I beg to move: "That the Bill do now pass."
Railways Bill, 1933—Fifth Stage.
On this particular stage of the Bill one wonders whether any advantage would accrue from again drawing the Minister's attention to three blots which appear on the face of the measure. On the Committee Stage we draw attention to a rather serious innovation contained in the Bill in that it interferes with the capital of a company without having any reference to the shareholders or proprietors of that particular company. It was pointed out to the Minister when the Bill was before the House on previous occasions that this is a very serious interference with the rights of citizens and public companies and we mentioned that as far as we were concerned it was without precedent in Parliamentary procedure that interference of such an important character should take place without any reference whatever to the shareholders.
In the interregnum between the Committee Stage and this Final Stage I was anxious to know from the Minister if he had pondered on the importance of the implications involved in the clauses dealing with these items and I would like to know if even now he would not reconsider the problem and treat it in a manner somewhat similar to the way he has dealt with voting for directors. The Minister will remember that in that connection he referred the matter to the Board to draw up a scheme and submit it to his Department within a period of six months. Could not some similar arrangement be made with regard to the reduction of capital and then, if the company does not take steps to satisfy the Minister within a reasonable period, there would be some justification for parliamentary interference, where there is no justification at the moment.
The next blot one would like to draw attention to is that it has been pointed out to the Minister that it would be exceedingly unfair if the baronial guarantee, at present paid by the State, amounting approximately to £48,000 and which, under the 1924 Act will fall on the railway company next year if not at the end of this year, is allowed so to fall. Perhaps the Minister will reconsider the hardship such a burden will impose on the railway company in the present strained state of its finances. Perhaps he will see if the period could not be extended over which this liability would be carried by the State rather than have it thrust on the railway company in the serious circumstances in which the company finds itself to-day.
The third point upon which I would like information is with regard to the loan which the L.M.S. Company gave the old D.S.E.R. Company. We had a considerable discussion on this point when the Bill was in Committee and also on Second Reading. We pointed out how unfair it would be to withdraw the director nominated by the L.M.S. Company from the board of the Great Southern Railways Company. We pointed out that if, as a result of that withdrawal, the railway company was to become liable for the immediate payment of £100,000, we thought that would be very unfortunate accruing, as the liability would, from an action of the State rather than from an action on the part of the railway company.
We were all glad to see that within the last few days the Minister had an interview with the Chairman of the L.M.S. Company. I hope that as a result of that interview the Minister will be able to tell the House he has satisfactorily arranged the difficulty to which I have referred.
I should like to associate myself with Deputy Good's remarks. I desire to protest against certain items in this Bill and, in particular, to emphasise one point in connection with Deputy Good's point, namely, the curtailment of the capital of the debenture holders of the company. That is a most serious step for the Government to take. Debenture stock is not part of the capital of the company. As the Minister knows, the debentures form merely a debt on the company. The interest on the debenture stock is a perpetual obligation on the part of the company. The debenture holders have no voice whatever in the management of the company. They have no vote. They lent money at a contract rate of interest. The Government proceed to break that contract between private individuals and a private company. They proceed to curtail and cut down obligations undertaken by the company for the use of money secured on the assets of the company at a contract rate of interest. The debenture money is on an entirely different basis from the ordinary capital of the company and the Government are taking one of the most serious steps possible when they break the contract. It ought to be the duty of the Government to maintain the sanctity of private contracts. They are doing the very reverse. I feel I cannot let this Bill go through its Final Stage without making at least this protest against that step in particular that is involved in the passage of the Bill.
On the Second Reading of this measure the Minister was informed from various parts of the House that this Bill and the Road Transport Bill would not solve the country's transport problem. It is not likely that in the presentation of any proposals of the sort which come from the Minister they will get that consideration here which the complications of the particular services seem to require. The complications of the particular services do not lend themselves to settlement in this House. These two measures, notwithstanding what the Minister may say, will not improve the transport problem. To a certain extent they stabilise it as it is so as to give the Minister an opportunity of correcting and lessening any further complications that may arise in connection with the services; but they do not solve the problem.
As I have stated, any proposals which come before the House have to be dealt with by members of the various Parties, having constituents interested in any one or other of the various forms of transport activities and Deputies are likely to be canvassed in connection with whatever proposals may come forward. On the Second Reading I mentioned to the Minister what appeared to be a practical way of bringing about a solution of this whole question. He has in his Department, certainly, two officials who would be quite capable of sitting down to consider and resolving the whole question along with an associated accountant, an engineer with a knowledge of transport and an engineer having a knowledge of railway transport. My suggestion would be that that committee would have full power to examine the whole question bearing in mind the idea that the railroads should form the main transport agency; that the main consideration was economic transport; that they would be entitled to consider in respect of any recommendations that they would make the claims that persons might have in respect of compensation; what compensation properly should fall upon the transport agencies; and what compensation ought to be paid by the State. That committee could produce in effect a Bill which would be a schedule to a single clause Act giving it the force of law and putting it outside of the competence of Parliament to consider it; keeping Ministerial control out of the recommendations and viewing them and considering them solely from the point of view of economic transport, having in mind the maintenance of the railway organisation as the particular agency for transport in the country, not ignoring the fact that a new form of transport has extended transport throughout the country, is extending it and is likely to still further extend it. That should form the main subject of this committee and I think that granted such a proposal as I have put to the House, even the House itself would vote with an overwhelming majority in favour of it.
Now we come to the measure itself at its best and its worst. At its worst it stabilises things as they are at the present moment and we cannot ignore the fact that for about ten weeks there has been a loss of £600,000 in railway receipts. The Minister thinks this Bill will remedy that. I am optimistic but not quite so optimistic as the Minister in that connection. Only one thing can improve the receipts of the company, namely, normal conditions here and the extension of the business we had. If this state of affairs goes on for the whole year and if the loss for the whole year be at the same proportion I find it difficult to see where the debenture interest, even at the reduced rate will be found. From my examination of this measure the debenture holders have still rights. Their rights are not limited except as far as the value of their holdings is concerned. I think they still have rights and if they still have rights and if these rights are maintained a new element can enter into the situation. Under the statutory rights they can take over the concern. They are in the position of mortgagees not shareholders.
I think the cutting down of the capital value of the company has been a little unfortunate. We have had no information regarding the proposed terms of reference submitted by the directors to the firm of accountants which made this proposal. The question that has been raised by Deputy Good about the payment of the baronial guarantees would only arise if there was a dividend in respect of the preference stock. I believe it is preference stock these people hold. I think it would be difficult to find out what holdings of stock should be allocated to shareholders in the baronial lines. It is a fact that the Dublin and Blessington Steam Tramway Company which was not as sound a proposition as the railroads from the financial point of view have done very much better in this connection. They have got something at any rate. These two Bills to my mind make no great contribution towards the improvement of transport. While saying that I express the hope that they will but I wish I could have more confidence in expressing that hope.
So far as the financial reconstruction scheme is concerned I think it was unworthy of the Minister that he deemed it advisable to intervene in the way he did. I say that for two reasons, first, that the course adopted with reference to the debenture holders is, I think, unprecedented and may later on lead to developments which will be highly undesirable; secondly, I believe the Minister himself has admitted that the construction scheme stands self-condemned by the absence of equity which characterises the way in which some of the preference stocks referred to in the schedule have been dealt with. I understand it is the intention of the Minister to remedy in the Seanad the apparent unfairness which I pointed out at earlier stages in the Bill.
In connection with reconstruction I would remind the Minister of the suggestion that I made to him that he should by statute empower debenture holders to act as a body, that he should offer them and the shareholders of the company benefits such as they are getting by this legislation and give them a Government guarantee for a large development loan, if the debenture shareholders and the shareholders would put up to him a drastic voluntary reconstruction scheme. I believe that along these lines he could get a better reconstruction scheme and at the same time he could put in hands work on the railroad systems of this country which would absorb very large numbers of unemployed men, work which would produce real and enduring wealth for the State as a whole.
Deputy Good has referred to the interviews that have taken place recently between the General Manager of the London, Midland and Scottish Railway and the Minister for Industry and Commerce. So far as I am concerned the Minister's attitude in that matter gives me no ground for complaint if he is prepared to say that he will indemnify the railway company against any losses in which national policy may involve the company. I submit to him again that it is neither just nor equitable on the grounds of national policy to make the Great Southern Railways liable for an undetermined sum unless the Government is prepared to indemnify them.
Lastly, the question of standard revenue remains unsecured and I invite the Minister between now and the time when he will be steering this Bill in the Seanad to examine closely the question as to whether the Bill in its present form may not result in the Railway Commission dealing with the standard of charges in a way which neither this House anticipates nor desires. Under Section 8, there are provisoes for the discontinuance of train services. It was in connection with that section that the Minister was heard to make his classic remark that he wanted no deputations pestering him if he made up his mind to close a line, that he wanted to hear no growling from a town or small community, and that he would dispose of any branch lines that did not commend themselves to his favourable consideration. I remind him now that he ought to change his tune when dealing with that side of the question and remember that where a town or district is prepared to make up the difference between what would be the economic and uneconomic running of a branch line they ought to be allowed to approach the Minister and place the facts of the case before him, and that they ought to be allowed to make an offer, whatever it may be, to preserve their property in the particular town the railway serves and which they want the railway to go on serving. All I am asking is that the Minister should hear them and withdraw his previous declaration, that the door would be slammed in their faces if they attempted to approach his august presence. I have no doubt that, in the Seanad, much will be done by the Minister to improve this Bill. I do not despair that he may yet produce a financial reconstruction scheme on sounder lines and to greater advantage by his well known and distinguished art of persuasion and negotiation.
I think that it is painfully obvious that the speech we have just heard from the Leader of the Opposition was delivered without any previous thought or consideration whatsoever. Deputy Cosgrave occupies a fairly important position in this House and his contributions are expected to be the outcome of thought and to represent the combined wisdom of his Party. We expect a serious contribution from him; we do not expect such a contribution from Deputy Dillon. We know that Deputy Dillon is completely ignorant on the subject of transport, but Deputy Cosgrave, as the then Leader of the Government, was responsible for the passage by this Dáil of the main Railway Act preceding the measure now under discussion—the Act of 1924. If the speech we have heard from him now is an indication of the measure of consideration that was given to the drafting of that Act, it is no wonder we have a transport problem. The Deputy said that these Bills will not solve the transport problem. He might have gone further than that. The transport problem we are trying to deal with is a legacy which this Government has inherited from Deputy Cosgrave's Government. The Deputy might have indicated in what way he would solve the transport problem. Is his solution of the transport problem on the Statute Book? He was President of the Executive Council for ten years and his attempts to produce a solution of the transport problem led to the chaos of which everybody is now talking. What would he have done if, by any misfortune, he had continued in the Presidency of the Executive Council? He does not say. The only suggestion we had from him—an inane suggestion—was that some officers of my Department should be appointed a Commission to go into the problem and that we ought to do whatever that Commission decided upon. The particular officers of the Department whom the Deputy indicated have been giving this matter continuous consideration, have been sitting in committee continuously upon it and the full benefit of their advice, experience and information was available to the Government when determining the introduction of this legislation. If the Deputy's view is that the sole responsibility for devising a means of solving the transport problem that he left behind him rests upon the officers of the Department of Industry and Commerce and that the Minister for Industry and Commerce should do no more than introduce a one-clause Bill giving these recommendations the force of law and saying that they must not be criticised by any members of the Dáil—if that is the Deputy's view, then we have an indication of the way these matters were considered when he was responsible for the consideration of them.
Did the Minister's officials recommend the Schedule in this Bill?
I am recommending it.
I am asking a definite question.
I am not going to answer that question or place responsibility on anybody but myself. The Deputy should have learned during his ten years of office that that is the type of question that should not be answered.
The Minister has stated that he had an opportunity of getting the benefit of the advice, wisdom and experience of his officials. He is asked a question: is that advice in the Bill? He does not answer.
I am taking full responsibility for the Bill.
The Minister cannot have it both ways. He cannot say that he had the benefit of the advice of his officials and, at the same time, that these recommendations are not contained in the Bill.
The Deputy is trying to cover up the inane suggestion he made and which he realises now is ridiculous.
I am not covering anything up.
Was it in that way the Railway Act of 1924 was introduced?
No, there was a problem which was solved at that time.
What did the Deputy do? Did he go to the officials of the Department of Industry and Commerce and say: "Produce the legislation and I shall bring in a one-clause Bill and tell the Dáil that they must accept it without criticism."
The Minister has not compared the then situation with the present situation. Apparently, he has not read the Act of 1924. He does not know what it contains.
I am not interested in what is in the Act but in how it originated. Did the Deputy follow his own advice in 1924? He did not. The Act, in every ridiculous part of it, has the impress of the Deputy's hand upon it. Whatever parts show wisdom and sense are, no doubt, the products of the officials; the rest are the Deputy's own. Only he could have introduced them. It is the situation created by that Act and the attempts to amend that Act that produced the situation with which we are now trying to deal. The Deputy says that this Bill will merely stabilise things as they are and that it is not going to solve the problem. Nobody else suggested that it is going to leave things as they are. That occurred only to the Deputy.
May I remind the Minister that the chaotic condition of the railroads has not been inherited by him, but has been created by him. Look at the reduction in the receipts of the railroad company between now and this time twelve months. Did the Minister inherit that? The President of the Executive Council is laughing at the joke. He has very little sense of humour, but that was too much for him.
Examine the position this time twelve months ago and this time two years ago. Go back to 1925— the first year in which the railway company had the full benefit of the Act of 1924 which the Deputy introduced. In that year, the railway company did not earn its debenture interest.
The debenture interest?
It did not earn the debenture interest.
Will the Minister equate that statement with his statement within the last three or four months that the railway company had earned debenture interest and other charges. Now, he says they did not earn debenture interest.
In 1925.
The Minister said three or four months ago—does he deny it—that the railway company paid debenture interest and other charges.
I said that they earned debenture interest and something more —about £40,000 more.
With smaller profits.
In 1932.
The Minister told us they did not earn it in 1925. The Minister will have to be medically examined.
The Deputy should look at the figures. It is all the worse when he says it, but he will improve with time. I would impress upon the Deputy his responsibility as the Leader of the Opposition. He has not been long in Opposition, but when he is there for a few years more, he will appreciate the responsibilities of an Opposition. Before he comes and makes what purports to be a considered contribution to an important measure he should, at least, find out something about it. I suggest that he should go to anyone who has the slightest knowledge of transport, even a junior official in the railway company, and attempt to find out what these Bills are likely to do, and to see then if he is prepared to repeat his statements, that the Bills will make no change, and will only stabilise things. Not even Deputy Dillon suggested that. We have had a suggestion from Deputy Good that the question of the reorganisation of the company's finances should have been referred to the Board, and that if at the end of six months the Board had not produced a satisfactory scheme, then this Bill might be introduced. That is precisely what happened.
I said to the shareholders.
The Board is responsible to the shareholders not me. It is more than six months since I met the Board and told them that if they wanted legislation introduced of the type embodied in the Road Transport Bill and the Railways Bill, a reorganisation of the company's finances would have to take place at the same time. I told them that and they agreed with it. I asked them to go ahead and to take whatever steps they considered necessary to get that reorganisation of the finances carried into effect. I told them I would much prefer that the only legislative proposals that would have to be introduced would be those necessary to enable them to give effect to their own decisions. They did not take action as rapidly as I thought they would. Ultimately they went to an eminent firm of accountants and produced in my office proposals by that firm for the reorganisation of the company's finances, and, in relation to the major stocks, these are the proposals in the Bill.
And the terms of reference to the firm of accountants?
I am criticising the suggestion of Deputy Good that we should leave the matter to the railway company. We did.
Surely you did not leave it to anyone.
When they did not proceed to give effect, over a period of months, to the proposals produced in my office, or to similar proposals, I introduced the Bill so that we would not have transport disorganisation accentuated, and a much more difficult situation left to be dealt with by the time the Railway Board had made up their mind as to what lines they were going to proceed on.
I said that it was unprecedented for parliamentary procedure to interfere with the share capital without consultation with the shareholders. I say that there has been no consultation of any kind with the shareholders of the Great Southern Railways. No scheme has been submitted to them. The scheme before us now in the Bill has never been before the shareholders who are the owners of the company.
If there has been no scheme of capital reorganisation submitted to the shareholders it is not my fault. It is well over six months since the railway company were told that if they wanted legislation they would have to submit such a scheme.
That is no justification for parliamentary action of such a drastic character.
That is a matter upon which we can be prepared to differ. I am quite prepared to say that in the national interests I believe this legislature has a right to interfere whenever it thinks fit to ensure that the equipment in this State will be kept at a degree of efficiency to serve the purpose of all citizens. Would there be anything wrong in introducing here proposals for the nationalisation of the railways? If we had introduced proposals for the nationalisation of the railways do you think the value fixed upon the various classes of stocks and shares would be that which is set out in the Schedule of the Bill, having regard to the market quotations since the famous Railway Act of 1924?
They were never so low as they are now.
They were considerably lower.
Never lower than at the present time, and the Minister knows it.
Before the Minister was called upon to conclude, Deputies had an opportunity of speaking. The Minister should not now be subjected to a barrage of interruptions.
That is for the gallery.
The Deputy is a great gallery man. He escaped by playing to it.
The proposals for the major stocks are quite fair and reasonable and are a necessary corollary for any scheme of reorganisation designed to put the effective control of all forms of transport in the hands of the Railway Board. There is the question of the minor stocks, and Deputy Dillon with his usual conceit talked about my being prepared to admit that some changes are necessary since he pointed out the injustice. He did nothing of the kind. If he will read the debates again he will find that he did not discover any question about the minor stocks until other people had made several speeches about them.
We had a suggestion from Deputy Good that the State should continue the payment of approximately £48,000 which was received by the Great Southern Railways Company each year since 1924, and which ceases next year, in consideration of the fact that the baronial guaranteed shares were changed into preference shares of the Great Southern Railways Company. There is no liability on the company as yet arising out of the transfer of these shares. Any injustice done was done to the owners of the baronial guaranteed stock, who got only preference shares of the company in exchange. Despite the fact that the Great Southern Railways Company got £48,000 it paid no dividend in this year on the preference shares to the persons who formerly owned the guaranteed stock. That injustice was perpetrated by the Party opposite, for whose policy I am not responsible.
Any baronial stock owner who sold had no injustice done to him.
That is a matter upon which opinions would differ. There was a suggestion in Deputy Dillon's speech that where a town was prepared to make good the loss on the working of a branch line it should be allowed to do so. That is an interesting suggestion. I would like to hear the views of the local authorities in the towns concerned. When baronial guarantees had to be paid there was quite a different outlook on the question of closing down branch lines in these districts. A number of deputations came to my predecessors asking that particular lines should be closed down so that the baronial guarantees would not have to be continued. If you have particular districts prepared to revert to the baronial guarantee position, in respect of branch lines, there will be a new situation in the future, in which some of us might change our views concerning these branch lines. At the moment the position concerning branch lines is that they will be closed down only when it is quite clear that the people concerned do not want them and are not using them. If the people in any district show clearly that not merely do they want branch lines operated but are using them, then they will be kept there under, the powers conferred by this Act. But where, for a long period of time, they show undoubted preference for road transport, and if reports show that trains leave and arrive every day carrying no one, then there is no case whatever for putting on the railway company the obligation to maintain lines which no one wants but which, at present, it is required to do by statutory enactment.
Reference was made to the loan which was given by the London, Midland and Scottish Railway to the Dublin and South-Eastern Railway Company, the liability for which was transferred to the Great Southern Railways in the Amalgamation Act of 1924. Again I want to say that the position in that respect has not been changed by this Bill. Whatever liability was acquired by the Great Southern Railways Company in 1924 still continues, and continued throughout the intervening period. According to the terms of the agreement that liability would appear to be a liability to repay upon six months' notice the amount of the loan, until January of this year, and to repay on demand after January.
Whether the London, Midland and Scottish Company would have exercised that power, to require repayment, so long as it had a representative on the Board is a matter of opinion. The legal position in that respect is not changed. The repeal of the Railway Directorate Act, 1924, merely puts the position exactly as it was when the Amalgamation Act was passed, and any question concerning that line, or the granting or the receiving of traffic facilities by the railway company, is a matter for discussion between the representatives of that company and the London, Midland and Scottish Company.
Is it being discussed at the moment?
I understand it is about to be discussed.
Did you discuss it with Sir Joshia Stamp?
We discussed a number of things.
Including the settlement of the economic war?
You never could tell. These Bills are going to effect a substantial improvement in the transport position that will make possible a transport organisation that can be maintained on an economic basis. That opinion is shared by everybody who knows anything about the transport problem, whether associated with railways or road transport or those who have given the matter study without practical experience. There is, in all quarters, a unanimous welcome for these measures. It is only those who have shown by their actions and by their words that they know nothing at all about them that wasted time in criticising these measures.
What about the Stock Exchange?
The position that will be created by these Bills will be one that will ensure that traffic will be carried on the railways, and on the roads, at the lowest economic rates; and that the receipts will be sufficient to pay all charges for organisation and administration, while giving a reasonable return on the capital invested. That is what we set out to achieve and that is what these Bills will achieve.
Question put: "That the Bill do now pass."
The Dáil divided: Tá, 80; Níl, 38.
Tá
- Aiken, Frank.
- Anthony, Richard.
- Bartley, Gerald.
- Beegan, Patrick.
- Boland, Gerald.
- Bourke, Daniel.
- Brady, Brain.
- 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.
- Derrig, Thomas.
- De Valera, Eamon.
- Doherty, Hugh.
- Doherty, Joseph.
- Dowdall, Thomas P.
- Everett, James.
- Fagan, Charles.
- Flynn, John.
- Flynn, Stephen.
- Fogarty, Andrew.
- Gibbons, Seán.
- Goulding, John.
- Hales, Thomas.
- Harris, Thomas.
- Hayes, Seán.
- Hogan, Patrick (Clare).
- Jordan, Stephen.
- Kehoe, Patrick.
- Kelly, James Patrick.
- Kelly, Thomas.
- Kennedy, Michael Joseph.
- Keyes, Michael.
- Killilea, Mark.
- Kilroy, Michael.
- Kissane, Eamonn.
- Lemass, Seán F.
- Little, Patrick John.
- Lynch, James B.
- MacDermot, Frank.
- McEllistrim, Thomas.
- MacEntee, Seán.
- McGovern, Patrick.
- Maguire, Ben.
- Maguire, Conor Alexander.
- Moane, Edward.
- Moore, Séamus.
- Moylan, Seán.
- Murphy, Patrick Stephen.
- Murphy, Timothy Joseph.
- O'Briain, Donnchadh.
- O'Dowd, Patrick.
- O'Grady, Seán.
- O'Kelly, Seán Thomas.
- O'Reilly, Matthew.
- 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.
- Beckett, James Walter.
- Belton, Patrick.
- Bennett, George Cecil.
- Broderick, William Joseph.
- Brodrick, Seán.
- Burke, James Michael.
- Burke, Patrick.
- Cosgrave, William T.
- Craig, Sir James.
- Daly, Patrick.
- Davis, Michael.
- Davitt, Robert Emmet.
- Desmond, William.
- Dockrell, Henry Morgan.
- Doyle, Peadar S.
- Esmonde, Osmond Grattan.
- Fitzgerald, Desmond.
- Fitzgerald-Kenney, James.
- Good, John.
- Haslett, Alexander.
- Keating, John.
- MacEoin, Seán.
- McGuire, James Ivan.
- McMenamin, Daniel.
- Minch, Sydney B.
- Morrisroe, James.
- Mulcahy, Richard.
- O'Leary, Daniel.
- O'Mahony, The.
- O'Neill, Eamonn.
- O'Sullivan, Gearoid.
- O'Sullivan, John Marcus.
- Redmond, Bridget Mary.
- Reidy, James.
- Rice, Vincent.
- Roddy, Martin.
- Thrift, William Edward.
Tellers:—Tá: Deputies Little and Traynor; Níl: Deputies Doyle and Bennett.
Question declared carried.