My object in attempting to amend this section was to secure that the company to be formed would not be owned by persons who are common stockholders of the Great Southern Railways on the establishment date, or whatever other date is arranged. The only satisfactory way, in my opinion, in which the transport situation could be dealt with here is the way which apparently the present managing director and the Minister thought up to about September, 1943, that is, that the company would be bought over, that the stockholders would be compensated in whatever was a reasonable manner for their interest in the company at the particular time and that some form of public organisation or machinery would take it over and run it either on the basis of the Electricity Supply Board or as a State business. When we are asked, with the limited information at our disposal, to pass this section, the House is entitled to know what were the circumstances which caused the change of mind on the part of the Minister.
The Minister considers that I misinterpret some of the statements published in the Press. I submitted, when speaking on the Money Resolution, that, up to September, 1943, the Minister was of opinion that the Great Southern Railways shareholders should be bought out and that a company of £10,000,000 should be formed to buy them out; that it was a Civil Service idea that the company should be a £20,000,000 company and, instead of a buying out, there should be a conversion, which would leave the company in the possession of the present stockholders, and that the Government, when they considered the matter, would take no more responsibility in a positive way for it except to say that they had no objection to the proposal.
First and foremost, I think it is up to the Minister to deny that what is implied here with regard to the original idea of a £10,000,000 company is correct. If he does not deny it, it is certainly due to the House, considering the importance of the measure, that he should explain why he changed his mind. In the report of the Minister's evidence before the tribunal into Great Southern Railways stock transactions in the Independent of 14th March, 1944, the Minister is reported as saying:—
"At the earlier stages, the reorganisation contemplated was a company with a capital of £10,000,000 to acquire compulsorily the Great Southern Railways."
In his evidence, as reported in the Irish Press of 22nd February, 1944, Mr. Reynolds was somewhat more explicit. He is reported as saying:—
"He suggested the adoption of a seven-year plan and the formation of a new statutory company with a capital of £10,000,000, this company to buy out the Great Southern Railways. He pointed out that during the period of reconstruction the new company would not be able to earn enough to pay interest on its stock and that the Government should be prepared to guarantee interest for a number of years."
That was the outlook with regard to the £10,000,000 company. In reply to the chairman of the tribunal, who said, by way of question: "And that there should be a statutory company with a capital of £10,000,000?" the Minister replied:—
"That was the tentative idea about the time. He received the memorandum from ...."
and then follows the name of an official who was the Assistance Secretary of the Department—
"....on September 6th, and the confidential file on September 8th. The change in the plan came about this time, and the new proposals were more favourable to the shareholders."
The Secretary of the Department is somewhat more explicit with regard to the change. In the Irish Press of 22nd February, 1944, the Secretary of the Department is reported as having stated that
"On 20th September, he had a protracted conversation with ...."
a named official
"....who proposed a conversion scheme as a basis of discussion. As a result of this Mr. Reynolds handed over to...."
the named official
"....a draft letter and circular, the circular being a circular to shareholders containing an outline of the proposed proceedings. After a discussion, the letter was revised and the circular and letter were given to...."
the named official.
Again, the Minister is reported in the Independent of 14th March as having said:—
"The file remained in his office from July 14th, until early in August, 1943, when it was given to the Assistant Secretary of the Department, after a consultation with the Secretary and himself, and the Assistant Secretary was instructed to arrange a meeting with Mr. Reynolds. The Assistant Secretary added a minute in September suggesting a company with a capital of £20,000,000 in redeemable bonds. There were further consultations with the Secretary and the Assistant Secretary on September 7th and September 23rd in which the question of reorganisation was discussed, and he indicated his views, which were conveyed to Mr. Reynolds.
"On October 8th, the Department brought to him a letter from Mr. Reynolds and a draft circular which Mr. Reynolds proposed to submit to shareholders. The Secretary and the Assistant Secretary retained the confidential file as far as he could recollect, and finally Mr. Reynolds's draft circular and a draft memorandum to the Government were approved by him (the Minister) and he issued a certificate on October 12th to enable it to be brought before the Government. It was considered at meetings of the Government on October 15 and 19, and the Government authorised him to say that they had no objection to the proposals."
"...to the proposals"—p-r-o-p-o-s-a-l-s. It is on these reports which have reached the public through the Press of evidence given before the tribunal that I say that our information, so far as it goes, is that until it was proposed from the Civil Service, in September, 1943, that there should be a £20,000,000 company which would convert the stock of the Great Southern Railways and apparently leave possession of the company in the holders of the ordinary stock, both the managing director of the railways and the Minister were apparently working with the conviction in their minds that the best thing to do was to buy out the Great Southern Railways and to buy it out for £10,000,000.
I think we are entitled to ask here what were the considerations that brought about that particular change. Again, we are entitled, I think, to be entirely against this section when we go further into the matter and see what kind is the company to which possession of the present assets and all this new capital are to be given. In the Irish Independent of Saturday, 22nd February, 1941, a letter appeared arising out of some discussions that had taken place here, initiated by Deputy Davin, on the non-publication of the tribunal report of 1939, and some comments made editorially by the Irish Independent on the previous day. The then Minister for Industry and Commerce (Mr. MacEntee) discussed the attitude of the Irish Independent, which at that time considered that because of the misfortunes that had befallen the railways, some of which, in their opinion, were attributable to the Government, the Government should assist the railways. The then Minister for Industry and Commerce wrote this:—
"But the real gravamen in this matter is the attempt which is being made by your journal to push on to the shoulders of the tax-paying community in general what is mainly the responsibility of those immediately associated with the Great Southern Railways Company. The problem in that regard is stated quite baldly in the following excerpt from the last report of the Great Southern Railways."
There are then given the revenue receipts and expenditure, and certain other figures for 1940, winding up with:—
"The loss on working for the year 1940 was £44,761."
The then Minister for Industry and Commerce continued:—
"Those immediately responsible for this situation are not the Government, nor the tax-payers, but the directors, shareholders and staff of the railways. These are the parties upon whom the primary and immediate responsibility rests for setting things right. As I have no doubt your newspaper has a great deal of influence with them, why not advise them to get together and try to do that without delay?"
According to the Minister for Industry and Commerce for the time being in February, 1944, the people responsible for the condition in which the Great Southern Railways was were the directors, the shareholders and the staff of the company. But their handiwork, reflected on in that particular way by the Minister, was not confined entirely to the losses in the year 1940. The Minister said the loss on working was £44,761. The report issued by the Tribunal of Inquiry into Public Transport in 1939 publishes a statement of the receipts and expenditure of the Great Southern Railways Company— the whole undertaking—for the years 1925 to 1938. These figures have been analysed by the Council of the Cork Chamber of Commerce which, in a brochure just issued, has directed attention to the general position of the Great Southern Railways Company in the past, and the present proposal.
Based on the figures contained in the report, the brochure issued by the Cork Chamber of Commerce shows that between 1925 and 1931, inclusive, the net profits—that is, the net operating result of the Great Southern Railways Company—were £1,471,000 and that the dividends paid in these years totalled £3,013,000. That means that the Great Southern Railways Company, between 1925 and 1931, had paid out in dividends £1,542,000 more than they had made by way of net profit. When we take the years 1932 to 1939, inclusive, the situation is that the total amount of net profits made in any year during those eight years was £64,000—there was only one year in which there was a net profit, and that was in 1938—but at the same time during those years the net losses were £1,164,000.
In the eight years from 1932 to 1939, inclusive, there were net losses as a result of the operation of the Great Southern Railways Company to the extent of £1,100,000, and yet in that period they paid out dividends to the extent of £582,000. The people to whom we are asked to hand over the ownership of this new company, with all the vast accumulation of capital that is contemplated, and who are to have responsibility for all the machinery of the railway company which, according to that report, was completely broken down—the people who are to perform these miracles are the people who were capable of these financial results in the years 1935 to 1939. They are the people who, from the point of view of carrying on the transport of the country, left the situation that was so fully described in the report and by the Minister in very many of his remarks when he was dealing with this matter on the two occasions upon which the Second Reading of this Bill was taken. These are the people we are asked to set up here as the owners of the company, the people who will look after our transport in these very critical conditions.
I do not see any reason why same people, even with a very elaborate amount of explanation, could venture the country's interests in these matters in such a way. It was quite clear from the tribunal report that the five people who were set up to examine the railway situation and who reported in 1939—that is, Mr. Ingram, Mr. Beddy, Dr. Kennedy, Mr. O'Brien and Mr. Diarmuid O'Hegarty—accepted a certain situation in the conditions in which we were passing away from the bad effects of the economic war. They took certain representations from the company's officials at that time that, with certain assistance, and being provided with capital, they could make certain useful reorganisations and changes, but they were careful to say that it would require very careful scrutiny. They advised a national transport board of some kind to stand outside the operation of the company and urged that it would require careful scrutiny for a number of years to realise whether the people then in charge could make a success of it. In view of the facts, and in view of the astonishing shifting of ground and shifting of mind on the part of the Minister and the suggestions that we get in the evidence before the Stocks Tribunal, we would want a lot more information from the Minister with regard to his attitude. I doubt if anything that the Minister could say would be able to persuade reasonable people that this new company should be put into the hands of and be owned by the common stockholders of the Great Southern Railways.