numbered 17,234, had been reduced to 13,400. If we take the Deputy's phrase, "monuments to the 1924 Act," we have this position, that there are 4,000 railway employees who were adjudged by the Railway Tribunal to be redundant, and these 4,000 people got compensation under a scheme which now has the benediction of the present Minister for Industry and Commerce although it was supposed to be iniquitous, both in so far as it put a terrible burden on the employees to prove that they were put out of employment by reason of the operation of the Railway Act, and, secondly, because it did not give them fair conditions until they had proved their case. It is now accepted, in this 1933 measure that we are discussing, that those who have been put out of employment by reason of the operation of the 1924 Act, whatever the number be, are at the moment in receipt of compensation under a scheme adopted by the present Government and first put forward by the late Government. Then there are the shareholders. I do not know what their numbers are, but they are certainly not less in number than the railway employees.
27,000.
Then there is the travelling and the trading public. They can be counted in numbers as representing the whole population of the country. There are peculiarities about the situation of all three classes, but mainly two. It must be remembered, and should always be remembered with regard to railway employees, that they occupy a peculiar position. Railway employment was always regarded as having something in the nature of permanency attached to it. To such an extent was that so that railway employees, after a probation period had been passed, were not liable to deductions on account of unemployment insurance and not open to its advantages afterwards. In the case of railway employees who at the moment lose their employment it should not be forgotten that they have no unemployment insurance money to tide them over the period of unemployment, and that many of these men were drawn into the ranks of railway employment because of the permanency that attached to that occupation. That is a matter that should be remembered.
Similarly with regard to the shareholders. The legislature long ago made provision that if three per cent. was paid in any of the last ten years preceding the investment of funds on the ordinary stock of railway companies in Great Britain or Ireland that the preordinary stock of these companies was subject for investment of trustee moneys. Later, I think by Court order that reached a point that if any dividend was paid on the ordinary stock of railway companies, then the preordinary holdings of these companies were open to the investment of trustee securities and investment funds under the control of the Courts. As a result, most railway securities of the pre-ordinary type are in the hands of trustees. People who have made, or attempted to make, certain provision for dependents, widows and orphans are the types of people who mainly hold railway stocks. That fact should be equally remembered with the other fact that I have stated with regard to railway employees. The travelling and the trading public are in a peculiar position. As I have said, in numbers they really represent the whole population of the country.
The industrialisation of the country, if it is going to proceed, requires that transport charges should be kept at the lowest possible point. The employees naturally desire to keep their wages as high as possible and their conditions of service as good as possible. If you want to make that concrete, what they want is—it is a natural desire—to keep wages as high as they were forced up to at the peak point reached during the war years; they want conditions and hours kept as they were fought out and won out, not by themselves in this country, but by English unions with which they were associated, relating hours and conditions and so on to the conditions of the good, big dividend earning English railway systems. The public in this country wants to get both its travelling and trading cheap. I suppose a trader wants mainly safety, security and punctuality in delivery. The passenger wants safety, speed and convenience. Both want convenience. In this case that is going to mean door to door carriage of both goods and themselves. There is no doubt that while the shareholder suffered in recent years and while the railway employee found his wages or earnings driven down, the public have made greater and greater demands for cheaper and more convenient transport, reaching a point where, so far as road vehicles are concerned, they were getting, and still are getting, transported under cost.
But even in these conditions of excessive road competition, with wage conditions fixed and maintained as they were at the peak point and with the shareholder being depleted of the earnings on his money that he had a right to expect, it is quite wrong to say that the Great Southern Railway system is outworn and obsolescent: that its rolling stock, etc., is in such a state of repair that really one cannot have any hope for it. Can one say that of any system that earned £3,600,000 gross receipts in the year before the one we are in? Is there any sign of bankruptcy about a company which gathered in three and a half million pounds in gross receipts; which has a road track in this country of over two thousand miles; of nearly three thousand miles of single line of rail; and carried—leaving out last year which was an abnormal period—nearly thirteen million passengers; two and a half million tons of goods, and two and one-third million head of live stock? That was not a bankrupt concern to start with. A concern which has the property of which I have spoken and which has the use of that property is not a bankrupt concern — thirteen million passengers, and it was on the passenger side that they were being most definitely beaten; two and a half million tons of goods, and two and one-third millions of live stock, with gross receipts earned of £3,617,000. It is too early to say that that system has passed its day. Is anybody in a position to say what is to replace it if we take the other ill-considered decision? Has anybody thought out the economics of road transport? Is anybody yet in possession of the data that will be required to work out the economics of road transport? It is not going to be the system that is operating on the roads that will help the railway system to put upon it the thirteen million passengers, the two and a half million tons of goods and the two and one-third millions of live stock catered for by the railways. Remember that if any more of the cream is skimmed from the railway traffic, the railways will not last and provision has to be made somewhere for the thirteen million passengers and for the two and a half million tons of goods and for the two and one-third million of live stock to which I have referred.
Why this House should casually come to an opinion, just because there has been a bad year, and even a succession of bad years, with a completely depressed community and an economic war forced upon them, and with unlimited road competition against them—why they should say that a railway system cannot make its way under other and more normal circumstances I cannot see. Unlimited road competition is one of the things from which the railway companies were said to be suffering before this and in 1932 a measure was introduced into this House and is now in operation to effect a change so far as passengers carried by road were concerned. The Minister yesterday told us that, in effect, the Great Southern Railways Company in its zone had achieved a practical monopoly in the carriage of passengers either in their own railway carriages or in their own buses. Now it was on the passenger side that the greatest harm was done through unregulated road competition and, if they had this monopoly, their situation should have been better than it was and probably would have been better than it is if it had not been for the peculiarly adverse circumstances that came to operate on them during the last year. The Minister himself, on the 9th January, talked of the uneconomic road competition. That could only refer to the carriage of goods, and we have his idea with regard to the mending of that. Supposing that a year hence the Minister can say with regard to the goods traffic what he said yesterday with regard to passenger traffic—that the Great Southern Railways Company over its own zone has become the virtual monopolist of the goods traffic of the country—will not that improve the railway company if there are not adverse circumstances? At any rate, there are two definite reasons there for hoping that the railway situation will be better. There will not be any longer merely the railway systems as they used to be, but a system catering both by rail and road for passengers and also for goods. They will be under the same company, but the old receipts ought to be flowing in and the passengers and live stock and the merchandise ought to go back to the height or the peak point which they previously reached unless there is to be a further decrease in the carriage of passengers, merchandise and live stock and that that is to be a permanent feature of Irish life.
There have been steps taken previously to consolidate the railway situation. The Minister said yesterday that eight measures have been brought in affecting the position of the railway companies. I want to refer to one of these measures, but particularly to the one upon which all the other measures were built—the 1924 Act. The 1924 Act consolidated the railways system in the country. If Deputy Davin were here he would retort: "Yes, at the cost of the employees;" and to that I would retort that whatever employees went out, and a good number of them had been rendered redundant by that Act, were compensated and they were compensated on the scale now adopted by the present Government. What else occurred? I used to boast of the one and a quarter million pounds reduction in expenditure that had been achieved under the 1924 Act. I have got to boast more now. At the annual meeting of the Great Southern Railways Company this year, the chairman, taking up year by year the economies that had been effected, said: "In the whole period since the amalgamation the reduction in expenditure amounts to £1,707,127 per annum." That amount still remained. If the old gross receipts had remained as before that amount of £1,707,000 in a saving of expenditure would not merely have paid the debentures, the guaranteed preference and the preference, and would have given not merely five per cent. to the ordinary shareholders, but a great deal more. I think it takes about £800,000 to pay the debentures, the guaranteed preference, the preference and to give a percentage to the ordinary shareholders. A reduction of £1,700,000 in the working expenses per annum as between the year 1924 and the year we are in now has been effected, and yet there are people who will say that the 1924 Act was a failure. It has got to be remembered that that reduction in expenditure of £1,700,000 has been achieved after paying compensation according to the terms and on the scale that the present Government have now adopted.
In addition to that, we passed, in 1927, a Road Motor Vehicles' Bill. There may have been earlier Bills passed in other Parliaments giving a company power to go on the roads, but if there were I do not know of them, and I think that our Bill was the first of that kind. In that Bill we gave them their outlet upon the road for the first time and they seized their chance, although many restrictions were imposed upon the measure by this House, and they could not seize their chance to any great extent because of these restrictions. In 1931 we went further and advanced to the point of controlling passenger traffic for them, and this year goods traffic is to be controlled. Those are the steps that have been taken to consolidate the system and, in view of all the circumstances, is it not wise to wait and see what will be the results of these before deciding that the railways are so derelict that their capital must be reduced from £27,000,000 to £12,000,000?
In addition to the Road Transport Bill with whatever it gives, we have this. Clauses 3, 4 and 5 of the Bill deal in some way with the reconstructed finances of the company. The rest has application to the company's position, sometimes a good application, sometimes bad. We start off in Clause 2 by remitting certain debts due by the company, and the Minister himself, yesterday I think, agreed with the statement of the chairman of the Great Southern Railways Company that this will bring them annually some £15,000. Then let us come to Clause 13—"The Railways (Directorate) Act, 1924, is hereby repealed." There is a loss from that of £20,000 per annum. The Minister says he does not know if the Great Southern Railways Company in fact received that £20,000. Would not a responsible man inquire, just merely put the question and ask to have the answer for this House, before he would decide to repeal the Act which gave them their directorate, which gave the London, Midland and Scottish Company that consideration for the payment of £20,000 per annum? At any rate let us quote these two things— £15,000 saved to the company as one item and £20,000 per annum lost to them.
There is another item. The London, Midland and Scottish Company invested in this company, through the medium of the Dublin South Eastern Company, about £300,000 from time to time. There was outstanding a debt of at least £100,000, lasting from somewhere about 1906, 1907 or 1908, with compound interest accruing since. Has that debt been paid back, or will it be demanded? If so, where is the company to get the money? Will they get the bank to lend them a shilling after the Minister's statement as to what were the main charges? What is that equivalent to in reduced receipts? How many years are to lapse before we get to the situation we were in prior to Section 13 of this Bill having been introduced and passed? The Minister says he does not care whether they lose the £20,000 or not. He believes that the London, Midland and Scottish Company, if they did make a bargain of this type, got the best if it. I wonder how? Was it through having a representative on the Board? Whatever advantage they used to get in their bargaining or in their dealings with the Great Southern Railways Company, are they going to be defeated in their bargaining powers now simply because their directors are removed from the Board, or is this another instance of the spirit of pessimism which means that they could always overcome the Irish directors? Is it that there is something in the railway system between this country and England which means that they have always the better of it?
At any rate we ought to know what really was the defect or the deficiency brought upon the railway company by reason of having a London, Midland and Scottish director sitting on the Board. I think the Minister ought to know before he introduced that, and we are entitled to the information if he did make an inquiry, as to the amount of the debt outstanding and the compound interest which has accrued. However, the directors are to go and that is being hailed with delight by the Labour Party. If the London, Midland and Scottish directorate are to go from the councils of the railway company in this country, why should not the National Union of Railwaymen be cut off from interference with the affairs of this country? If we are going to get rid of a director representing an English company on the Board of our company, why should not we get rid of whatever interference there may be by an English railway union in the affairs of this country?
I wonder is there any member of the Labour Party who is able to tell me whether there is any truth in a story which circulated in this country at the time of the Treaty and which gained currency here in recent years that the N.U.R. made an attempt to cut away from this country. I understand that the N.U.R. in England, as a group, made up their minds that once the Treaty was signed there was going to be a definite break up. The N.U.R. was going on the assumption that the Irish Unions were going to secede from the N.U.R. They acted on that opinion. They thought that was the principle that was at stake.
I believe, not out of any feelings of gratitude for Irish railwaymen but simply because they wanted a strong union in this country they did consider whether or not they should establish an Irish union on a sound footing and I understand they came to the conclusion that they should give a sum of money amounting to £20,000 as a war chest for an Irish Railway Union in this country. They were greeted with a flood of telegrams, and finally they met a big deputation who urged that in no circumstances should there be a break-up in the relations with that union to establish a branch union here. If we are going to have a clearing out of people who interfere in this country, let us do it root and branch as far as the railway people are concerned. Why cannot we have our own unions here? Why not have them financed by our own people? Why cannot they fight their own battles? If that is not going to be looked into, I would ask the Minister to look into this: to see if there is not required any change in the laws affecting the rights of trades unions here affiliated with trade unions across the water and to see whether they are now receiving certain legislative preferences to which they are not entitled under the law.
In Sections 6 and 7 of this Bill we have an attack upon the present number of directors, apart from the matter of the London, Midland and Scottish director, and we have an attack on the system by which they are elected. Why this House should declare as its opinion that postal voting is a more progressive method of election than that of voting at an open meeting and by proxies, I do not know and it has not been argued. We have Deputy Davin waxing probably more heatedly on this section than any other, except, perhaps, Section 8. Deputy Davin is going to introduce further amendments to Section 7. He wants the number of directors cut down. The proposal in Section 7 is to cut the number down to seven. Deputy Davin wants the number reduced to six. I do not know whether the Minister has ever seen a copy of the measure which the Labour Party introduced to this House in 1923 called the Transport and Communications Bill. If he does come across it he will see that it is a bit of a curiosity. He will find that this Party which is now so excited about having seven directors at that time proposed a special Minister for transport with whatever secretaries and staff might be required in that Government Department. They were going to add to him a railway dictator, a man who was to be called a Director of Railways, and then, funnily enough, that Director of Railways was to be assisted by seven railway commissioners, so we had a Minister, a dictator and seven advisers. And as if that was not enough we are going to have a rates tribunal to determine matters about rates, and other matters now determined by the railway company, and only under the supervision of the rates tribunal. We are to have, to determine rates, a tribunal consisting of three members, who are to be permanent, associated to a general panel of 12 members, and a railway panel of four. In addition, we are to have a central board on Irish railway wages and an Irish railway council and after a period the directors are to be left at seven.
The Minister does not deal with the Wages Board here, and I presume that Board is to be left. I confess I was terrified lest there should be any attempt to interfere with it, although the power of that Board, and its importance have been very seriously diminished in the last two or three months. I always felt you must have some such body. If a strike breaks out, and if people are reasonable then, within two or three weeks they are going to look for some machinery for arbitration; and what machinery could be better than representatives of the two sides to the dispute with an independent chairman; and that is what the Wages Board is. The Wages Board operated pretty successfully in this country up to recently. I cannot understand why, when that Board is called into consultation and after they have made a decision which has always been respected, recently their decision should be called in question.
It was called in question after they had taken eight successive cuts off the workers.
I am not denying the claim that could be made, or that might be made. But a claim was made and it was argued out and the Board decided that a particular thing should be done. I put it to the Deputy, if you are going to have conciliation machinery and its award is not accepted what position are you in? What is the conciliation machinery for? What are you driven back to? You are driven back to the machinery of the strike and eventually again to the machinery of conciliation and what better machinery can there be for that than a body composed of representatives of both parties and an independent chairman? We have a situation now that the award has not been accepted, and that the conciliation machinery, to some extent, has been scrapped though not entirely. The demand for a new award was made in abnormal circumstances. I can well imagine following what the Minister said as to the meaning of the abnormal circumstances that they had to be scrutinised, and that because of politics a proper plea could not be put forward. Why should the railwaymen suffer because the railways have in recent months suffered much from the economic war?
The Deputy is historically inaccurate in his statement. The application was made in July.
What consideration operated in the minds of the Tribunal that decided it? Was it only the position of the railway company? The Minister can talk about when the application was made. He knows as well as I do that if there had been a lightening of the situation as far as economics in this country are concerned there would not be an award against the men.
What about the influence of the eight previous cuts? The Deputy has made no inquiry. They were inflicted on the men.
The Deputy says that I made no inquiry.
You said that the railwaymen enjoyed peak wages.
No, I did not say that.
The records will tell.
I did not say that. I said it was their aim to enjoy the peak wages but they did not succeed. It is a natural aim for one to hope to continue to enjoy peak wages. We all want to do that. There has been that award, and although I admit there have been successive cuts and that each cut that came made the latest cut more difficult, yet despite all that this machinery to award cuts, to decide upon awards, is in existence. The latest cut is not even void now. It has been postponed until April, and one of the Bills here has some relation to it. In this Bill there is Section 8 about which Deputy Davin has definite hopes, and with that is to be read the second sub-section of Section 13. I do not see any great difference. I see some differences and I think they are advantageous as between this and the section repealed in the 1932 Act. The only thing I want to make inquiry about is that in the previous section of that Act now repealed the Minister had to be satisfied that there was alternative transport, and not necessarily alternative transport under the auspices of the company making the application. In this the company has to satisfy the Minister that they are to run an alternative transport. I want to know rather would the alternative transport run by somebody else satisfy. So far as this means that branch lines will have to be closed down, if it can be proved to the satisfaction of the Minister that they are unremunerative, I am with him. I do not see how anyone can claim that they should be kept running and in employment when they are not remunerative. It would simply mean that they are going to be kept there as charities. I asked yesterday to have the simple thesis argued out, leaving exaggerated capital out of it, whether if it can be shown that a particular branch line is not improving and is unremunerative yet notwithstanding, and despite that fact, that branch line should be kept going. Outside that, and in addition to the sections to which I have referred, namely, 3, 4, and 5, there is Section 10 which I frankly confess I do not understand. I do not know what it means. I do not know whether it means that the Railway Tribunal is not to be paid, when dealing with rate matters, or whether, when dealing with rate matters it is going to charge fees to meet its expenses. I presume that is rather the fact, but it is not carried out in the wording of the section which, I think, is not perfectly drafted.
We have in the Bill, to meet the railway situation, Section 3, 4 and 5. I said previously, when talking about these awards that the conciliation machinery might be called into being again soon. The Minister for Industry and Commerce warned the House here, the other day, that the wages award was not void but was only postponed. I want to know what is the Minister's idea. Has he any proposal definitely about whatever sum of money is likely to be saved by the cutting down of the debenture interest? There are three sets of people who may claim a share if any is to come. There are the employees; there are the postponed shareholders like the ordinary shareholders, and there is the travelling and trading public. If I am to take this Bill as meaning anything, Section 5 would indicate that the travelling and trading public ought to get the advantage of anything saved from the debenture holders, because it says:—
5 (1). As soon as conveniently may be after the passing of this Act the Railway Tribunal shall reconsider the standard revenue...and after hearing the Minister and all other parties desirous of being heard and appearing to the Railway Tribunal to be interested the Railway Tribunal shall adjust and vary the said standard revenue to such extent (if any) and in such manner as appears to the Railway Tribunal to be just and equitable in consequence of the reconstruction of the capital of the company effected by this Act and the Railway Tribunal shall fix the amount of the standard revenue accordingly.
That would indicate, on first reading, that you present the Railway Tribunal with this new fact, that so much—a quarter of a million or so—is saved from the debenture shareholders. Readjust standard revenue in accordance with that.
The Minister said that he did not think standard charges were going to be lowered. Standard charges depend on standard revenue, he said. What does this phrase mean? I will consider it in its application to the 1924 Act as meaning one thing. The Railway Tribunal in deciding upon standard revenue had not to take into consideration anything about the distribution of the revenue? All they had to decide was what charges will, with efficient and economic management, bring to the company a net income equal to the average aggregate net income enjoyed by the absorbed or amalgamated companies for the three years ending with the year 1930. Are they given new terms of reference in this? Are they asked to reduce standard revenue and, therefore, standard charges by the amount going to be saved? If that is so and if the trading community is going to get the benefit of whatever is taken from the debenture holders, that is one situation.
I should imagine that the new situation, as it presents, itself to the railway employees, is a perfectly clear one also. There is no award against them; it has been postponed. Their Northern brethren have been asked to get the Railway Board to see whether there are no new circumstances that will bring about a new award. Surely there are new circumstances here. I recommend to Deputy Keyes that he should bear in mind the previous eight outs which so affected his thoughts and the thoughts of the people for whom he speaks. He should now definitely associate himself with this measure and he can definitely say to the conciliation machinery, if it is brought together again, that there are new conditions. He can say that the award that has been made against them, but that is not yet operative, should be indefinitely postponed.
If it is neither of these two things that is to happen, then provided always that the traffic will keep at the same point or will increase, the shareholders are going to get some benefit. Has the Minister a proposal about it? Does he intend that whatever is looted from the debenture shareholders, the owners of the railways, should go to the trading community, the employees, the other shareholders, or all three? The only section that has any reference to it is Section 5 and, on first reading, it looks as if it is a matter for the Railway Tribunal to determine and so reduce standard charges. I do not think it bears examination when Section 52 and 53 of the original Act are put together. That leaves us with Sections 3 and 4. I suppose the Minister must have, with a certain amount of cynicism, seen Section 4 written. Reference is made in that section to trustee securities, but whether any trustee money will be hereafter invested in them is a completely different matter.
Quite.
If anyone listened to the Minister to-night, he would go away feeling that nothing he had control of would ever again go into railways. It has one good point about it, it prevents the immediate realisation, or an attempt immediately to realise, trustee securities with a view to further and new investment. In so far as it gives a breathing space of two or three years, it is all to the good. In so far as these are going to rank again as trustee securities, that day had passed. That leaves us with Section 3, a section which cuts down the property of the people who really own the railway system—the debenture holders. Yesterday the Minister, in answer to Deputy MacDermot, used a very peculiar phrase, a very cryptic phrase, with regard to debenture holders and the necessity for unanimity amongst them. Deputy MacDermot asked him would it not be possible to postpone for some period dealing with the property of the company in this way so as to find out what the debenture holders thought of it. The Minister replied that that requires unanimity. That was the simple phrase. Under certain circumstances which are likely to occur, if the Minister's view is correct, debenture shareholders can take possession of the railway; they can divide out whatever funds are in reserve; they can sell the property for what they can get and divide the spoil. They can put in a receiver to do various things for them.
The Minister is quite right when he says that if you could collect all the debenture holders in one room and if all of them except one were against putting in a receiver and if the one man wanted to put in the receiver, presumably he could do so, unless other means were found of circumventing his getting the receiver appointed. From that angle only unanimity is required. Take Deputy MacDermot's point. If we really want to find out what debenture stockholders think of this whole matter, we certainly can, from a general meeting, get as good an expression of opinion from those people as from the preference or ordinary shareholders. It can be described as a bare majority, or evidence can be shown that it was a considerable majority. You can, however, get a good decision from them as to how their property should be handled. You can get an expression, maybe by a couple of different schemes, as to how best the reconstruction can be effected. It is not quite an accurate answer to say that unanimity would be required.
I referred yesterday to certain circumstances. I drew attention to a particular meeting when the chairman of the railway company said—and I think it is the common case with everybody—that the railways in this country during the last year have been suffering from three things—road competition of a particular type, trade depression common to this country as to all other countries, and the specially aggravated depression owing to the economic war. I say that the last year is not a fair one to take by reason of the abnormal circumstances. Take the year before, which the chairman of the Great Southern Railways brought in by way of comparison when he was giving an account to this year's general meeting. He said that last year the company's gross receipts were £3,617,000. The expenses that had to be set off against that in connection with dividends, interest or fixed charges were £2,991,000. There was a net profit of £625,000. He said later that £447,000 odd were required to pay debenture and fixed interest charges.
The figure of £615,000 represented the worst year that the railway company had prior to the starting of the economic war. Their net receipts—and that was before the latest of the awards was to be enforced against the employees—were £615,000. They were able to pay the debentures; they were able to pay the some part of their guaranteed preference shareholders. It takes about £800,000 to pay all the shareholders, all the debenture, guaranteed preference and preference and to give one per cent. to the ordinary—and they showed a net profit of £615,000. Now if one is interested enough to read back over the corresponding statements from year to year for the past five or six years one feature emerges peculiar to these items.
Previously the complaint usually was that the passenger receipts were dropping considerably. This year the chairman gave the fall in receipts, and he gave them under different headings. The passenger train traffic showed a decrease of £24,000 as compared with the previous year. The goods train traffic (excluding live stock) showed a decrease of £282,000; live stock showed a decrease of £134,000 and miscellaneous items a decrease of £3,000, making in all a drop this year in receipts of £444,000. The debenture money, as far as taking it in terms of gross receipts, gained no extra value this year. The chairman said:
"The stagnation in trade—more particularly as it affected live stock and farm produce—from which the farmers of the Free State have suffered so heavily, had disastrous effects on the railways, coming, as it did, at a time when they were struggling for their very existence, handicapped by the adverse conditions to which I have already referred. Official trade returns of imports and exports for 1932 relating to the commodities which form a large proportion of our normal goods traffic, bacon, fresh meat, flour and other mill stuffs, farm produce, live stock, coal, cement, etc., show a decline in volume and value of 26 per cent."
There is the chairman's statement to his shareholders this year. That is the cause of the very bad fall in last year's receipts. And it is not always going to be so. May I hark back again to the "Irish Press" Editorial of March 1st, which said:
"In the foundation of local factories and the widely distributed increase of population now in progress there are the elements of a brighter future for our railroads than they have known for generations past."
With that bright prospect and with the abnormal circumstances that operated for the last year, is it fair to say to the proprietors, to the railway debenture holders: "We are going to lop off your property and the profits you get from it by a certain percentage?" The Minister said that he found that this whole scheme for which he has taken responsibility, apart from the fact that it came from the company to him, justifies the equities of the situation by two things. The peculiar rights of each of them based upon the property and the prospects of the revenue earning capacity of the company. The prospects taken from what year? If it is this year—the last year with which we have dealt—there is no reason that anybody can see upon which to base a case for a reduction of the shareholders' property by one penny. In the worst year they had a net receipt of £617,000, enough to pay the debentures and to leave something approaching £200,000 over. Take that year, because it is only in the circumstances of that year that any case can be made and we decide to neglect the bright prospects of the future that are depicted in the "Irish Press" and we are now going to interfere with the shareholders' property. We asked several times where did this scheme come from and we got an answer from the Minister, and he says he takes responsibility for it. He is always careful to drag in the circumstances as to where this scheme came from—that it came from the company. Again I want to get it on record just what the chairman did say:
"I now come to the Bill's proposal regarding reconstruction of capital. In all our conferences with the Minister he was insistent in his demand for reconstruction of the company's capital simultaneously with the enactment of any measures of relief for the railway. He contended that it was obviously hopeless to ever again earn any dividend for the greater number of our shareholders, so long as their existing nominal capital values remain unaltered."
And then this follows:
"That was, of course, an undeniable contention."
Can the Minister tell this House in what circumstances he discussed the railways which brought those of the directors who visited him to say that that was an undeniable contention? Did he put before them his plans for the future of the country? Did he talk about the growth of industries and the development of the country? Did he talk about the growth of population now in progress, and did they disbelieve him? And was it an undeniable contention that the railways could never again earn money for their shareholders. Did they discuss the railways in the light of the circumstances that were operating as far as unrestricted road competition was going on? Or in the light of the legislation that was to be brought in? Or did he detail that legislation to them? I would like to get an explanation of the words of the chairman that:
"It was obviously hopeless to ever again earn any dividend for the greater number of our shareholders, so long as their existing nominal capital values remained unaltered?"
The circumstances are an important matter, the circumstances that surround that phrase from the Minister. However, the Minister pressed it still further. The chairman said:
"The Minister pressed us to assist him in his desire to befriend us by devising some means of reconstruction and making some attempt to secure our shareholders' consent."
The Minister yesterday in answering an interjection said he presumed this scheme was put forward as a scheme that would be accepted voluntarily by the shareholders. I wonder can he say that after what I have read.
"The Minister pressed us...to make some attempt to secure our shareholders' consent. We pointed out to him that an effective scheme of reconstruction must embrace the debenture holders...whom we did not represent. It would be idle for us to invite or try to persuade them to make the sacrifice of their income unless and until we could assure them of some resulting added stability of the railway undertaking. It was impossible, therefore, to approach them at that stage."
Did the Minister tell of the conditions that were likely to give the added economic stability to the railways? Whether he did or not the chairman says:
"To gain information, however, for ourselves we employed an eminent firm of financial accountants and experts to examine our accounts and financial condition, and advise us as to the feasibility of evolving from them an equitable scheme of reconstruction."
And then this sentence is the pivotal point of the whole scheme:
"Their report laid it down that no scheme, based on anything but guess-work as to the future, was possible to be set up. Subject to this specific proviso they submitted a scheme for our guidance and criticism."
And then the chairman goes on to say:
"That scheme was shown to the Minister as it stood, without endorsement or approval and, indeed, without any examination or consideration by the board."
And the Minister tells us it is equitable on the face of it. But it cannot be regarded as based upon anything but guess-work. And in this year of all years, with the trade depression of the world having its impact here and with the special impact of the economic war upon us, we are going to cut down the property of the railway shareholders in a scheme which, as the eminent financial accountants and experts have put it, is based upon nothing but guess-work for the future.
That is the reason that I ask the Dáil to decline to give a Second Reading to this Bill until an independent tribunal, after hearing the evidence of all interests likely to be affected, has considered and reported on two matters (1) whether a reduction is called for at all and (2) if one is called for what reduction should be effected that, as between the different denominations of stock, will be fair and equitable in all the circumstances. It seems to me that it bodes ill for the future of this country, for all the hopes expressed with regard to the industrialisation of the country, the ruralisation of industry, the swift passage of goods from one rural centre to another, the bigger mass of population which will be demanding goods and producing goods to answer the demand that, despite all that, we are marking our appreciation of the future of this country, viewed through the medium of our main transport agency, by writing down the capital from £26,000,000 to £12,000,000. That is a pretty good test of the belief of the people who make these promises in the promises they make.
Apart from the question as to whether there is going to be any big industrialisation of the country and apart from the question of what economic state, new or old, we are to have, can anybody justify the doing of this: taking the worst year the company has had, taking a guess-work scheme and saying the time—abnormal as it is—makes it necessary to cut down railway capital and that it is fair and equitable to cut down this capital according to this guess-work scheme? I could have understood the Minister coming in here with either of two propositions—that the circumstances of the time were very abnormal; that, in these abnormal circumstances, everybody had got to bear a bit of the burden; that railway shareholders, amongst others, would have to bear it and that at this time, when we were bringing in measures to get the railways rehabilitated as transport agencies, we would ask the shareholders to remit their claim to some share of their interest for a period of a couple of years but holding out the prospect that, eventually, they would go back to where they were; that the value of their property would be as it was and that the receipts they drew from it would not, by legislative action, be cut down. I could have imagined the Minister doing another thing—coming in here with a Bill and saying: There is a road transport Bill which, added to the other Bill of 1932, gives the railways the best position we can ever help them to. Let those Bills run for a couple of years and assist, by the carrying out, through administrative policy, of the spirit of these measures, to make the Great Southern Railways the main transport agency for goods and passengers in the country; say then to the directors: "You have two or three years in which to make good. If you do not make good in that time, here is a warning to you and your shareholders that we will regard the position as pretty bad and reduce the capital accordingly." Either of these two solutions—although a case could be made against both—would be a much more equitable solution of this problem than adopting the course in this Bill.
You take this company with 2,000 miles of track, still carrying, despite all competition, 13,000,000 passengers; two and one-third million head of live stock; and two and a half million tons of merchandise, and you say to them: Because of the impact of the economic war, on top of world depression, the receipts have so come down that they were just barely able to pay the debenture interest this year, you are going to cut down the capital and, to add to the futility of the whole business, to cut it down according to a scheme which the Minister says is guess-work and which he says he received from the company subject to the specific proviso that it was guess-work. This scheme he adopts as fair and equitable on the face of it, and he adduces this last argument—equal to most of the other arguments he used about this Bill—that if anybody can give him a better scheme he will consider it. I could evolve a variety of schemes, and if I were allowed to put them up on the same terms and on the same basis of argument as the Minister has put up his, they would stand equal to his. Take another division of this stock: let £100 debenture be regarded as £90, the guaranteed preference be regarded as value for some other figure, and let us go in and out in that way. I could say "That seems to me on the face of it equitable." If I cannot give reasons why I think it equitable, I shall be in the same position as the Minister. In the end, I could take refuge in the statement of the directors, that it is based on guess-work. Let us have something more than guess-work. Let an independent tribunal say what the prospects are when these Bills are beginning to have effect—I refer to the 1932 Act and to the Bill now introduced—and postpone any interference, shocking as it is, with the property of certain people who invested their money on the strength of the peculiar position these stocks occupy. They were looking for a guaranteed amount of money; they were looking for a gilt-edged security. They did not want any element of chance about the business. There are funds in court invested in this stock. It is a trustee security, held, in the main, by trustees and that is going to be interfered with on account of the worst year the railways have ever known, and on foot of a scheme that the Minister himself has admitted came to him from the directors with the hallmark of guess-work upon it.
We should have a tribunal and we should let that tribunal decide quite a number of things. This is an attempt to reconstruct the main transport agency of the country. It should be done on some better basis than I described. Nobody has any idea; nobody has, I think, even the data on which they could base a good opinion as to the economics of road transport in the country. That being the position, without any examination we are going to destroy property, as this Bill proposes to do, and we have not even been given the consolation of knowing to whom it is intended the loot is to go. We have had no indication of that. We have had no indication that the position of the travelling public or the trading public is to be improved. If we knew that, it would be some consolation, though I do not think that any improvement that could be looked to would ever compensate for this shocking business of interfering in this light-hearted, haphazard way with property of such great value as the railway companies still have.
You have not referred to the works at Inchicore at all. Do you know where Inchicore is?
I do. Perhaps the Deputy will speak on that point?
Mr. Kelly
I will not. You are supposed to have all the wisdom.
The case made by the Deputy against this reconstruction scheme is based upon his assertion that last year was the worst year the railways have had. Who told him that? Where did he get that information? Does he know so little about what was happening to the railways when he was Minister for Industry and Commerce that he has no realisation of the fact that, despite the economic war, the world depression and all the evils which occurred last year was not the worst year the railways ever had. The net receipts of the railway company in 1925, when the Deputy was Minister for Industry and Commerce, when his Amalgamation Act of 1924 was producing all the beneficial results to which he referred, were considerably less than they were last year and were insufficient to pay the debenture interest in that year.
In each year since then, with one exception, the gross earnings of the railway company have been diminishing. If the Deputy had got his facts right at the beginning, he would have talked less nonsense in the end. It is easy to argue for the postponement of a painful operation. The reconstruction of the capital of the Great Southern Railways Company and the other provisions contained in this Bill and the other Bill are, many of them, going to be painful in operation to some people. It is natural that they should request the postponement, try to convince themselves and others that the situation is not such that the operation must be carried out if the patient is to live.
The Deputy started by quoting a speech delivered by me in which I said that although the situation of the railway companies was serious they were not bankrupt. Then with great vehemence and some eloquence, he argued for an hour in support of that contention. No one was contradicting him. He was fighting all the time shadows created by his own imagination. Nobody had asserted that the railway companies were bankrupt. The only quotation he read from a speech by me was a quotation in which I asserted that the railway companies were not bankrupt. I have been saying here yesterday and to-day that railway transportation is, and will be for a long time, the most economical method of transportation available to us. But, if we are going to give the railways an opportunity of serving the country in a proper manner, an opportunity of carrying on, on an economical and profitable basis, we have got to make certain alterations in our transport system, certain alterations in the organisation and finances of the railway company. That is what these Bills are proposing to do.
I do not think that there is anything in the Deputy's speech that has not been replied to already. The reconstruction of the capital of the company is, in our opinion, an essential condition for making the railways the backbone of a profitable and economic transport organisation. The Deputy quoted from a speech delivered some days ago by the chairman of the Great Southern Railways Company. One of the statements made in that speech was that the assertion made by me to the directors when I met them, that it was unlikely that the railway company could ever again pay a return upon £26,000,000 of capital was undeniable. The Deputy asked me what information the chairman of the railway company had when he made the statement that that was undeniable, upon what he was acting. He was acting with all the knowledge that the Deputy now has; all the knowledge that any member of the public now has; acting with the knowledge of the nature of the legislative proposals which we were submitting to the Dáil. He spoke three days after the Bills were published, and he spoke with as much information as it was possible for him to have. The statement he made was a sensible statement, a statement which has been agreed to by a number of Deputies here to-day, a statement supported by a number of persons who have expressed disinterested opinions on the railway situation. But it is not merely a fact that it is unlikely that the railway company will ever again earn a revenue which will permit them to pay a reasonable return upon £26,000,000 of capital, but it is also a fact that it is most undesirable that they should be put in a position in which the natural desire to pay that return would tend to operate to cripple the efficiency of the services they were conducting. If we are going to give to the railway companies the opportunity to secure a transport monopoly here, if we are going to give them an unfettered direction of road services as well as rail services, we want to be satisfied that that power is not going to be used, that these road services are not going to be conducted, with the one idea of again paying a return upon capital which is represented by assets no, longer capable of earning revenue.
That is the justification for undertaking this reconstruction scheme and now is as good a time as any other. There is no reason to believe that the railway company will not again have a period of greater prosperity than it had last year. Just as in 1925 it went down lower than it went last year, its prosperity was in part restored by the economies which it was able to effect. But during the whole period the gross receipts were declining. During the whole period the passenger traffic was declining. The Deputy mentioned the fact that the passenger traffic was only down by £24,000 last year. I suppose he metaphorically slapped himself on the back and said, "It was my Bill in 1932 that did that." He merely forgot for the moment that the Eucharistic Congress last year brought more people to this country than came on any single occasion before; that entirely abnormal passenger traffic conditions operated; and that that had some bearing upon the apparent arrest in the decline of the company's receipts from passenger traffic. The conveyance of 13,000,000 passengers is a big undertaking no doubt, but if the use made of respective services is any indication of their suitability, any indication of the public need for them, any indication of their ability to serve the requirements of particular parts of the country, against the 13,000,000 passengers carried in railway carriages last year there is the fact that very nearly double that, over 22,000,000 passengers, were carried by road services during the same period. That is a figure which has to be compared with the figure of 6,500,000 for 1928. A comparison between these figures will give some indication of the growth of road services and the extent to which passenger traffic has gone to road services. It is undoubtedly possible to get back for the railways some part of that traffic. A large part of it is new traffic that the railways never had and never will have. In so far as it represents traffic taken from the railways, it is possible to get back for them some part of it, but only if the rolling stock, permanent way, and the equipment of the railways are kept up to date; only if there is no inability on the part of the company to spend upon the maintenance of its system, on its carriages, on the conveniences made available for those using the railways, adequate sums in each year. If train services are going to be slow, if carriages are going to be uncomfortable or unclean, if railway stations are not going to be kept in proper repair, people will naturally not use them. I am not saying that that is the condition at present. There are no arrears of maintenance on the main lines, as there is on the branch lines, which necessitate speed restrictions.
There is undoubtedly scope for the expenditure of quite large sums of money on up-to-date rolling stock. There are also arrears in the provision made for the maintenance of stations. If the railway company is to get back traffic, they have to give service for it. They can give good service only if the changes contemplated by these Bills are made, and if they are released from the charges which the Bills are designed to relieve them from.
Is the Minister giving the information to the House from the Departmental point of view, that the maintenance of the main line is in a perfect condition?
I am stating what was said at the general meeting by the chairman of the company.
It is a very necessary statement in view of what has been said during the debate.
I am asking the question, because I know that there is a responsibility devolving on the Minister's Department to see that the maintenance of the line is up to a reasonable standard.
Quite so. Some attempt has been made to create the impression that there is a conflict between the present attitude of the members of this Party and their attitude during the recent general election. Although the Deputy who said that a conflict existed did not attempt to prove it, and certainly did not succeed in proving it, if he attempted it, the Bills being introduced are precisely the Bills we would have introduced if an election never took place. They are the Bills we had in mind when speaking at meetings during the course of the election campaign. The sole reason why the Bills were not published before the election was because they were not drafted in time to permit it.
I want to correct a statement that I made when I stated that 22,000,000 were carried by buses. That 22,000,000 consisted of people outside the city and suburbs. The proper total was 72,000,000; 49,000,000 being in the city and suburban area.
The other matters mentioned by the Deputy can be more suitably dealt with on the Committee Stage. A modification in standard revenue is, I think, desirable. It is quite clear that a reduction in charges on the company, consequent on the re-organisation of the finances, cannot be passed on to the traders, because no modification of standard charges is possible. We have the certificate of the Railways Tribunal that no system of charges which they can devise is capable of yielding to the company the present standard revenue. We think that the standard revenue should be reconsidered by the Tribunal, having regard to the reconstruction of capital, so that it may be brought to some figure in closer touch with actuality.
We had a considerable discussion here to-day, and a further statement by the Deputy concerned, on the proposal to remove from the London, Midland and Scottish the right to nominate a director on the Board of the amalgamated company. I stated earlier to-day that, irrespective of the consequences, that is a step which, in my opinion should have been taken. I think it is very undesirable that the main railway system of this country should be tied up in any way with one foreign railway company. There are other British railway companies with associations here, and even if there were not, I think we should ensure that no person representing a foreign interest, and a foreign interest entirely, should have a directing voice in the control of the railway system here. Even if that voice was only one in seven, and that the influence exercised by the member appointed was the influence which one would normally assume to be exercised by one member of a board of that number, I want to make it clear that the situation is aggravated by the fact that the company in question is the London, Midland and Scottish. I did not want to say anything about this company, but I have had some reason to take stock of its attitude with regard to this country on a few occasions since I became Minister for Industry and Commerce.
I was struck from the very beginning by the fact that it has not employed a single Irish national on its steamship services between the two countries since the Free State was established. I was struck by the fact that on every occasion on which it could avoid spending money in this country it avoided doing so. I was struck by the fact that the number of those placed by it in positions to direct operations with this country were not Irish nationals. Because of that, I think that the position of a foreign company with a right to nominate a director on the Board of the amalgamated company was aggravated, when the company in question became the London, Midland and Scottish. It may be that the attitude of the company in other circumstances will force us to take some other action some time but, in the meantime, I am prepared to stand over the proposal to take from them the right to have a member on the Board.
Will you accept the liability attaching to that proposal?
I do not think that right should ever have been given. I want to get clear what is in the Deputy's mind. The Dublin and South-Eastern Railway Company got a loan of £100,000 from the London and NorthWestern Railway, which subsequently became the London, Midland and Scottish, and in return for that loan they gave to the London, Midland and Scottish Company the right to nominate a director on the Board of the Dublin and South-Eastern Railway. There was a very direct relationship between the Dublin and South-Eastern Railway and the London, Midland and Scottish —a relationship which I think if a national Government existed at the time would never have allowed to be established, and certainly would have prevented if they found it existed. When the Dublin and South-Eastern Railway was amalgamated with the Great Southern Railways Company the London, Midland and Scottish Company did not carry the right to a directorship in the amalgamated company because of the loan. The directorship was not given because of the loan. The directorship was given in consideration of the agreement entered into, which secured for the amalgamated company certain concessions in respect of through rates, and certain privileges in the division of the receipts from through rates, amounting to £20,000 yearly. I say that if the London, Midland and Scottish Company paid £20,000 yearly they got value for it, and if they want to terminate that arrangement, well they are at liberty to do so. They cannot expect to continue to get value unless they pay for it.
Supposing, as a result of action by the Dáil, the company is called upon to pay back £100,000, plus compound interest, who is going to accept the liability?
As soon as the existence of the liability is established?
There is no doubt about it.
The question can be considered. I can assure the Deputy it is not the intention of the State to assume it.
In other words, you will compel the company to carry that liability.
What liability?
The liability which I have mentioned.
The Deputy has first to establish the identity of the liability.
Other Deputies will establish that.
These are the main points worth mentioning now. All the other points mentioned are really Committee points and can then be discussed more suitably. As I said already to-day, and yesterday, the purpose behind these Bills is to create in this country transport organisation that will be suitable to our needs, that will be capable of supplying for each individual and each part of the country the type of transport required and that will be capable of working on a profitable basis. These organisations will not be railway organisations only any more than they will be road organisations only, but they will be so directed as to ensure, in so far as possible, the preservation of the railways, as to ensure that, in so far as the preservation of the railways is in itself desirable, they will, to the greatest possible extent, be preserved, and that there will be no question of termination of railway service or closing down of branch lines until it is clearly shown that the public convenience is not going to be seriously affected and that such action is going to make the rest of the concern more profitable and tend to promote its prosperity and its prospects of providing railway employment. I did not intend to be discourteous to Deputy Good——
It is quite all right.
——but I think that, in relation to that loan, it is just as well to draw his attention to one of the conditions of the agreement entered into by the Dublin, Wicklow and Wexford Railway at the time this loan was negotiated. It reads as follows:—
"Either company shall have power, on giving six months' notice in writing, to require repayment of or repay the sum advanced, or any part thereof, provided that, for the five years immediately preceding the date of the notice, interest at the rate of 3½ per cent. per annum has been paid on the sum advanced."
The Deputy will see, therefore, why I asked that the existence of any liability should be demonstrated first.
What was the date of the loan?
1905.
Mr. Kelly
Was it in golden sovereigns or in paper?
I am afraid I cannot answer that but I expect that sovereigns were the currency then.
Counters.
Is the Minister's point there that no liability exists?
So it would appear to me.
Supposing it is found otherwise, on inquiry, and liability accrues as a result of the Dáil's action, who will discharge that liability?
The liability of the Dublin, Wicklow and Wexford Railway has undoubtedly been transferred to the Great Southern Company.
And that company, as a result of the Dáil's action in removing this director, will have to discharge this liability?
When the liability was undertaken by the Dublin, Wicklow, and Wexford Railway, they did something which, in my opinion, they should not have done, and something which, in my opinion, they would not have been allowed to do if there had been in existence at the time a national Government.
That has nothing to do with the case.
I submit that it has a lot to do with it, because the question arises as to whether we should, by our Act, continue that arrangement. There was considerable objection to the thing being done in 1924, and I think that when I mention the fact that Deputy Mulcahy and other members of the present Cumann na nGaedheal Party, opposed it strongly, it will be an indication that it produced such strong feelings that there was even a division——
I do not object to the Minister adhering to the point at all, but if liability accrues as a result of this action, he ought also to accept the liability and not throw it on to somebody else who is not here to answer.
I move:
That the Bill be now read a Second Time.
Question put: "That the words proposed to be deleted stand."
The Dáil divided: Tá, 81; Níl, 35.
Tá
- Aiken, Frank.
- Bartley, Gerald.
- Beegan, Patrick.
- Boland, Gerald.
- Bourke, Daniel.
- Brady, Brian.
- Brady, Seán.
- Breathnach, Cormac.
- Breen, Daniel.
- Briscoe, Robert.
- Browne, William Frazer.
- Carty, Frank.
- Clery, Mícheál.
- Concannon, Helena.
- Cooney, Eamonn.
- Corish, Richard.
- Corkery, Daniel.
- Corry, Martin John.
- Crowley, Fred. Hugh.
- Crowley, Timothy.
- Daly, Denis.
- Davin, William.
- Derrig, Thomas.
- De Valera, Eamon.
- Doherty, Hugh.
- Doherty, Joseph.
- Donnelly, Eamon.
- Dowdall, Thomas P.
- Everett, James.
- Fagan, Charles.
- Finlay, John.
- Flynn, John.
- Flynn, Stephen.
- Fogarty, Andrew.
- Geoghegan, James.
- Gibbons, Seán.
- Goulding, John.
- Hales, Thomas.
- Harris, Thomas.
- Hayes, Seán.
- Hogan, Patrick (Clare).
- Houlihan, Patrick.
- Keely, Séamus P.
- Kehoe, Patrick.
- Kelly, James Patrick.
- Kelly, Thomas.
- Kennedy, Michael Joseph.
- Kent, William Rice.
- Keyes, Michael.
- Killilea, Mark.
- Kissane, Eamonn.
- Lemass, Seán F.
- Little, Patrick John.
- Lynch, James B.
- MacDermot, Frank.
- MacEntee, Seán.
- McGovern, Patrick.
- Maguire, Ben.
- Maguire, Conor Alexander.
- Moore, Séamus.
- Moylan, Seán.
- Murphy, Patrick Stephen.
- Murphy, Timothy Joseph.
- Norton, William.
- O'Briain, Donnchadha.
- O'Grady, Seán.
- O'Kelly, Seán Thomas.
- Pattison, James P.
- Pearse, Margaret Mary.
- Rice, Edward.
- Ruttledge, Patrick Joseph.
- Ryan, James.
- Ryan, Martin.
- Ryan, Robert.
- Sheridan, Michael.
- Smith, Patrick.
- Traynor, Oscar.
- Victory, James.
- Wall, Nicholas.
- Walsh, Richard.
- Ward, Francis C. (Dr.).
Níl
- Alton, Ernest Henry.
- Anthony, Richard.
- Beckett, James Walter.
- Belton, Patrick.
- Bennett, George Cecil.
- Broderick, William Joseph.
- Broderick, Seán.
- Burke, James Michael.
- Burke, Patrick.
- Cosgrave, William T.
- Davitt, Robert Emmet.
- Dockrell, Henry Morgan.
- Esmonde, Osmond Grattan.
- Fitzgerald, Desmond.
- Fitzgerald-Kenney, James.
- Good, John.
- Keating, John.
- McDonogh, Martin.
- McGilligan, Patrick.
- McGuire, James Ivan.
- Morrisroe, James.
- Morrissey, Daniel.
- Mulcahy, Richard.
- Murphy, James Edward.
- Nally, Martin.
- O'Connor, Batt.
- O'Higgins, Thomas Francis.
- O'Leary, Daniel.
- O'Mahony, The.
- O'Reilly, John Joseph.
- O'Sullivan, John Marcus.
- Reidy, James.
- Rice, Vincent.
- Roddy, Martin.
- Thrift, William Edward.
Tellers:—Tá: Deputies Little and Traynor; Níl: Deputies Bennett and Seán Brodrick.
Question declared carried.
Question put: "That the Bill be now read a Second Time."
The Dáil divided: Tá, 80; Níl, 36.
Tá
- Aiken, Frank.
- Bartley, Gerald.
- Beegan, Patrick.
- Boland, Gerald.
- Bourke, Daniel.
- Brady, Brian.
- Brady, Seán.
- Breathnach, Cormac.
- Breen, Daniel.
- Briscoe, Robert.
- Browne, William Frazer.
- Carty, Frank.
- Clery, Mícheál.
- Concannon, Helena.
- Cooney, Eamonn.
- Corish, Richard.
- Corkery, Daniel.
- Corry, Martin John.
- Crowley, Fred. Hugh.
- Crowley, Timothy.
- Daly, Denis.
- Davin, William.
- Derrig, Thomas.
- De Valera, Eamon.
- Doherty, Hugh.
- Doherty, Joseph.
- Donnelly, Eamon.
- Dowdall, Thomas P.
- Everett, James.
- Fagan, Charles.
- Finlay, John.
- Flynn, John.
- Flynn, Stephen.
- Fogarty, Andrew.
- Geoghegan, James.
- Gibbons, Seán.
- Goulding, John.
- Hales, Thomas.
- Harris, Thomas.
- Hayes, Seán.
- Hogan, Patrick (Clare).
- Houlihan, Patrick.
- Keely, Séamus P.
- Kehoe, Patrick.
- Kelly, James Patrick.
- Kelly, Thomas.
- Kennedy, Michael Joseph.
- Keyes, Michael.
- Killilea, Mark.
- Kissane, Eamonn.
- Lemass, Seán F.
- Little, Patrick John.
- Lynch, James B.
- MacDermot, Frank.
- MacEntee, Seán.
- McGovern, Patrick.
- Maguire, Ben.
- Maguire, Conor Alexander.
- Moore, Séamus.
- Moylan, Seán.
- Murphy, Patrick Stephen.
- Murphy, Timothy Joseph.
- Norton, William.
- O'Briain, Donnchadha.
- O'Grady, Seán.
- O'Kelly, Seán Thomas.
- Pattison, James P.
- Pearse, Margaret Mary.
- Rice, Edward.
- Ruttledge, Patrick Joseph.
- Ryan, James.
- Ryan, Martin.
- Ryan, Robert.
- Sheridan, Michael.
- Smith, Patrick.
- Traynor, Oscar.
- Victory, James.
- Wall, Nicholas.
- Walsh, Richard.
- Ward, Francis C. (Dr.).
Níl
- Alton, Ernest Henry.
- Anthony, Richard.
- Beckett, James Walter.
- Belton, Patrick.
- Bennett, George Cecil.
- Broderick, William Joseph.
- Broderick, Seán.
- Burke, James Michael.
- Burke, Patrick.
- Cosgrave, William T.
- Davitt, Robert Emmet.
- Dockrell, Henry Morgan.
- Esmonde, Osmond Grattan.
- Fitzgerald, Desmond.
- Fitzgerald-Kenny, James.
- Good, John.
- Keating, John.
- McDonogh, Martin.
- McGilligan, Patrick.
- McGuire, James Ivan.
- Morrisroe, James.
- Morrissey, Daniel.
- Mulcahy, Richard.
- Murphy, James Edward.
- Nally, Martin.
- O'Connor, Batt.
- O'Higgins, Thomas Francis.
- O'Leary, Daniel.
- O'Mahony, The.
- O'Reilly, John Joseph.
- O'Sullivan, Gearoíd.
- O'Sullivan, John Marcus.
- Reidy, James.
- Rice, Vincent.
- Roddy, Martin.
- Thrift, William Edward.
Tellers:—Tá: Deputies Little and Traynor; Níl: Deputies Bennett and Sean Broderick.
Question declared carried.
Committee Stage fixed for Wednesday, 22nd March.