Like the other members of the Seanad who have spoken already, I am not enamoured of nationalisation for its own sake, but I am prepared to regard this nationalisation measure as necessary in the interests of the transport of the country. Whatever we may think of it, we have to agree that it is better than the hybrid system it is replacing. The system it is replacing had a facade of private enterprise and public ownership without the reality of private enterprise—a large private company under a dictator appointed by the Government, and, in the end, something which was neither one thing nor the other. It had neither the freedom of private enterprise nor the responsibility of a State operated concern. Therefore, I do not propose to say anything in general against the present Bill. There are, however, one or two provisions in the Bill which I think it relevant to criticise at this stage. I think that the Minister might give the Seanad some information which is not included in the Bill regarding the type of person to be appointed on the board of the new concern. The powers in the Bill are extremely wide, and there is no definition whatever for the benefit of the Oireachtas and the public as to the type of person to be appointed to operate this gigantic national undertaking. There are many questions to be answered about the new Board. Will it be composed of technical experts? Will it be a board drawn from the heads of the various branches in the railway system? Will they be people with general business experience? Will labour be represented? Will it be a vocational board? Will it represent the various layers of labour and management engaged in the industry? These are matters upon which the Seanad would like to have some guidance from the Minister.
I would also like to hear a development of the theme touched upon this evening by Senator Buckley—the relations between the board and the Oireachtas. That question, I think, we may have to postpone. It has been the subject-matter of a debate, indeed only the other day, but it should be further elucidated, so that we shall know the relations between a company which will operate with public money and Parliament which will provide the public money. It is part of the big question which is so much discussed at the moment and which is under consideration by the Government. On that account, I do not propose to do more than refer to the fact that this will be a very big example of that particular kind of concern.
There is one other matter in relation to the directors to which I would like to draw attention. I am not satisfied that the Bill does not embody a principle which may be undesirable and it does not seem to be a principle which we should allow to pass without hearing some reasons advanced in justification of it. I refer to the provision in the Bill excluding from this board all the members of either House of the Oireachtas. It seems to me that with the great growth of boards of this kind operating public utilities, it is a pity that those who are running them should be excluded from participating in the parliamentary life of the country. I feel in agreement with those who have expressed opinions that the very type of man who would be successful on this board is a man who might be eminently suitable for parliamentary work. It seems to me that the exclusion of members of the Oireachtas tends to penalise ambition and talent. Some people may have peculiar qualifications which would make them suitable to operate as members of the Oireachtas and as members of the board. Why the two should be divorced is not self-evident. I think that it might in some cases deprive the boards or the Oireachtas, one or the other, of some very valuable member.
Looking back on the history of the 19th century and what one can read about the House of Commons, one of the things which have always enriched, I understand from reading parliamentary history, English parliamentary life is the link which existed between the city and the House of Commons. In England there was not this class of professional politician. The people who took part in parliamentary debates in the great days of the 19th century were members of the professions, bankers, directors of great city companies, etc., and these people could bring a wealth of knowledge to parliamentary debates which is extremely valuable. It seems to me that some justification should be offered for the extension of this principle. We have had it already with regard to the Central Bank, and I cannot help feeling that membership of the Board of the Central Bank would be an extremely valuable addition to members of the House in discussing financial affairs. Unless there is some very cogent reason for this proposal I think that there is a great deal to be said for reconsidering it. It prevents careers being open to talent, and it deprives the Oireachtas of a particular type of specialised ability which might be very useful. Instead of the two occupations, parliamentary life and membership of utility boards, being competitive, I think that they might be complementary and experience in one might make a person more useful in the other.
The next point with which I want to deal is a matter which has been widely canvassed, and there is reference to it in the evening newspapers this evening, that is, the basis of compensation of the common stockholders of Córas Iompair Éireann. The basic valuation, as was stated by the Minister in his speech, was the average stock exchange valuations in Dublin Stock Exchange during the period 1945 to 1947. I am quite prepared to admit that it is very difficult to find an entirely just, satisfactory and equitable basis for the repayment of capital on this scale, but at the same time there is a great deal to be said against taking the current stock exchange valuations as really representing the value of the capital of the company as a whole. What happens on the stock exchange is that small parcels of shares are sold from time to time showing very small margins of change. The market is insensitive and the prices which are quoted are very largely a matter of individual computation.
It seems to me that there is not any reason why, because a particular parcel of shares even over a period of years is worth so much, that the total value of the company, as a totality as it were, is correctly represented by multiplying those shares to represent the value of the capital as a whole. It seems to me that that is a non sequitur, that there is a missing link there and that the capitalisation of a company and the value of the capital of the company as a whole is something more than the total, the multiplied total, of individual transactions even over a period of years.
That, I think, is true generally, but I think that in the case of this particular company which we are discussing it results in a particular form of injustice because the period during which the shares were quoted and which is being taken for the stock exchange valuations was a period during which the value of the shares was depressed by a number of extraneous circumstances over which the shareholders had no control and for which they were not responsible. In the first place, as I said at the beginning of my observations, the company was really a hybrid affair. On paper it was a private company with private shareholders and private directors; in fact, it was hampered and restricted in every way. If it had been purely a private company operating with private capital it would have been free to do a great many things which would have enhanced its earning capacity and consequently increased the value of its shares. It would have been free to raise its rates and charges; it would have been free to close down branch lines which were running at a loss; it would have been free to get rid of redundant labour although labour trouble and unemployment might have resulted. These, from the point of view of a private profit-earning corporation, were obvious ways to reduce costs and raise profits, to raise the tone of the market and the value of the shares.
I am not saying for one moment that it would have been desirable from the national point of view that railway freights should be raised; I am not saying that it would be desirable that branch lines should be closed down or that labour should be laid off as redundant. I am not begging any of those difficult and controversial questions, but if this company was allowed to masquerade as a private concern I think that it is unfair that the shareholders of the company should be deprived of the ordinary, normal, commercial methods of increasing prosperity and increasing the value of the shares. What is suggested is that the valuation of 1945-47 should be taken, a valuation resulting from a particular state of affairs which had the effect of reducing the value of the company's shares to an artificial level consequent upon the hybrid make-up of the company, not being one thing or another, a private company which was not allowed to do things in its own interests and which had to operate the railways and conduct all its affairs under the whim of a dictator and which, in the real or alleged public interests, had to keep fares down, branch lines open and employment up. From a reasonable business outlook that is not a fair valuation of the company's capital.
It is very reminiscent of what is taking place in a big way under the Labour Government in Great Britain. Companies are put under a threat of nationalisation after a period of severe physical controls and every sort of abnormality. Shares are depressed to an artificial level, investors are afraid to buy and people are selling out in order to get out. They are told that the company is going to be nationalised and the valuation is that of stock exchange values during a certain time. That I think is very unfair. That may be fair from the point of view of the socialist Government, which has not got very much regard for private enterprise, but from the point of view of the Government of this country, which would repudiate the description of socialistic and which always preaches the virtues of private enterprise, it seems to me that it is an example which is not to be copied.
I know that one may be asked if the value which is defined in the Bill is not a fair value, what would be a fair value, and I am quite prepared to agree that it is extremely difficult to find a fair value. It is very difficult indeed to state what a fair value would be, but I suggest that almost any alternative reasonable system that could be suggested would result in a value higher than the value actually given, and I think that is as far as an individual member of the Seanad can go. What would a possible basis of valuation be? I do not think that any of them is perfect, but I suggest these as possible lines of approach. From the point of view of the cost of construction of the railway, the value now being given to the ordinary shareholders is very inadequate indeed, but I admit that the value of the railway is not equal to the cost of construction. At the same time, however, I am trying to suggest to the Minister other possible bases on which to start his calculation, and I suggest that any other possible basis would give a higher valuation than is in fact given.
I will admit that the cost of the original construction has largely become irrelevant in the circumstances, but what about the cost of replacement? If there was any effort at present to replace the physical assets of this concern, to build them up again at present-day prices, the cost of reconstructing the assets of Córas Iompair Éireann would be very much greater than the value of the compensation awarded to the debenture holders and the ordinary shareholders under this scheme. Another possible basis would be a breaking up, a realisation of the physical assets. If the entire assets of Córas Iompair Éireann were auctioned off—land, buildings, rails, locomotives, hotels and contents —I cannot help feeling that the probable price realised would give the ordinary shareholders a higher basis of valuation than what is suggested by the Minister. All I am arguing is that of all the bases of valuation the one has been selected which seems to be most unfair to the ordinary shareholder.
To come back to what I said a moment ago about the socialist Government, if ours were a professedly socialist Government, that might be a very good thing to do—to put property owners in their proper place and to teach them a lesson—but ours is a Government which is always boasting about its reliance on private enterprise and its encouragement of the private investor. If you are trying to encourage the private investor to develop the resources of your country, nothing can be more paralysing or more discouraging than the example of the nationalisation of a great industry of this kind under which the common shareholders are paid too low a price for their stock. I can see nothing more calculated to frighten people away from investing in Irish industry than the fear that at some future date the industry may be nationalised and that they will be compensated on the basis of a stock exchange valuation which is the result of abnormal conditions, very largely brought about by the fear of nationalisation itself. That is one of the performances of our socialist neighbours which I for one am not anxious to emulate.
Even assuming that the value fixed, in fact, is fair, or, rather, was fair at the time it was fixed, the time it was fixed was May, 1949, nearly a year ago, and everybody is aware that there has been a fall in gilt-edged securities in the past ten months and, therefore, what is proposed is that the shareholders in this company should be paid in a stock the market value of which has depreciated. In other words, if the price originally was fair, which I have been disputing, in May, 1949, it has become unfair to-day owing to the fact that it is being paid in a stock which has gone down, a stock the market value of which would not be more than 94 or 95 to-day. It must be remembered that this is a long-dated stock, a 1975-85 stock. It does not mature for nearly 30 years, and stock of that kind, as the Minister is aware, is very subject to capital variations owing to changes in the rate of interest.
Already it has been seriously depreciated. A further rise in the rate of interest would depreciate it still more, and it seems to me that, from the point of view of equity and justice between man and man, between the State and the individual, there is an inescapable dilemma here. If the price was fair last May, it has become unfair to-day; if it is fair to-day, it was too high last May. If there comes about a change in the value of the stock between the time the valuation is made and the time the payment is made, the owners are being paid in a depreciated medium. I say nothing about the change that has taken place in the value of the £ since. I admit that it is irrelevant, but the change in the rate of interest has quite definitely cut down the value in pounds of railway stock to-day and here again the Irish Government are—I do not say imitating, because I do not believe they are—perhaps unconsciously following the bad example of the Socialist Government in relation to gas stocks. Nothing has caused more indignation amongst property holders in England and more unrest in stock exchange and city circles than the fact that the gas companies' shareholders are being compensated now in a gas stock which has depreciated on the stock exchange from the time the valuations were made.
In other words, the share capital is first written down 20 per cent., only 80 per cent. of the original nominal amount is redeemed at all, and then it is redeemed in a stock which has depreciated by another 5 or 6 per cent. I suggest to the Minister that that is a serious injustice, and, if it is not too late to right it, either the rate of interest on the stock should be raised to 3? per cent. or the nominal amount should be slightly raised in order to compensate for the fall in the capital values owing to the rise in the rate of interest.
These are all financial aspects of this measure, but there is another aspect to which I should like to refer. It gives me an opportunity of referring to a matter which is, I think, of some public interest, that is, the much debated and much discussed Store Street bus terminus. Many technical questions are involved, but I should have thought, from the point of view of the man in the street, that the site for this particular bus station was just foolish. I should have thought that, if all your traffic is going north-west, south and south-west, to site your bus station to the east of the main traffic centres of the city was not a particularly intelligent thing to do; but as I say I do not pretend to have any particular knowledge from the technical point of view. Apparently that is a view taken now by the Government because it is now being abandoned. It is unsuitable for its purpose as a bus terminus and unnecessary for its purpose as offices, and, so far as we can make out, it is being transferred to some Government Department. From the point of view of the railway company, apart from what they may get from selling it, it is an entirely useless object, a great white elephant which has dissipated a large volume of resources which might have been very much more productively employed. That is all quite true, and, I hope, relevant.
There is just one other aspect to which I should like to refer, speaking as a citizen of Dublin who has a pride in his city, and that is the disfigurement of the Custom House and the neighbourhood caused by this new construction. I have been brought up in this city, of which I am very proud to be a citizen, and as long as I can remember anything I was always told that the greatest and most gruesome piece of engineering in Dublin was the loopline bridge, that if it had not been for that bridge we could see the Custom House. Very well. We can now go down the river below the bridge to see the Custom House. What will we see?—the bus station—a much more formidable disfigurement of the skyline than the loopline bridge ever was. It may be truly said of the directors of Córas Iompair Éireann si monumentum requiris circumspice—indeed, the difficulty is not to see, but to avoid seeing the monument with which they have disfigured the Dublin skyline.
One other final reflection, which I do not think is entirely irrelevant. One cannot help feeling that there has been a great degradation in public taste over the last 200 years, principally amongst those entrusted with the expenditure of public money. In the 18th century, whatever their merits were, or demerits in other respects, at least they did adorn their city and put up buildings of which we are all proud. To me, Dublin is one of the most beautiful cities in Europe, of which, architecturally, we are all very proud. Even the much-maligned business men of the 19th century who built the railways did not do too badly. The Broadstone, Kingsbridge and Harcourt Street are all much admired by architects of the best taste who have been greatly impressed by the beauty of the Dublin termini. I am sorry to say that the industrial leaders of Dublin in the 20th century have not left such good marks behind them. I am afraid that the loopline bridge, the gasometer and the Store Street bus station are rather sad monuments to the taste of our industrial leaders in 20th-century Dublin.
Now, to go back to something constructive, the members of the board. Is it too much to hope that amongst the members of the new board somebody will be included with some sense of taste, some feeling that a public service of this kind has great power to increase or decrease the amenities of the city and the country? We hear a great deal about planning. I never pick up a paper that I do not read about planning or about Dublin's big plans. I am sorry to say, however, that Dublin has been more planned against than planning. That is the final note on which I would appeal to the Minister. If he cannot find any more compensation for the stockholders, even if he cannot make up for the decline in the compensation stock, at least he can prevent citizens of Dublin from being faced with more eyesores in the future, such as they have been forced to endure in the recent past.
