Public Business. - Road Transport Bill, 1933—Second Stage.

Question proposed: "That the Bill be read a Second Time."

I assume that Senators have made themselves familiar with the terms of the two Bills—the Railways Bill and the Road Transport Bill—and have also had an opportunity of acquainting themselves with the discussion which took place concerning them in the Dáil. It is, however, necessary that there should be given to Senators a general picture of the transport situation existing in the country with which these Bills are designed to deal, because, without that general picture in their minds, it will be difficult for them to realise the necessity, as we see it, for the adoption of these provisions. Since the establishment of Saorstát Eireann, there have been a number of enactments relating to transport, and the position here has undergone many considerable modifications during the period. When the Saorstát came into existence, there were a number of separately owned railway companies operating. Road transport, as we now know it, did not exist and, although the position of the railway companies was by no means satisfactory, nevertheless, they were not faced with problems of the same nature as those that face them to-day.

Shortly after the establishment of the Free State, a Commission was established to inquire into the railway position, and it recommended that the railways should be nationalised. In that connection it is interesting to note that every commission which was established at any time in recent years and, in fact, for a long period back, to examine the railway position here recommended nationalisation as the remedy. In the year 1924, however, the Government then in office introduced its railway proposals, with which Senators are, I am sure, familiar. The main scheme of these was to amalgamate into one company and to make part of one organisation all the railways which were situated entirely in the Saorstát. That left us with the position in which we had the Great Southern Railways Company as the principal railway organisation controlling the lines which had formerly been operated by independent companies, and which were situated entirely within the boundaries of this State.

In addition, there are a number of railway companies operating services both in the Saorstát and in the Six Counties, the principal of which was, of course, the Great Southern Railway Company, but there were also four other companies of some importance. It was contemplated that the Amalgamation Act of 1924 would make possible the achievement of such economies in railway management and administration that a period of comparative stability and prosperity for the railway companies would follow. At that time, however, no due attention appears to have been given to transport development then proceeding in other countries, but which had not been experienced here. I refer to the growth of the omnibus companies and the development of the business of carrying goods and passengers by road.

It was not until 1925 and 1926 that road services developed here on any large scale. At first, no very great importance was attached to it. Many people who examined the matter appeared to be of the opinion that these road services would prove to be uneconomic and would not last. In due course, however, different opinions began to prevail. In 1927, an Act was passed which enabled the Great Southern Railways to operate road services subject to very great restrictions imposed that time because it was feared that the Great Southern Railways with its resources would be able to drive out of existence other companies who were then operating road services. That position continued for some time. It was soon seen, however, that the Act of 1927 was of little value to the companies.

Finally, in 1931 two Bills were introduced by the Government then in office and these represented the first serious attempt which had been made to deal with the situation which had developed here and which was producing for the railway companies a position that was becoming impossible. The two Bills introduced were—the Road Transport Bill and the Railway (Miscellaneous Provisions) Bill of 1932. These achieved between them firstly regulation of the business of carrying passengers by road and, secondly, the removal of certain difficulties experienced by the railway companies. The railway company was empowered under certain circumstances to reduce or abandon railway services and were released from other obligations. It became clear, however, throughout 1932 that the situation had not been adequately met and that something more drastic and fundamental would have to be done if we were to have in existence here a transport organisation capable of being maintained on an economic basis and providing for the country the services required for the convenience of the people and the development of the country's industry and trade.

In so far as legislation is concerned that was the position that existed when this Government came into office. The two Acts of 1932 had been passed but were not at that time in operation. The appointed day under the Road Transport Act of 1932 was fixed by me and the task of making the necessary arrangements to bring the Act into operation on that appointed day, 25th July, 1932, fell to the present Government. The operation of the Act was carried out by the present Government so that it was not until the end of last year that road transport business was brought under control so far as it related to passenger carrying. The Railway (Miscellaneous Provisions) Act had in some respects achieved its results. The consideration of applications under it for the reduction of services, and the closing of the lines again had to be undertaken by me and the orders that were made under that Act were made by the present Government.

From the beginning, taking the whole transport situation and placing it under review we had been convinced ourselves that the provisions of the two Acts to which I have referred were inadequate to deal with the situation. We had expressed that view when in opposition and consequently felt that we were bound to consider the position carefully and bring to the Dáil and Seanad our own proposals in the shortest possible time. The railway position was as I said serious. No doubt, most Senators are themselves aware of that. It is hardly necessary to prove that statement by quoting any array of statistics. The Railway Act of 1924 established a system of standard revenue and standard charges to be fixed by the Railway Tribunal. The Railway Tribunal was asked to take into account the earnings of the company in the three years prior to the Great War and any changes in capital liability which had occurred in the meantime—and it was asked to fix on that basis or in regard to these matters a standard net revenue which the Great Southern Railways could earn with efficiency and good administration. That standard net revenue was fixed by the Railway Tribunal who also prepared a classification of merchandise and a series of standard charges which were to be charged by the railway company and which would be sufficient having regard to the volume of traffic likely to be offered to bring in the standard revenue.

In fact the standard revenue was never earned. In each year since 1925 with one exception the gross receipts of the railway company fell continuously. Although for a period the net receipts showed an increase, that increase arose entirely out of the fact that by measures of economy, expenditure was cut much more rapidly than receipts declined. It was obvious that that process could only go on for a short period and that if the decline in the receipts was not checked further economies could not be effected without seriously damaging the earning prospects of the company and that the net revenue would fall. A change took place in 1929 and from that year onward the net revenue fell off very considerably. In 1929, the net receipts were £817,000; in 1930, £713,000; in 1931, £625,000 and in 1932, £405,000.

To a very large extent, the decline in receipts of the railway company was due to the fact that it had engaged in an intensive competition with road operators in order to get traffic at all. It is clear that until last year and even only to a small extent last year there was no substantial diminution in the actual volume of traffic offering to be carried. Because of the competitive element that made its appearance for the first time, the railway companies had to quote cut rates and they were frequently making application to the Railway Tribunal for liberty to charge exceptional rates, that to reduce rates more than 40 per cent. below the standard rates fixed by the Railway Tribunal. That was the position we found, and it was in relation to that that we considered the matter. We were struck by the fact that the expert bodies which, from time to time, had examined the railway situation here and recommended nationalisation. We gave the advisability of nationalising the railways very careful consideration, indeed. We decided, in all the circumstances, not to attempt it. It appeared to us that it should be possible to secure by legislation whatever benefits might be derived from nationalisation without the immediate disadvantages we foresaw. I admit that in order to do that a degree of co-operation from those owning and controlling the railways of a very high order will be required but I think that we can rely upon that and that it is only in the event of co-operation of that kind not being afforded or new difficulties which we do not now foresee arising it will be necessary to reconsider that aspect of the problem. We felt that if we were going to get anywhere we had not merely to get an amalgamated railway system but to get an amalgamated transport system. We felt that it was quite useless to contemplate putting the railways back into the position they occupied before road transport had developed. The advent of road transport conferred great advantages on many people in the country. It opened up areas that the railways did not touch and it afforded facilities that were of considerable utility to many parts of the country. We could not contemplate wiping out those facilities. We felt, however, that if they were to be maintained they should be maintained as part of a general transport system. Our aim was to get one organisation into existence which would control transport in all its forms and within which any change in the nature of the transport facilities demanded by the public could be carried out. Our idea was that that transport organisation should provide rail-services where rail services were most economical and should provide road services where those were most suitable, that any change in the old transport organisation of the State occasioned by improved facilities for road transport or altered conditions upon the railroad would take place within that organisation with the least possible dislocation of labour or finance. It was because such an organisation could obviously be brought into existence on the basis of nationalisation that consideration had to be given to it. We decided however to try to get that organisation into existence upon another basis—the basis envisaged in these Bills.

These Bills propose to make it possible for the Great Southern Railways Company in its area and the other railway companies in their areas to establish themselves in what is described as a monopoly position. In other words, they will control not merely their rail services as formerly but also road services in their areas. They will be required by law to provide such services as are required, and they will be subject to a number of checks to ensure that the monopoly position will not be exploited to the detriment of the public. Each of the companies will be enabled to achieve that position by a policy of acquisition. I do not think that it would be right for us to bring about a position in which persons who had invested their money in road transport services should be made to lose that money as a result of legislative action or that they should be put into a position where they could not compete fairly against their rivals and so driven out of business. We felt that if a monopoly position was to be created and unified transport control brought into existence, it should be achieved by a policy of purchase, a policy of acquisition, rather than by a process of intense competition, with destruction of the capital involved. The main purpose of these two Bills is to enable that position to be brought about.

The Road Transport Bill provides, broadly speaking, for the bringing of the business of carrying merchandise by road under a form of control similar to that now operating in respect of passenger services. By the Act of 1932, no person is entitled to run an omnibus service in the Saorstát unless he is the holder of a licence issued under that Act. The Act provided that those who were operating what were called "existing services" should become entitled to licences practically as of right. They could be refused on various grounds but, in fact, those operating existing services were given licences without question. The definition of "existing services" under that Act was, in my opinion, somewhat harsh in so far as it ruled out persons who had commenced to operate those services and in some cases invested considerable sums of money in them before the Act had been introduced, and before they could have known it was the intention of the Government of the time to make it illegal for them to continue those services. In the Bill now before the Dáil, we adopt what I think is a better procedure. We take as the essential date the date upon which the First Reading was given to the Bill in the Dáil. Any person who was operating a service upon that date or in the period between that date and the 1st July of last year is held to have been operating an "existing service" and becomes entitled automatically to a licence in respect of that service for the future. The Road Transport Act of 1932 also provided for the issue of licences from time to time for new services as required. In relation to that matter, we have not followed the precedent of the Road Transport Act, 1932. Under the Bill now before the Dáil—in so far as it relates to merchandise services only—no new licence can be issued except to a railway company, to a shipping company, to a canal company, or where, in the opinion of the Minister, a service is required in the public interest and no railway company is willing to provide it, to an independent operator. The intention is, however, definitely to ensure that the business of carrying merchandise for hire on roads will be fixed at its present magnitude, and that any development from the present position will be under the direction and control mainly of the railway companies. We provide that licences to operate road services may be given to shipping companies. I think that is a necessary provision in order to ensure that shipping companies will be in a position, if necessary, to maintain themselves independently of the railways and also to ensure that no question will arise of rail policy operating to benefit one shipping company as against another.

In the Road Transport Bill now before you, we also take power to provide, under certain circumstances, for the compulsory acquisition of licences. It is hoped that the power of compulsory acquisition will not have to be resorted to and that, in fact, the railway companies will be able to acquire the businesses of their principal competitors by agreement, but it is felt that the power of compulsory acquisition should be present so as to prevent a situation arising in which the whole aim and policy of the Bills might be defeated by the action of one or a group of road operators standing out and refusing to facilitate matters. That power of compulsory acquisition is taken not merely in relation to licences issued under this Bill, but also in relation to licences issued under the Road Transport Act, 1932. It works in two ways. If an authorised company, whether a railway company or a tramways company, desires to acquire the licence of an operator, whether the operator is engaged on merchandise carrying or passenger carrying, the company will attempt to do so in the first instance by agreement. In default of agreement, however, it may apply to the Minister for Industry and Commerce for an order for compulsory acquisition. The Minister would have to be satisfied that the making of the order was in the public interest and, if so satisfied and makes the order, then the terms of the acquisition are fixed by an arbitrator to be appointed by a Reference Committee, who will take into account the pecuniary loss and expense inflicted upon the licensee by the acquisition of his licence.

It is also open to a license to apply for an order to be acquired. It would, I think, be wrong to have the position that a railway company could choose for itself whether to get the business of a particular competitor by acquisition or by competition. It is clear that it would be almost impossible for those competitors to compete under those circumstances if they knew that at the end of the period of competition, after they succeeded in maintaining their existence against the railway company, they could then be compulsorily acquired in any event. Having regard to our view that any unification should be by the method of acquisition, we propose to make it impossible for the railway company to adopt that policy in respect of any competitors by giving to these competitors the right to be compulsorily acquired, if they demonstrate to the Minister that public interest demands it. It would be our policy to operate that power so as to ensure that a road operator whose position was being undermined by uneconomic competition on the part of the railway company should have the right to get acquired by that company before his capital had been exhausted and the value of his services had been seriously diminished.

What I have said I think gives an almost clear picture of the whole of the purpose behind the Road Transport Bill. There are, of course, a number of provisions in the Bill—it is rather a long measure—and they are all designed to achieve purposes incidental to the main scheme. We can probably discuss these provisions more satisfactorily in Committee. The main scheme is to make subject to a licensing arrangement the business of carrying merchandise by road and to provide for the transfer of licences, where it is considered desirable, from independent operators to railway or tramways companies. I think, however, I should make special reference to the position in respect to the City of Dublin. Under the Road Transport Act, 1932, it was contemplated that the control of transport would be centred in three main areas—the area of the Great Southern Railways Company, the area of the Great Northern Railway Company and the City of Dublin, and that the main operators in these areas would be the railway companies or the tramways company in the city. That purpose was to a great extent achieved in the area of the Great Southern Company. That company acquired the business of most of its rivals for the carriage of passengers and throughout the whole of its area there is only a very small number of independent operators remaining. As a result it has been able to stabilise to a large extent the passenger position and there is no reason to believe that it will not be able gradually to build up for itself what will be a profitable part of its activities.

In the area of the Great Northern Company the same success was not achieved, mainly arising out of the fact that the company were apparently unable to effect an agreement to purchase with some of their principal competitors. In the City of Dublin very little change took place at all. All those who were operating existing services got licences. A number of those who were unfortunate not to have been operating services for the whole of the qualifying period did not get licences. Apart from that change, nothing else has happened. We have, of course, eliminated what was frequently referred to as pirating, that is, the operation of buses on particular routes only at particular times when a good deal of traffic was likely to offer. Although we have eliminated pirating, we have not by any means eliminated competition or the evils associated with competition on particular routes. The racing of buses and the various devices adopted to get passengers, sometimes only at great risk to the public, are still going on on many routes, and there is not at the present moment any indication that the situation is likely to change in the near future unless this Bill becomes law and, in consequence of it, changes are brought about.

We propose to have this acquisition clause apply in relation to passenger licences in the city as well as in the areas of the railway companies. I do not contemplate that the power of compulsory acquisition will be used extensively. I found, however, when considering the position in Dublin last year that I was practically powerless to get any movement at all towards improvement here, mainly arising out of the fact that those controlling the existing services had what appeared to be fantastic ideas either in exaggeration of the value of these services or the reverse. Attempts to get joint consideration of the problem and some agreement as to policy in relation to it did not succeed. It will be possible, in view of the powers conferred by this Bill, to force consideration, to bring the people concerned to the point where they will have to consider policy in relation to these matters, and I hope that by the judicious exercise of these powers we will get a large measure of agreed policy which could be carried into effect with the least possible dislocation over a period of time and without imposing hardship upon anybody. If that is not possible, I certainly intend to use the power in order to produce here in the city the situation originally contemplated where the intense competition which we have experienced will cease to exist and where licensees will be charged in relation to particular areas to provide not merely good services for the conveyance of the public, but also continuously improving services.

The only other thing that I think should be mentioned in relation to the Road Transport Bill is the provision made for the exemption of certain areas from the scope of it.

In so far as the Bill is concerned with the carriage of merchandise, it is proposed to exempt certain areas which are included within a radius of 15 miles of the principal post office in Dublin, 15 miles of the principal post office in Cork, and ten miles of the principal post offices in certain other port towns. These towns were selected because there are conducted from them regular steamship services. It was thought, in relation to these towns, that it was necessary to have this provision so as to ensure in the first instance that these steamship services would not be unduly interfered with, and, secondly, that the nature of the distribution trade which exists in connection with these towns would not be brought under control. I might say that our main purpose was to achieve exemption from the scope of the Bill of areas round Dublin, Cork, Limerick, and one or two other towns. We had, however, to get some foot-rule by which to work, some standard by which we could distinguish one town from another, and the standard was that from these towns there were regular steamship services, and they appeared to us to be the most suitable. The position is that there exists, taking Dublin as the main example, a number of persons carrying goods of all kinds for reward who are not ordinarily carriers in the accepted sense at all. They would not contemplate, as a rule, the acceptance of business involving the transportation of goods either to the west of Ireland, the south of Ireland, or over long distances. The carriage of goods associated with the metropolis, the produce of market gardens, milk supplies, or the distribution of goods to suburban residents, does not take anything from the railway companies. That is not the type of business railway companies are likely to be interested in. The exclusion of these areas from the scope of the Bill for all those people engaged in that type of activity to keep in it without being subject to any control. It makes the administration of the Bill simpler, and achieves another purpose to which we attach importance.

If we were to make these areas subject to the main provisions of the Bill, by deleting the provision for exemption, everyone engaged in the business of carrying goods for hire in these areas would be entitled to and would certainly request the issue of licences to carry goods. It is extremely likely if they had to get licences that they would apply for licences to carry goods, not merely in and around Dublin and Cork, but over much wider areas, and consequently would become competitors, or potential competitors of the railway companies, and would have to be acquired before the railway companies could establish themselves in the monopoly position we contemplate. On the other hand, if we maintain the exempted areas we give a very substantial inducement to these people not to extend their activities outside those areas, but to confine themselves entirely within them, carrying on without being subject to the restrictions on long distance business. The inducement which we give is this: A person who gets a licence under the Bill is subject to certain definite restrictions. In his application he is required to state the class of goods he proposes to carry, and the area in which he proposes to carry goods. In respect of these goods in that area he must give the same facilities to everyone. He must carry goods of all the kinds specified in his licence when offered to him between any two points in the area. He must carry them for one person on the same terms and subject to the same conditions as for another. If a person receives a licence of that kind in respect of goods to be carried outside the exempted area he will be also subject to the same conditions, and to the same restrictions, when operating within the exempted area. Consequently such licensee will be at some disadvantage as against a person who confines his activities entirely to the exempted area, and does not therefore require a licence. There is that inducement provided to people ordinarily engaged in short distance suburban distribution traffic, or carrying on business in or around the cities, to confine themselves to that type of business.

The provisions of the Railways Bill are part and parcel of the same general scheme. It was originally intended that there would be only one Bill. Certain legal difficulties are responsible for the fact that there are two Bills instead of one for consideration. I understand the intention is that the financial clauses of the Railways Bill will be discussed separately. I would like to say that they cannot be considered apart from the general scheme. They are part of the general scheme. Even though special considerations may arise in reference to them, they stand or fall with the main body of the proposals.

The main changes effected by the Bill, apart from the financial changes, are, I think, well known. It is proposed to simplify the procedure for the reduction of services on parts of the lines of the companies or for a cessation of services on these lines. Under the Act of 1932 there is power at the present time to make an order authorising a railway company to cease running services, or to reduce services which are now being run under statutory authority on any line or branch line. As Senators are no doubt aware, there exists in relation to a number of branch lines, in certain portions of the systems throughout the Saorstát, a statutory obligation upon the railway companies to run certain defined services. The railway companies must continue to provide trains on these lines no matter what traffic is offered and no matter what the circumstances unless released from that obligation by an order made under the Act of 1932. Over the rest of the system there is, at the present time, freedom conferred on the railway companies to run any services they like. I do not think it is possible to abandon a line or a portion of a line without promoting legislation. They are certainly at liberty to reduce or to vary the services any way they like without interference from anyone. For example, a number of branch lines, particularly in the South of Ireland, were closed last year by the railway company on their own authority. They did not require any special authority for the purpose. The lines were built by the railway company and they were entitled to close them if they so desired. In relation to other lines where services were reduced the reductions had to be preceded by a statutory order made by the Minister for Industry and Commerce.

The change made under this Bill is, at first sight, not very substantial, but it alters the position considerably. In the first place we require the railway companies to maintain, in respect to the whole system, a certain service of trains—the service of trains which ran during the first seven days of January, 1933. We provide that an order may be made authorising a railway company to reduce or to abandon any of these services subject to certain conditions. One is that they must provide alternative services on the road sufficient to handle any traffic likely to offer. The principle behind that provision is clear. If we are going to have the railway companies in a monopoly position so that they would be controlling both the rail and the road services, and that the public would be depending on them for transport facilities, there must be an obligation on the companies to provide facilities having regard to the fact that we have practically taken from ourselves power to enable anyone else to provide them. We must put on the railway companies a very definite obligation to ensure that the services are there, and if the railway companies propose to stop the services on a particular branch line, or portion of the main line, or to reduce the services considerably, then we require them to provide road services sufficient for any traffic offered.

If the reduction in services takes place merely in consequence of a diminution in the volume of traffic, then no order is required. The railway company are quite free, under the section, to vary their services in any way they think fit, because of a diminution in the volume of traffic. If, say, 5,000 passengers on an average travel by train to Howth on a Sunday during one particular year, and because of greater attractions elsewhere only 2,500 travel in future, then obviously half the service only will be required. The railway company in such circumstances could reduce the service to that extent without any question of an order being necessary or without any fresh obligation being imposed upon them. But if the railway company decided that the 2,500 passengers going to Howth could be more conveniently carried by road than by rail and shut down the line, substituting an omnibus service for the rail service, then an order would be required by the railway company, and it would have to provide an omnibus service. It would also be obliged to provide alternative employment or compensation for the railwaymen who were rendered redundant by the closing of the line, as well as to maintain the bridges, level-crossings, fences and other works which are being maintained in connection with the railway line.

Our policy is, therefore, quite clear. The railway companies are required to maintain the same service of trains which they had in January, 1933, but they may reduce that service if the traffic diminishes. If, however, they decide to change their policy in relation to the traffic and have it carried by road instead of by rail, then they must get an order from the Minister for Industry and Commerce to enable them to do so, and also undertake the obligations that are imposed upon them by this section in relation to the provision of an alternative service, maintenance of bridges, compensation of employees, etc. That section will be one difficult of administration if there is, in fact, any substantial falling off in traffic in the future as compared with the critical week fixed in the section. I am not very much perturbed about that, because I think we can safely contemplate that, in so far as goods traffic is concerned, the volume of traffic offered is not likely for some time to come, at any rate, to fall substantially below that offered in the first week of January in this year. So what we have really done is to fix the minimum service for the railway companies. They can increase that service as much as they like and provide additional facilities either on road or rail. It is only in the event of a definite change in policy on their behalf, a definite decision to substitute road services for rail services, that Section 8 comes into operation at all.

There are certain changes concerning the number of directors, the method of electing directors and matters of that kind, that I do not think it is necessary to deal with at this stage. They will arise more appropriately on the Committee Stage. There is an obligation placed on the railway company to produce a scheme of superannuation for its employees. The Railways Act of 1924 provided for the preparation by the Great Southern Company of a superannuation scheme in agreement with the trade union representatives of the workers. The Act did not provide what was to happen if there was no agreement, and that is precisely what happened. The scheme was prepared, but the trade union representatives did not approve of it, and because of the disagreement nothing happened. The Act of 1924 became inoperative in that regard. It is necessary in certain circumstances of that kind to bring in a third party. We propose to bring in the Railway Tribunal. The company is obliged to prepare a scheme and to submit it to the Railway Tribunal. The Tribunal can hear all interested parties and either approve of the scheme as submitted or approve of it with modifications. When approved of by the Railway Tribunal the scheme comes into operation and so the deadlock is resolved.

There are certain other provisions that it is hardly necessary to deal with at this stage. It is proposed under the Bill to enable the Great Southern Railways Company to operate an air service if they are so inclined. I do not know that they have any immediate intention of doing so, but it is felt, having regard to our experience in regard to omnibus services, that they should be at least empowered to do so in advance rather than that the position should be allowed to develop in which they could not take any part in it until rival services had been established. We also propose in this Bill to remit certain debts due by the Great Southern Company to the Government. That, however, is one of the financial provisions which, I think, can be more appropriately discussed on the other Bill.

I would like to say that it is my conviction that the operation of these Bills will result in a substantial improvement in the transport position here. I think that view is generally shared by persons who have given this question deep study. We may disagree as to the manner in which the aim intended is achieved, but I think that nobody can seriously dispute the fact that if we are going to get an economic transport organisation here we must have unified control, one organisation providing facilities for the different forms of transport. We must eliminate the cut-throat competition that is now going on which makes it impossible either for railways or for road operators to get an economic freight for any goods they are carrying. With unified control, subject to all the safeguards that are necessary in the public interest, we can make it possible for the new transport organisation to fix its freights and conduct its services on the basis of getting paid for the work done—of getting paid on a remunerative basis sufficient to provide for all working expenses, maintenance and depreciation and making provision for a reasonable return upon the capital invested.

It may be that difficulties that we do not see at the moment will arise, and that, in some respects, our scheme will prove to be defective. If so, we will only have to amend it again or adopt some other measures in the future. But I think these proposals should get a reasonable period of time before they are rejected, or before any one comes to the conclusion that they are not going to achieve the results aimed at. It is true that the railway companies are meeting with special difficulties in this year. These difficulties have been exaggerated to a great extent, and certain Senators may have been misled in consequence of them. The new conditions existing here now have, of course, a very direct bearing on the future of the railways and on our transport organisation generally. I think that the directorates of the different companies have taken these considerations into account. The industrial policy of the Government, its aim to secure the internal production of a very large number of different classes of goods formerly imported is going to have a very special bearing on the transport position. I do not think that is going to disimprove the transport position—quite the contrary. In relation to most of these goods it is true that the number of places at which they will be produced in the country will be far fewer than the number of ports at which they were formerly imported. Consequently, a greater amount of internal transportation will have to take place. The railway companies contemplate, as a result of these industrial activities, that they are going to have more business to do. That applies almost entirely to the Great Southern Company. The cross-Border companies had definitely to consider their position. They had to examine the traffic that was offered in previous years and they have come to the conclusion that because of the new circumstances existing here a very definite proportion of that traffic is permanently lost to them. Goods which they had the business of importing into the country in the past were now being produced here, and, consequently, the transportation associated with the importation of these goods will not offer in the future. These companies also took into account the circumstances of the emergency duties operating here and in Northern Ireland and came to the conclusion that certain losses were likely to accrue as a result of these also but that these losses were likely to be only of a temporary nature and, that, therefore, they could plan on that basis. Whether that view is correct or not I do not know, but it seems to me that Senators should be very careful not to come to any conclusions based upon the assumption that the present position is, to any very great extent, affected by the emergency duties. I do not think it is true. The railway companies are, of course, interested to some extent in the prices which producers can obtain for their produce, but they are concerned to a much greater extent with the volume of traffic carried. They are much more concerned with the volume of the traffic of these producers than with the value of the produce, and the volume offering at present is not very much less than that which would be offering if these emergency duties were not in existence at all and may not show any substantial increase if these duties cease to operate. Live stock was, of course, one of the principal items of traffic with which the railways were concerned. Throughout March, certainly, and April there was no diminution in the number of cattle exported from the country. The price of these cattle may show a considerable falling off as compared with last year, but the number of cattle carried shows an increase on last year and, consequently, the amount of transportation required for that purpose did not show any diminution. The same applies to other classes of goods and, in so far as there has been a diminution for outgoing or incoming goods, it has possibly been entirely replaced by increased internal transportation. Take for example bacon pigs. The export of bacon pigs has fallen off. The number of bacon pigs acquired by Saorstát bacon factories has considerably increased. To a large extent the diminution in export is accounted for almost entirely by the increased production at home. That does not affect transportation except to a slight extent and, consequently, cannot be taken into account in determining transport policy. Even if it were taken into account, it is not reasonable to assume that it is going to be permanent. Assuming, however, that trade is bad in any event, and that some increase will follow upon better times, we can, I think, put our transport organisation upon a sound basis. I think it can be done even having regard only to the present volume of trade, and that it can be put upon a sound, even though not very profitable, basis. It will enable freights to be levied which will provide for operating costs and maintenance costs as well as for some return upon the capital invested. If that is so, any increase in prosperity will be a much greater improvement in the position of the transport organisations and they can look forward to a future when they will be able to earn substantial profits for distribution amongst their shareholders as well as for allocation for reserves to meet bad times that may possibly come on still further in the future.

The only basis for that, however, is, in the first place, unified control, and, secondly, getting into the minds of those responsible for transport policy a realisation that they must be not merely the directors of railway companies but that they are charged with the responsibility of providing whatever forms of transport are required for the needs of the community. If road transport is found to be more economical, or is demanded by the public, then it must not be sacrificed entirely to the needs or requirements of the railways. Railways are and will be for a long time to come the most economical method of transport in a considerable part of the country and most economical for a great variety of goods. So far as that position obtains, they must be retained but they must be not merely a separate organisation but an integral part of a wider transport system meeting all the requirements of our people in every area. It is for that purpose these Bills are designed and, in so far as that end is accepted by all as desirable, any criticism of these Bills should be directed, I think, towards their effectiveness in bringing about that situation rather than in talking at cross purposes having in mind an entirely different set of circumstances that might arise.

We could go back to the system which obtained before the 1924 Act and let unchecked competition exist and permit the one best able to survive to drive out the others, but if we did that I think we would do a considerable amount of national damage. Accordingly, we did not proceed on these lines but decided instead to impose a very considerable degree of control, believing that by doing so we can best serve not merely the interests of the present owners of transport organisations but the interests of the country as a whole.

To the extent that these two Bills before the House tend to reduce the chaos that exists, and to minimise the cut-throat competition that also exists, in all branches of transport, they are, undoubtedly, an improvement on the present position. They constitute an extraordinary series of compromises, some of which tend to eliminate what would otherwise be beneficial effects resulting from the proposed legislation. The Minister has stated that every Commission that was set up to inquire into the question of railway reorganisation recommended nationalisation. In other words, everybody who seriously studied the problem over a period of months, and sometimes over a period of years, as in the case of the 1906 Commission, and who studied it impartially and with due regard to the interests of the community, arrived at one decision, and that was that, in the interests of the State and of giving the country an efficient transport organisation, the railways should be nationalised. The Minister, however, who studied the question in a few weeks or a few months, disregards that type of advice altogether and makes up his mind that private enterprise is the only solution, and to-day we have the brilliant result of following that policy, and of adoring that fetish of private enterprise, in the condition in which the railways are at present.

It is extraordinary the change in outlook that takes place in the mind of a prominent member of the Opposition when he becomes a Minister. It is amazing to find the present Minister introducing this type of measure to-day in view of statements he made, not only in the heat and recklessness of an election campaign, but in the calm and sombre atmosphere of the Dáil. I know that it is unkind to remind the Minister of some of his past statements, and I do not wish to take up too much time by doing so, but I will just give one example of the change which has taken place by quoting one statement which the Minister made on the 9th December, 1931, on the Transport Bill. He said:

"I think that as strong a case, if not a much stronger case, can be made out for the public ownership of transport services as can be made out for the public ownership of an electricity supply. The position here is that the case is also strengthened by the fact that there does not exist amongst the people of this country any feeling of confidence in the existing railway management.... We are strongly in favour of public ownership of transport services with unified control outside the boundaries of the municipalities. Inside the boundaries of the municipalities we are in favour of municipal ownership and control of these services."

It is only 15 or 16 months ago that that statement was made. He confirmed it as his policy later in the election campaign by stating in Athlone on 8th February, 1932: "Wasteful competition should be stopped, and Fianna Fáil proposes to stop it by unified control under public ownership."

There were various statements made to the same effect, showing that the considered policy of the Minister, and presumably of his Party, because he said "we" and generally bound his Party, was that unified control under public ownership was the only solution. He has not indicated what has happened since, that would tend to alter the position as it was at that time. Yet we find that in these Bills practically the whole responsibility for relieving the present chaotic condition of transport, giving an efficient and economical service to the community, and trying to place the service on a solvent basis, is placed altogether on the shoulders of private enterprise. The same confusion and uneconomic competition, and to a great extent the same disorder, can continue to exist when these measures are Acts unless people with a prospect of making profit—private citizens and private companies—set about reducing or eliminating that disorder. The fact, for one thing, that these Bills are essential to help to save the railway services from disappearance, is, I think, the most effective answer to those who state that State interference is in itself an evil thing. We can imagine the clamour and the orations we would hear in this House in regard to the evils of State ownership if the railways had been State owned instead of privately owned, as has been the case. To be consistent, Senator Sir John Keane and Senator Bagwell, the twin pillars of private enterprise without interference, should vote against every section of these two Bills, notwithstanding the fact that they are necessary in order to save private enterprise from disappearing altogether.

The opponents of State ownership ignore one very important fact, and that is that when the State purchases any particular industry or service it has to continue to pay a fixed interest or dividend, which is generally about five per cent. In addition to that it has to establish a sinking fund to clear off capital expenditure. That is an imposition placed on the State in regard to any service which it takes over which is not at all placed on private enterprise, which simply pays whatever dividend it can earn and no more, and which assumes no responsibility for the payment back of capital.

What about the Post Office?

What about the Post Office? It is certainly the most efficient service that we have in the community. It gives the person away in the wilds of Connemara the service, perhaps slightly modified, he would get if he lived in the City of Dublin. It is giving a service which no private company would give there, an absolutely uneconomic service in a thinly populated country over widely scattered districts. To think that an organisation of that kind can be worked on a self-supporting basis is absurd. At all events, the railways are a classic example of the failure of private enterprise. I do not for one moment say the State or anybody else could have made the railways a success, having regard to the terrible difficulties with which they have been faced, but I do say that if the State had owned them and they had failed, it would be quoted as one other example of the evils of State interference in industry.

These Bills have come much too late. They should have been introduced six or seven years ago. The late Government was guilty of criminal negligence in this respect. They are responsible for most of the evils, with such unfortunate results for the employees, shareholders, and all concerned, with which the railways are faced at the present time. It is a pity when the present Government, even at this late stage, tackled the problem that they did not summon up sufficient courage to act in a less lame and halting manner than they have done. We were told when unified control under public ownership had been shelved, that as an alternative we were going to get unified control under private ownership, under one management. There is nothing in this Bill to suggest anything of the kind except that railway companies, shipping companies and others may be able to find the money to purchase their competitors. The Minister has received an assurance that the Great Southern Railway Company and its two road transport concerns will be amalgamated and worked as one company in about six months' time. We shall be all interested to see whether that promise is fulfilled or not. I sincerely hope that the Minister will see if it is not fulfilled that legislative action is taken to bring about the necessary amalgamation. The running of these three concerns owned by the same shareholders is one of the most glaring examples of extravagance that exists in the country. Worse still than the extravagance is the amazing fact that these companies compete actively with one another all over the country notwithstanding their emphatic statements to the contrary.

Examples were given in the other House of some of the types of competition which takes place. It is unnecessary to quote them here, but as one example of the absurdity of the position you have this happening: Messrs. John Wallis & Sons have a number of local agents who are paid by commission and who are given a fair amount of latitude as to the rates they will offer. Needless to say their object is to get all the traffic they can, even though it be from the railways. They compete with the railways whenever they get the opportunity. We found recently an example of certain commodities which were being sent from Dublin to Ballina, going first by Messrs. Wallis & Sons to Longford and then being reloaded on the train for the rest of the way to Ballina. This is information given to me by a railway official who has been dealing with the transaction. That is one of the results of payment by commission of touts, people who should never be allowed to interfere in the regular transport work of the country.

To my mind a great blot on the Transport Bill is Section 7, which deals with the exempted areas. Dublin City and Cork City have exempted an area of 15 miles radius or an area with a diameter of 30 miles. Ten other cities and towns have exempted areas with radii of ten miles or with diameters of 20 miles. In other words, those centres where the bulk of the population live, where the traffic is densest and transport is most necessary, are areas which are exempted from the operations of the Bill altogether. That means that within those areas the present conditions are going to be perpetuated. They are going to be allowed to continue. Surely, if the question of railway solvency or prosperity was never at stake, some form of control would have been necessary in view of the disorder which has developed during the last six or seven years. What justification, therefore, is there for exempting any area from the beneficial effects of regulation in such a matter as transport?

The Minister from time to time in discussions on the Bill has given various reasons for these exemptions. He gave one as the administrative difficulties. Secondly, he mentioned difficulties as regards food supplies to the particular towns concerned. Another reason was protection for ports Still another reason he advanced was that the traffic in these areas had no revenue value for the company and that the exemption would keep people from operating outside the boundaries of these places who would otherwise operate there and have to be bought off. If density of population means administrative difficulties, what is the justification for exempting places like Westport and Ballina and bringing under the operations of the Bill places like Kilkenny, Clonmel and Athlone, with far greater populations? The difficulties of trying to administer the Bill as now drafted will be infinitely greater than they would be if all areas came under the Bill. Fancy the circumference of the area round Dublin and Cork that will have to be watched to see that the people who do not come under the Bill do not operate outside that circumference. Say that a man has a load to deliver 16 miles from Dublin. Who is going to see that he shall not exceed the 15-mile limit and deliver the goods at their destination? Instances of that kind will be occurring right round the circumference of these areas every day of the year. You would want to increase the forces of the Gárda by about three times their present strength in order to administer the Act. Then in regard to the question of the food supplies, surely the food supply of any city or town is not dependent on chaos in transport. Ordered conditions do not militate against good transport services and that seems to be the assumption. Again, if you must feed Ballina and Westport by maintaining chaos, how are you going to feed Kilkenny, Clonmel and Athlone by having good order?

The question of the protection of the ports really cannot be serious. What port is Dublin, for one thing, being protected against? Section 15 of the Bill provides ample protection for everybody and for every place, because it lays down that: "No licensee under a merchandise licence shall, in carrying on the business authorised by such licence, make or give any undue or unreasonable preference or advantage to or in favour of any particular person, trade, industry, district or port." The Minister has complete power there, because if he sees danger to a port by allowing a railway company or shipping company to purchase all local transport companies, he need not agree to the transfer or he need not allow the company compulsorily to acquire. He is complete master of the situation. In fact, it is laid down in Section 51 (4) that he must not compulsorily transfer any business except he believes that it is in the community interest to do so.

It contends, too, that this traffic is of no revenue value for the railway companies. The railway companies are also road transport companies and they are going to operate on the roads of necessity to a greater extent in the future. Why should they not have an opportunity as road companies of competing on equal terms with all others for this heavy traffic, which is of a very valuable character? It comprises highly-paid small traffic such as groceries, wines and spirits, machinery, drapery, boots and shoes, and so on—a type of traffic which is most profitable and which is most easily handled by transporters of all kinds. The railway companies' lorries cannot compete on equal terms with the unregulated competition inside. They have to submit to all sorts of restrictions. They have to have a special classification approved by the Railway Tribunal and they must have maximum rates fixed by the Tribunal which may be published or examined by any of their competitors, who need not reciprocate and who will, of course, not reciprocate.

They have to pay rates of wages which the Minister considers reasonable, and they have to comply with various other restrictions of which the unregulated person inside is absolutely free. He can sweat his employees, if he is in a position to do so. He can favour on trader as against another or he can favour one district as against another. He can take traffic or refuse it, but the others are common carriers and must accept it, so that, for practical purposes, you are shutting out railway-owned transport services from competing for any of the traffic which begins and ends in any of these exempted areas, and then we are told that this is a pro-railway measure. If the Minister thinks it is in the interests of big centres that they should have, say, a hundred hucksters dealing with all the merchandise transport instead of two or three big companies with capital and stability behind them, he can have that state of affairs and still bring them under control. He could bring them under the control of the Bill but leave them outside the scope of Part V, which involves compulsory acquisition.

To that extent he would help, at all events, to restore order and tend to amalgamation between these companies, and he would ensure that the cities and towns concerned would have different types of vehicles and a service more compatible with the requirements of a city. The city itself, from the passenger point of view, is full of eye-sores and bone-shakers called buses, approved under the Act of 1932, which really should never have been approved as public service vehicles. They are a disgrace to the city and a menace very often to public safety. Are the citizens of Dublin to be left in the same position or in even a worse plight with regard to their passenger transport? The Minister, I think, has set up a commission to inquire into the evils resulting from too many shops and from too many hucksters trying to do their type of business and to consider the question of licensing shops. At the same time, he exempts, twelve huge areas in the country from any regulations, so far as transport, a much more important service, is concerned.

Section 2 defines the existing carrier as a person who may have, at any time between July and 8th February, carried on a road transport business. In other words, if a person worked a lorry as a public service vehicle carrying for reward, for one day prior to the introduction of the Bill, he has a vested interest under this Bill just as if he had been running it for ten years prior to that. He must get a licence so long as he complies with certain conditions and, in order to get him out of competition, he must be bought out. At the same time, the employee who loses his job as a result of the compulsory acquisition of his firm has to have five years continuous service before he is entitled to one penny compensation. There you have the two methods of treatment. The man who puts a second-hand lorry on the road has to be fully compensated, although he may be working only for one week, while the man with four and a half years' continuous service, who loses his job, gets no compensation at all. Here, again, the Minister has changed his views considerably. He weeps now for the fate of the person who, with a couple of weeks' use of a lorry, does not get compensation for it, but, speaking in the Dáil in June, 1929, he said:—

"The railways have fixed assets. They have lines and stations etc., whereas the omnibus companies own only omnibuses. These have a limited life, and I believe that very little hardship would be imposed on anybody if it were enacted that, after a particular date, let it be one year or 18 months ahead, the sole right of running public services on the road would be vested in that transport board the establishment of which we suggest."

He was very much less tender then, and he spoke of a transport board, which, of course, has not seen the light.

In regard to Part V of the Bill, where it provides for an arbitrator to settle the price in the event of a dispute between the purchaser and the seller, why is it made mandatory on the arbitrator in every case to award costs to the licensee, to the person selling, as against the purchaser? Suppose, for instance, the arbitrator agrees that the price offered by the purchasing company was reasonable, or perhaps, excessive, and there was no necessity at all to go to arbitration. Why is it made compulsory on the arbitrator to award costs against the purchaser? It seems to me that he should be left discretion in that case. Part VI, which refers to compensation for redundant employees, is also a very peculiar and strangely worded part of the Bill. The net result of it is that, if a man whose licence is being transferred, or a portion of whose business is being transferred to another company, retains one of the employees concerned in his service, he can dismiss him after six months without any compensation, but if he is transferred to the purchaser he is covered for two years. I do not see where the logic comes in there. There is no provision for arbitration at all to settle disputes in cases in which a redundant employee looks for compensation. It simply says that it may be a simple contract debt which can be recovered in the court, but the Bill makes no provision for the court deciding whether the man is entitled to the compensation or not. It seems to me that the Bill is incomplete there, and that some provision will have to be made either for an arbitrator, or empowering the court itself to try the question of compensation and to fix it.

There is one point in regard to the administration of Part V of the Bill that I have been asked, from various quarters to urge strongly on the Minister. It is that he would refuse or refrain, at all events, from extending the compulsory powers of acquisition embraced in Part V of the Bill to the Great Northern Railway until such time as they drastically alter their present attitude towards the staff. I do not like having to refer to this, but it has something to do with the administration of this Bill. I regret to say that a campaign of vengeance against the staff is proceeding on that line at the present time which is almost without precedent in Irish industrial history. It is true that there has been a dispute, and a strike on that company's line, but there has been an agreement which was intended to bring peace, and for which the Minister himself is very largely responsible. Instead of bringing peace, it has merely whetted the desire for inflicting punishment on the employees concerned, so far as the management of the company can do it.

The extraordinary part of it is that this campaign is carried on not only against the men who were on strike, but against large sections who were not on strike. The salaried staff were not on strike. They accepted what the company thought they should get, but many of them were dismissed because they refused to blackleg on their colleagues and others because there was no work for them while the strike was on. The agreement covered the recall of these men on the basis of seniority. It has been flagrantly violated and, in scores of cases, men have not been recalled, while those working are working from ten to 14 hours every day, and paid only for eight hours a day. I have cases of clerks having to start at 9 o'clock in the morning and, with two short intervals, compelled to work until 3 o'clock the following morning. Worse still, private instructions seem to have been issued, because they have been delivered, warning any of those men that if they report these breaches of the hours agreement to their unions, they will be forthwith suspended, and eventually dismissed. In these days, it is looked on as a privilege, instead of a right, to work, and a man with a wife and family, with that threat hanging over him, is not lightly going to take the risk of reporting the matter and getting himself dismissed.

The worst of those offences have been carried out on the other side of the Border, but the headquarters of this company is in this State, and I suggest that it would be a most improper thing if a Minister of this State gave the benefits of legislation, introduced, as he says, for the benefit of the railways, to a company which carried on these barbarities, whether it is in Northern Ireland, China or Egypt. I hope he will not give the benefits of this part of the Bill to that company until it resorts to civilised methods. On the Board of that company is an ex-official of the Minister's Department who, I believe, has been consulted fairly often in regard to these matters, and I would suggest to the Minister that he might suggest to the noble lord concerned that his company should have some respect for signed agreements and for civilised conditions if they expect to get the benefits of legislation passed by this State.

With regard to the Railways Bill, I have very little to say to it except that it is very largely a Bill to make better provision for the closing down of railways, at a time when the British companies are spending more and more money in trying to make the railways more attractive to the community. I do not take the stand that, in no circumstances should a branch line be closed down. That would be absurd. If the public do not support it in a reasonable way, the company cannot be expected to run it indefinitely at a loss, but, under the Bill, the only condition necessary in order that a line may be closed is that the company shall show to the Minister that it is for the purpose of more economical working, and that they have legal powers to run a road service in its place and intend doing so. If the Great Southern Railways Company want to close the line from Athlone to Galway, and could show that it was for some economical purpose, would the Minister draw the line there?

Does the Senator think it could show that?

You never know that they might prove. I do not say they could but, supposing they did, has the Minister power to refuse to give an order?

I think so. But the Senator will admit that if the railway company could prove that the closing of the line from Athlone to Galway would lead to more economical working we would have an entirely new transport situation.

They might prove to the Minister eventually that it would be more economical to close the whole line and run a road transport service. The Minister does not seem to leave himself much discretion.

I do not think that they could prove that.

It is a far-fetched suggestion, I hope, but the Minister is leaving himself very little room for the exercise of discretion. The Minister refuses to take power to hold a public inquiry. He was very contemptuous of the value of local expressions of opinion. Would he care to extend that to the case of elections? Are local expressions of opinion always stupid when they deal with a concrete question such as the closing down of a railway line which serves a particular district and are they always brilliant when they deal with national and international questions of great importance? The Minister cannot have it both ways. I suggest that he should have taken power to hold, if he so desires, an inquiry when application is made to him for the closing down of any section of a line. That power might be useful. He had it under the Act of 1932, but he simply will not have it now. The power was not compulsory and I think the Minister might have taken it in this Bill.

In Section 8 (e), a paragraph slipped in on the Report Stage, at the instigation of the railway companies, presumably, which has caused considerable alarm amongst the staff. It means that any of the employees on a line closed down can be shunted into a road transport concern and then dismissed after two years without compensation. The compensation provisions themselves do not provide any limit. Once a man is dispensed with as a result of the closing down of a line, he is entitled to compensation unless he gets other employment, but here he can be transferred to a road transport service and after two years dismissed. In any case, why visualise separate road transport concerns in view of the assurance given by the railway company that it would be all one company? If the employee does get suitable employment, it would be all right, but why the limit of two years?

As regards Section 9, which deals with superannuation, I should like if the Minister would indicate later to what sections of the staff that is intended to apply. At the present time, the salaried staff contribute to a superannuation fund. They have to pay from three per cent to six or seven per cent of their salaries to get rather small pensions and the fund is not available until the man comes to the age of 68. The lower-paid grades would be quite unable and unwilling to pay such a high rate of contribution and even the pensions as they are, are only made possible by the fact that all the railway companies in Ireland are in one fund and, in addition, the London Clearing House. If you separate the Great Southern and put it on its own, it means withdrawal from the fund and payment of a heavy fine. You would then have to work on reduced membership, with a lower paid staff to support the fund. The tribunal, I observe, has no power to reject a scheme. It must devise a scheme. The employees have no right to refuse the scheme so decided upon, even though they may not want it. I propose to move on the Committee Stage amendments which I hope will make this section somewhat more elastic. I know that the Minister means well but the proposals might do more harm than good.

This Transport Bill is supposed to be a pro-railway Bill in many respects. Really, all it does is to give the companies in certain areas powers, if they can find the cash, to purchase their competitors. The expense is being made as high as is humanly possible by giving a special vested interest to every Tom, Dick and Harry who may have a lorry for a few days or for a week. Then, the railway companies are prevented from competing with any prospect of success inside the 12 exempted areas. As I said at the beginning, anything that makes for a reduction of the existing disorder and that helps to restore the companies to solvency is an improvement but I am afraid that some of the compromises which the Minister has allowed to creep into the Bill will tend to create fresh problems which will have to be dealt with by fresh legislation in the near future. Nobody can hope for prosperous railways companies or for prosperous transport services of any kind until prosperity returns. The Minister is rather optimistic when he says that the economic war has not affected the companies to any great extent. I am sorry to say it has. The evolution of the new economic policy is going to affect transport for some time. During that period, I think that an old institution like the railways, employing so many people and involving so much capital, requires consideration that, perhaps, it would not be entitled to in other circumstances. I hope, therefore, that amendments which may tend to improve these Bills from that point of view will receive the favourable consideration of the Minister.

I understand that under an arrangement made we are discussing two Bills together—the Road Transport Bill and the Railways Bill. Of one of these Bills, I have a good deal to say and of the other not very much. Of the Road Transport Bill, I have little to say. It seems to me to be the result of long study and to be a good attempt to deal with what has become a very great difficulty. It seeks to place transport under more regularised and less wasteful conditions. I have no criticism of it to offer and I hope it will get a favourable passage. As regards the Railways Bill, the Preamble describes it as an Act to amend the law relating to railways and railway companies. In the light of the knowledge which we collectively possess, the Bill is really designed to prevent the Great Southern Railways from a financial break-down. The Bill seeks to prevent railway transport, which is still necessary to the community—though not as necessary as it was—from becoming a burden on the State. It should do this having due regard to the public interest—I might say the national interest—to the interest of the proprietors, who are a considerable section of the public, and of the employees. Broadly speaking, that is the problem. It is our business to consider whether this Bill constitutes a satisfactory attempt at its solution, whether it goes far enough in some directions, and whether in trying to lessen some evils it does not create worse evils.

There are many facts and figures involved in the consideration of this Bill. I have no special knowledge of a great many of them but, as regards the principles involved, I have some special knowledge and I have some criticism to offer. I am convinced that the Bill could in some respects be improved in Committee. Before I offer any criticism, I should like to state that I realise that neither this Bill nor any other Bill that is politically and reasonably practicable could straighten out the present position with any degree of completeness. Therefore, it would be futile to expect too much. The trouble is shortage of money and you cannot by legislation deal with that kind of trouble except by forcibly taking money out of the pockets of some people and putting it into the pockets of others. That might be described by a somewhat different term. The Bill cannot, therefore, be regarded as more than an attempt to ameliorate a situation which is very bad. I have no desire to delay the Bill or to criticise it in any spirit of hostility. We all must recognise how difficult it is to draw up a Bill to deal with this problem. A great many of the difficulties are quite obvious to me and I can imagine a great many more. Section 2 gives a definite measure of financial relief to the company. Under Section 8 considerable reductions in working expenses may be possible. These two sections are definitely helpful. Section 3 deals with reconstruction of capital and, in principle I do not like that part of the Bill. It really affects nothing. It makes a better financial position on paper but it does not really make money except in one respect, to which I shall presently refer. I see some justification for the writing down of capital in that if the State helps the company in the way in which it is doing in this Bill, it is not unreasonable to call upon the proprietors to make some sacrifice. But the proposal in the Bill does not really mean anything and it obscures a certain issue. It is like saying: "Put your head in the sand and pretend you have not lost any money." To the writing down of debentures, there is the very strongest objection. I am convinced that it is a wrong thing to do—that it is wrong in the national interest as affecting the national credit. Debentures are not like ordinary stocks and shares. They are the ultimate commercial security. They are debts. The debenture holders are creditors and there should be consultation with them if this course is necessary and cannot be avoided. If the writing down of debentures is necessary, it ought to be done by consent and I earnestly commend the Minister to consider that aspect of the matter.

Sections 6 and 7 have to do with the reduction of the number of directors, their fees and postal voting. There is a reduction of the number of directors to seven. That is possibly a very good thing. Arising out of my experience, I am not in favour of having large bodies doing business. The number seven is adequate and the reduction should certainly make for despatch. I do not believe in the postal voting part of the scheme and it does not seem to me to be necessary. Admittedly, the position is very bad and there is a tendency in those circumstances for people to say: "The men there cannot be of any use; better have a completely new lot." That is a very lighthearted way of dealing with the matter. There may not be appreciation of the difficulties. If you had a Board of geniuses, the position might be a little better but I am not so sure that it would be entirely satisfactory.

Senator O'Farrell has criticised the Bill. I remember that on a previous debate on a Bill of a similar character I was criticised by the Senator for mentioning State ownership, and it was pointed out that I was the only person who had done so. We had it mentioned to-day, but not by me, that this Bill was a recognition that the alternative was State ownership, because we have a business unable to go on and that the State would have to take it or let it go. Very expensive they will find it. As regards bolstering up private enterprise, and the railways being, as was stated, a classical example of such failure, there I join issue on the facts. I do not wish to bore the House with a lecture on that subject. It is one on which I could speak for a long time. The fact is that privately run railways are much better, and always will be better, than State railways. I could enumerate State railways which have wholly, or very largely, been modified. There has been a reversion from State ownership, as far as possible, because of the great failure that State ownership has proved itself. Any other ideas are out of date, because the State has there proved itself hopelessly inefficient. It is the same with shipping, the examples being those of the Australian State lines and the United States. I would like to point out that State action is largely responsible for the particular trouble that this Bill deals with. I know quite well why some people want State railways. There would be magnificent security, with uneconomic wages and conditions in the service, or the raising of the wages. What we ought to have before us are the interests of the people as a whole. If the privately owned railways revert to the State it will be a very expensive thing for the nation as a whole and will benefit a comparatively small number of people.

In the matter of electing directors by postal voting, I doubt whether anything material has been proved. I see various reasons how an unsatisfactory position may be created. Supposing as a result of the operation of postal voting there was a great deal of canvassing by various interests, and that people got on to the Board who knew nothing about the working of railways, or who would not necessarily agree with each other, that would be a very nice body to pull a concern out of a very deep hole. Assuming that postal voting alters the personnel, in my opinion you have no assurance that that is going to be for the better. I think it might be for the worse. Continuity in this matter is important, and is the result of possessing knowledge. Otherwise time would be lost trying to teach new directors their business about the troubles that arise. New blood should be infiltrated. I am speaking as a matter of principle, and I am quite certain that is the right principle. Otherwise it would really be a case of changing horses while crossing the stream, and to do that in a blind sort of fashion seems to me undesirable. It has to be remembered that the difficulties of the companies have been very grave. There has been world depression, and then there is the special depression caused at the present time by the State to the livestock trade of this country. Then there has been motor development which in this country is specially difficult and very much greater than in England for a variety of reasons. Distances here are much shorter, as it is on long distances that trains compare favourably with motors. There is not so much parcel traffic, which is obviously much better conveyed by train. Coal is a small item here. In a country which is not densely populated railways are not very numerous, and frequently road distance is much shorter than by rail. These conditions obtain here much more than in England, and consequently the difficulties are greater. While road development is a thing that cannot be stopped, because it has been a boon to mankind, we should try to regularise it.

Section 9 deals with the superannuation of employees. I agree with that part of Senator O'Farrell's remarks which apply to the rigidity of that provision. It is most desirable that there should be a pension scheme, but whether there is money for it is another question. It seems to me that the section is very rigid. Supposing the money is not there, there ought to be some other proviso. As regards whether the Bill goes far enough, there is the question of the baronial guarantee obligations which was settled by the Act of 1924. I think the Government might further consider that question and should pay them. If that relief was given it might be earmarked for certain purposes. The Government could see that the money was spent in the proper way, having regard to circumstances and conditions. As regards the burden of rates on the railways, that is no new thing. What I am suggesting is that railway hereditaments should be exempted and should be relieved from that part of the poor rate which applies to road maintenance. It seems to me that there is some degree of justification for claiming that the railways should not pay for the roads. It is quite true that the railways cannot be used without the roads to get to them, but very expensive high class motor roads are not required by them. I hope it will be found possible to make the Bill a better one in one or two respects when it reaches Committee. In concluding, I would like to emphasise the great difficulties of the railways. I hope I have not approached consideration of the Bill in a spirit which will be taken as hostile, because it is impossible to devise a scheme which will please any very large section, when the Government are under an obligation to bring in a Bill to deal with the question.

I wish to refer to two points in these measures. One of them has been mentioned by Senator Bagwell, and that is the method by which the capital of the railways is being reconstructed, and more especially the writing down of the debenture capital. I consider that that constitutes a most dangerous precedent, that the State should come in.


I think it was agreed at the beginning not to discuss the financial clauses of this particular Bill, but to discuss them on the Railways Bill proper, when it is before the House.

I thought the two Bills were to be taken together.


I agree, but I explicitly asked the House to have the financial clauses excluded, so that they will be debated separately, so to speak, on the Railways Bill.

I was not here at the time. I am sorry I did not observe your ruling.


Thank you.

I should like the Minister to say whether he has considered a totally different method of dealing with road transport. I realise that some form of control, either direct or indirect, is necessary, but I view with apprehension the setting up of elaborate machinery of classification and rating for the purposes of this measure. I was hoping that experience of railway work would have accomplished something. I thought that would have been rather a warning, and I had hoped that the Minister would have considered something by which very considerable latitude in regard to the operation of the rating principle would be permitted, and that the rule would be that those who use the roads should pay for them up to their full value. I should rather have seen liberty as regards the roads and as regards the class of traffic carried, and that there should be a rate for vehicles engaged on road merchandise. I do not think for a moment, even now, that these vehicles on the road are paying a proper contribution for the unkeep of the roads. I should have liked to have seen the matter approached in that way, so that inefficiency would be ruled out by the burden of taxation, that the efficient would be able to carry that taxation, the burden of which would be recouped in the matter of economic rates. I am very sorry to see that we should be continuing this method of regulation, with all its rigidity and with all the obligations involved, instead of the freer method of automatic regulation, by placing on road transport an adequate burden of taxation for upkeep.

I would like the Minister to deal with Section 53 of the Road Transport Bill, and particularly the latter part of the section as regards the compensation payable to persons to whom a licence is transferred:—

And the measure of such compensation shall be the pecuniary loss and expense (if any) which such first mentioned person sustains or incurs or will sustain or incur by reasons of such order and which is the direct consequences of such order.

I would like if the Minister would deal explicitly with the position in regard to the vehicles of a licensee whose licence and equipment is being transferred. What is the position with regard to this matter? I would be glad if the Minister in his reply would deal specifically with the points I have raised.

Are we to understand that the financial sections of this legislation are not to be discussed this afternoon? I am anxious to know when it will be possible to discuss these particular sections, because unless we have another Second Reading they will not come up again until the Committee Stage is reached.


The Road Transport Bill will be put separately as soon as the Minister replies. The House will then take the Railways Bill and discuss the financial sections of it. The debate on the Railways Bill will be confined to the financial sections of it. The Minister for Industry and Commerce will now conclude on the Road Transport Bill.

Most of the matters raised in the debate can be more effectually dealt with when we come to consider these Bills in Committee. In so far as the Road Transport Bill is concerned, I have received the impression that the principle of it is approved. The same thing, I think, could be said of the Dáil. The principle of it was generally accepted. Any disagreement there was related mainly to methods and detail. The principle of it, of course, is the bringing subject to control of all those engaged in conveying merchandise by road for hire. The only point of principle that arose in that connection was that raised by Senator O'Farrell: the issue of public ownership as against private ownership. There are, I think, many very strong arguments in favour of nationalisation, some of which the Senator referred to and some of which he did not mention. There are equally strong arguments against it. The considerations which determined the Government to proceed along the lines embodied in these Bills rather than by the method of nationalisation, to which we had to an extent committed ourselves previously, arose out of a number of matters which were mainly temporary, certainly considerations of expediency and not of principle. The Senator himself referred to one. He put it forward as a consideration, or as an argument, in favour of nationalisation, whereas in present circumstances I think it is a very strong argument against it. He referred to the fact that when the State takes over an undertaking of any kind it has to pay on the capital invested interest at a fixed rate. That is undoubtedly true. The State gets its capital by borrowing from its citizens. It has to pay on the amount it borrows interest at fixed rates. It puts that capital into enterprises of various kinds. It should aim to get back from those enterprises the amount necessary to meet the interest and sinking fund charges on its borrowing. There appears to be no prospect of doing that at the present day in the case of the railway companies. If we were to attempt to do it we would produce a situation much more serious even than that which now exists.

The position, as the Senator himself knows, is that the railway companies have paid no interest on capital at all this year. Unless something very exceptional happens they will not pay any this year, and probably none next year. If all the charges that should go against revenue were to be adequately provided for, it would be, in my opinion, impossible for the Great Southern Railways Company to pay any substantial return on its present capital. As members know, there are other companies in the Saorstát which have not paid any return on their ordinary shares for a number of years. The directors of them have long since abandoned the hope of ever being able to pay a return on their ordinary shares. The position is that if the directors and boards in charge of these companies, and to some extent the board in charge of the Great Southern Railways, were to attempt to get out of the undertakings, a return on the capital invested either by forcing an increase in receipts, reducing expenditure by cutting down the provision for maintenance and depreciation or by reducing wages, they would produce in relation to transport here a situation much more serious even that what we have. It is for that reason I think that, if we were to contemplate the nationalisation of transport here, we should not do it at the present time. If we had determined to have it we would have hesitated, we certainly would have delayed, bringing in legislation of this kind. We would have allowed the situation to get to the stage where we would have got possibly a public demand for nationalisation as the only way out of the situation. That is not the position. We decided to go upon this other line. We think that if the Bills that we have now before the Oireachtas produce the results that we anticipate nationalisation will not be necessary and will not even be regarded as likely to improve on the position.

If these Bills fail, if in fact they do not achieve the position that we contemplate, then we will be forced, as one Senator said, to take one of two decisions: either to take over the railways and maintain them as a public service in so far as it is necessary to maintain them—if necessary at an annual cost to the taxpayer—or else allow them to go as the stage coach went and carry on some other form of transport. The essential things have been achieved. It does not make much difference whether a number of citizens of this State own railway shares—ordinary shares, preference shares or debenture stock—or own Government Bonds representing the amount which the Government have invested in the railway undertakings, provided we have got efficient management, unified control and the necessary legislation to ensure that uneconomic competition is not going to prevent efficient management, plus unified control, producing the results that can be produced only by these two means. I am quite confident that the Bills will work out right. Certainly I have seen no indication of anything which would show that such confidence is not justified. I believe there will emerge for the Great Southern transport organisation management as competent as could be provided by other methods. We will also get unified control, and because of this legislation there will be a field for development in transport which will enable the whole organisation to be put on an economic basis if it is properly utilised, and if the measures, which would appear to the layman to be dictated by commonsense, are adopted.

With regard to the various points raised in the debate, we had criticism of the exempted areas. The criticism was somewhat similar to the criticism we had in the Dáil. It is said that these areas are the areas of densest population, where traffic is heaviest; that it seems an extraordinary thing to exempt these areas from a Bill the aim of which is to bring transport subject to control. That is a fallacious argument. It is undoubtedly true that all the important traffic in the Saorstát originates or terminates in one or other of these areas, but the only traffic exempted from control under this Bill is the traffic that both originates and terminates in one of these areas. That traffic is not of importance to the railways. I do not think anybody can seriously pretend that sending goods by rail over a distance of five, six or ten miles is likely to commend itself to most traders at the present time, or that it is the kind of traffic that the railway companies want.

What about the railway-owned lorries?

Now we are getting another point of view. The question is: should we abolish these exempted areas and try to bring the merchandise traffic with them subject to control for the sake of control, and not merely for the sake of improving the railway position? I do not think the Senator realises all the difficulties likely to emerge in such a case. The number of licences that would have to be issued would be considerable. Each of these persons would have to be subject to the supervision which must ordinarily attach to a service conducted by a licensee. That, however, is not the important part. I would recommend the retention of these exempted areas for the administrative convenience they create. The main argument for them is this: that the Bill as it stands offers considerable inducement to a public carrier whose business is entirely or mainly within one of these exempted areas not to apply for a licence at all, but to confine himself to these areas; to operate there not subject to control, and consequently to put himself out of the running, as it were, as a competitor with the railway companies upon the long-distance routes which are of such vital importance to the railway companies.

If we can get the long-distance transport organised, whether it be transport by rail or road, and controlled centrally, then we will get the position when we can afford to ignore whatever position exists in or around these port towns or cities. Merchandise transport in these areas does not require control for its own sake. I do not think there is a transport problem there which would have to be tackled if the railway situation was not as it is. It is quite different in the case of passenger transport. We are only bringing merchandise transport under control because such control is necessary to our general transport scheme. It is necessary however to our transport scheme only in relation to the long distances and not to the shorter distances. By exempting those areas we are administratively, making it easier and cheaper for the railway companies to get into the monopoly position that we contemplate in the rest of the Saorstát, and although our expectations in that regard may possibly be over-optimistic, I think it will be found that the cost to the companies of acquiring the position that we want them to achieve will be substantially reduced by the retention of these areas than otherwise.

A question was raised concerning the definition of an existing service in the Bill. The interpretation applied to the definition, however, was not quite correct. A person is described as a carrier who has carried on at some time between the 1st day of July, 1932, and the 8th day of February, 1933, a merchandise road transport business. That does not mean merely having been engaged in the business of carrying goods for one day or for one week Neither does it include the person who had a lorry which he used mainly in connection with his own business but which on very rare occasions he used to convey goods for reward for somebody else. The carrying on of business means something more definite than that. My interpretation is that the person must not merely have more or less regularly carried goods for reward, but must have held himself out as being available to do the business offered him to do. That is my interpretation of carrying on business. It does not merely mean that a person must have on some occasion carried goods for reward, but he must have been to the public knowledge engaged in the business of carrying goods for reward. A number of people throughout the country have lorries which are used in connection with their own business, but which on rare occasions they might also use for the purpose of carrying goods for somebody else, very frequently at low freights. These people would not be eligible in my opinion to get a licence under the Bill. In order to get a licence they must have been carrying on the business of motor transport and have been known to have carried on the business of motor transport and have been available to provide transport services when asked by people requiring them.

A statement was made in connection with the operation of the Road Transport Act, 1932, about the nature of the buses used upon some services, their dilapidated condition, etc. It was suggested that the Department of Industry and Commerce had the responsibility of approving of these buses. That is not quite correct. The Department issue a licence to a person to conduct a passenger service. We do not approve of the buses. We require the licensee to maintain that service upon a certain standard and to improve upon that standard continuously. If the service was deteriorating, if no attempt was made to maintain or improve upon the equipment, we would withdraw the licence. Up to the present we have acted on this principle: that everybody who had an existing service was entitled to a licence and should get it. In other words, everybody should get the chance of making good and be allowed to continue in that business for some time. It will be only in the event of such person definitely failing to make good, failing to maintain the standard of service, or improve upon it, that the licence will be withdrawn. In that event, there will be no question of compensation or anything else. The licence will be withdrawn and the person will go out of business; just as licences would be withdrawn, and have been withdrawn, when other conditions attaching to the licence were not kept by the licensee.

A question was also asked as to why in the section relating to compensation the arbitrator should be required to give costs against the company acquiring the licence. The arbitrator is asked to allocate such costs as he considers reasonable. The intention is that the person parting with the licence should get a net sum which would compensate him for the loss and expense resulting from the transfer of the licence. If that provision were not there it might happen that the person would be awarded a certain sum in compensation out of which he would have to pay any costs associated with the arbitration proceedings, an amount which would in fact diminish considerably his compensation payment. We want to avoid that. We say he should get compensation, plus the costs associated with the determination of the compensation, so that he will have net, at the end of it all, the amount which the arbitrator deemed to be fair to give him to compensate him for the loss.

I think the Minister missed my point. I postulated a position in which an offer would be made to the licensee whose business was being acquired and he refused it and insisted upon going to the arbitrator thereby incurring legal expense. The arbitrator decides that the offer made was a fair and reasonable one and that there really had been no necessity for arbitration. Why in these circumstances is there a provision in the section to give costs against the purchaser? There is no discretion left to the arbitrator. He shall award costs in each case, no matter who is responsible for the arbitration.

He can award such costs as he considers reasonable. However, we can argue the point again in Committee. It seems to me, however, that the main thing is to ensure the insertion of the safeguard I have referred to. It is possible that a case may arise where the safeguard would not be required, and might, in fact, work in the wrong direction. I do not say it is going to provide against that. The Senator also raised a question about the determination of disputes in relation to the award of compensation to employees. It is intended, of course, that such disputes should be determined by the court. The provisions of the Bill in that regard are not analogous with the provisions in relation to compensation for the owner of the licence. In his case the facts cannot be ascertained; the amount he should get cannot be fixed. The arbitrator must fix a figure having regard to all the circumstances. For the employee, the measure of his compensation, what he is to get, is set out in detail in the Bill. The amount that is to be given to him and all the other circumstances are all set out there. He knows, and everybody else interested in the matter knows, by reading the section, what the employee should get. A dispute cannot arise except upon some question of fact which should be determined by the court.

He will have to go to the court.

He will have to go to the court in the event of a dispute arising, but in that the judge would be a better arbitrator than somebody appointed as arbitrator for the purpose, because the only question that can arise is a question of fact. There is no question of the determination of the amount of compensation. It is only a question of fact, whether the employee is or is not entitled to compensation. If he is, the measure of compensation is there.

The question will also arise whether he was redundant because of the transfer of the licence. That is one of the most difficult questions that the court will have to determine at great expense.

Again, that is a question of fact. I do not propose to make any comment upon the Senator's remarks concerning the G.N.R. Company. It is not impossible that that situation with which he dealt will not be in existence by the time that any question will arise of utilising the compulsory powers under the Bill. The Bill has yet to find its way to the Statute Book, and a period of three months must elapse before the appointed day will be fixed, and three months will be required in the Department in order to prepare the machinery necessary to work the Bill. By that time I should hope that the matters to which the Senator has referred will have been remedied. I should like, however, that he should bear in mind the extent to which the difficulties of the G.N.R. Company might be removed by the operation of the measure, and that if we were to act in the manner he suggested we might be aggravating the difficulty which is causing the trouble, whereas by allowing the G.N.R. Company to achieve in its area the position we contemplate the root cause of the difficulty might be removed.

On the question of branch lines, I should like to say this: an order for the closing of a branch line will only be made after it is clear that the public living in the area served by the line do not want it. That will be made clear by the records of the actual use made of the services. When I made certain remarks about public inquiries in this matter I was speaking clearly what is in my mind. I think a public inquiry in relation to an application can throw very little light on the subject. That is something of which we had practical experience. There was a number of applications last year for orders to reduce services, and in relation to some of them public inquiries were held. Having got the results of the public inquiries, the minutes of evidence, the report of the person conducting the inquiry, and read them all carefully through and studied them, you were no wiser than you were before the inquiry was held. Before the inquiry was held you had the traffic returns, the actual use which is made of the services by the public, the number of passengers who travelled on each day over a long period back, the amount of merchandise offered; and it was clear whether the public wanted the service or not. If there was a bus service as well as a railway service you could get the records of the bus service and see the number of passengers travelling by bus as against those travelling by train. You will also have the other information necessary and which you would have to bear in mind relating to the future prospects of the district: the prospect of some industrial or mineral development; the prospect of some town as a possible tourist resort, or something of that kind, and that development being arrested by the closing of the line. Having regard to all that information, all of which can be produced from the records and examined in detail, the decision will be made, and a decision to close a line will not be made until it is clear that it is not wanted, that the public are not using it, that they prefer other services, and that other services are, in fact, being provided adequately. The same will apply very largely to the reduction of services on particular lines, although not quite to the same extent, because people might be using the service and at the same time not using it sufficiently to make it pay. There may be three passenger trains to a particular town in a day. People might, in fact, be travelling by train and might naturally object to the three being reduced to two, merely because it reduced their convenience. But if the use they are making of the service only justified the maintenance of two trains, I say there should be only two trains, and an attempt made to put the whole service upon an economic basis. People are always glad to get something for nothing, or for less than cost. The fact is that a very large number of people at present are getting transport facilities for nothing or for less than cost, and they cannot continue to do that.

In the event of the railway company deciding to close a branch line where the residents in a town or district were satisfied to go back to the old baronial guarantee system, and to make up the losses which the railway company were sustaining through the running of the branch line, will it be possible under this Bill to provide that the residents will get that opportunity?

I should like to see an amendment produced for that purpose. It is not possible under the Bill as it stands—that is quite clear. If in fact the people in a particular area were willing to restore the baronial guarantee system, it would be an interesting development. My experience has been that they are not, and I think most Senators will remember that when baronial guarantees were being paid there were, in many districts, local agitations for the closing of branch lines in order that the ratepayers might be released from the obligation to make payment.

I know that some towns will be completely wiped out if the branch lines are closed.

If the Senator wishes to propose an amendment which would permit the restoration of that system, wherever the local authority was willing to restore it, I see no reason why the railway company or ourselves should object. Other matters raised were also in the main Committee points, but it is no harm to deal with them. Senator Bagwell raised the question of rates upon railway hereditaments. I want to express again my opinion that the railways should be responsible for the payment of their proportion of the rates that go to the maintenance of roads, because the maintenance of the roads is at least as important, probably much more important, to the railway companies than anybody else. I think most people will admit that the railways without the roads would be of very little use to anybody. The roads serve the railways and the railways, to some extent, serve the roads. A good road system throughout the country, properly maintained, is of first-class importance to the railways, even if the railways do not operate road services themselves. I think that, in theory at any rate, there is no case whatever to be made for releasing the railways from the obligation of paying whatever rates are levied on their property for the maintenance of the roads.

Senator Bagwell, I think, and Senator Sir John Keane, as well as Senator O'Farrell, referred to Section 9 of the Bill, which provides for the superannuation scheme. The section asks that the company shall, within six months after the passing of the Act, prepare and submit to the Railway Tribunal a scheme for the establishment and maintenance on the basis of equal contributions by the company and the employees of the company, of a fund for providing superannuation allowances for such of the employees of the company as can, with due regard to actuarial considerations, be provided with such allowances out of such fund. I think that the framing of that section makes it clear that it is not intended to impose upon the railway company or the employees of the railway company any undue burden. The scheme is to be drawn up and based upon the principle of equal contributions by the company and its employees, and when prepared it will be examined in detail by the Railway Tribunal before which any interested party can make their case and to which any representations relating to the scheme can be brought. If it is not possible to bring a particular class of the employees into the scheme, having regard to the actuarial considerations, they have to be left out. If they are included in the scheme, it must be on a basis of equal contributions. The intention is that the scheme will be sound from the beginning. At the present time the railway companies do pay ex gratia pensions to some of their employees, and I think that most people will admit that it is desirable that there should be some kind of pensions provision. As Senator O'Farrell says, the railway clerks are already members of a pensions fund. Other employees are getting ex gratia pensions from the company and no doubt they would come under such a scheme. Others also may be brought in but only if the scheme can be made actuarially sound and be so framed as to be within the financial resources of the railway company. What the basis of the scheme will be, I do not know. A certain scheme was prepared, following the passage of the 1924 Act, which provided for small pensions for retired employees of the company, but it was rejected by the unions. If the railway companies produce the same scheme again, then, presumably, the unions will make their case to the Railway Tribunal, but it is likely that they will have to modify it in some way before presenting it.

Senator O'Hanlon inquired about the phrase used in Section 53 of the Road Transport Bill referring to compensation. It is clear that, when a licence is transferred, if the person wants to get with the licence the equipment used by the previous owner, then, whatever payment would be made for the equipment would be additional to the compensation payable on the transfer of the licence. On the other hand, the fact that the purchaser did not require it might mean a loss to the seller. It is quite possible that the equipment used in connection with the service is of no value except in connection with that service, and that he would be left with lorries or other such equipment which would be of no value to him, and which he would not be able to sell except at a considerable loss. If that is the case, the arbitrator would have to take that into account, and to have regard to the fact that the equipment might not be saleable and that in disposing of it the licensee would be likely to have considerable difficulty. These factors, of course, would have to be taken into account. On the other hand, it may be that the equipment would be of such a nature as to be easily disposed of, and that the person requiring the licence will desire to purchase it. In either set of circumstances, the arbitrator would have to take it into account. The intention is that he shall have regard to the loss and expense which the licensee will incur either in consequence of the transfer of the licence or in disposing of the assets or equipment associated with the service after the licence has been transferred. That is why the phrase "sustains or incurs or will sustain or incur" appears in the section. From certain quarters I have had representations made against the particular form of wording used here. It has been suggested that the phraseology tends to benefit the railway company, as being the party likely to do the acquiring, as against the independent operators as being the parties whose services are likely to be acquired. I do not think so. I have gone into these representations very carefully, and I think that, taking everything into account, one gets back to that phrase "pecuniary loss and expense (if any) which the person sustains or incurs or will sustain or incur by reason of the order transferring the licence." That seems to be a fair measure of the compensation to be payable, and I propose to adhere to it unless somebody produces a better phrase. If I can be convinced that the phrase produced is a better phrase, I should be prepared to accept it. I think these are the main points. If I have not covered all the points, Senators will have an opportunity to discuss them on the Committee Stage and, in any event, matters of this kind can be better discussed on Committee Stage.

Question—"That the Road Transport Bill, 1933, be read a Second Time"—put and agreed to.
Committee Stage ordered for Wednesday, 17th May.