Dáil Éireann debate -
Wednesday, 20 Sep 1944

Vol. 94 No. 10

Private Deputies' Business. - Transport (No. 2) Bill, 1944—Committee Stage (Resumed).

Question again proposed: "That Section 9, as amended, stand part of the Bill."

Mr. Coburn

I wish to ask a question on this section, a question bearing on the power of the company to acquire any other transport undertaking. It is stated that the expression "transport services" means transport services by railway, tramway, inland navigation, sea, air or road. I observe that the Minister has met certain fears which might be raised by the insertion of the words "by agreement" after of the words "acquire." I think he mentioned something in reference to the Great Northern Railway operating services in certain areas within the Twenty-Six Counties. If I understood him aright—I just could not catch his words very accurately—he favoured these services being operated, if at all possible, by the new company. The Minister is quite aware of the exceptional circumstances at present prevailing. He knows that the Great Northern Railway is operating north and south of the Border, that it is a company which has given, in very difficult and trying circumstances, a very efficient service. It is a company that has not very much territory within which it can operate in the Twenty-Six Counties and any curtailment of its activities would be detrimental to the future of this very well-managed railway concern.

Whilst at the moment I feel that the interests of that company are made safe enough by the insertion of the amendment providing for acquisition by agreement, I should like the Minister to say—I shall not ask him for a guarantee—that he would keep before his mind, that consultation should take place between the interests concerned before anything is done that would militate against the interests of the company. Although the words "by agreement" have now been inserted in this section, the case might be made that the services at present operated by the Great Northern Company, and which I hope will continue to be operated by them, were not adequate and on that plea the Minister might enable the new company to start another service in that area and by competition make the service operated by the Great Northern Railway Company so unremunerative that the company would have to abandon it. Without asking for any guarantee from the Minister, I hope that before any development of that kind arises the Minister will give the matter serious consideration and that he will not do anything—I leave it at that—that would in any way militate against the activities of the Great Northern Railways as carried on for a number of years past.

Question put and agreed to.

SECTION 10.

Amendmentment No. 14 not moved.

Question proposed: "That Section 10 stand part of the Bill."

General Mulcahy

I put down an amendment that would take the Dublin United Transport Company out of this section. The section provides for the dissolution of the railway company and of the Dublin Transport Company in connection with the amalgamation that is sought to be brought about under the Bill. In the report issued this morning by the tribunal appointed to inquire into the transactions relating to the stocks of the railway company, one of the points brought forward by the tribunal on page 60, as indicating that there was no improper disclosures of information, was the fact that, although the absorption of the Dublin United Transport Company had been in contemplation from the very outset, and had been referred to in every memorandum and minute dealing with the matter of capital organisation, there had been no stir of any kind in connection with the transport company's shares during that period that would show that any inkling of this matter had got out. The fact apparently is that so fantastic was the proposal that in the new general transport company, the passenger transport services of the city would be amalgamated with the machinery for the transport of cattle, beet and other farm produce, it never entered into anybody's mind, even though they might be aware that proposals were on foot for transport reorganisation, that anybody could seriously entertain the idea. I think that fact indicates the mind of everybody in the country with regard to the idea.

First and foremost, I think it is a great wrong to the citizens of Dublin generally that their passenger transport services would be taken over under this Bill, and that instead of that service being run in an efficient and cheap way that would give them the very specialised service they want, it is to be mixed up with the general transport proposals.

An Leas-Cheann Comhairle

The Deputy is now speaking on the section?

General Mulcahy

Yes. I do not want to be driven to discuss the point of order that it is not possible to discuss this point separately and divorce it from the general proposals. I simply had to accept that. In regard to this service, I think a wrong has been done, and a measure of that wrong in another way can be ascertained by considering the points I put before the House when I made my remarks on Section 8, that, in fact, the charges that have been made for the carrying of passengers to the City of Dublin since the 1939 report was issued have been such that a very large amount of capital of the Dublin United Transport Company has been repaid. I suggest that something like £1,100,000 has been repaid. The Minister declined to accept that figure, but he has given inadequate or rather imperfect figures to cover that situation. I might point out again to the House that whereas the amount shown as being the capital of the Dublin United Transport Company, on page 105 of the report, totals £2,210,000, the amount of capital that is being provided for in connection with this new company is £660,000 ordinary stock and £600,000 6 per cent. preference stock.

Therefore, in one way or another, there will be wiped out by the time this company is formed the difference of, say, about £1,000,000 of capital. The Minister has indicated that about £300,000 of that is to be carried forward as debentures. That leaves another £700,000 to be accounted for. The only conclusion that we can come to is that that sum has either been collected from the users of transport in the City of Dublin and been repaid, or will be collected and repaid before this company begins to operate. To that extent, transport users in the City of Dublin have been called upon to pay something like £700,000 over and above the cost of running the company, and of paying for the interest, repairs and general maintenance of the system here. Since that is the position, the users of transport in the City of Dublin would be entitled to look forward to a reduction in the high rates that already exist; but instead of that being done, they are to be called upon to shoulder a burden which will be utilised to reduce the expenses of the transport system in the rest of the country either as passenger or goods services.

That wrong is being done to the citizens of Dublin. It falls in a particular way on those who are living in the working-class areas of the city and who have to travel comparatively long distances from their homes to their work places. When all these various types of services are amalgamated in one company, or one monopoly, the real cost of these types of services will, I submit, be obscured. The result will be that you will not have, generally speaking, the efficient or cheap service that you ought to have.

I object to the citizens of Dublin being saddled unnecessarily with the cost of services that ought not to be borne by them. If we are going to have an efficient service, I submit that the passenger services for the city of Dublin ought to be of a special type. It is one that will require a particular type of organisation. The efficiency of it should not be obscured by mixing it up with the general transport of the country. The cheapness of that transport should not be prejudiced in the way that it is being prejudiced in the Bill.

Notice taken that 20 Deputies were not present; House counted and 20 Deputies being present,

Mr. Larkin

There are two main grievances that need to be stressed in connection with this Bill. The first is in relation to the citizens of the State as a whole so far as its financial structure is concerned, and the second, to which Deputy Mulcahy has drawn attention, is one that is peculiar to the citizens of Dublin. Dublin Deputies have been vociferous in giving expression to a point of view that they consider to be in the best interests of the citizens on the proposal to bring the Dublin United Transport Company within the confines of the new company. Those of us who have a certain viewpoint on that question should not allow any opportunity to pass without again stressing what is undoubtedly a strong and genuine complaint so far as Dublin citizens are concerned. I am particularly interested in this not so much from the point of view of the amount of capital of the Dublin United Transport Company that is involved and to which reference has been made, but rather the manner in which that company has been allowed to milk the citizens of Dublin of an amount which was considered by the Railway Tribunal in 1939 to be grossly excessive. That has gone on over a period of ten years.

Some time ago I directed the attention of the Minister to the fares charged at present by the Dublin United Transport Company. I pointed out to him that the profits of the company from 1938 to this year had increased from about £70,000 to almost £400,000. I submitted to the Minister, in view of the high burden that was being imposed on the citizens of Dublin, in common with the citizens of the State as a whole through the operation of a swollen cost of living, that some relief should be given to Dublin citizens by a lowering of fares. The answer he made to me at the time was that it was not considered expedient to bring about a reduction in fares, but that such a reduction was contemplated after the emergency. He also said it would be necessary for this company to have considerable reserves to meet the cost of the new and additional equipment that would be necessary when normal conditions returned. He also, of course, as he has done on a number of occasions, pointed out that there had been no increase in bus fares in Dublin.

I do not know if the Minister travels very often on buses. Superficially, it may be correct to say that there has been no actual increase in fares. I would point out to him, however, that during the emergency, in the case of the 28-seater buses, the company has been allowed to carry eight additional passengers. You have, by means of that an actual increase in income of nearly 25 per cent. That increase has been obtained without increasing the costs of running the bus. Therefore, there has been a large increase in the income accruing to the company from the running of their buses. That increase in income has resulted from an imposition of travelling conditions that the public in normal times would not be asked to put up with, and would not put up with. Therefore, it is true to say that so far as transport is concerned the drain on the resources of the citizens has been increased. If, as the Minister maintains, there has been no actual increase in fares, it is worth while pointing out that there has been a complete withdrawal of all special tickets, such as monthly tickets, for workers. That hits the working classes very severely, many of whom have to travel very considerable distances to their work. Take the case of a man travelling on the shilling stage. At present he will pay 2/- per day going to and from work, or say 7/- per week for a weekly ticket confining him to one journey each way on six days of the week. That is the position now as against a monthly ticket for 24/- which permitted him to travel as many times as he wished in the month and every day. We can see, therefore, that for practical purposes there has been a very substantial increase in the fares that are being garnered by this company from the citizens of Dublin.

If, as the Minister has pointed out, one of the means by which the new company will be in a position to meet its commitments so far as interest on debenture stock is concerned and to pay a dividend on the common stock, if that be possible, is the bringing into the transport scheme of this company in Dublin with a high earning capacity, how is there to be relief for the Dublin citizens under normal conditions? We expect a reduction in fares. Is the City of Dublin to continue to subscribe a sum of nearly £500,000, over and above the actual cost of transport, to the new monopoly of the future?

I have a particular point of view on local transport. There is not much use in putting it forward now but I do think that Dublin citizens have got, even at this stage, a special claim in regard to local transport—a claim which has been completely sidetracked by this Bill and the decision to absorb the Dublin Transport Company into the national undertaking. It cannot be denied that, in Dublin, there are local peculiarities and transport needs that will not be catered for by a national concern to the same extent that a local concern would be compelled to cater for them. It is indisputable that, if the Dublin services are absorbed into the national concern, it will be much more difficult to secure a reduction of the present excessive fares—fares which are excessive from the point of view of the margin left to the company. It will be much more difficult to get improved services to the suburbs and to arrange cheap excursions for school children to the seaside in summer, all of which matters can be of tremendous importance not merely from the point of view of transport in the city but from the point of view of housing needs and the health and welfare of the sections of the community affected. I cannot envisage a board of directors sitting in Kingsbridge and charged with responsibility for all national transport taking the same close and intimate view of the peculiar needs of Dublin as would be likely in the case of a company confined to Dublin and having to cater for conditions peculiar to Dublin. From that point of view, I think that Dublin and its citizens are being drawn into this new monopoly because, by virtue of its concentration of population, Dublin possesses a very high earning capacity and will serve to bolster up and secure this national concern.

Dublin citizens are not entitled to any greater privileges than other citizens, but, on the other hand, they should not be penalised to a greater extent than other citizens. If we are to continue under present conditions, our contribution to the new company will be close on £500,000 a year, and we shall be getting a very poor system of local transport. If the new company proves to be in difficulties, are we to be asked to bear our share of the burden placed on the people as a whole as regards the guarantee of interest on the debenture stocks, and are we, in addition, to carry this local burden—a burden placed upon us by virtue of the original legislation passed in this House and secured to the company by various enactments? The position of the company has been improved by the fact that they have been operating in emergency conditions, and have been relieved of many obligations which transport undertakings would normally have to meet. The Minister has, on a number of occasions, made great play with the fact that, since the change of management, the company has become a very healthy, solvent company, and has paid an increased dividend each year, while reducing its capital commitments. He has told us that it has a fine fleet of buses, and that it has given fine conditions to its workers. It has only given conditions to its workers which many of the bus companies, knocked out of existence by legislation of this House, gave to their workers many years ago. It is only to-day that this company is establishing decent conditions. That is not a thing to be placed to its credit. In recognition of the fact that they have been given a monopoly in Dublin and allowed to extract this large sum for transport from the citizens of Dublin, it would be but fair that some portion of the money should go to the workers, and that it should not be all retained for the benefit of the debenture holders.

It would not be natural to expect that the Minister would, at this stage, place his duty as a Dublin member before his duty as a member of the Government. But when we realise that transport, housing needs and the health and welfare of the great mass of the citizens constitute a single problem, not one part of which is soluble unless the problem be dealt with as a whole, I think it is well somebody should point out the difficulties we shall have to face in Dublin. I say that we are being deliberately sacrificed because there is need for bringing into the national concern an undertaking with a high earning capacity. It is also well to point out that, if the Bill goes through in its present form, we shall, in addition to meeting our commitments as citizens of the city be required to pay a very heavy annual tribute to the national undertaking and, in return, get nothing but a transport system which will have no relation to the ordinary transport needs of a city of the size of Dublin or to the needs which exist because of the housing problem.

Mr. Cogan

While I have no special interest in the City of Dublin, which is ably represented in this House, I am opposed to the merging of the Dublin Transport Company in this scheme. I take that attitude because it is proposed to bring under the control of the State a service which can be efficiently managed, and which has demonstrated that it has been so managed, by private enterprise. No arguments have been put forward to justify the taking over of the Dublin Transport Company on the ground of inefficiency. I am also opposed to the merging of the two companies under State control on the ground that we are seeking to make this new transport company all-embracing and to bring under its control the transport services of almost the entire State.

I can see dangers to rural areas from this amalgamation of all city and rural services. I can see the danger of complicated problems arising in the City of Dublin, which might cause trouble in the working of the transport company and lead to disputes. It would be fantastic to have all services from rural areas tied up simply because some complex problem arose in the heart of the City of Dublin. I have not heard any justification whatever for the taking over of the Dublin Transport Company. It is desirable that we should endeavour as far as possible to keep State commitments to the minimum instead of trying to bring them up to the maximum level.

Mr. Lemass

I endeavoured during the course of the Second Reading debate on the Bill to explain to the House the reasons why I regarded the amalgamation of the Dublin United Transport Company and the Great Southern Railways as a fundamental part of our whole transport scheme. I think it was obvious that the amalgamation of the two companies would strengthen the national transport organisation. No case has been put forward by Deputy Larkin or by Deputy Cogan for maintaining a separate organisation confined in its operations to Dublin that would not equally apply to any other part of the country. If an argument is being put forward in favour of maintaining a separate transport organisation in Dublin to meet Dublin's peculiar needs, the same argument could be put forward for Cork. Why not? Cork is a municipality, and there are municipal services there. There are special needs in the Cork area, and surely a Cork organisation would be concerned to see that Cork City would have as to the best type of organisation for the citizens.

General Mulcahy

If Cork was the same size as Dublin.

Mr. Lemass

Is it, then, a question of size? Deputy Mulcahy says that that is the question. That is not what Deputy Cogan said. He fears that the requirements of rural areas may be overlooked by reason of the fact that the board would be solely concerned with the interests of Dublin. Surely if there is a case to be made on the ground that an organisation operating in Dublin could provide better and cheaper services, if there is no responsibility for transport services outside Dublin, it is not merely a question of size but a question of population density. You could have a company running the transport service for the eastern counties providing a better and probably a cheaper service, than if it also had to provide a service for more sparsely populated counties. Are we to revive the old Dublin SouthEastern Railway? If you pursue the argument that, because of special circumstances, particular difficulties or special features of the transport problem, organisations confined to particular areas could provide better services than a central body, you must not limit them to Dublin. I do not think that argument is sound. I think a national transport organisation can provide better services than an organisation confined exclusively to the city.

Mr. Davin

It is only recently the Minister changed his views.

Mr. Lemass

That is true. Deputy Davin made that point before, and Deputy Mulcahy made a somewhat similar reference. Deputy Mulcahy referred to the inability of people to comprehend the reasons why an organisation solely concerned with passenger transport in Dublin should be linked up with another organisation whose main concern was the moving of cattle and beet. Twelve or 15 years ago that argument could be followed. Twelve or 15 years ago a railway company was mainly a railway company and the Dublin United Tramways Company was mainly a tramways company, but since then both have become omnibus owners. The omnibuses created an entirely new situation for both concerns. The Great Southern Railways Company are now operating buses on a much larger scale than the Dublin United Transport Company, and by the amalgamation we are not merely effecting immediate economies in administration but making possible further economies by reason of the standardisation and interchangeability of vehicles, equipment and plant.

We provide a new national transport organisation, with the best technical abilities available to either company, and over and above that there is a clear cash gain which Deputies should not leave out of account.

Deputy Mulcahy was concerned about the capital. In 1939, it was stated in the paragraph of the report of the Transport Tribunal to which he referred, that the total capital liabilities of the company were £2,211,000. What were they made up of? Ordinary stock, £660,000, 6 per cent. preference stock, £600,000, 3½ per cent. debentures due for repayment November, 1939, £300,000, 3½ per cent. debenture stock due for repayment January, 1947, £300,000, debentures at varying rates of interest due for repayment December, 1939, £82,100, and a bank overdraft of £269,000. In 1939, the company issued new debentures amounting to £700,000 and out of the proceeds of that issue they paid off the debentures due for repayment, and have since then repaid that issue. The outstanding debenture liabilities are £300,000 due for repayment in 1947. That liability is transferred to the new company.

General Mulcahy

By the time the transfer takes place would the bank interest be repaid?

Mr. Lemass

I cannot say. It is a simple calculation to find out what has to be paid in interest on the ordinary stock of the company. By the substitution for preference and ordinary stock for 3 per cent. debenture stock in the manner proposed in the Bill—£145 worth of stock for every £100 of existing stock a saving of interest is achieved. The liability of the new company in respect of interest and dividends is reduced by more than half. There is an immediate saving of £67,000 yearly. It does not represent any increase of fares or any imposition on the citizens of Dublin, except a reduction in the amount of interest payments and dividends. In addition, the new company's earning capacity is very substantial. It will be a matter for decision by the board of the new company to what extent the added revenue from amalgamation will be used to give effect to a reduction in fares, or provide in some other way improved transport facilities for the citizens of Dublin.

I think it is obvious that transport in Dublin could be cheapened. It is wrong to assume that the national board will not be concerned with the problem of Dublin, and with the provision of cheap fares to districts where the population has been moved from city slums to suburban dwellings. That will be the function of the board. They will have no other function except to provide the best and most efficient transport service, meeting the requirements of the public at an economic price and without making a loss. I think it quite obvious that this amalgamation is going to improve the transport organisation of the whole country, and it must inevitably involve the improving of the transport organisation in each part of the country. There are not merely the obvious advantages of amalgamating two companies operating similar types of vehicles and a similar business, but there are clear gains of substantial magnitude flowing therefrom. I stated already that I regarded this amalgamation proposal as an integral part of the whole scheme, and I think that if there was to be a decision now to drop that part of the scheme, the whole Bill would require reconsideration and drastic amendment. It is my belief that we will, by reason of this amalgamation, assist very considerably the development of a sound transport organisation. I believe that of all the various proposals in the Bill, or all the schemes which may occur to the board of the new company, there is nothing which will make a greater contribution to the development of a sound transport organisation than this amalgamation of the two existing companies.

Mr. McGilligan

Did I hear the Minister say that the saving of interest arising out of the Dublin United Transport Company would be in the region of £67,000 per year?

Mr. Lemass

Yes, £67,000 per year.

Mr. McGilligan

To my mind, that is a loss to the stockholders of £67,000.

Mr. Lemass

Certainly. The stockholders of the Dublin United Transport Company will get that much less. They have agreed to take that much less.

Mr. McGilligan

Is it not a bit of a modern miracle that people who are going to suffer a loss of £67,000 interest on their shares have been told by ex-Judge Wylie and Mr. Tweedy that the figure proposed by the arrangement is higher than any arbitrator would give?

Mr. Davin

Could the Minister say how the figure representing goodwill in the last accounts of the Dublin United Transport Company was arrived at? Was it arrived at by a body of expert accountants, by the board of the company or by the managing director?

Mr. Lemass

Goodwill is an asset. The balance sheet of a company must balance. There were capital liabilities on one side and they had to have something on the other.

Mr. McGilligan

Is that it?

Mr. Lemass

What does that goodwill represent? It represents, in the main, money paid out to acquire other transport organisations which have since disappeared. There are no tangible assets against that expenditure, but there is goodwill created by the expenditure which is the most valuable asset the company has. Undoubtedly sound financial policy would dictate the wisdom of eliminating that item of goodwill from the balance sheet as quickly as possible.

Mr. Davin

Does the Minister know what an ordinary accounts clerk would call that—faking the balance sheet?

Mr. Lemass

On the contrary. I stated here and I now repeat that the principal asset of any transport organisation is its goodwill.

Mr. McGilligan

It is only something to balance the accounts, according to the Minister.

General Mulcahy

It seems to me that there is no faking, or that if somebody were to draw the picture of which Deputy Davin speaks it would be a picture of a machine taking the unfortunate man in the street by the throat and squeezing £800,000 more out of him in five years than the ordinary commercial law would warrant, because that is what apparently happened in Dublin.

Mr. Lemass

Will the Deputy show how that happened?

General Mulcahy

Since 1939, up to the date upon which this company will be established, there will have been paid off the capital liabilities of the Dublin United Tramways Company which existed at the end of 1939 £800,000 out of the £1,100,000 which they proposed to pay off within ten years.

Mr. Lemass

But it cost nobody anything.

Mr. McGilligan

That is marvellous. They must have written it off as goodwill.

General Mulcahy

It cost the people using the transport system £800,000.

Mr. Lemass

They paid no more than they paid previously.

General Mulcahy

They were denied the cheap rates which, under ordinary commercial law or commercial dealings, they were entitled to.

Mr. Lemass

They were paying precisely the same rates during that period as they were paying in earlier years when the company was making very little profit at all.

General Mulcahy

The point is that they were charged rates since 1939 which enabled the company to repay £800,000 of their capital more than the running of the company, the payment of dividends or anything else would warrant, and, in spite of the report of the tribunal which examined the matter and which pointed out how unjust it would be that people should be charged the excess fares necessary to carry out this repayment of capital, they were charged even at a higher rate than was contemplated when this warning was issued.

Mr. Lemass

Might I say this also, arising out of the remarks of Deputy Mulcahy and Deputy Larkin? It is quite true that emergency conditions have helped the company's revenue by reason of the fact that buses are more crowded——

Mr. Davin

And trains.

Mr. Lemass

——and that some of the runs have been slightly curtailed. It is also true that the expenses of operating the company have enormously increased. The cost of fuel and replacements has enormously increased. The staff of the company which could not be fully employed was nevertheless paid on a full employment basis. When the trams ceased to run by reason of the electricity stoppage, all the tram crews were kept in full employment at full wages. These additional expenses must also be taken into account, and I think it would be correct to say that the expenses arising out of the emergency far exceed the added sources of revenue which the emergency created.

Mr. Larkin

Would the Minister say that the increase in the expenses has been as great as the increase in the gross income of the company?

Mr. Lemass

It is only a matter of opinion because there has been all the time a process of reorganisation of the company's accounts.

Mr. Davin

The railway company's balance sheet does not prove that.

Mr. Lemass

The railway company's balance sheet is almost incomprehensible to the ordinary person, and one of the things I hope to do under this measure is to procure from the company a proper set of commercial accounts.

Mr. Davin

What you are trying to do is to prevent people getting any information in future.

Mr. Lemass

On the contrary. I intend to get all possible information in a form the Deputy can understand.

Mr. Larkin

Is not the public statement of the Chairman of the Dublin United Transport Company that the amount available for distribution has increased from, roughly, £70,000 in 1938 to nearly £400,000 last year comprehensible?

Mr. Lemass

That is not correct.

Mr. Larkin

It is.

Mr. Lemass

Oh, no.

Mr. McGilligan

Do you mean that whether the chairman said it or not, it is not right?

Mr. Lemass

He certainly did not say it.

Mr. M.E. Dockrell

The Minister a few moments ago referred to the taking over of the transport company as being an essential part of the Bill, and gave what, on the face of it, appeared to be an explanation of that. I do not think he has touched the real root of the matter, namely, that the profits of the Dublin United Transport Company are needed to bolster up the possible future losses of the railway company. On the one hand you have, in the case of the Dublin United Transport Company, a company which operates by means of buses and trams for short distances. It carries the citizens to and from their work. These are, in the main, essential journeys. The people must take these buses or trams to get to their work, and the fares are a charge on their incomes just as much as the rents of their houses.

Now, I am not going to go into the question of the shareholders of this company—that is another sidelight— but I will just say that I do not think the shareholders of the transport company were as pleased with the proposed change as the Minister would like to make out. It is really with the citizens of Dublin and the charges they will have to bear for their transport services in the future that I am concerned. I can see no earthly reason for the taking over of the Dublin Transport Company, except to put the earnings of that healthy company into the earnings of the railway company, which is by no means as healthy. The transport company operates on short journeys. That company is patronised by people who must go on those short journeys and the fares, in their essence, become a charge on their income. Every city member is vitally concerned with the charges which the citizens will have to pay and I am afraid, looking into the future, that we can see no hope for a reduction in the fares.

The railway company is in a different position. It carries goods over long distances. It also carries passengers, but not to and from their daily work—at least, not to any extent. Even for the passengers it is not quite such a charge on their income as in the case of the Transport Company. In connection with freights, of course, it is not a charge on them at all; it is a charge on industry. There is no essential connection between an urban transport company and a rural railway company. If both companies were equally prosperous, there might be some fairness in the proposals, but taking heed of the fact that the railway company is not in a healthy position, or was not prior to the war as regards making profits out of earning capacity, I can see no reason why, when the emergency is over, the railways will not go back, somewhat at any rate, to the position in which they were before 1939. The company may put on new carriages and they may tempt a certain number of people to go on railway journeys, but unless there is very repressive legislation introduced to prevent persons, in their private capacity, travelling by motor car, or traders from carrying goods over long distances in their own vehicles, the railways are bound to get back somewhat to the position in which they were in 1938 or 1939. I can see the position coming in which the citizens of Dublin will be forced to pay higher and exorbitant fares to keep the railway company going, and I think that is a very unfair position.

In connection with the balance sheet, the Minister has said that he wishes to make it as clear as it can be made in the new company. Will he guarantee that the receipts and expenditure of the Dublin Transport Company will be kept publicly and shown separately from those of the railway system? It is only then that the citizens of Dublin will be able to form a fair idea as to how much they are paying towards the needs of the rural community.

Mr. Maguire

As regards the proposal to amalgamate the Dublin Transport Company and the general railway services. I have listened to various speeches made here, and I must say I was quite impressed with the Minister's statement in favour of that proposal. As a countryman, I can visualise the necessity of an amalgamation of the various services and of placing them under one control. I cannot see the wisdom of advocating separate transport services in places like Dublin as against places like Leitrim and Sligo. I cannot see how the City of Dublin, cut off from the rest of the country, can hope to carry on its ordinary business, with its growing population, and possessing, as it does, an advantageous situation in relation to transport services, as against counties where there is a dwindling population.

If there must be in the country a transport service covering the whole area, and if there are parts of the country so sparsely populated that a transport service must be run without profit, then I think, from the national point of view, it is only fair that there should be some co-ordination between the sparsely populated areas, where the transport may be run at a loss, and the thickly populated areas, where there is adequate and profitable transport, so as to ensure that the remotest parts are served as well as the parts more favourably placed.

I cannot see Dublin existing without adequate food supplies coming to it from various parts of the country, such as eggs, milk, butter, and live stock. Assuming we have transport services in each locality in proportion to its population, must it not necessarily follow that the transport of these essential things to the growing population of a place like Dublin will increase in cost, and, increasing in cost, have to be borne by the consumers here? I can see no logic whatever behind the suggestion that this amalgamation should not take place.

I know perfectly well that a national system of transport will have an important bearing on various parts of the country and on the rural community. Already evidence of that exists. We have a transport system which has a unified system of control. That transport system's charges have definitely increased. It is quite true, as the Minister stated, that so also have the costs of running that service and the incidentals connected with it. At the same time, I believe that any transport system covering the whole country, and that has a unified control, will, even under very mediocre management, ensure that its outlay will be borne by the charges made over the whole community. It is quite a simple matter if it is done in that way.

I have great hopes of a national system of transport. I hope the management will take into consideration the needs of the different areas. Dublin may be confident of itself, and so sure of its own position that it feels amalgamation with the rest of the community would be injurious to its healthy position, but nevertheless I urge, and I believe it is right so to urge, that other parts of the country should be taken into consideration in the planning of our future transport system. What I mean to convey is that the ports of Sligo and Galway should be developed in connection with the system of internal transport. That would tend to increase the populations of those areas and it would not allow this terrible catastrophe to continue where we have one centre for the whole of the country—the capital—in which amalgamation with the rest of the community on matters of essential national importance is regarded as a menace. I think future transport arrangements should be aimed at the development of various centres in the country, to increase their activities and to increase their industrial possibilities, so that Dublin will not in future find itself at variance with the general development in national transport, or any other such service.

General Mulcahy

Deputy Maguire does not seem to realise the case we have been putting. We have been putting this case, that in the City of Dublin since 1939 there has been an increased home assistance; there have been vouchers for milk, for butter, for potatoes, for turf; every idea that the Government could get into their heads for trying to combat the poverty and destitution which emergency conditions have brought about here has been employed, and while the Government, in a city where people have to utilise the buses and trams in travelling fairly long distances in the course of their business, were supplying additional home assistance, additional unemployment assistance and additional food vouchers, apparently the transport system was squeezing out of the pockets of the travelling public in the City of Dublin £800,000 more than was necessary to carry on the business satisfactorily and to pay dividends on the capital which was invested.

Mr. Maguire

Was not that the position in general?

General Mulcahy

That was the position here in Dublin.

Mr. Maguire

And in Leitrim and Sligo and every other part of the country.

General Mulcahy

No, because they had not the same type of machinery for squeezing transport charges out of the rest of the country as apparently existed here in Dublin. What are we trying to avoid here? We are trying to avoid the application of that system to the whole of the country. Never before was it more important than it will be in the coming few years to have a cheap and efficient transport service throughout the country. In Dublin, there was squeezed out of the unfortunate people £800,000 more than it was necessary to take out of their pockets during that difficult time. We are dealing with a Bill here which proposes to recover, during the next 16 years, out of the people who use transport in the country, £10,000,000 more than would normally be necessary to pay the interest on the capital, to carry on the business, to pay the workers, to provide material, to cover the cost of renewals, and so on. That is what we are struggling against.

The interests of the City of Dublin are involved in seeing that the same thing will not be carried on in relation to Dublin to-morrow as was carried on during the last five years. We have that interest as regards the City of Dublin, and we are also interested in ensuring that moneys which should go to relieve the charges on travel here in the city will not be taken to cover up and obscure what is going to happen to the rest of the country, and which is going to have the same effect on the rest of the country as it had on the people in the City of Dublin. People struggling under economic difficulties are going to have, in the first place, more money taken out of their pockets for transport than ought to be taken, and a less satisfactory system of transport. If Leitrim and Sligo are to develop to-morrow, and are to have increased production to-morrow, they must have efficient and cheap transport to distribute their produce throughout the country, and if the transport system of the country during the next 16 years has to pay £10,000,000 in the way in which this Bill proposes, then Dublin is going to be swollen more and more by people perhaps with less and less employment. But you are not going to have industries and agriculture developed in Sligo or Leitrim to feed the accumulated population that there is in the eastern counties. Sligo and Leitrim are the very places which will be hit if we have not cheap and efficient transport. Do not let Deputies from the country be confused by the suggestion that the Minister is going to take large sums of money out of the pockets of people in the City of Dublin who use transport and apply it to help the people in the rest of the country.

Mr. Maguire

The proposal is to make a general pool of all the transport.

General Mulcahy

The proposal is to do with the rest of the country, at a critical time for transport, what apparently has been done in Dublin in the last five years.

Mr. McGilligan

I should like to add a few remarks to what has been said by Deputy Mulcahy in reply to Deputy Maguire. At the meeting at which ex-Judge Wylie tried to get the shareholders over the hurdle of acceptance of those proposals, he said, as far as I remember—I do not pretend to quote him accurately—that the figure proposed was higher than any arbitrator would give. He indicated what it was. It was to pay £14 10s. 0d. in stocks of the new company for every £10 stocks of the Dublin United Transport Company, and he said his opinion was that, if an arbitrator were brought in, the shareholders would not get par value or anything like it. He was followed by Mr. Tweedy, who went even further than Judge Wylie. He said that if an arbitrator were called in, so far from getting £14 10s. 0d., the £10 stock would be very seriously written down. We are proposing to give £14 10s. 0d., and to redeem it by moneys extracted from the people of Sligo and Leitrim as well as from the people of Dublin in the next 16 years.

Mr. Davin

The Minister seemed to me, at any rate, to give a most amazing explanation as to how the very high figure representing goodwill in the accounts of the Dublin United Transport Company was arrived at.

Mr. Lemass

I did not pretend to explain it.

Mr. Davin

There is a certain set of figures here on one side of the balance sheet, which are simply balanced up by putting in a figure for goodwill on the other side.

Mr. McGilligan

Something had to be put in.

Mr. Davin

If Deputies could balance their own banking accounts in that way they would be able to pay their general election expenses very quickly.

Mr. Lemass

But Deputies would need to have the goodwill.

Mr. Davin

That is so. The Minister's goodwill, of course, in a case of that kind, would be put at a very much higher figure than the goodwill of the ordinary Deputy, even a Fianna Fáil Deputy, but I think the Minister will have to go a little bit further if he has any sincere desire to convince the House that that is a correct method of arriving at the figure representing goodwill.

The Minister made quite a lot out of the meaning of the financial success of the Great Southern Railways Company. The Dublin United Transport Company is undoubtedly a very successful company from a financial point of view at the present time, and I suspect that the appreciated value of its shares in recent years is explained by this fictitiously high figure representing goodwill. If the same kind of system were applied to the recent successful working of the Great Southern Railways Company, would he tell me what figure for goodwill should appear in the accounts of that company? Surely it is worth £1 or £100 or £1,000 or £1,000,000 on the same kind of argument? The Minister also argued in answer to Deputy Larkin, that the present financial position of the Great Southern Railways Company was partly due—he would not admit that at all at the beginning of his statements—to emergency conditions.

An Ceann Comhairle

Would the Deputy please inform the Chair what section he is purporting to discuss? On Section 9, we had a long discussion on the lines which the Deputy is now following. Section 10 deals with the dissolution of dissolved companies, and is not concerned with the running of the Great Southern Railways in recent years.

Mr. Davin

I am endeavouring, with your permission, to follow the good example which the Minister set by introducing these matters to this discussion.

An Ceann Comhairle

On this section?

Mr. Davin

Yes, certainly.

Mr. McGilligan

On this section.

Mr. Davin

The Minister talked about increased revenue as compared with increased expenditure. I would like him to look at the last Great Southern Railways returns. He tried to convince the House that the expenditure in connection with the running of the Great Southern Railways was merely balancing the increased receipts. Now, for his information, I quote the principal item on the expenditure side of the last balance sheet issued to the shareholders by the Great Southern Railways. It shows that the receipts from passengers during the year 1943 reached the amazing figure of £1,186,247, compared to the receipts under the same head of £762,697 for the previous year, 1942. I hope the Minister has these figures in his head or has a copy of the balance sheet in front of him. The principal item on the expenditure side is: locomotive running expenses at £1,445,459, as compared to a higher figure for the previous year, £1,478,299. So there was an actual reduction in the principal item representing expenditure, compared to the type of case the Minister tried to get into the minds of Deputies.

The Minister is entirely wrong, therefore, in suggesting that expenditure is going up in a corresponding way to receipts. The Minister promised —and I hope he will carry out his promise—to make certain in the terms of this Bill that the ordinary layman, the taxpayer—who may be involved in the administration of this Bill if there is a deficit—and the shareholder will be furnished with returns in the future in a way that can be properly understood. This return, the last one published, under the signature of the present chairman-dictator, has a winding-up note as follows:

"The financial accounts and statistical returns are issued in an abridged form, but any proprietor who desires to have a copy of the full accounts will be supplied with one on application."

When the Minister is making up his mind as to the type of return which will be furnished in future, under certain regulations to be made by him, I hope he will make certain that they will be furnished to the general public, the shareholders and taxpayers, in a more understandable manner than as presented in the past. At any rate, I am using the figures I have just quoted to prove that the Minister's argument is not correct. If additional evidence is necessary, that the present financial position of the company is not entirely due to the efficiency of the management, that evidence can be got from the report of the chairman who presided at the meeting held under the old directors on the 1st March, 1940. Returns that were submitted to that meeting only covered a half year of the emergency period and the chairman, in a number of important points made in his speech, said:

"Undoubtedly, the increased business in the latter half of the year—

that is, the first half-year of the emergency period—

"—which was mainly merchandise, must be attributed to war conditions."

Even the chairman had that in his mind as the reason why the company earned more revenue then. I am sure the Minister knows—at any rate, he ought to be able to get confirmation from the present chairman—as to whether the chairman at that meeting was making an accurate statement or not. Though it has been repeatedly suggested by the Minister in his many speeches on that section, it is not true to state that the present financial position and prosperity of the Great Southern Railways is entirely due to the efficiency of the management.

Mr. Lemass

I wish to intervene to correct certain figures I gave. I gave a calculation as to the amount required to pay 6 per cent. on the existing shareholders' capital of the Dublin United Transport Company which was somewhat incorrect. I have worked out now that it would take £75,800 to pay 6 per cent. on the existing ordinary and preference share capital of the Dublin United Transport Company.

General Mulcahy

That is not including debentures.

Mr. Lemass

Not including debentures. The amount required to pay 3 per cent. upon the guaranteed stock to be substituted for that would be £54,000, so there would be a saving of about £21,000. Deputy Mulcahy appears to be perturbed by the fact that the company succeeded in paying off some of its loan liabilities. I think he has failed to appreciate the fact that it is the saving of interest effected by that redemption of the company's debentures which has made more possible the maintenance of the company's fares unchanged during the emergency and brings appreciably nearer the day when a reduction of fares would be possible. It is a desirable thing that the company should effect that reduction in the interest charges by the methods to which it has resorted. I think it is a matter for congratulation that the company has been able to do that without any variation in charges and, so far as I know, it can be described as the only municipal transport system in Europe which has not increased its fares during the war. I know that Deputies may not wish to accept these things, but I think it is something to be proud of and that it is a matter on which we should congratulate the company.

Mr. McGilligan

How do they compare, say, per mile, with Belfast?

Mr. Lemass

I do not know the comparison with Belfast. There was an American expert on municipal transport who toured Great Britain, Ireland, and other countries, on behalf of some authority in America, and who reported that the second best municipal transport service was in Dublin.

Mr. L. Cosgrave

When was that?

Mr. Lemass

A couple of years ago. So far as the accounts of the Dublin United Transport Company are concerned, they are prepared in the usual commercial form. The accounts of the Great Southern Railways—and of all other railway companies—are not prepared in the same form, and I think the antiquated system of preparing railway accounts and presenting returns of financial working and the antiquated system of finances of railway companies generally must be abolished. We must try to get from the new company commercial accounts and a balance sheet similar in form to that which the Dublin United Transport Company now presents—one which will set out on one side its capital liabilities and on the other its evaluation of fixed assets and current assets and show the financial position of the company clearly and accurately.

Mr. McGilligan

And show the value of the goodwill in each year.

Mr. Lemass

Yes.

Mr. McGilligan

That will mean where the two sides do not balance, making a subtraction.

Mr. Lemass

The Great Southern Railways, like the Dublin United Transport Company, spent a great deal of money in buying out competitors. The money was spent by it from capital and represents capital expenditure. They got a return for that expenditure, not in fixed assets but in goodwill, represented by the sole right to provide transport services of that kind in a particular district. I think those are most valuable assets, but you cannot put a finger on them. It is not like a building, an engine or a car. It is, nevertheless, something which cost the company a great deal, and something which should be reflected in its balance sheet until it has been eliminated by the reduction of the capital provided.

Mr. Davin

It is one man—that is the goodwill—in the case of the Great Southern Railways.

Mr. Lemass

No; it is something much more. In the case of the Dublin United Transport Company, the company has already succeeded in securing a reduction in capital liabilities, which permits a variation of the goodwill item in the balance sheet. I think it is a matter to perturb the shareholders of the Dublin United Transport Company that, out of a total of £2,164,000 of assets, £1,649,000 represents goodwill. I think that is a bad balance sheet, and one that should be remedied as early as possible.

Mr. Davin

Hear, hear!

Mr. Lemass

We must, however, recognise the fact that that goodwill does represent money actually paid out and advantages secured in return for that expenditure. There is one other matter I wish to deal with, and to which reference was made to-day. Deputy McGilligan apparently contends that the terms offered to the shareholders of the Dublin United Transport Company are too favourable. Anyone could have that opinion. These terms were arrived at as a result of negotiation. I felt I could defend them. Deputies have quoted stock exchange values in relation to the Great Southern Railways Company shares. I notice they are steering clear of stock exchange values in regard to the Dublin United Transport Company shares. If they think the current stock exchange quotation for the shares is a fair basis for determining the value to be placed upon Great Southern Railways shares, it must equally apply in the case of the Dublin United Transport Company shares, and on the basis of stock exchange values the terms offered to these shareholders are quite reasonable and fair.

Mr. McGilligan

The stock exchange quotations at what date?

Mr. Lemass

On the date on which the offer was made.

Mr. McGilligan

During the inflationary boom.

Mr. Lemass

The stock exchange quotation on that date.

Mr. McGilligan

Does the Minister not realise the seriousness of the situation when the two people who put themselves forward as the most knowledgeable members of the board of directors of the company, addressing the shareholders, advised them that no arbitrator would give them this amount?

Mr. Lemass

That would depend, of course, entirely upon the arbitrator's terms of reference.

Mr. McGilligan

These two people would naturally have before them, first of all, the type of stock the stockholders at present had, what it was being transferred into, and the question as to whether or not there was a Government guarantee behind it. The two persons who spoke were not likely to forget all these considerations. I do not remember if they set all these things out, but the conclusion of the remarks of one of them was that they would not even get par for their £10 shares, and of the other was that it would be written down much below par, instead of getting £14 10s. I set against that the Minister's statement to-night that what these people are buying is something less than what they have been getting. He says interest is going to be saved in this transfer. His figure is £21,000. That means a loss to these people and yet, buying that loss at this figure, these two people say the terms are better than any arbitrator would give them, that they would not even get £10 for the £10 stock.

Mr. Lemass

Clearly that would depend on what the terms of reference would be. Some Deputies would say that if we were buying the Dublin United Transport Company we should only buy the fixed assets—stations, buses, trams, trolleys, overhead wires. The value of these assets is £359,000. They had other current assets represented by stores, sundry debtors, cash in hands at £102,000. These were the only tangible assets you would buy. I think it would be most inequitable to buy the company on the basis of giving only the value of these assets but if that basis were adopted, quite clearly, the amount paid to the company would be a mere fraction of the total sum subscribed by the shareholders and representing the capital of the company. Similarly, if the arbitrator went upon the basis of earnings over a period of years——

Mr. McGilligan

Quite likely he would.

Mr. Lemass

—which he possibly would, I doubt very much if the company could hope to get more than ten years' purchase, that is, more than the aggregate earnings of the past ten years. The shareholders of the company might argue that that was unfair to them, that they had a company which had been in a bad condition, that they of their own initiative reorganised the management, that they had without any suggestion or assistance from the Government effected such improvement in their affairs that their future earning capacity was far in excess of their past earning capacity and that, consequently, acquisition upon the basis of the past earnings would be unfair to them. These matters are clearly of a character upon which agreement would be difficult to obtain. I think, in the circumstances, it was much wiser to get agreement upon the actual transfer of shares. If the shareholders of that company elected to take—as they did —guaranteed 3 per cent. debentures in exchange for 6 per cent. preference or ordinary shares, on the basis fixed, it was because, although it did mean a loss of revenue to these shareholders in each year, they knew their position more definitely than if the matter were left to an arbitrator and they knew that the 3 per cent. on the guaranteed stock was secured to them.

Mr. McGilligan

They are doing far too well out of it.

Mr. M.E. Dockrell

Will the Minister answer me on the question of the separate accounts? Will the accounts of the Dublin United Transport Company and of the Great Southern Railways Company be shown separately?

Mr. Lemass

Yes. At the moment there are most elaborate accounts presented by the Great Southern Railways Company and by the Dublin United Transport Company. I do not think we should necessarily keep these accounts separately. I would not like to say it will not be done, but, in so far as it may involve a great deal of unnecessary book-keeping by the company, I think it would be unreasonable to insist. Certainly there will be separate accounts for omnibus and railway working.

Mr. Davin

Road freight and cartage accounts?

Mr. Lemass

Yes, certainly.

Mr. Cosgrave

Will the Minister say what is the figure for increased revenue last year as a result of increases in fares and freight charges?

Mr. Lemass

£300,000. The revenue of the Great Southern Railways Company increased by very much more than that.

Mr. Cosgrave

As a result of increased fares and freights, over and above the previous year?

Mr. Lemass

I am speaking from recollection of the figures. I think their net revenue increased by over £1,000,000.

Mr. Davin

What?

Mr. Lemass

Of that increase, only £300,000 is attributed to the increased fares.

Mr. Davin

Their net income was £641,344.

Mr. McGilligan

The income increased by £1,000,000. That is the Minister's statement. If the main discussion is over, there is one minor point to which I wish to refer. This brings in the Second Schedule to the Bill. According to the Second Schedule, each of these dissolved companies will be at liberty to prepare accounts for the year 1944.

Mr. Lemass

They will have to.

Mr. McGilligan

They will have to. There has been considerable comment in this House and in published reports on transport as to the manner in which the accounts were presented; in other words, they were brought out in such a way that no provision was made for depreciation or adequate allowance made for renewals. What were called profits were shown and dividends declared out of these. Is it likely that that sort of thing may happen again this year?

Mr. Lemass

In the past the railway company made no provision for depreciation at all. That was not its method of finance. They appropriated every year out of gross earnings a certain amount to renewals and maintenance. That arose out of an arrangement with the income-tax authorities. As I understand it, the company have now made a new arrangement with the income-tax authorities under which they make an appropriation to depreciation instead of this allocation to repairs and renewals. Last year, for the first time, they did make an appropriation to depreciation of £556,000. It is intended that that practice will continue.

Mr. McGilligan

It is quite right to say that under the old system depreciation was not provided for but, instead, there was supposed to be adequate provision for renewals. We know that was not done. It is confessed in the report. The railway officials themselves confessed to it. Notwithstanding that, it is quite clear that each of these companies may declare a dividend this year on a balance sheet which they may draw up which may show a profit by again omitting the appropriate provision for either depreciation or renewals. Will that be allowed or is there power to control it? They are given control of the accounts up to February or March, 1945.

Mr. Lemass

Subject to the provisions of the Companies Acts.

Mr. McGilligan

Then they may do what was done at the time of the Pigs and Bacon Board business—just scoop the pool—take whatever is there?

Mr. Lemass

It is a matter of opinion, at any time, as to whether the company made adequate provision for repairs and renewals, or whether they should have provided a larger figure, and how much larger figure. I do not know whether anyone could offer an opinion on that subject. The judgment of one individual will be different from the judgment of another. Quite clearly, the company is entitled in law to devote to dividends moneys which some other person might consider should be more prudently spent upon the renewal of its assets.

Mr. McGilligan

The only benefit railway companies have as opposed to ordinary trading companies is that they are not bound to make provision for depreciation before they declare a dividend. They may, therefore, as they have done on many occasions— and it has been the subject of very adverse comment in the courts—declare dividends at times when an ordinary trading company would be guilty of malpractice if they had declared it. The alternative method was adopted of making provision for renewals. That is an arbitrary thing. It can vary. We know that the tradition of the Great Southern Railways Company was not to make adequate provision, and in that way they have declared in 16 years dividends amounting to £4,000,000 at a time when it was quite clear by the minority report that if they had made adequate provision for renewals they could not have paid even their debentures, let alone any dividends. Is it possible that they are going to be allowed to continue that practice up to the last year of their existence?

Mr. Davin

Is it not a fact that previous to this year the chief engineer of the company gave a qualified certificate regarding the condition of the permanent way, or at least a big section of the permanent way, but that for some reason or another no such certificate is included in the last accounts?

Mr. McGilligan

It is certainly a fact that for years past the track was in a dangerous condition.

Mr. Davin

There is nothing here about it.

Mr. McGilligan

If you allow your track to get into a dangerous condition, it appears that dividends still may be declared.

Mr. Lemass

It is part of the functions of the board of the company to determine in what way the revenue of the company will be allocated.

Mr. McGilligan

Are they going to be allowed to continue that practice for one year more?

Mr. Lemass

I am saying that the obligation is on the board of the company to see that revenue is properly spent both in respect of the maintenance of the company's assets and its future earning power. I think it is misleading to say that the company paid out in dividends more than they earned in the past 10 or 16 years. They had reserves. Some people might hold that the reserves they held as a result of the payment they had received from the British Government should have been entirely used in repairing damage to the line which occurred when it was under British control. The company kept the balance, left out of those reserves, for the payment of dividends, and paid out dividends year after year in excess of revenue earned, but they were able to do so because of the reserves that they had. I think that all the reserve funds are now exhausted, and all that is available now is the sum in excess of revenue for maintenance.

Mr. McGilligan

Suppose that this year they may take £400,000 for dividends?

Mr. Davin

Could the Minister say why it is that no certificate from the chief engineer appears on the accounts this year regarding the condition of the permanent way, rolling stock, or anything else?

Mr. Lemass

There is a certificate from the chief engineer.

Mr. Davin

It is not in the ordinary accounts.

Mr. Lemass

I shall read the certificate for the Deputy, which is as follows:—

"I hereby certify that the whole of the company's permanent way, stations, buildings, canal, and other works have, during the past year, been maintained in safe working condition and repair, subject to speed restrictions on branch lines.

G.J. MURPHY,

Chief Engineer."

Mr. Davin

That does not appear in the ordinary accounts.

Mr. Lemass

It appears in the report of the directors.

Mr. McGilligan

Is not that modified there by certain restrictions?

Mr. Lemass

The only reservation here is "subject to speed restrictions on branch lines".

Mr. McMenamin

Is the amount given?

Mr. Lemass

It is a full certificate in respect of the permanent way, and there is no qualification in the certificate except in respect of branch lines.

Mr. McMenamin

What is the matter about speed?

Mr. Lemass

The reservation is "subject to speed restrictions on branch lines".

Question put and declared carried.

SECTION 11.

Mr. Cosgrave

I move amendment No. 15:—

In line 3, after the word "undertakings" to add the words "including all assets and liabilities".

This amendment was put down by Deputy Hughes and myself merely to clarify any doubt which may exist as to the meaning of the word "undertakings". We take it that it is undesirable that the new company should be empowered, as a result of its establishment, to evade any liabilities or undertakings which the old company had, and the purpose of the amendment is merely to ensure that all the assets and all the liabilities of the dissolved companies shall be taken over by the new one.

Mr. Lemass

The amendment is not necessary. There is an Act, called the Railways Clauses Act, 1863, which makes full provision for the amalgamation of statutory transport undertakings. We have incorporated that Act in this Bill, and that makes the provisions in that Act part of this Bill. These provisions relate to the carry over of rights, liabilities, and so forth, everything there has been transferred except in so far as special provision has been made to deal with certain matters in the Bill. The Deputy will notice that in Section 7 of the Bill there is the necessary clause, which is to the following effect:—

Part V of the Railways Clauses Act, 1863, is subject to the provisions of this Part, incorporated with, and forms part of, this Part, and in the construction of the said Part V for the purposes of such incorporation—

(a) this Part shall be deemed to be a special Act,

(b) the dissolved transport company shall be deemed to be a railway company, and

(c) Section 54 of the said Act shall have effect as if the words "until the expiration of 12 months after the time of amalgamation or" and the words "whichever first happens" were not contained therein.

The effect of that sub-section is to incorporate in this Bill Part V of the 1863 Act, which makes full provision for those things.

Amendment, by leave, withdrawn.

Section 11 put and agreed to.

SECTION 12.

Mr. P.S. Doyle

I move amendment No. 16:—

Before Section 12 to insert a new section as follows:—

Save as modified or amended by this Act all existing contracts and statutory obligations of each of the dissolved companies shall remain in force and continue to be binding upon the company. (Peadar S. Doyle, Patrick McGilligan, Fionan Lynch.)

Mr. Lemass

The same thing applies here. All these matters are provided for in the Railways Clauses Act, 1863. Part V of that Act deals with the question of amalgamation. Section 39 of the Act provides that the Special Acts relating to or affecting the dissolved company or their undertakings in force at the passing of the Amalgamating Act shall, except so far as they are thereby expressed to be varied or repealed, remain in full force. Section 40 deals with debts and claims of dissolved companies, and says that, except as may be otherwise provided in the Special Act, all debts and claims of the dissolved company shall be payable and paid by or to the amalgamated company. Section 41 deals with all deeds, conveyances, grants, assignments, leases, purchases, sales, contracts, and so on, and all obligations and liabilities of the dissolved company existing prior to the amalgamation. All these clauses are now incorporated in this Bill by reason of the incorporation in the Railways Clauses Act.

Mr. McGilligan

So that all this remains?

Mr. Lemass

Yes.

Mr. McGilligan

Even with regard to the payment of wayleaves?

Mr. Lemass

Except in so far as special provisions are made in this Act.

Mr. McGilligan

What about the right which the Dublin Corporation have to purchase the Dublin United Transport Company undertakings in a particular year?

Mr. Lemass

That is not being changed. Whatever rights they have, still remain.

Mr. McGilligan

There is a definite agreement which the corporation have with the tramway company, which, possibly, is beneficial to both, that if the tramway company desires from time to time to give up portions of their lines, they give notice to the corporation, and then take away the lines and fill them in, and so on. Then somebody—I suppose the city engineer— takes over, and from that time on the city takes responsibility for maintenance, because otherwise the tramway company would have to remake the road. Does that arrangement remain?

Mr. Lemass

Yes, that remains.

Mr. McGilligan

And the clause relating to the arrangement concerning wayleaves up to 1966 is still there?

Mr. Lemass

For whatever it is worth, it is still there. We are not interfering with it.

Mr. Costello

That is a rather strange phrase to use: "for whatever it is worth". Suppose the corporation undertook to take over the tramways company.

Mr. Lemass

It is not the company itself, but the tramways operated by the company.

Mr. Costello

But if the company is being dissolved, how are its obligations affected?

Mr. Lemass

The obligations of the tramways company are transferred to this new company.

Mr. Costello

In other words, is it not a fact that the old Dublin United Tramways Company is being wiped out?

Mr. Lemass

What is patent to everybody is that the tramways are disappearing.

Mr. Davin

They are coming back again.

Mr. Lemass

They will have the right to acquire whatever tramways are there in 1960. Mind you, they have no right to run trams on tracks without a licence.

Mr. McGilligan

But the old right is taken over and continued.

Mr. Lemass

It is a matter of the powers of the Dublin Corporation.

Mr. M. O'Sullivan

Is the right in regard to wayleaves continued?

Mr. Lemass

No. There is a special provision in regard to wayleaves.

Mr. M. O'Sullivan

At present the Dublin United Transport Company is under a guarantee to pay wayleaves to the corporation until 1966. Will that be taken into consideration in regard to Section 50?

Mr. Lemass

We are proposing to abolish wayleaves, subject to the payment of a capital sum in compensation to the corporation.

Mr. M. O'Sullivan

Will the amount be calculated on the basis of what they would have to pay until 1966?

Mr. Lemass

In addition to the obligation to pay wayleaves, there is the agreement to which Deputy McGilligan refers, relating to the payment of rates and the maintenance of the roadway between the tracks. That is carried over and becomes an obligation of the new company. There is then the right of the corporation to acquire the tramways in 1960.

Mr. Davin

For what it is worth.

Mr. Lemass

That is not being changed.

Mr. P.S. Doyle

The Dublin Corporation has about 73 agreements and contracts with the Dublin Transport Company. Is the Minister satisfied that these contracts and agreements are being preserved in the Bill?

Mr. Lemass

All contracts, obligations and agreements of the Dublin United Transport Company become contracts, obligations, and agreements of the new company.

Mr. M. O'Sullivan

That includes the undertaking so far as Victoria Bridge is concerned.

Mr. Lemass

There is a special amendment in regard to the Victoria Bridge. All these obligations, deeds, conveyances, grants, assignments, purchases, sales, mortgages, agreements, contracts, securities, etc., which before the amalgamation had been executed or entered into by the dissolved company will pass over to the new company except in so far as special provision is being made to deal with them.

Mr. McGilligan

The wayleaves are gone and the agreement to purchase is of no value.

Mr. Lemass

The wayleaves will go subject to the payment of a capital sum in compensation.

Mr. McGilligan

The right of purchase is made valueless by the operation of the Bill.

Mr. Lemass

It is not being abolished by the operation of the Bill.

Mr. McGilligan

But we are told there will be no tramways to purchase.

Mr. Lemass

I think it improbable that the tramways will exist in 1960. If there are no tramways, there is nothing on which the agreement can operate. It may be that some new invention will be discovered which may mean a new life for the tramways.

Mr. McGilligan

Sometime the Minister will tell us whether there is an outline for transport in the country— whether it is going to be a rail business in the main with road feeding, or a road business in the main with the rail taking the heavy traffic. With regard to the city, at some stage or other he will have in his mind or will have to reveal to the House whether what is in contemplation is, in the main, a bus undertaking or in the main a tramway undertaking, leaving out of calculation some new invention which may resurrect the life of the trams, as opposed to the particular frenzy there is for buses now. What is the proposal? Is it to be mainly rail with some road services in the country, and in the cities mainly buses?

Mr. Lemass

As far as Dublin is concerned, the mere growth of the city makes it inevitable that it will be an omnibus development.

Mr. Byrne

Is the Minister aware that at present the corporation has not sufficient power to compel the transport company to erect shelters for passengers? Will he say what power the corporation will have in order to compel the company to provide shelter accommodation?

Mr. Lemass

I think the Deputy must take that matter up with the Minister for Local Government. It arises under the Road Traffic Act.

An Ceann Comhairle

The Minister has no responsibility in the matter. It is the responsibility of another Minister.

Mr. Byrne

The Minister is giving power to a new authority to run services in Dublin. I want to know what power the corporation will have to demand from the transport company proper services for the people, proper shelter and proper accommodation generally?

An Ceann Comhairle

That is a question for another Minister.

Mr. Byrne

The present Minister is giving power to a new board.

Amendment, by leave, withdrawn.

Amendment No. 17 not moved.

Question proposed: "That Section 12 stand part of the Bill."

General Mulcahy

My original reason for putting down an amendment to delete all words after the word "pounds" in the section was that I objected to the scheme by which such an enormous amount of temporary capital was to be included in the financing of the new company. The position is that when the company starts, the total paid-up capital at the outset will be £13,401,000, of which £9,875,000 will be redeemable stock and £3,525,000 common stock. It is proposed that the redeemable debenture stock will be guaranteed and repayable not later than 1960.

Mr. Lemass

That is the substituted debenture stock.

General Mulcahy

That is, that £9,800,000 of the company's stock will be repayable by the year 1960. The matter has been referred to so very often that I think on this section we ought to get some kind of a clear statement from the Minister as to why such an enormous amount of capital is going to be treated simply as temporary capital.

Mr. Lemass

I think the Deputy might leave that to a later section.

An Ceann Comhairle

The question will arise on amendments Nos. 32 and 33. Amendment No. 32 is in the Deputy's name.

General Mulcahy

That still leaves the idea of the temporary capital there.

An Ceann Comhairle

It could be discussed on that.

Mr. Lemass

The only thing that we are doing in Section 12 is fixing the statutory limits of the capital of the company. There is no provision in Section 12 as to whether the capital is redeemable or not. That provision arises under Section 16.

General Mulcahy

Section 12 is a neat-looking little section. The suggestion in it is borne out in the rest of the Bill, and it seems to me to be more than a suggestion.

Mr. Lemass

Even if in 1960 the £9,000,000 of substituted debenture stock is redeemed, Section 12 will still remain. It seems to me that the point the Deputy is on arises not on Section 12, but on Section 16.

General Mulcahy

Very well. If the Minister will be happier about it we can discuss it on Section 16 rather than on this section. There is just this one definite point: why such an enormous amount of temporary capital is being provided, especially when we take into consideration that this temporary capital is going to give way to excessive transport charges and that at a time when we cannot afford it. We cannot afford that in the interests of the economy of the country, in the interests of the cost of living of our people and of our competitive position.

Question put and agreed to.

SECTION 13.

An Ceann Comhairle

On Section 13 I suggest that amendments Nos. 18 to 27a, which deal with one major issue about stock, might be discussed together. The amendments in Deputy McGilligan's name should, I submit, be treated as a scheme, with the debate on amendment No. 18. Amendment No. 27a might be considered as an alternative scheme and discussed at the same time, a separate decision being given, if desired, on it. Deputy Mulcahy may like to have a decision on amendment No. 19. I suggest to the House that a more valuable and orderly discussion would take place if amendments Nos. 18 to 27a were discussed as a comprehensive scheme.

Mr. McGilligan

There are just three points in my amendments. The first is that we should regard as proprietors of the company those who were proprietors at a particular date before the chairman's speech; the second point is to say what those people are to get; and the third point would arise with regard to those people who have crept into the company since March, 1943— that they should be treated in an entirely different manner. I would like to get a decision on each of these three points in the amendments.

An Ceann Comhairle

But they can be discussed on amendment No. 18.

Mr. McGilligan

Part of the scheme that I am proposing is countered by Deputy Mulcahy's amendment and another part of it is definitely changed by Deputy Cogan's amendment.

An Ceann Comhairle

Deputy Cogan may have a decision on his amendment.

Mr. McGilligan

I would like his scheme after my own in preference to what is in the Bill.

General Mulcahy

I am not quite clear about the implications in Deputy McGilligan's amendment No. 18.

Mr. McGilligan

Amendment No. 18 is nominal.

An Ceann Comhairle

A pivot to hang the scheme on.

General Mulcahy

I am wondering whether it would not be better to have a separate debate on the amendment dealing with "-establishment date". The idea of striking out "establishment date" and substituting the other date is a definite, clear idea. If that were decided first we might get a more satisfactory debate on the other.

An Ceann Comhairle

Deputy McGilligan might formally move amendment No. 18. It is scarcely worth while opening the discussion at this last minute.

Mr. McGilligan

I move amendment No. 18:—

In sub-section (1), line 16, to delete the word and figure "sub-section (2)" and to substitute therefor the words and figures "sub-sections (2) and (3)".

I move to report progress.

Progress reported; the Committee to sit again to-morrow.

The Dáil adjourned at 9 p.m. until 3 p.m. on Thursday, 21st September, 1944.