Dáil Éireann debate -
Thursday, 1 Dec 1949

Vol. 118 No. 12

Committee on Finance. - Transport Bill, 1949—Money Resolution.

Minister for Industry and Commerce (Mr. Morrissey)

I move:—

That, for the purpose of any Act of the present session to provide for the establishment of a transport board, to specify its power and duties, to provide for the transfer to that board of the undertakings of Córas Iompair Éireann and the Grand Canal Company, and certain other transport undertakings, and to provide for certain other matters connected with the matters aforesaid, it is expedient to authorise:—

(1) the payment out of moneys provided by the Oireachtas of the expenses incurred by the Minister for Industry and Commerce in the administration of such Act;

(2) the advance out of the Central Fund or the growing produce thereof of any moneys from time to time required by the Minister for Finance to meet sums which may become payable under any guarantee given by him under Section 28 of such Act;

(3) the charge on the Central Fund or the growing produce thereof of the principal of and interest on any securities issued by the Minister for Finance under Section 28 of such Act;

(4) the repayments to the Central Fund out of moneys provided by the Oireachtas of any amount outstanding in respect of moneys advanced out of that Fund to meet sums which may become payable under any guarantee given by the Minister for Finance; and

(5) the refund to the board out of moneys provided by the Oireachtas of the amount of all stamp duties paid by the board on any instrument which is executed in order to supplement the transfer, effected by such Act, of the property of any dissolved undertaker.

Mr. Lemass

There are a couple of matters arising out of the financial provisions of the Transport Bill which can be more conveniently discussed on the Money Resolution than on the relevant sections of the Bill. The matters I have in mind at the moment are two — one, the question of the adequacy or otherwise of the provisions made in the Bill for the raising of new capital by Córas Iompair Éireann, and the other, the future financial prospects of the board to be established by the Bill.

I confess, however, that it is becoming increasingly difficult to discuss these aspects of transport policy in view of the fundamental and extraordinarily rapid changes which appear to be taking place in the Minister's attitude towards them. Since the introduction of the Bill, there have been changes in the Minister's policy of an extraordinary kind. For example, we learned yesterday afternoon for the first time that it is the intention of the Government that the new Córas Iompair Éireann Board is to be subsidised by the taxpayer, on the basis of an annual vote by the Dáil, to meet working losses as they emerge. I think most Deputies will agree that it was strange, if the Government had that idea originally in mind, that the Minister did not make some reference to it when moving the Second Reading of the Bill. Anybody who heard his speech on the Second Reading, or read it in the Official Debates, was entitled to assume that subsidisation was not part of the Minister's policy. In fact, until some time after 4 o'clock yesterday afternoon, it appeared clear that the Minister's policy was quite the contrary, particularly when we noted that he proposed to insert in the Bill as an obligation of the new board that it "should so conduct its undertakings as to secure as soon as may be that, taking one year with another, the revenue of the board shall be not less than sufficient to meet the charges properly chargeable to revenue".

That fundamental change in policy which became known to the Dáil yesterday afternoon necessarily involves also some revision of our attitude to the Bill. I think it is well known, from the debates that took place here on the Transport Act, 1944, that we on this side of the House do not believe in the policy of subsidising public transport. I do not propose to repeat the arguments which I advanced then. Anybody who is interested in the case to be made against the policy of subsidisation will find it set out in the report of the debates on that Bill.

It is, however, necessary to recognise that once the practice of subsidisation is begun it cannot be easily or abruptly ended and, while we believe that the policy will inevitably mean the creation of a situation which somebody will some day have the difficult and painful task of clearing up, the announcement made yesterday represents a very definite change in the whole position. Deputies on this side of the House have not yet had ample opportunity of considering fully the significance of that change. We have proposed a number of amendments to the Bill based upon the assumption that the aim of the Minister's policy was to put the transport system of this country on an economic basis, operating with such costs and striving to earn such revenue that subsidy would be unnecessary. In view of the announcement made, it is clear that the Bill will require reconsideration on our part.

I give, as an instance of the difficulties which the Minister's announcement may cause in considering future transport policy, the significance of the introduction of the element of subsidy in relation to the provisions of earlier transport legislation which impose restrictions upon private road hauliers. The justification for these restrictions was to be found in the necessity as well as the difficulty of putting the public transport services on a paying basis. If the taxpayers of the country are now to be requested to provide subsidies for transport, if the preservation of the main public transport service is now to be the concern of the taxpayer as well as the concern of the management, then I think we will have to ask ourselves whether we are justified in maintaining these restrictions upon private road hauliers in full. These restrictions, as many Deputies know, impose considerable inconvenience upon some sections of the community. We thought that inconvenience was justified in view of the difficulties of the main transport operating company. If those difficulties are to be relieved by the taxpayers, including people who are suffering the inconvenience, then clearly there is another position which will have to be considered. If, having considered it, we decide that it is necessary to submit further amendments to the Bill, I presume there will be an opportunity of doing so.

The matters I wish to refer to particularly at this stage are the two I have mentioned. The Bill provides for the establishment of a new board which, amongst other powers, will have the right to raise new capital, with the consent of the Minister for Industry and Commerce and the Minister for Finance, by the issue of transport stock to the extent of £7,000,000. Whether that is enough, or more than enough, to meet in full what we regard as the requirements of the situation, the need for the reorganisation and re-equipment of the transport system is a subject with which the Dáil must naturally be concerned.

Deputies will remember that when the Minister introduced his Bill he thought fit to open his speech by reading a list of the items of capital expenditure which he stated the present Córas Iompair Éireann Board had entered into or were about to enter into. The total of that long list of heads of contemplated capital expenditure, as detailed by the Minister, was £17,235,000, and the Minister later in the course of the debate described that programme as mad, harebrained and extravagant. I hope Deputies have examined that programme since. We have got now to relate it to the provisions of this Bill and to the arrangements which the Minister has recently made for the advance of money from the Exchequer to the company for capital purposes. We know that Sir James Milne, in his published report, estimated the capital needs of Córas Iompair Éireann for the next five years at £10,500,000 and the Minister has based his Bill upon Sir James Milne's recommendation, even though the Bill only provides for the issue of new stock to the extent of £7,000,000. That was the amount required to implement the Milne recommendations which contemplated the provision of the additional £3,500,000 by the reinvestment of depreciation funds. In addition, however, as I understand, to the £10,500,000 which will be available to the board under the provisions of this Bill for the next five years, the Minister has induced the Dáil to agree to advance out of the Exchequer a further £2,500,000.

Mr. Morrissey

Is that the £4,000,000 subsidy which the Deputy's organ said is being given to the new board?

Mr. Lemass

Of which £2,500,000 is for capital purposes.

Mr. Morrissey

The Deputy's organ said that a sum of £4,000,000 was being provided as a subsidy for the new Transport Board.

Mr. Lemass

Yes.

Mr. Morrissey

That is truth, of course.

Mr. Lemass

I will deal with that. Of the £4,000,000 voted yesterday, £2,500,000 was stated to be advanced for capital purposes. The Minister is not proposing any consequential alteration in the financial provisions of this Bill, and we must, therefore, assume that he regards the capital needs of Córas Iompair Éireann as being £10,500,000, plus £2,500,000, a total of £13,000,000, for five years. May I say that in trying to institute a comparison——

Mr. Morrissey

Is the Deputy suggesting that the £2,500,000 capital provided by the House yesterday is for the new board?

Mr. Lemass

It is £2,500,000 to meet the capital needs of Córas Iompair Éireann.

Mr. Morrissey

Up to 31st March next.

Mr. Lemass

As from the date of the Milne Report.

Mr. Morrissey

To 31st March.

Mr. Lemass

Sir James Milne's estimate of capital needs was prepared in November, 1948.

Mr. Morrissey

But it did not include Store Street and a few of the Diesels.

Mr. Lemass

I do not care what it included. I intend to deal later with the items; I am dealing now with total figures. The Minister said that Córas Iompair Éireann were proposing to incur capital expenditure to the extent of £17,250,000 and that that was mad, harebrained and extravagant. That sum of £17,250,000 was not related to any period of time. We do not know from what the Minister said whether the board contemplated that expenditure in five, ten or 20 years. We know that Sir James Milne estimated the capital needs of Córas Iompair Éireann for five years at £10,500,000, and we know also that the Bill makes it possible for the company to invest £10,500,000 in capital works in five years, and that, over and above that sum of £10,500,000, the Dáil has agreed to the making of advances for capital purposes from the Exchequer to the extent of £2,500,000. In other words, Córas Iompair Éireann in relation to the five years to which the Milne Report referred is being authorised under the Estimate and the Bill to incur capital expenditure to the tune of £13,000,000, and we must, therefore, assume that it is the difference between the £13,000,000 which the Minister is proposing to authorise and the £17,250,000 which he said the old Córas Iompair Éireann Board proposed to spend that is worthy of the description "mad, harebrained and extravagant."

Mr. Morrissey

It will be spent for a different purpose.

Mr. Lemass

We are going to examine the purposes for which it is spent.

Mr. Morrissey

Examine some of the purposes for which it was intended to be spent.

Mr. Lemass

Let me say one thing in order to get this picture right for the Dáil. In passing, may I congratulate the Minister upon having misled many Deputies and members of the public as to the realities of the transport situation here? Either in the past or in the future, I have not been nearly so successful in getting the truth known.

Mr. Morrissey

You made a good effort.

Mr. Lemass

I did my best, and I think there is nothing now to be done but to keep plugging away. If the facts are expressed clearly enough, I believe that even Deputies sitting behind the Minister will begin to grasp them.

Mr. Morrissey

Such a fact as the statement about the £4,000,000 subsidy to the new board?

Mr. Lemass

The Minister read out a list of capital items amounting to £17,250,000 and said that the board intended to incur that expenditure, and that, if they did so, they were mad and harebrained. He did not, however, as I have said, confine himself to giving us the total of the capital expenditure which the old Córas Iompair Éireann board intended to undertake. He itemised it and under every separate heading gave a separate figure. I want to say that, so far as it is possible for an ordinary Deputy to check the figures given by the Minister, by reference to the Milne Report, by reference to the annual reports published by Córas Iompair Éireann or by reference to any statement made by any director or officer of Córas Iompair Éireann, the figures given by him were completely imaginary — the product of his own imagination.

Mr. Morrissey

That is untrue.

Mr. Lemass

We will find that out.

Mr. Morrissey

These are the figures supplied by Córas Iompair Éireann themselves.

Mr. Lemass

We will investigate that, too. Let me say, however, in reference to that and in support of my contention, that Córas Iompair Éireann, under the Transport Act of 1944, were authorised to raise new capital by the issue of guaranteed debentures to the extent of £6,000,000. We must assume that the directors of Córas Iompair Éireann knew the limitation upon the raising of new capital by the issue of debentures imposed upon them by the Act.

Mr. Davin

They knew nothing. They were not allowed to know anything.

Mr. Lemass

Deputy Davin is entitled to his opinion, but, if they knew nothing, they at least had a legal adviser who could tell them what was written into the Act.

Mr. S. Collins

They apparently had not an engineering adviser.

Mr. Lemass

They have a lawyer, and, if they have not, I am sure that there will be plenty of applicants for the vacant position. Up to the extent of £6,000,000, they could incur capital expenditure. To the date of the Milne Report, they had in fact issued debentures under that provision of the Act to the extent of £3,000,000. Therefore, when Sir James Milne was reporting upon their financial position, the utmost they could do, without new legislation, in the matter of raising capital to finance expenditure of that kind was to secure £3,100,000.

Mr. Morrissey

Which they were unable to get.

Mr. Lemass

Wait now; I will investigate that, because obviously they have succeeded in getting a large part of it since. Since the date of the Milne Report, between November, 1948, and the 31st March, 1949, the date upon which the Minister for Finance laid a document on the Table of the House, they raised two further capital sums by the issue of debentures, one of £800,000 and one of £350,000, a total in that period of £1,150,000. Since then, if the figure given by the Minister was accurate, they have raised another £400,000, because he mentioned that the total of these short-term debentures due for redemption next month is £1,550,000. How did they raise that money? On the strength of the Government guarantee, and even I do not believe that the credit of the Government has fallen so low that nobody will subscribe money on Córas Iompair Éireann debentures guaranteed by the Minister for Finance.

Mr. Morrissey

They were not able to get it on the strength of the previous Government's guarantee.

Mr. Lemass

I do not want to be sidetracked. The Minister stated that the company were proposing to engage in capital expenditure to the extent of £17,000,000. I say that, in so far as these items of capital expenditure detailed by the Minister can be checked by the Milne Report or the annual reports of the company or any other sources open to Deputies, they are completely imaginary. I say further that, as against that imaginary figure of £17,000,000, there was the knowledge that Deputies have and which the directors and officers of Córas Iompair Éireann have that, under the law as it stood, they could raise in the form of new capital £3,000,000.

Mr. Morrissey

In relation to the £17,750,000, I should like to point out that these figures are based on Mr. Reynolds's own proposals.

Mr. Lemass

Not so far as the House can check his proposals.

Mr. Morrissey

They are figures given by Mr. Reynolds himself to my Department.

Mr. Lemass

That is on record. The Minister may deny that before I am finished talking. They are Mr. Reynolds's figures?

Mr. Morrissey

Supplied to my Department and by my Department to me.

Mr. Lemass

While I have doubts about that, I will reserve them, because what the Minister says seems to fit the argument I am going to make. I want to put a further statement on record. These are capital plans which the Minister suggested were prepared by Córas Iompair Éireann before the change of Government. If they had contemplated undertaking them, they would naturally have proposed amending legislation to raise the limit to which new debentures could be issued. They did not propose any such legislation to me. However, let us examine this estimate of £17,250,000, keeping in mind all the time, as I want Deputies to do, Sir James Milne's estimate of £10,500,000 for capital needs for five years and the Minister's proposal to make available £13,000,000 for capital expenditure since the Milne Report was published. The Minister has made it clear that the section of the Bill which authorises the company to raise new capital to the extent of £7,000,000 is based upon Sir James Milne's recommendation. I assume, therefore, that he also accepts the appropriation made by Sir James Milne of the £10,500,000 new capital which he estimated to be necessary to the various sub-heads of expenditure set out in the report.

A comparison, however, between the projects upon which Sir James Milne thinks it is necessary for the company to spend £10,500,000 in five years and the projects upon which the Minister stated the company intended to spend £17,000,000 is complicated by the fact that in the report itself Sir James Milne grouped the programme of capital expenditure which he recommended under six heads, whereas the Minister, in order to make his list look as impressive as possible, included every item he could find, including a large number of very minor importance involving very small amounts. However, having made that comparison, I find that there are, apparently, only three items upon which the old Córas Iompair Éireann Board proposed to undertake capital expenditure in the immediate future which are not included in Sir James Milne's estimate of capital needs for which provision is made in this Bill. These three items are: the establishment in Dublin of a factory to manufacture road vehicle chassis; the establishment in Limerick of a new wagon shop; and the establishment — Deputy Davin will be interested in this — of a central railway station in Dublin.

Mr. Davin

What about the skyscraper?

Mr. Lemass

This central railway station is a project which Deputy Davin was urging on the Minister yesterday. These are the only three items——

Mr. S. Collins

What about the hotel in Glengarriff?

Mr. Lemass

The company decided to abandon that project in 1946.

Mr. Morrissey

It may be dead, but it cost a lot to bury it.

Mr. Lemass

There are a lot of things going to be done by the Minister which it will cost a lot to bury. Comparing the two estimates of capital needs, I find that these are the only three items which are on the company's list and which are not apparently in Sir James Milne's list — the chassis factory in Dublin, the wagon shop in Limerick and the central railway station in Dublin.

Mr. Davin

What was to be the cost of that?

Mr. Lemass

If the Deputy looks up the Dáil Debates, he will find that the Minister stated the cost would be £750,000. Let us be clear about these three items. I do not propose to do more than merely get the facts on the record and make them available to any Deputies who are interested in the facts. Sir James Milne, in paragraph 19 of his report, stated of this proposal to establish in Dublin a chassis factory merely this: "It cannot be regarded as an essential adjunct to an efficient transport system." He stated that if the project is required in the national interest then, in his view, it should be entrusted to a separate undertaking. That was not a very severe condemnation of the project to establish in Dublin a factory to manufacture motor chassis.

Mr. Morrissey

He was a very charitable man.

Mr. Lemass

He recognised that it might have been regarded as necessary to establish it in the national interest. He merely put forward his view—that it is not customary for railway companies to operate factories of that kind. Therefore, he said that if we wanted it he recommended that we should entrust it to a separate undertaking. It is not being proceeded with. It is not being entrusted to a separate undertaking. It is being killed because of the reason advanced by the Minister — that this factory, if it were to be economically operated, would require to produce ten chassis per week, that the needs of Córas Iompair Éireann would be fully met if they got four or five new chassis per week and that, therefore, five or six of the chassis produced per week at the factory would have to be sold to the competitors of Córas Iompair Éireann. At first sight that looked a fair argument, but at first sight only. Five or six chassis per week represent 250 or 300 per year. In 1948 we imported 11,364. Not all of these, I admit, may have been required for commercial vehicles. But, as a check upon that figure, I tried to ascertain the number of new commercial vehicles registered in 1948. The figure was 5,384.

For some reason it is apparently considered good national policy that we should kill a sound project for the establishment of a new manufacturing industry in this country because of the 5,384 chassis which we import from England, from Leylands and other firms in England per year, some 300 of which might be made there in excess of Córas Iompair Éireann's own needs. However, that is one of the items which is being dropped, one of the items of capital expenditure which are not to be proceeded with because, in the Minister's view, they are "mad, harebrained and extravagant".

The second is the proposal to establish a wagon shop at Limerick, and here it is obvious that Sir James Milne did not understand what the project was about. He merely commented, in paragraph 393 of the report, that "the company's shops are adequate for present requirements". Mr. Reynolds, however, in his observations upon the report explained that the establishment of these new shops at Limerick was designed for the purpose of producing steel wagons which the company's existing shops are not equipped to produce. He stated, furthermore, that the decision to establish these new wagon shops for the manufacture of steel wagons at Limerick was decided upon in accordance with the policy of the Government then in office for the decentralisation of industry. He argued that, apart altogether from the soundness of the policy of industrial decentralisation, there were even from the point of view of the company itself many arguments in favour of the distribution of its manufacturing activities to various centres in the country. That is one other of the projects which is being dropped. It will be good news, no doubt, in Limerick that the policy of industrial decentralisation exists only on paper, and that when any practical proposal, which might implement that policy comes under the control of the Minister for Industry and Commerce it becomes "mad, harebrained and extravagant".

The third of these projects was the proposal to establish a central railway station at Dublin. There is no reference to that project of the Córas Iompair Éireann Board in the Milne Report. I am aware, however, that it was discussed by the Córas Iompair Éireann Board, and by the board with me. I am strongly in favour of it. I have always regarded it as an essential weakness of the whole Irish railway system and a permanent handicap on its development that there does not exist in Dublin a central railway passenger station. The selection of the Store Street site for the establishment of the central bus depôt was, I think, influenced by the knowledge that the only possible site for the subsequent development of a central railway passenger station was at Amiens Street. However, the project must, obviously, have been far in the future in view of the fact that Amiens Street is the property of the Great Northern Railway, and that the process of securing an arrangement with the Great Northern Railway Company for the acquisition and development of the station by Córas Iompair Éireann as a central railway station for Dublin had not been begun.

Leaving these three items aside, then every other item in the list of "mad, harebrained capital expenditures" which the Minister said the Córas Iompair Éireann board was proposing to undertake is provided for in the capital clause of this Bill and will, presumably, be undertaken by the new board, with certain differences. The amounts differ in relation to certain of these projects. The new board, under this Bill and the direction of the Minister, will spend on some of these projects amounts different from that which the Minister told us Córas Iompair Éireann intended to spend.

I want Deputy Davin and Deputy Larkin to examine this matter with some care, because they made the charge here in the course of the debate upon the Second Reading of the Bill, and repeated it yesterday, that the policy of the Córas Iompair Éireann board was hostile to the development of the railways.

Mr. Davin

Yes.

Mr. Lemass

Deputy Davin repeats the charge.

Mr. Davin

With proof that I gave yesterday.

Mr. Lemass

That is very clearly in the Deputy's mind, that the Córas Iompair Éireann board was planning its development in a way that was prejudicial to the preservation and development of the railway part of its undertaking, and was unduly in favour of the road part of its system. When one comes to consider the difference between the estimate of capital expenditure for five years prepared by Sir James Milne, leaving aside for a moment the additional £2,500,000 which the Minister got provided yesterday, and the "mad, harebrained, extravagant," capital expenditure which the Minister told us the old Córas Iompair Éireann board intended to undertake, and finds that the difference between the two sums is £7,000,000, we find this, also, that the difference between the expenditure which the Minister told us the Córas Iompair Éireann board proposed to undertake on the railway system and the amount which is to be provided for expenditure on the railway system under this Bill in accordance with Sir James Milne's recommendations, is £8,000,000, so that more than the whole of the difference between the two sums is to be found in the contemplated reduction in capital expenditure to be undertaken on the railway system.

Mr. Morrissey

You denied that these figures exist except in my imagination.

Mr. Lemass

What I have said is correct, that so far as it was possible for me to check, by reference to the Milne Report, to the published reports of the company or to any statement published by any director or officer of the company, they exist only in the Minister's imagination.

Mr. Morrissey

Or to any contact with a late officer?

Mr. Lemass

So far as I have had any information whatever concerning the intentions of Córas Iompair Éireann, these figures are imaginary.

Mr. Morrissey

This is a very important matter of nearly £20,000,000, and the Deputy is making very serious charges. Has the Deputy consulted, or asked the ex-chairman of Córas Iompair Éireann whether these figures are right or not?

Mr. Lemass

I have not.

Mr. Morrissey

Why not?

Mr. Lemass

That is a matter for myself. I prefer to work here upon the basis of information available to everyone.

Mr. Morrissey

You are trying to mislead the House as usual.

Mr. Lemass

I have given the reference for every statement that I have made here in relation to this matter. I have given the reference in the Milne Report and I have quoted the paragraphs in it. When I quoted figures I told where I got the figures. I am going to continue on that policy. I am going to use no information——

Mr. Morrissey

I have it here.

Mr. Lemass

I do not care what you have. I repeat the statement that, in so far as this House is confined in its information to a report that was presented to the Minister by a man whom he described as "the greatest transport expert in the world", and whom he charged with the responsibility of investigating the proposed plans of Córas Iompair Éireann, we can find in his report no reference to most of the figures quoted here by the Minister.

Mr. Morrissey

Even Sir James Milne did not discover everything.

Mr. Lemass

There is one item, however, of expenditure on the railway system contemplated by Sir James Milne which, apparently, according to the Minister, the old board did not, for some extraordinary reason, contemplate, and that is expenditure on the permanent way. Sir James Milne recommends that, in the next five years, capital expenditure of £2,900,000 be made on the permanent way, of which £1,300,000 will be available from the annual appropriation for depreciation, and the balance of £1,600,000 is to be secured by the issue of additional stock. I think it should be made clear that the estimate of expenditure upon the permanent way which Sir James Milne gives does not mean that expenditure will be greater than it would have been, but that under the new and, in my view, rather dubious system of finance which Sir James Milne recommended, a larger proportion of the expenditure to be undertaken on the permanent way will be financed by incurring additional capital liability than by appropriations from revenue, a process which Mr. Reynolds described in his comment as gaining an immediate benefit by mortgaging the future.

Mr. Morrissey

You were very fond last night of that system recommended by Sir James.

Mr. Lemass

I am prepared to fight the Minister on any ground. I fought him last night on his own ground and I am prepared to fight him to-night on mine.

Mr. S. Collins

And you got a fair routing, mind you.

Mr. Lemass

The Minister said that the old Córas Iompair Éireann boards proposed to incur a capital expenditure, over some definite period, on new locomotives, to the extent of £6,000,000. In trying to check that figure with the observations of Sir James Milne in his report, I find the only capital expenditure upon locomotives authorised by the old board was £888,000, including the locomotive boilers the Minister was so perturbed about. The Minister stated the board proposed to incur capital expenditure on new wagons to the extent of £2,250,000. Again, Deputies can search the Milne Report and they will find no justification for that figure, although apparently Sir James Milne and Mr. Reynolds were in complete agreement that a considerable intake of new wagons is necessary before any economy can be effected.

The Minister told us the old board proposed to spend £3,000,000 upon railway coaches. He was criticising them yesterday because they had not built any coaches. I can understand how he and some of the Deputies behind him, as a sort of instinctive protective measure, would like to forget that there was a war. During the war the company not merely could not build new coaches but they were going through the process of breaking down three wagons to get one to work, and that was the only way in which the system could be kept operating during the emergency. But as part of the mad, harebrained, extravagant proposals for capital expenditure the Minister said they were going to spend £3,000,000 on new railway coaches. There is no justification for that figure in the Milne Report although Sir James Milne recommended that an endeavour should be made to place orders—I am not quite clear where the orders are to be placed—for the delivery of 150 coaches over the next five years.

Most of the other items in the list of capital expenditure contemplated, according to the Minister, by the old board, are not referred to in the Milne Report. I hope that Deputy Davin has noted the fact that these large capital sums which the Minister states the company was about to expend were, in the main, upon railway equipment. He will find it hard to reconcile the Minister's assertion in that regard with the charge he made that the railway board and Mr. Reynolds were so prejudiced against the railways that they were planning for their destruction.

Mr. Davin

What about the closing down of 160 miles of railway?

Mr. Lemass

The Minister is going to take care of that.

Mr. Davin

You have it in his letter.

Mr. Lemass

In so far as the Minister has attempted to justify the lower provision for new capital expenditure contained in the Bill, in contrast with what he tells us the old board intended to incur, the difference has to be explained, first, by the substantial reduction in the expenditure contemplated upon railway equipment and, secondly, by dropping the three particular projects to which I have referred, which appear to me in the main to be desirable, and, having regard to our experience during the war years, almost essential to the successful operation of an economic transport system.

Let me turn from that aspect of the question to deal with the financial prospects of the new board. The Minister told us yesterday that if the board makes losses the taxpayer will be asked to make them good; that year after year he will come to the Dáil with the estimate of the losses to be incurred in that year and ask the Dáil to vote that money and to vote also for the taxes necessary to raise the money. He expressed the hope that the company would be able to arrange its business so that the subsidy required would be small and might, in the course of time, disappear.

Any Deputy who has studied the review of the future prospects of Córas Iompair Éireann contained in the Milne Report knows that the Minister's hope is without foundation. Inevitably this board must lose money; inevitably the taxpayer will be asked to provide substantial sums to make good the losses. It is true the Minister has taken precautions for next year. He has voted already some of the money they will lose next year and he represents it as a liquidation of losses incurred in the past. How the company could have lost last year the money required to pay the licence duties upon its vehicles in 1951, or its debenture interest in 1951, is a matter which only the Minister can understand.

Mr. Morrissey

I thought the Deputy was going to tell me how I would get the money other than from the taxpayer. Where would the Deputy get it?

Mr. Lemass

So far as the 1944 Act was concerned, there was a clear obligation on the Dáil to vote money to recoup the Exchequer for any monies advanced by the Exchequer on foot of the State guarantee to pay debenture interest which the company failed to repay within the following 12 months. For the first time in the history of Córas Iompair Éireann an advance from the Exchequer on foot of debenture interest was made this year. At least, information to the effect that it was made reached the Dáil for the first time in March of this year and there would be on the Dáil an obligation to vote for the replacement of that money next year if it was not repaid by the company in the meantime. If the Minister wants me to confess that Córas Iompair Éireann could not repay next year, I will do it, Córas Iompair Éireann lost so much money in 1948.

Mr. Morrissey

In 1947.

Mr. Lemass

1948. The particular situation in 1947 is known to the House. The company could not have made money in a year in which, for three months, its rail service was stopped because there was no coal, and, for three months, its bus service was stopped because of a trade dispute. The losses during that year were due to the abnormal circumstances of that year. But the company came into 1948 with the certainty of a loss, unless the Minister agreed to authorise an increase in fares. The Minister did not agree. The board told the Minister that if he would not agree to any increase in fares they would lose £1,000,000. They lost £1,000,000. Sir James Milne told the Minister that he should agree to an increase in fares; but, again, he held his hand for three months during which the company lost another £500,000 until he sanctioned an increase in fares—12 months too late.

Mr. Davin

When did you reduce the bus fares?

Mr. Lemass

In 1946, and increased them again in 1947.

Mr. C. Lehane

Your estimate was nearly £1,000,000 out.

Mr. Lemass

I do not think so.

Mr. Morrissey

Would the Deputy tell me where I would get the money to pay the £500,000 worth of cheques that were lying in the safe, with no money available to meet them?

Mr. Lemass

I could not. I am quite prepared to admit now that Córas Iompair Éireann, under present circumstances, having been restricted in its development for two years, could not possibly operate at a profit either in this year or next year.

Mr. Morrissey

I am talking of two and a half years ago.

Mr. Lemass

Remember Córas Iompair Éireann was established in the middle of the war. Deputies who take the trouble to read the speech I made when introducing the Transport Act of 1944 will know that I said then that this company could merely hope to mark time until the emergency was over and that the large capital expenditure upon new equipment and reorganisation, which alone would make the Company an economic proposition, could not be undertaken until years after the war had ended.

The time that we were planning against in 1944 came last year and this year. But, instead of having a period of rapid progress and development, we had the company again marking time because it did not know what would happen to it, because there was no provision to meet its capital needs, and because the policy of the Government was to prevent anything happening until they had made up their minds what they would do.

Mr. Morrissey

They were not marking time when they were marching to Glengariff and Store Street.

Mr. S. Collins

They were in reverse.

Mr. Lemass

Let us consider the financial prospects of the new board. I am sure that Deputies will agree that the financial prospects of the new board are an important matter in relation to this Bill, and doubly important since the Minister's announcement yesterday that the losses made will be recouped by the taxpayer.

Mr. Morrissey

Could they be recouped by anybody else?

Mr. Lemass

Sir James Milne set out his estimates at pages 68 and 69 of his report. I think Deputies should study this report very carefully. Starting with paragraph 474 Sir James Milne discusses the future financial position of Córas Iompair Éireann:—

"On the assumption that the volume of traffic in future years is the same as that estimated for the year 1948 and the cost, including £250,000 as the cost in a full year of the wage awards made during 1948, remain at the present level, the deficiency of net revenue, after providing for liquidation of goodwill but before payment of debenture interest would be approximately £850,000."

He then set out in a table, with which we are not concerned, an estimate of the further net revenue which would be required to pay interest at various rates upon the common stock. I say we are not concerned with that because, under the proposals contained in this Bill, we will guarantee to the former owners of that common stock an interest in perpetuity at the rate of 2½ per cent. per year, irrespective of whether the company makes a profit or a loss. Under Sir James Milne's proposals they would receive a dividend only if there was a profit.

We will pledge the taxpayer to ensuring that these common stockholders get 2½ per cent., even if the situation should arise in 1950—as some Deputies think it arose in 1949—in which the company has not enough money to pay its wages. If that situation arises in the future, the wages will not be paid, but the common stockholders will be guaranteed by the taxpayer their 2½ per cent.

Captain Cowan

Is the Deputy interested in giving the taxpayer the facts?

Mr. Lemass

Yes.

Captain Cowan

Then why did he not allow any contribution, except his own, to appear in to-day's Irish Press?

Mr. Lemass

That is hitting below the belt. Shall I say that I was occupied in the Dáil and that I could not give my customary attention to the production of that organ?

Captain Cowan

You keep everybody except yourself, out.

Mr. Lemass

Sir James Milne further stated:—

"The probable financial effect of the recommendations made in different sections of the report is summarised below. Many of the proposals cannot be fully effective for some years and those most likely to contribute to an early improvement in the company's financial position are first outlined.

Immediate prospects: An increase in road and rail and passenger fares, which it is suggested should be put into immediate effect, £600,000."

The Minister gave us some figures yesterday to show that the increase put into effect in 1949 did not yield an increase in the gross revenue of the company to the extent of £600,000.

Mr. Morrissey

You said a moment ago that if I had done that in 1948 there would have been no loss and I would have £1,400,000.

Mr. Lemass

Nineteen hundred and forty-nine is one year after 1948 and one year further with the Minister in charge. Let us assume Sir James Milne was correct. Against this deficiency in net revenue of £850,000, without providing for debenture interest or other charges on revenue, it is hoped that £600,000 will come from an increase in fares and charges. Might I point out also that the Minister did not agree to the operation of increased fares and charges to the extent that Sir James Milne recommends? I think he was wise. I think Sir James Milne's recommendations were completely unsuitable and would certainly be politically unpopular.

Mr. Morrissey

You seem to be very fond of them.

Mr. Lemass

There are to be economies in maintenance and operating costs: £250,000 upon locomotives, £100,000 upon wagons, £100,000 on passenger road vehicles and £50,000 upon road freight. There is to be a 5 per cent. cut in the wages bill amounting to £200,000. There are some Deputies here who will have a better idea than I have as to the prospects of the company's succeeding in making good that recommendation.

Mr. Davin

He did not recommend it to do away with 3,500 railwaymen, did he?

Mr. Lemass

He did not, and neither did anybody else—and a saving in the cost of locomotive coal, amounting to £225,000. If when all these things happen, ignoring the fact that the increased fares did not bring in £600,000 and that the cost of materials for the repair and replacement of wagons and locomotives is going up and, because of devaluation, will go up still further, and ignoring the fact that the cut in wages costs of 5 per cent. is not likely to be carried through, ignoring the fact that fuel costs are going up instead of going down, ignoring everything that has happened since Sir James Milne produced his report, then, against the £850,000 deficiency £825,000 can be secured. That does not pay any debenture interest. It does not pay the 3 per cent. upon the new transport stock. It will not pay the 2½ per cent. to the former stockholders of Córas Iompair Éireann. But Sir James Milne was optimistic. He said that the estimate of economies may be regarded as conservative and that, in course of time, it might be reasonable to allow for some increase in the volume of traffic and that if that were secured then the addition to the net revenue might be reasonably estimated at £400,000.

According to Sir James Milne's estimate, the position of the company can be improved by £1,000,000, which would convert the deficiency of £850,000, originally estimated, into a credit balance of £150,000—or £220,000 less than the amount of £370,000 required to pay the debenture interest. The amount of debenture interest to be paid under the Bill will be, apart from any new capital expenditure undertaken, some £90,000 more.

The immediate prospect upon all the estimates that Sir James Milne made was still a deficiency, but he went ahead and said that, on the basis of his recommendations, this company will eventually pay its way. What were the recommendations? He recommended that there should be established a central highway authority which would take over from Córas Iompair Éireann the cost of maintaining the permanent way. It was a rather elaborate system for subsidising the company. If that proposal was established then Córas Iompair Éireann would benefit, he estimated, to the extent of £350,000 a year. He recommended also that there should be imposed substantially higher licence duties upon other road vehicles and he estimated that if these higher duties were brought into operation, and if the capital expenditure which he was estimating was carried through, then the position of the company might improve to the extent of another £300,000. Adding these two items to the £150,000 already secured under his original estimate, he got a total net revenue of £800,000—just enough to pay the company's way, allowing for a substantial increase in interest charges because of the new capital expenditure. But we know that the Government has turned down the proposal for a central highway authority.

Mr. Morrissey

Who told you that?

Mr. Lemass

Is there going to be another change? How can we intelligently discuss the Bill if the Minister will not tell us what is in his mind?

Mr. Morrissey

The Deputy has asserted that the proposal has been turned down by the Government. I ask him who gave him that information?

Mr. Lemass

I assumed that when the Minister came to the Dáil with the Transport Bill and made a Second Reading speech he outlined the Government's transport policy.

Mr. de Valera

That is another mending of the hand, evidently.

Mr. Morrissey

Who is mending the hand?

Mr. Lemass

Are we to understand that the Minister did not tell the Dáil the whole policy of the Government in relation to transport?

Mr. Morrissey

Who informed the Deputy that the Government turned it down?

Mr. Lemass

The fact that the Minister did not announce it as part of his policy.

Mr. S. Collins

Deputy de Valera must have consulted the fairies.

Donnchadh Ó Briain

Will Deputy Collins shut up?

Mr. Lemass

If the Deputies opposite me are content to vote for a Transport Bill upon a Second Reading speech by the Minister who has not shown his hand——

An Ceann Comhairle

Deputy Collins has interrupted 12 times in the course of Deputy Lemass' speech. If every other Deputy did that a debate would be impossible. Deputy Collins has no special licence. If he persists, he will have to leave the House.

Mr. Lemass

Unless the Minister proposes to do more than he has informed the Dáil it is quite clear that this concern must lose money, unless Sir James Milne's estimates are completely wrong. Not merely have they to provide for working costs out of the revenue secured from the sale of transport but, also, they have to provide for other charges upon revenue, the interests charges upon the stock issued, the pensions appropriation and certain other charges.

As I have mentioned pensions appropriation, there is, perhaps, something that I should say at this stage. The Minister informed the House yesterday, as an explanation or illustration of Córas Iompair Éireann's financial position, that there were £306,000 due to the trustees of the wages pension fund. He said that that figure included not merely the company's contribution to the pensions fund but also the contribution which the company collected from its employees and which were not handed over to the trustees. "In simple words, the company"—I am quoting from the Minister's speech —"while not paying its own share of the contribution to the pension fund, spent the money which had been deducted from wages and salaries and is now obliged to make good the payments of that fund. The moneys due represent payments which should have been made to the fund during 1945, 1946, 1947, 1948 and 1949." Deputy Cowan heard the Minister make that statement. Other Deputies heard him. It is reported in the Press.

Captain Cowan

Not in the Irish Press. It concealed it pretty well.

Mr. Lemass

It will not do so tomorrow. I can assure Deputy Cowan of that. I was reluctant to deal with that matter during my speech yesterday because what the Minister said so conflicted with my recollection of the provisions of the company's pensions scheme that I felt the Minister must either be completely misinformed or that my recollection must be completely wrong. I took the precaution this morning—and I hope Deputy Cowan will take the same precaution—of going to the Dáil Library and getting the Pensions Scheme Order, which I signed in September, 1945, which established the pensions scheme for the regular staff of Córas Iompair Éireann and which sets out the liabilities of the company under that scheme. Is there not a clear implication in the Minister's remarks that there was a pensions fund; that the company was obliged to make contributions to a pensions fund and that the amounts paid by the employees should have been paid into a pensions fund——

Captain Cowan

Should have been paid.

Mr. Lemass

Should have been paid. Is that not what the Minister meant? Go down to the Library now and study the scheme. It is in three parts: (1) those who were entitled to pensions under it; (2) the pensions which the company is obliged to pay, and (3) it sets out the following in two brief sentences: "The employees shall contribute 1/- per week to the company to meet the cost of these pensions. The company shall bear the whole cost of the pensions." Is there a pensions fund yet?

Captain Cowan

Certainly not.

Mr. Lemass

The legal obligation of the company was to pay the pensions. It had to pay these pensions as a normal outgoing from revenue——

Mr. Morrissey

Did they collect the 1/- a week?

Mr. Lemass

That 1/- a week became part of the normal revenue of the company. There was no fund.

Mr. Morrissey

There was, and there were trustees.

Mr. Lemass

Remember what the Minister said: "These moneys due represent payments which should have been made to the fund during 1945, 1946, 1947, 1948 and 1949." It that fund in existence yet?

Mr. Morrissey

And because they were not paid, we now have to pay £306,000. Nothing was ever paid into it.

Mr. Lemass

When was the Order made changing the pensions scheme from a straightforward liability of the company to pay the pensions into an obligation to pay contributions to a fund?

Mr. C. Lehane

That obligation was created when the first 1/- was accepted.

Mr. Lemass

The obligation was to pay the pensions set out under the scheme. The company's right under the scheme was to collect 1/- a week from the employees. I charge the Minister with having made in this House yesterday a statement intended to mislead the Dáil. There is a fund now. On the 22nd April, 1949, the Minister for Industry and Commerce, Daniel Morrissey, made an Order, Statutory Order No. 115, 1949, amending that scheme so as to provide, for the establishment of a fund and putting upon the company an obligation to make a contribution to the fund and providing for the payment into the fund of the contributions of the employees. That was in April of this year.

Mr. Morrissey

Am I to be denounced for regularising the position?

Mr. Lemass

"The moneys due, represent payments which should have been made to the fund," a fund which did not exist——

Deputies

Hear, hear!

Mr. Lemass

——"during 1945, 1946, 1947 and 1949."

Mr. Morrissey

Why did it not exist?

Mr. Lemass

If any Deputy doubts the facts, he can check them as I did. He can go to the Dáil Library and get the details of the scheme as set out in the original Order that I signed. He can check the amendment of the scheme as made by the present Minister in April of this year. I ask any Deputy in honesty——

Mr. MacBride

What was the shilling for?

Mr. Lemass

As a contribution to the cost of the pensions paid. The shilling was the contribution of the workers to the cost of pensions.

Mr. MacBride

What happened the shilling?

Mr. Lemass

It went into the revenue of the company. That was the scheme. I know that Ministers are trying to wriggle out of the fact that the Minister for Industry and Commerce here yesterday made a statement in this matter which was intended to blacken the reputation of the company and which was not true.

Mr. Morrissey

I shall copper-fasten it when I get an opportunity.

Mr. Lemass

Was there a fund in existence?

Mr. Morrissey

There could not be because the Minister refused to make the Order which I had to make last April.

Mr. Lemass

I have no recollection of that but I do not believe it. I have no recollection of being asked to make such an Order. I am not contradicting the Minister, but I do not think it is true.

Mr. Morrissey

I shall convince the Deputy and the House of it before I have finished.

Mr. Lemass

The Minister is always going to do something in the future: "If I could only open my mouth, I would blast you off the face of the earth". He is like a grenade without a detonator. The Minister said that the fund was established in 1945, that the company was obliged to make contributions, and that the employees made contributions to the fund. I established that scheme in 1945. It is a straightforward, simple scheme, requiring the company to pay pensions at prescribed rates, giving them the right to collect one shilling a week from the employees towards the cost. That scheme was completely discussed and completely agreed with every trade union catering for the company's employees. I met representatives of every trade union representing the employees and we discussed the scheme in detail. It was agreed to by them. There was no fund and there was no obligation on the company to pay into a fund——

Mr. Morrissey

There was.

Mr. Lemass

I challenge the Minister to produce the Order setting out the scheme and read it out here.

Captain Cowan

Were there trustees?

Mr. Lemass

There were no trustees. The establishment of the fund, the appointment of trustees, became an obligation of the company when the present Minister for Industry and Commerce made his amending Order on the 22nd April, 1949. I do not know whether it was made——

Mr. Morrissey

What did that amend?

Mr. Lemass

The Order I made in 1945.

Mr. Morrissey

What Order?

Mr. Lemass

The Pension Scheme Order.

Mr. Morrissey

I think there was no such pension scheme.

Mr. Lemass

There was a pension scheme but no pension fund. The pension scheme placed on the company an obligation to pay pensions out of the revenue of the company. You are all very perturbed now when you know he is caught out. That is a very hollow laugh of Deputy Collins. The scheme was set out in the Order made by me— Córas Iompair Éireann (Confirmation) Order, 1945, Statutory Rules and Orders, No. 242 of 1945.

A Deputy

You were busy that year.

Mr. Lemass

I challenge any Deputy opposite to get that Order, to read it, to note the details of the scheme and then to read the statement made by the Minister yesterday and to see which of us is telling the truth.

Mr. M.J. O'Higgins

The puzzle is to find the shilling.

Mr. Lemass

Ask the workers who got pensions, the workers who, during ten years in consequence of the blunder made by my predecessor under the 1924 Act, got no pensions. There are Deputies who know the history of pensions for Córas Iompair Éireann workers. They know that despite the efforts I made to make the 1924 Act work, I could not make it work, and ultimately I came here and got legislation enacted which ensured that the company would prepare a scheme, and I said that if that scheme were acceptable to the representatives of the railway workers I would accept it, and if it were not acceptable I would amend it. We got a scheme; we got it accepted by the trade unions; and we got pensions paid to the workers.

Mr. Morrissey

What do you want to say about it?

Mr. Lemass

I merely want to say that this is a discreditable effort by a Government Minister to blacken the reputation of the company by a false statement, a statement that there was a legal obligation which they ignored, to pay contributions to a fund, that they took the shillings which should have gone into a fund, when there was no fund in existence.

Mr. Morrissey

There are people in Maryborough for less.

Mr. Lemass

You are not there yet.

Mr. Morrissey

And if all the people who deserve to be there were there, there would be a few vacancies here.

Mr. Lemass

Personal abuse is the only reply I ever get.

Mr. Morrissey

There was no personal abuse until the Deputy started it.

Mr. de Valera

The Minister has not stopped interrupting for the last hour.

Mr. Morrissey

I could not deal with all the falsehoods, but I will deal with them.

Mr. de Valera

What were the falsehoods?

Mr. Lemass

The point I was dealing with before I was diverted to the issue of the pension scheme is that even on the most favourable assumptions made by Sir James Milne and under the policy of the Minister as he has outlined it, this new Córas Iompair Éireann board must inevitably use at least over £500,000 a year. If Sir James Milne's assumptions are not borne out, if there is no cut of 5 per cent. in the wages bill, if there is no reduction in the cost of fuel—and we know that a substantial additional burden was imposed on Córas Iompair Éireann last week through an increase in the cost of fuel—if there is no reduction in the cost of materials for the construction, repair and maintenance of locomotives, carriages and wagons, the loss will increase beyond £500,000. Now the Minister came here yesterday and told us for the first time that whatever they lose, the taxpayer is going to be asked to pay. That is the size of the bill which the taxpayer will face year after year. If that is intended to be a solution of the transport problem, you can have it. Conditions are developing which require a far more fundamental examination of our transport position. This difficulty which has developed here, which is making it harder for this kind of transport organisation to pay its way is not confined to this country.

Deputies have seen the reports of a similar situation developing in Britain and they have also seen the reports of such a situation developing in America. They know it existed, and that it has always existed in France, Belgium and other countries whether the transport undertakings are operated by the Government, or operated by State directed concerns, or by private enterprise. We cannot solve our problems in transport by the patchwork system which it is proposed to set up here by this Bill.

Captain Cowan

What happened after the year 1944?

Mr. Lemass

If the Deputy wants an answer to that I will tell him that at the time of that Act I was rather more optimistic than subsequent events justified and I will concede it to him. We had hoped that the economic recovery at the end of the war would be more rapid than it was. Our hopes appeared to be justified in 1946, and, in fact, the recovery was so rapid in 1946 that Córas Iompair Éireann made a large profit in that year but we know now that the economic blizzard that hit England in that year accompanied by a meteorological blizzard and which had had its effects in this country, had serious consequences in 1947 and that the effects of that blizzard are still being felt in the world. We may have to face the facts that Córas Iompair Éireann cannot pay its way in the immediate future but let us face the position honestly and without equivocation. I tell the House that it is my view that once the word subsidy was mentioned the hope of financial recovery disappeared, and I am sure of that as I am standing here. In future the question of whether charges will be increased, or whether facilities are adequate or not, will become a matter of Party controversy —a political issue—in which the House will be asked to provide services whether they are economic or not.

Mr. Morrissey

What is your alternative?

Mr. Davin

Fair enough.

Mr. Lemass

I am prepared to develop that, if I am permitted to do it.

Mr. Morrissey

Give us the alternative now.

Mr. Lemass

The Minister is very naive. We are discussing his proposals here. We are deciding on his proposals. In the course of the Committee Stage of this Bill I will, if it is necessary, consider every section of it.

Mr. Morrissey

Give us the alternative—that is all I am asking. Are you giving it to us now?

Mr. Lemass

I am not.

Mr. Morrissey

What is the alternative?

Mr. Lemass

I say that I think that the Bill as he introduced it is better than the amended Bill the Dáil is asked to pass now. I think the proposal to impose another paid tribunal on the transport system is an extremely foolish one in view of the experience of the Railway Tribunal set up by the 1924 Act. The Railway Tribunal that was then appointed, reported finally that it could not do the job it was set up to do. It gave up, and now the Minister is proposing to resurrect the Railway Tribunal. That is the Minister's proposal in his amendments and if that is the Minister's alternative, I would say frankly that I prefer his original Bill. There is another course for dealing with the matter of transport charges and the adequacy of services—the course set out in the 1944 Transport Act. The Minister is opposed to that course solely because it compels him to take responsibility. His aim is to avoid personal responsibility. If he faces up to the task he may achieve something. On the basis of dodging personal responsibility he can only make a mess of it.

Mr. Larkin

There have been one or two questions addressed to me by Deputy Lemass and Deputy Davin. Deputy Davin has more intimate knowledge of the railways than I have. Deputy Lemass seemed to believe that Deputy Davin and I were suffering under the belief that there was a road complex on the part of the board. Deputy Lemass went on the point that if we had regard to the proposed capital expenditures as outlined by the original board and compared them with what was recommended in the Milne Report and what is apparently now in the mind of the Minister, the old board had not due regard to the railway side of the undertaking. I would like to refer Deputy Lemass to two pages of the Milne Report. The first is page 30 in which there is set out the capital expenditure authorised by the board. It totals £5,325,000. Of that total of £5,325,000 the total expenditure under the railway head was but £1,532,000, but the total expenditure on the road section was £3,534,000.

Mr. Lemass

No.

Mr. Larkin

I am leaving out some small items, because of doubts whether they are really railway or road. In the table on page 70, in which the Milne Report sets out the capital expenditure, we find items like £3,000,000 for rolling stock and £1,500,000 for goods station improvements as well as an item for improvements at Limerick Junction. If we take straightforward items, we find a total of £7,400,000 for all, but if we take the road items alone we have only £1,900,000. I do not want to dispute the figures with Deputy Lemass, but I would like to say that whatever may have been their personal views, in fairness to the board, the Milne Report does not show that the road complex was there and it seems to me that the report shows what we are up against.

Mr. MacEntee

It is well to remind the House what we are asked to do. We are being asked to pass a Financial Resolution that it is expedient that certain moneys should be paid out of the Central Fund in order to give effect to the policy which is embodied in the Transport Bill. It might be easy to approach the matter if we knew what that policy was. According to the amendments which the Minister put down afterwards, it would appear it was believed that the transport company, Córas Iompair Éireann, would at some time be a self-supporting and self-sustaining industry. He may not have had that intention when he first introduced that Bill to the House, but, surely, he must have had it when he put down amendments to his own Bill, to Section 14, which asks the Dáil to prescribe that it should be the duty of the board so to conduct its undertaking as to be in a position, taking one thing with another, to meet the charges properly chargeable to revenue. If that proposal of the Minister means anything it means that he would definitely come down in favour of a self-sustaining, self-suporting transport undertaking. Having put down an amendment just a few days before, the Minister yesterday announced that in his view it was not necessary that this transport undertaking should be self-supporting but that it should be maintained by the aid of subsidies to be provided by the taxpayer. Surely a fundamental instability is manifested by the Minister when he makes a declaration here in Dáil Éireann on an Estimate which is a direct contravention of and contradiction of the principle of the amendment which he himself proposes. It would be essential, I suppose, that a transport undertaking should know where it is going and surely it is essential that the Minister proposing to reorganise the transport system of this country should know what his own mind is. He does not appear to know it from day to day. He has, as Deputy Lemass pointed out, put down a number of amendments which completely recast the Bill. He has put down an amendment which, as I have said, would compel the company to regulate its charges to its customers for transport according to its costs, and yesterday he announced in this House a policy which would enable the company in fixing its charges to disregard its costs. Is it advisable, when we see the sort of confusion which exists in the mind of the Minister responsible for a measure of this sort, to pass the motion now before us?

Let us consider this question of subsidy from another point of view. Complaints have been raised from time to time that the present regulation regarding the use of private transport is restrictive of private enterprise and that by reason of this restricted use of private transport the costs to producers —and of course to consumers—have been unnecessarily increased. It has been said that one of the reasons why it has been difficult for us to maintain, say, the bacon curing industry in this country was that the cost of transporting the pigs to the factories has been unnecessarily increased by reason of the fact that public transport must be used for the purpose. I am not saying that these complaints have been justified, but among those who have made them most frequently have been the persons who are supposed to represent rural constituencies and agricultural interests in this House. If the use of private transport for the carriage of goods and commodities is restricted under the present system, will Deputies who believe that these restrictions are unnecessarily severe ask themselves what the position will be if instead of being self-supporting the company is to be enabled to carry on its services at the expense of the taxpayer? Inevitably, if the taxpayer has to foot the bill and the Government has to come in here and ask the Dáil to provide moneys, the whole tendency will be further to curtail the use of private transport for the carriage of commodities and to try to divert from the private lorry owner to the Government transport undertaking the traffic which would normally be available to that private undertaking. That is the position which, I think, seems inevitable if we agree to accept this principle of public subsidy for the public transport undertaking. More and more the liberty of the ordinary individual to carry goods for hire will be restricted. More and more the ordinary consumer and producer will be deprived of the facilities which the private transport undertaking is in a position to afford. That is the first thing that emerges from the Minister's declaration yesterday.

The next thing that emerges is that if the public transport undertaking is put in a position to disregard all question of cost, as it will be once a subsidy is ensured to it, then we may make up our minds that it will be vain to hope for economy in public transport or to look for it. The public transport undertaking will become a pawn in Party politics here. The employees will be put in a privileged position and the ordinary private individual, whether he be producer or consumer, will be held up to ransom by the employees, manual and clerical, executive and administrative, of that undertaking.

Mr. Davin

That is good advice.

Mr. MacEntee

That is the advice which Deputy Davin, Deputy Martin O'Sullivan and Deputy Keyes and every other officer of the Railway trade union would give to the railway employees.

Mr. Davin

So say you.

Mr. MacEntee

That is the position into which the farmers of this country will be put by the policy which the Minister is now asking this House to accept. I cannot decide for them whether that is an enviable position or not; they can turn it over in their own minds and come to their own conclusions and decisions in regard to it. But let them not refuse to face the facts. That is why the Minister's decision and policy is meeting with the enthusiastic support of Deputies Davin, Martin O'Sullivan, Keyes and Larkin.

Mr. Morrissey

It cannot be too far wrong if it is meeting with the Deputy's opposition.

Mr. MacEntee

Let us consider another aspect of the Minister's policy. We are asked to endorse, if we pass this Resolution a few weeks following the decision of the Government to remain linked to sterling——

Mr. Morrissey

This is the article which the Deputy wrote in the Sunday Press.

Mr. MacEntee

The Minister for External Affairs went to a hall in O'Connell Street and delivered a speech there in which he tried to dissociate himself, as far as it was possible for him to do so, from the policy which the Government had adopted.

Mr. T.F. O'Higgins

This is the Money Resolution?

Mr. MacEntee

Yes. He said that one of the reasons why the Government was in the position in which it found itself was that it failed to repatriate with sufficient rapidity our sterling assets. I am going to relate this very definitely to the Bill.

Minister for External Affairs (Mr. MacBride)

I do not want unnecessarily to interrupt the Deputy. In fact, I am very interested in hearing him develop his argument. But what I said was that our present economic plight was largely due to the disastrous financial policy which had been pursued over the past 25 years, during 16 years of which Deputy MacEntee and his Party pursued that policy of sending our money and people out of the country to create wealth somewhere else.

Mr. MacEntee

Now, that was perhaps one of the statements which the Minister made, but I would not be permitted by the Chair to controvert here that wild, unfounded and unsubstantiated statement. If we were not able to bring back the sterling assets at the rate at which we desired to do so, it was because we would not be permitted to establish industrial concerns here, which would require the plant and equipment which would enable us to bring back those sterling assets in the only form in which they could have been brought back here and used in this country.

Mr. MacBride

Did the Deputy not oppose the Shannon scheme and the sugar factories? Were they not ideal investments? Did he not oppose them?

An Leas-Cheann Comhairle

Deputy MacEntee should be allowed to proceed.

Mr. MacEntee

Am I allowed even to inform the Minister that we established the Irish Sugar Company, bought out the Belgian interests and increased the number of factories from one to four?

Mr. MacBride

Did the Deputy himself not describe the sugar factories and the Shannon scheme as white elephants in his own eloquent language?

Mr. Davin

They have a brother in Store Street.

An Leas-Cheann Comhairle

When the Minister for External Affairs and Deputy MacEntee have finished, may I say something? I cannot see what the general financial position of the State has to do with this Resolution.

Mr. Morrissey

It is a pity you have to stop him.

Mr. MacEntee

I am pointing out that, in order to repatriate sterling assets, we must find industrial investments for them. But what was it proposed to do by the old board of Córas Iompair Éireann in order to bring back some of those sterling assets?

Mr. Morrissey

Buy Diesels.

Mr. MacEntee

Yes, even buy Diesels. They are sterling assets repatriated in a substantial and tangible form.

Mr. M.J. O'Higgins

Argentine wheat.

Mr. MacEntee

It was proposed to establish a coach-building factory in Limerick for steel coaches and a chassis factory in Dublin to make chassis for the road transport vehicles of Córas Iompair Éireann and of other users. Seven hundred thousand pounds, I think, was the figure, the capital cost of the chassis factory; £700,000 of sterling assets that were to be brought back to this country and utilised in giving employment and laying the foundation of a heavy engineering industry here. When Deputies go into the Lobby to vote for this Resolution, let them remember that one of the things they are doing is to vote that this £700,000 of sterling assets will remain in England, to waste away as they are doing now and that £700,000 of industrial equipment that might have been brought in and used to give employment here to Irishmen, to lay the foundation for a heavy engineering industry, is not going to be brought in. That is the policy of the Minister for External Affairs, that is the policy of Deputy Lehane, of Deputy Dunne, of Deputy McQuillan, of Deputy Brennan and, of course, of Deputies Cowan and Larkin. They are voting deliberately to kill the hope of establishing either the steel coach building factory or the chassis factory. The £1,250,000 of sterling assets is going to be allowed to remain in England wasting away, as it is doing at the moment, while the Deputies who ask why we had not done enough during the war years to build up industry here are going to vote to stifle that constructive idea and to prevent its realisation for ever.

This chassis factory, about which we have heard such a lot, is going to play an important part in helping to develop this country industrially. There is a number of large concerns—the Irish Sugar Company, the Turf Board, the Electricity Supply Board and our public transport undertaking—none of which independently could support a heavy engineering industry, but all of which could combine and might build it up, provided that some of them could take the initiative in starting that industry and take the responsibility of establishing, managing and working it. Of all those that I have mentioned, Córas Iompair Éireann was the best suited to do that, because its interests are the most diversified. By the action which the Government is taking in relation to that constructive attempt on the part of the management of Córas Iompair Éireann, the hope of such a development has been indefinitely deferred.

Remember that, if it is being deferred, it is being deferred not by the mere action of the Minister but by the action of those who have gone into the Lobby in support of the Minister and of the policy which he has announced here to-day. He made no concealment of it. The Deputies have been made fully aware of it. If they support the Minister in that policy, they are doing it with their eyes open. There is no use in their going outside this House and ascribing our present economic plight to what was done or not done a year ago. They have had an opportunity of doing things now and they are refusing to do them now. Not only that, but they are definitely supporting a Minister who has announced that as far as he is concerned, they will never be done.

An Leas-Cheann Comhairle

The Deputy ought now come back to the Money Resolution.

Mr. MacEntee

This debate, thanks to the interruptions of the Minister, has wandered over a very wide field. Amongst other things mentioned in the course of the debate was the pensions fund. The Minister seemed to take some credit to himself for establishing a pensions fund. I am not going to traverse the ground gone over by Deputy Lemass, but I wonder to what extent the workers in Córas Iompair Éireann are going to find their position improved and made more secure by the establishment of the fund——

Mr. Morrissey

The money will be there to pay them.

Mr. MacEntee

——rather than have their pensions a general charge upon the revenue of the company.

Mr. C. Lehane

Of a bankrupt company.

Mr. MacEntee

The Deputy says "of a bankrupt company". If the company is bankrupt——

Mr. C. Lehane

It would have been.

Mr. MacEntee

——who is respons ible for that except the Minister?

Mr. O'Leary

The man beside you.

Mr. MacEntee

If the company is bankrupt, who is responsible for that fact other than the Minister because the Minister last year refused to allow the company to give effect to a principle which he now proposes by his own amendment to impose upon the new company as a statutory obligation. The Minister has put down an amendment to this Bill which states that "it shall be the duty of the board so to conduct its undertaking as to secure, as soon as may be, that, taking one year with another, the revenue of the board shall be not less than sufficient to meet the charges properly chargeable to revenue". That is a sound principle. I am sure every member of the House will agree that it is a sound principle. Why did not he allow Córas Iompair Éireann to give effect to that principle last year? The reason, of course, has already been referred to by Deputy Lemass, that the Minister is not a man who will face up to his responsibilities. The one guiding principle in relation to this Bill and to everything that he proposes to do under it is that he is going to get out from under the mess. He will not even take the responsibility of saying that the charges to be imposed by the board are fair or reasonable or not. No. He is going to appoint a transport tribunal to do that. That has two advantages. It allows the Minister to shuffle out of his responsibility and it creates new jobs for the Minister's political friends.

Mr. MacBride

Which, I trust, will not be availed of in the same way as when the chairman and the other principal officers of Córas Iompair Éireann were appointed.

Mr. MacEntee

That is a very unworthy remark coming from the Minister for External Affairs.

Mr. C. Lehane

It comes well after your remark.

Mr. MacBride

The Deputy made a charge that this was for political patronage.

Mr. MacEntee

Precisely, and may I hope that, since I have made the charge, the Minister will take every care to show by his appointments that the charge is unfounded.

Mr. MacBride

He certainly will.

Mr. MacEntee

I have given him ample opportunity.

Mr. MacBride

There was no greater scandal in public life in this country than the appointments made and the salaries paid in Córas Iompair Éireann. It was the greatest scandal.

Mr. Lemass

That is relevant to this debate?

An Leas-Cheann Comhairle

Indeed it is not.

Mr. Lemass

You either will stop these interruptions or allow others to deal with the points the Minister is making.

Mr. Morrissey

The Deputy should be allowed to deal with them.

An Leas-Cheann Comhairle

The Chair has physical limitations. The Chair is endeavouring to keep order. Deputy MacEntee is not looking for a clear or easy passage. He is dealing with irrelevant matters and the Deputy knows it.

Mr. MacEntee

I am not dealing with irrelevant matters.

Mr. Morrissey

I knew you would put your foot in it.

Mr. MacEntee

I put no foot in it.

Mr. Morrissey

You are going to put the other foot in it now.

Mr. MacEntee

The people in charge of Córas Iompair Éireann were efficient and their past record has shown it and it would have been demonstrated when the Minister interfered with the exercise of their free judgment in relation to what should be done in order to get Córas Iompair Éireann in a solvent condition.

Mr. MacBride

Had either of the two principal officers any railway experience?

An Leas-Cheann Comhairle

I would say to the House that, for its own convenience as well as for the sake of the dignity of the House, interruptions should be avoided from every quarter. An interruption is disorderly no matter from what quarter it comes. Deputy MacEntee is not dealing strictly with the financial construction of the company. It is forced upon the Chair that Deputy MacEntee knows that. Deputy MacEntee will have to make himself relevant in this matter.

Mr. MacEntee

This is a motion around which every question germane to the principle of the Bill may be raised. That has been decided on other occasions. For quite a considerable period when Deputy Lemass was speaking he was compelled to refer to an Order made by the Minister for Industry and Commerce in relation to the establishment of a pensions fund. I am trying to point out that those Deputies in the House who believe that the pensions of the retired employees of the company will be better secured by such a fund than if they were made a general charge upon the revenue of the company are labouring under an erroneous belief and I think I am entitled, in view of the general content of the Bill, to refer to that matter. I was saying——

Mr. T.F. O'Higgins

Before you were ruled out of order.

Mr. MacEntee

I was saying that the Minister, in amendment No. 18, which he has put down to the Bill, is trying to enforce a very sound principle. I hope the House will see its way to adopt this amendment which prescribes that: "It shall be the duty of the board so to conduct its undertaking as to secure, as soon as may be, that, taking one year with another, the revenue of the board shall be not less than sufficient to meet the charges properly chargeable to revenue."

Under the pensions scheme which the former Minister for Industry and Commerce, Deputy Lemass, made, these pension charges were a charge upon the revenue of the company and a prior charge upon the revenue of the company and the company, under the Minister's amendment, is bound, in fixing its charges to the public, to make provision which will ensure that its obligations to its retired and superannuated ex-employees will be honoured. Is that going to be the position in relation to the pensions fund? If a pensions fund is established, it becomes a separate entity from the company.

Captain Cowan

Of course.

Mr. MacEntee

It becomes a separate entity from the company and into that fund the company is bound to pay certain fixed contributions related to the contributions of its employees, but these contributions from the company and from its employees can be invested at the discretion of the board of the company.

An Leas-Cheann Comhairle

Surely that would arise on the amendment and the section.

Mr. MacEntee

No, Sir, it does not arise on the amendment because it arose at the instance of the Minister for Industry and Commerce.

Mr. Davin

Quote the pension rule.

Mr. MacEntee

If these investments depreciate, as apparently they may, if the income from them falls off or proves to be insufficient to meet the pension charges falling on the fund, what is going to be the position then?

An Leas-Cheann Comhairle

Deputy MacEntee knows that that discussion can arise on Sections 41 and 42 of the Bill. He is endeavouring to anticipate and to have a second discussion. I ask him to come to the financial resolution. I have given him a good deal of latitude. My patience is becoming exhausted.

Mr. MacEntee

I am sorry if your patience has reached that stage of tenuity at which it is no longer capable of being exercised. I think, Sir, in those circumstances, I will sit down.

Mr. M.J. O'Higgins

Deputy MacEntee started by saying that, after Deputy Lemass's speech, he thought it was probably necessary to remind the House what we were discussing. He has now finished up by finding out that what he proposed to discuss was not what the House was intended to discuss and he has resumed his seat. I take it that, on this Money Resolution, Deputies are entitled to give their reasons for believing that the money which it proposes to make available to the Minister should either be made available or should be withheld. The reason I believe this money should be made available by the passing of this resolution is the very deplorable state of the undertaking known as Córas Iompair Éireann. The situation which existed in that undertaking when the present Minister took office and particularly the situation which existed in March of this year was such that the Minister had to come to this House and report that the undertaking was in such a bankrupt condition that, unless more money was made available for it by the House, it would not have been able to pay the wages bill that week——

Mr. Lemass

Was the money made available, and, if not, how did they pay the bill?

Mr. M.J. O'Higgins

——and that the undertaking had cheques drawn for £500,000 which could not be issued because there was no money to meet them. That summarises the position which that company had reached as a result of the efforts of the previous Minister when he first started interfering with the transport system.

Certain discussion has taken place with regard to the pension scheme. I want to put this point of view to Deputy Lemass, and I think Deputy Lemass, when he has calmed down, is probably sensible enough to appreciate it. The case was made that there was no obligation on the company to keep the shillings paid by the employees and to utilise them for the creation of a pension fund, that they were entitled to rake in the shillings and put them into revenue and spend them as they liked and that, under an Act of the previous Dáil passed by Deputy Lemass, in return for their collection of their money, there was a legal obligation on them to pay pensions. The position was that, in return for a legal obligation, which they might or might not be able to fulfil, they were, according to Deputy Lemass, entitled to do just what they pleased with the shillings paid by the employees for the creation of a pension fund. The position last March, and this is one of the reasons it is necessary the Resolution should be passed, was that the company, in the words of the Minister, was existing in the shadow of the bailiff. It was unable to foot the week's wages bill of its employees. In that situation, what on earth was the use to the employees of a legal obligation imposed under some Order made by Deputy Lemass in 1945? Is it not quite clear that, whether Deputy Lemass slipped up or not when working out the details of the 1945 scheme, that he intended, and he must have been understood by the company and certainly by any partial observer as doing so, to create at least a moral obligation on the company to preserve the fund, so that there would be some fund there in order to meet the legal obligation which he says he imposed? What is the use of a legal obligation to a creditor when the person on whom that legal obligation rests is not a mark?

Mr. Lemass

Nobody is disputing that with the Deputy. It has got nothing to do with the question. There was no fund or obligation to pay into the fund, contrary to what the Minister says.

Minister for Finance (Mr. McGilligan)

There was £150,000 worth of investments put into it at one time.

Mr. Lemass

I invite the Minister for Finance to state the law and the terms of the Order.

Mr. McGilligan

Why was £150,000 worth of investments put into the fund?

Mr. Lemass

There was no fund.

Mr. McGilligan

Where did the £150,000 worth go? It is in the balance sheet for 1946.

Mr. Lemass

It is an appropriation of revenue against a potential liability.

Mr. MacGilligan

It is not. Look at the balance sheet for 1946.

Mr. M.J. O'Higgins

I wonder if Deputy Lemass admits now that there was a moral obligation on the company.

Mr. McGilligan

There was a legal obligation.

Mr. M.J. O'Higgins

And a legal obligation.

Mr. Lemass

There was no legal obligation.

Mr. M.J. O'Higgins

What was all the hysteria we witnessed from Deputy Lemass this evening for? What was the reason for all the desk thumping and for his characterisation of the Minister as a liar? What was the reason for his brandishing his quotations in front of him and saying that the Minister had endeavoured to mislead the House and to give a false impression of the situation? Deputy Lemass now admits that there was an obligation on the company and that the company did not live up to that obligation.

Mr. Lemass

I say nothing of the sort.

Mr. M.J. O'Higgins

The reason they did not live up to it——

Mr. Lemass

It met its obligation in full.

Mr. M.J. O'Higgins

——was that they spent otherwise the money they collected from the employees for this purpose.

Mr. Lemass

Nonsense. They paid out in pensions four times what they took in from the employees—4/- for every 1/- they got in.

Mr. McGilligan

The trustees are owed £273,000 at this moment.

Mr. Lemass

The trustees were not appointed until this year.

An Leas-Cheann Comhairle

Deputy O'Higgins is in possession and these interruptions must cease.

Mr. M.J. O'Higgins

Does any Deputy think that if the Fianna Fáil opposition to this motion were carried, if the Resolution were not passed by the House and if Córas Iompair Éireann were allowed to go on in the way Deputy Lemass would like them to go on, or would permit them to go on, according to his attitude here this evening, the company would be in a position to foot any pension bill next year, or any wages bill next year, or next week for that matter? That is the situation which has been created. Deputies may argue about whether Deputy Lemass is the man responsible for that or not, or whether Deputy Lemass was too trusting in relation to the men he appointed—that he believed they were capable and competent to carry out a co-ordinated transport policy and that he was, as I said on the Second Reading, let down by them. That is a matter on which we can have differences of opinion.

One of the reasons I think this Resolution should be passed is that it is essential that something should be done and the Minister is making an effort to do something to enable the public transport system to continue in operation. Deputy Lemass thought— and I take it he was sincere in this— that his efforts in 1943 and 1944 were going to give us what he described as a cheap and efficient transport system for the future. The report of Sir James Milne, which has been quoted here so often, shows that there was, in fact, no proper planning or proper policy by the board of Córas Iompair Éireann before the change of chairman, and it is because the kind of thing which was happening under the old board, and on which Sir James Milne reported, was happening and because it is necessary to bring about a change in that situation that this Resolution must be passed.

Progress reported; Committee to sit again.