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Dáil Éireann díospóireacht -
Friday, 9 May 1924

Vol. 7 No. 5

DAIL IN COMMITTEE. - RAILWAYS BILL, 1924—THIRD STAGE (RESUMED).

SECTION 3.
(1) The amalgamating companies may on or before the 31st day of July, 1924, submit to the Minister an amalgamation scheme framed in accordance with the provisions of this Act which has been agreed to by all those companies.
(2) The Minister shall refer to the railway tribunal any scheme so submitted to him, and the tribunal, unless it appears to them that the scheme does not conform with the requirements of this Act or that the provisions of this Act relating to the procedure preliminary to the submission of an agreed scheme have not been complied with, shall confirm the scheme.
(3) If the amalgamating companies fail to submit an agreed amalgamation scheme framed in accordance with the provisions of this Act on or before the said date, a scheme for the amalgamation of those companies shall be prepared and settled in accordance with this Act by the railway tribunal.
Amendment 17 not moved.

I beg to move Amendment 18:—

In sub-section (1), line 55, to delete the figures "1924" and to substitute therefor the figures "1925."

The date mentioned is quite impossible. It makes the section practically impossible to work. In fact, it is doubtful if the Bill can pass through all its stages before the date mentioned. I cannot see how it will, and I am moving this amendment in order to give the companies time for the necessary procedure.

The amendment has been described as dilatory, and the reason stated is that there does not appear to be time for an amalgamation scheme framed in accordance with the provisions of this Act to be brought before the tribunal. It is pretty definitely public knowledge that certain arrangements for an amalgamation scheme and for provisional schemes have already gone very far forward, and no objections have been raised by the companies concerned to this date. It is not merely possible, but it is probable that the amalgamation scheme will be introduced, and will be approved by this date.

May I remind the Minister that Section 8 provides that any agreed amalgamation scheme should be submitted to the proprietors and the debenture stockholders of the amalgamated and absorbed company affected in the manner provided in the Fourth Schedule to this Bill. Candidly, I think it would be impossible to comply with this provision within the period mentioned.

I would like, if I may, to support Deputy Byrne in this amendment. The amalgamating companies may on or before the 31st July, 1924, submit to the Minister an amalgamation scheme. That gives a very short period for the carrying out of the necessary work. In any case, it does seem to me to be fixing dates that are, to say the least, rushing the matter very much. Of course, that may be resented by the Ministry on the lines that they are going to put the Bill through in the shortest possible time, and make the changes as quickly as possible. On the other hand I do think that the date that is put in, the 31st July, 1924, is rather earlier than the date that should be put into it. I have already said that I am not going to obstruct the Bill in any way, and as far as I am concerned, I do not expect that I will call for divisions on very many of the amendments that stand in my name, but assuming that those amendments go through the ordinary procedure a very considerable portion of the time would be occupied in passing the Bill. Fixing the 31st July, 1924, for completion is, I think, too short.

The amendment, to my mind, would be reasonable, and might be sustainable if the circumstances were not what they are. The circumstances are that an agreement was almost reached between, certainly, one of the amalgamating companies and the one that is outside. There was a point in dispute—these disputes usually occur between business men. The man on one side says: "My interest in this particular concern is worth so much—x£'s." The man on the other side, who is purchasing, says: "Your interest is only worth 90 per cent. of —x£'s." It is not a matter in which very grave considerations have got to be judged. The negotiations had got to a point where, as far as I know, very little remained to be settled, and if the scheme be not hastened to some extent there will be disadvantages. Every advantage is taken of delays in this matter, and the real fruits and the real advantages are needed now more than at any other time. Deputies know that the reduction in profits—which, I suppose, is the shortest way to put a serious economic situation—necessitates an immediate change in our railway system, and unless the Dáil were informed as to the difficulties which would take time to solve and as to the delays that are inevitable, I do not see that there is a case for the acceptance of the amendment.

In an amendment of mine, which was ruled out, it was suggested that the word "December" be substituted for "July." You will see that in Amendment No. 17. Would that be acceptable to the Minister? It seems a half-way house between the two proposals.

That would leave us in the position that the amalgamation scheme would be submitted on or before the last day of December, and the entire scheme has to be framed and come into operation on the 1st day of January, so that if no agreed scheme were submitted in December, there would be no time for the determination by the tribunal of definite schemes.

That would be a matter for subsequent consideration. It would be rushing the question to leave in July, and I think, from all the adverse remarks we heard this morning, we do not want unnecessary rushing. It has been suggested by the body I represent that December would give a reasonable period. That is the advice of businessmen, and I think that, without rushing, it would not be possible to get this Bill through and get all the necessary formalities in the various companies complied with in the time set out in the Bill. If December were adopted, it would be possible to get over any objection that would be raised.

I do not think that I would be divulging any State secret if I were to say that I have been in communication with practically all the parties concerned with this amalgamation, and I am not satisfied that a real effort has been made on the part of one of the contracting parties not to waste time.

Amendment put and declared lost.
Amendment No. 19 not moved.
Amendment 20.—To delete sub-section (2) and to substitute therefor the following new sub-section:—
"The Minister shall consider any schemes so submitted to him and unless it appears to him that the scheme does not conform with the requirements of this Act or that the provisions of this Act relating to the procedure preliminary to the submission of an agreed scheme have not been complied with shall at the earliest opportunity lay on the table of each House of the Oireachtas a copy of such scheme and the same shall upon the expiration of 21 days therefrom become of full statutory force and effect and binding and conclusive on the parties thereto and on all other persons unless during the said period of 21 days a resolution to the contrary effect be passed by either of the said two houses, in which latter event it shall be open to the Companies parties to such scheme to submit to the Minister within six months from the date of the passing of such resolution, a new or amended scheme framed in accordance with the provisions of this Act."

I take it that Amendment 20 is to delete the reference to the Railway Tribunal and there are consequential amendments in the name of Deputy Hewat to the number of 13 which, I think, aim at amending the Bill, so that the Railway Tribunal will not appear. The question of the Railway Tribunal will arise on Amendment 20. I think Deputy Hewat agrees with that course.

Yes. I am afraid that I want a lot more practice than I have got up to the present as a Parliamentarian to follow all these documents. I am down for proposing this amendment. As you have said, A Chinn Comhairle, the amendment aims at reconsidering this question of the Railway Tribunal. The amendment proposes that a scheme shall be brought before the Dáil and discussed. The Bill provides for referring the matter to the Railway Tribunal. The creation of this Railway Tribunal means the setting up of a body and in this particular case the same body is to carry out two separate functions, or at least what I claim are two separate functions. In other words, the Railway Tribunal, when formed, will, I think, take unto itself all the various questions that arise in connection with the administration of the railways. But is it right that the same body should have anything to do with the various railway amalgamation schemes? Would it not be better that those should come before the Dáil and be considered by the Dáil, as a whole. Obviously it would be desirable that the fixing of the various schemes—the payment to be made and all that sort of thing—should be done by a separate body, and that that body should disappear when that particular part of the work is done. It does not follow that the same men who would compose the Railway Tribunal would be in any way the best men to consider the scheme or to value the scheme. The amendment objects to the clause as it stands and proposes to substitute the words set out. I move that the amendment be accepted.

The purpose of the amendment is to delete "tribunal." But it does a great deal more than that, as I will show in a moment. It substitutes for "Tribunal""Minister," with a proviso that if it appears to him that certain preliminary matters have been complied with the scheme shall be brought before both Houses of the Oireachtas and have full statutory force, unless objected to. It is for the Dáil to consider how far it is desirable for both Houses of the Oireachtas to consider the technical details, that will have to come up in connection with the amalgamation schemes. Further than that, there is no provision in this amendment as to what is to happen in the event of the Minister finding that the requirements preliminary to submission have not been complied with. Further than that again, if both Houses of the Oireachtas object, the amendment states: "It shall be open to the companies parties to the scheme to submit a new or amended scheme framed in accordance——.""It shall be open": that is to say, there is no finality about it, no compulsion on the railway companies: a new scheme can be brought before both Houses of the Oireachtas, and if objected to the matter lapses. The amendment in its effect would be to delay the whole arrangements to be set up in the Bill.

I should like to say on behalf of the Party with whom I am associated that we look on the clause setting up the Tribunal as one of the best parts of the Bill. In the past we had no machinery at our disposal to redress the many grievances under which traders and the general public suffered, but we have some hope that a means has been found now, and for that reason we are very favourable to the setting up of such a tribunal.

Deputy Hewat hardly suggests or could reasonably suggest, as the amendment does, that all the financial arrangements in connection with the setting up of the amalgamated companies should be left to the companies as such to determine and decide between themselves. If that was the position it would be very easy, and I am sure that they would take advantage of the opportunity for the present shareholders to make a very good deal between themselves to dispose of their shares on the Stock market, and then find they had sold to people who would be in a very false position if the grouping had been set up. I think it is very necessary that sufficient powers should be given to the Tribunal to see that the financial arrangements, capitalisation and everything else, should be very carefully looked into, because if you examine the position which occurred in England as a result of the British Railway Act you will find you can benefit by the very sad experience which some people had there as a result of the failure on the part of the Government to examine the financial arrangements of these schemes in a proper and satisfactory way. Deputy Hewat has not said, of course, that they should have a freedom which would enable them to do that. Assuming that the capitalisation of the amalgamated company was too high, it would be quite possible that the shareholders of the amalgamated company would come along and say that they had not sufficient powers to earn what was a sufficient dividend. That would be a very undesirable thing so far as the farming community would be concerned. It would prevent any relief in regard to the rates, and might mean an increase of the rates. Deputy Hewat should tell the Dáil that such powers would be in the hands of the amalgamated company to do these things. What is the justification for the amendment? He has not said that that is likely to happen, but it may if there is not sufficient powers to examine all these things by the Government or a Tribunal, such as is suggested in the Bill? Does Deputy Hewat also mean in the amendment to suggest, as I think he does, that there should be no control whatever over the question of rates, a control which the Tribunal is given in the Bill? If so, there is nobody who would have any effective control over the new company as representing the interests of the community as a whole. I doubt if Deputy Hewat, as a representative of the business interests, could from that point of view press this amendment.

As regards the point raised by Deputy Davin, of course you have to recognise that these amendments hang one with another. My original objection to the Bill was an objection to the Tribunal as well as to the Bill itself, but the Bill having reached this stage, I admit that the Tribunal is necessary, and I am not carrying my objections to the Tribunal to that extreme length at all. But I would have preferred that the whole thing should be voluntary, or that any grouping scheme should be voluntary and that therefore that internal arrangements would be made for carrying on the business. Of course, with the defeat of my original amendment for grouping the concerns, my attitude is altered, but in this particular case of the Tribunal I say that the Tribunal should be confined to work in connection with administration of railways, in laying down original schemes with a different personnel from the personnel which I hope will be permanent, as things are going now. A different personnel would probably be better for the work than the personnel that would be best for the Tribunal as a standing body of appeal.

Deputy Hewat really means to say that he desires to withdraw the amendment, because I think he will realise that what he is doing is asking the Dáil to agree with him on this occasion, to deny everything he has ever said hitherto about bureaucracy. The railway companies are to propose a scheme and Deputy Hewat objects to an independent tribunal examining that scheme, relating not merely to railway companies, but to the public interests, the trading interest in general; and he prefers that the Minister should examine the scheme and if he approves simply pass it on to the Dáil to lie for 21 days. That is a new doctrine by Deputy Hewat; bureaucracy in excelsis is proposed by Deputy Hewat in this amendment. I would have thought that the Minister should not be asked to set apart one of his officers to examine schemes in addition to all that officer's other duties but that it would have met the desires of the commercial community better to have the schemes examined by a Tribunal composed of three persons, such as is designated in the Bill, to examine them in relation to all the many requirements of the trading public that Deputy Hewat professes to speak for and the other public who are not amongst Deputy Hewat's constituents. I think that the scheme in the Bill is better than the amendment, and I imagine that Deputy Hewat has not realised that with the failure of his previous amendments this one also ought to have fallen.

Amendment put and declared lost.

The failure of amendment 20 involves the failure of amendments 21, 30, 31, 39, 40, 41, 42, 43, 47, 50, 51 and 54.

That is a slaughter of the innocents.

Not so innocent.

The question is: "That Section 3 stand part of the Bill."

I want some information on this. The amalgamated companies, may, on or before the 31st of July, 1924, submit to the Minister a scheme or schemes framed in accordance with the provisions of this Act. I want to know from the President if it is the intention of the Government if an agreed scheme is submitted that that scheme must be accepted by the Government as agreed by the people outside, without any careful examination by the Tribunal or the Minister. Is the Tribunal, so far as the agreed scheme is concerned, merely a registration body or a body that will examine an agreed scheme submitted?

Section 2 sets out that "The Minister shall refer to the railway tribunal any scheme so submitted to him, and the tribunal, unless it appears to them that the scheme does not conform with the requirements of this Act, or that the provisions of this Act relating to the procedure preliminary to the submission of an agreed scheme have not been complied with, shall confirm the scheme."

Deputy Davin's suggestion is an important one. It is that this section may read that if the tribunal is satisfied that the forms of the Act have been complied with, and that the procedure preliminary to the submission of an agreed scheme have been complied with, then the tribunal shall confirm the scheme. They are not to be required to consider the merits of the scheme. They are not to be required to consider whether the scheme does conform to the common interests or not; all that they are required to do is to decide whether the forms and the procedure have been complied with. I submit that that is not enough, that the tribunal should be required to report on the scheme on its merits, to decide whether there are any public interests detrimentally affected by the scheme, to decide whether there are any agreements between the companies involved in the scheme so submitted which may be detrimental to the public interests, and I think, this mandatory provision to Section 2, that the tribunal shall confirm any such scheme provided it has complied with the procedure, is rather too strong, that it should not be mandatory, and that they should have power to report and point out the defects from the point of view of public interest. I think the section would require reconsideration, having that in mind.

It may require reconsideration, but not in the public interests. It would perhaps require consideration if one were of opinion that the stockholders or shareholders, or other persons interested in the value of one of the amalgamated companies were not getting due consideration in the reorganisation, amalgamation, or unification of the various companies. Only to that extent. So far as the public interest is concerned, the public interest is safeguarded by reason of the average of the three years' expenses. If, for example, one were to say that the relative values of W, X, Y and Z was a fourth of the total £27,000,000, but that the proportions were not increased, that the relative values of the particular companies joined, and that by reason of that a company's stock-holders had their interests so looked after that their proportion or ratio in respect of the £27,000,000 was greater than what it should be, then to that extent only the interests of the shareholders of that company who were given greater consideration than the interests of the other three companies would be a matter for the directors in the first instance, and for the stock-holders in the second. The public interests are safeguarded absolutely if you limit the actual amount that they are entitled to earn by the three years' average. The public interest is not in any way interfered with by reason of this section. If stockholders or other persons think their interests are not sufficiently safeguarded we would be prepared, if the Dáil think it is desirable, to have it the subject of a special clause. Personally, I do not think it is desirable. I am satisfied, from my meetings with the directors of the various companies, that the interests of the stockholders are being very well looked after by the directors.

The public, I suggest, would have very much concern with the capitalisation. If there is over-capitalisation of the amalgamated company arranged by agreement between the people who submit this scheme, I submit that is likely to have a very serious effect on the trading community.

To what extent?

It is quite possible, as I have previously stated, that at a later date the amalgamated company may come to the tribunal and say that their powers are not sufficient to earn a reasonable dividend, with the result that you will have to meet that situation either by a reduction in the wages of the employees, or an increase in the existing rates. I suggest that is in the public interests, and that the capitalisation of the amalgamated company, whether it is agreed or not, should be the first concern and the serious consideration of the railway tribunal.

AN LEAS-CHEANN COMHAIRLE took the Chair.

I fail to appreciate the points that have been made. The facts are that any issue of stock obviously will not be of the value of the sum set down—£27,000,000. I should say it would be very much less than that, but whatever the sum is the real thing that concerns the public interest is the amount of money that this new body is to be allowed to earn. That is limited by reason of the ratio of the three years' average. The next question is if the new company has a nominal capital of £20,000,000, each of the companies to be amalgamated or absorbed, as the case may be, will seek to get a proportion of that. We will suppose for a moment that one of them gets twice what he is supposed to get; it has no effect whatever on the amount of money the whole concern is entitled to earn. It is not a matter of the preservation of the rights of public interests but, rather, if it should so happen that the stock-holders or share-holders of a concern did not get due consideration, it is the concern of the stockholders or the shareholders only.

Of course, this whole matter will come up again. The Minister has failed to see that if certain arrangements are made regarding capitalisation of companies the way is made for an agitation in three or four years' time. A poor mouth will be made by the shareholders to show how they are only getting so much per cent. They bought stock and it is returning only so much per cent. "How can we afford to do this, and how can we afford to do that. We are receiving only so much on our capital investments."

The thing has been done. It is not something entirely new. It is not supposition. It has in fact been done under a similar scheme, of which this is a copy, and the public interests of the future have to be safeguarded from the attack of an innumerable, or at least very many railway shareholders, in ten years' time. They will be liable to the plea that the money that they invested in railway stock in 1924-5 is only returning them so much, and they will plead: "You must allow us to charge a higher rate for our services and charge a higher rate for our goods or reduce wages," or do this or that or the other thing. In a general way, if procedure only is to be the consideration that the railway tribunal has to take into account, then the position of the companies is secured, and the public interest may be very detrimentally affected. I suggest that as a matter of fact there are schemes already in the pigeon holes waiting, and if they have followed the lines of some of the British companies they are just re-adjusting the method of capitalisation so as to prepare the way for a future agitation. The present companies will be benefited and future shareholders will then find themselves in difficulties and they will come to the tribunal and they will come to the Dáil and ask for consideration because of the fact that they were taken in. in 1924 and 1925.

If they allow the present opportunity to escape and do not make their case now—and there would unquestionably be a case—I fail to see how, when they have got stock, whatever its nominal value, which it will produce for them the average of the three years already mentioned, there is cause for any apprehension. If it is put to me that there is danger of an agitation starting in one year, two years, or three, five or ten years, I am afraid it is beyond the limits of the possibility of this Oireachtas to prevent that. I would direct the Deputy's attention to Clause 4, sub-section (d), which I think makes the thing even more water-tight than I have described it. I have certainly failed to grasp the force of the case that is being made as to any infirmity that there is in this section. Perhaps on re-consideration it might appear to me to be so, but it certainly does not at the moment.

If you read up the history of its application in the British Railways Act, you will see what happened there.

Perhaps I might, but I am afraid I will not have time to do that. In any case, I am fairly satisfied from the general tone of this Act, from all the safeguards we have put into it, that we will be able to stand any agitation save one, and there may be a case made in respect of that one. There might be a fair case made in this way. Take the case of persons who invested money in a railway company that was not a success. They put their money into the company in good faith, and let us take it the business of the country developed to such an extent that they would have a claim for consideration. I should say that that event would not be likely to occur within 20 years, and by that time I expect that Deputy Davin and Deputy Johnson will be wealthy landowners in the country and that they will not object.

Under the scheme of the Great Western group in England, the Minister forgets that the Great Western Company of England has been able to do things which the companies in Ireland are quite well able to copy, and the Bill that is now before us is in very many of its clauses word for word copied from the British Act, and in this clause the companies put their fingers into the eyes of the British public and the British legislature and took advantage of the loophole in the Act. The Great Western group decreased its nominal capital under the capitalisation scheme by £14,000,000, but by its manipulation it actually increased its fixed annual charges by £91,000. Now, adopt that method and you will undoubtedly give the company, or the shareholders of the company, an opportunity to say that the scheme which was presented was agreed to, and having agreed to that scheme, the Railway Tribunal and the Dáil have a right to take into account the circumstances of the time the scheme was accepted. And when they come to make what is a fair charge they would say that that should have to be taken into account. When there are proposals for reducing the charges upon public rates, etc., the cry will come: "We are only getting so and so from our invested capital," which, following the example from the British grouping, would be increased by the manipulation of the capitalisation scheme which was not examined and must not be examined because of the forms we followed. The Tribunal is practically, under this section, precluded from considering anything else but the procedure. If the procedure has been followed accurately, then the Tribunal is bound to pass this scheme. I say that is a defect that should be looked into before we arrive at Section 7, and I hope it will be. I hope the Minister will consider the desirability on Report, if this section is passed in its present form, of altering it so that the powers of the Tribunal will be to consider the whole of the scheme of capitalisation or any matter relating to the proposed amalgamation.

If the Deputy will put me in possession of the facts that he has with regard to the Great Western and its amalgamation scheme I will undertake to examine it very carefully before Report Stage is reached.

Question—"That Section 3 stand part of the Bill"—put and agreed to.
The Committee adjourned at 2 o'clock.
The Committee resumed at 2.50 p.m.

in the Chair.

SECTION 4.

An amalgamation scheme under this Act—

(a) shall provide for the incorporation of the amalgamated company under an appropriate name with power to hold land for the purposes of the company, and make such provisions as appear necessary or expedient with regard to the share and loan capital of the amalgamated company and the vesting of the property, right, powers, duties and liabilities, whether statutory or otherwise, of the amalgamating companies; and

(b) shall provide generally as to the terms and conditions of amalgamation and for the winding-up of the amalgamating companies, including the allocation to holders of securities of the amalgamating companies, in substitution therefor and in satisfaction of all claims arising thereunder, of such securities of the amalgamated company, and of such amounts, as may be specified in the scheme; and

(c) shall incorporate Part V. of the Railways Clauses Act, 1863, subject to the provisions of this Act; and may incorporate any of the provisions of the Companies Clauses Consolidation Act, 1845, and the Acts amending that Act, subject to the modification that any committees appointed under section 95 of the Companies Clauses Consolidation Act, 1845, may comprise persons who, though not directors of the company, are proprietors and possess such other qualifications (if any) as may be provided by the scheme; and

(d) shall give effect to the provisions contained in the Second Schedule to this Act with respect to the direction of the amalgamated company, and may, with the consent of the proprietors, provide for the payment of compensation out of the assets of an amalgamating company to any director of such company who suffers loss by abolition of office; and

(e) shall contain such provisions with respect to the management of any superannuation, pension, provident, widows' and orphans' and other benefit fund or funds established by any amalgamating company as may be necessary in consequence of amalgamation, so, however, as to preserve in all other respects the management of such funds unaltered until other provision is made by the Oireachtas; and

(f) shall incorporate the provisions contained in the Third Schedule to this Act with respect to existing officers and servants; and

(g) may make such incidental and supplemental provisions as appear necessary or expedient in order to give full effect to the provisions of the scheme and the purposes of this Act.

I beg to move:

To insert after paragraph (b) a new paragraph as follows:—

"Shall provide for the repayment by the amalgamated company to the London, Midland and Scottish Railway Company of the sum of £100,000 lent by the London and North Western Railway Company to the Dublin. Wicklow and Wexford Railway Company pursuant to the provisions of the Dublin, Wicklow and Wexford Railway Acts."

In moving the insertion of this new paragraph, probably the Dáil will allow me to make reference to a few notes which are extracts from agreements which have led to my putting down the amendment. The object of the amendment is to secure repayment to the London. Midland and Scottish Railway Company of sums advanced or subscribed by the L. N. W. Railway Company for the benefit of Irish railways. The sum of £100,000 was authorised and advanced about the year 1905 as a temporary loan for the purpose of enabling the Dublin, Wicklow and Wexford Railway Company to complete the New Ross and Waterford extension, and this is referred to in the Schedule to the L. N. W. R. Act of 1905.

In the years 1901 and 1902, during the Boer War, £87,000 were advanced when the Dublin, Wicklow and Wexford Railway Company endeavoured to raise a sum of £100,000, by the issue of 4 per cent. guaranteed stock, in connection with the carrying out of the New Ross and Waterford extension, which had been commenced in the year 1899. Only £13,000 of this issue was taken up in Dublin, leaving £87,000 unsubscribed. Unless this balance was forthcoming there was no alternative but that the project should be wholly or partially suspended, if not altogether abandoned. The L.N.W.R. Company came to the assistance of the D.W. and W. Railway Company, and took up the entire balance of the issue, £87,000.

The £126,800 represents 1,268 £100 shares of the G.S. and W. Railway Company, which were taken under the following circumstances: In 1872 it was found essential, in the interests of the country, to provide railway communication between the Great Southern and Western Railway and the North Wall. By the G.S. and W. Railway Act of that year that company was empowered to make its North Wall Extension from Kingsbridge. By the same Act, amended by the L.N.W. Railway Act of 1877, the L.N.W.R. were empowered to advance monies to enable this project to be carried out. In all they advanced a sum of £126,800. All these monies were advanced by the L.N.W.R., now the L.M.S., to independent Irish railway companies in the interests of the trade of the country. It is now proposed that these independent companies should be swallowed up in an amalgamated company, losing their separate identities, and it is not unreasonable that the L.M.S. should ask that the monies subscribed by them should be refunded.

This is the most extraordinary proposition I have ever heard. On behalf of whom is this proposal put forward? Is it on behalf of the Port and Docks Board, which I observe recently has evidenced a remarkable improvement? The people of Ireland are, as you know, a peaceful people, evidence to the contrary occasionally notwithstanding. But if there is one particular spot in Ireland that was not a peaceful spot, judging from the reports we read in the newspapers, the assembly-room of the Dublin Port and Docks Board is certainly that particular place. But an extraordinary change has come over the personnel of that body. They are now a lot of cooing doves, one to the other, and they have all joined up in an attack on this particular measure. All past differences, all past disputes, and all past abuses between sections of that body are now composed. This, indeed, has been a most remarkable Bill.

Like the Nationalisation Bill.

It has been a most remarkable Bill. It was never intended that it would produce such a result as I have indicated. That fact alone shows the immense potentialities of it. The proposition before us is that a railway company, not of this country, is to get treatment different and superior to any national railway in this country. We have a proposal here by which a Company is to get par value in respect of an investment made in 1901 and 1902, and the citizens of Dublin or of the country who subscribed the £13,000 to make up the £100,000 are denied the same right and privilege. As I am not in the confidence of the Dublin Port and Docks Board, I do not know whether this particular proposal is put down at the suggestion of the L.M.S. We may suppose it is. If it is, there is a claim made here in respect of investments made by them, to give them a cash value, that is apparently denied other people.

Examining the proposal further we find that a sum of something like £300,000 is to be made good because, apparently, there is a discount upon its present value when the words par value are being put into the clause with regard to repayment. Apparently the present value of this is not what the face value of it would indicate. The thing we are endeavouring to do with regard to railways is to put them on a sound basis, to check their work, to have what we will call a supervisory body over their receipts and expenditure, and to see that the trade of this country will have a fair chance. Now, this new company is to be burdened with an amount apparently in excess of the cash value of the particular assets in question.

I would like to know the reasons for this proposal, other than the reasons that have been read out, because I am certain I could go around the country and get shareholders in the D.S.E.R. Company who paid par price for securities at present at a discount of 70 to 80 on the market. I could get those people, smaller investors, and people to whom a loss of this sort is greater than to a gigantic corporation like the L.M.S. I suppose I could be accused, with some degree of certainty, of having a certain little business knowledge. If an investment is made by a corporation, a wealthy, well-managed, well-conducted business corporation outside of this country, in something in this country, certain results are anticipated and certain advantages must be anticipated. If there were any results or advantages by reason of these particular investments, have we anything to put on the other side of the account so far as this proposal is concerned? I think the Dáil is entitled to know why, if this be preferential treatment, it should be given to a wealthy corporation. If it be not preferential treatment, why is the motion put down?

This motion in the name of Deputy Alderman Alfred Byrne is only interesting to me in so far as I forecasted an interesting reply from the President.

Hear, hear.

I am glad that the President had the opportunity of getting his feeling of indignation against the Dublin Port and Docks Board off his chest. I am afraid I was getting seriously concerned that the President's health might suffer from the continued bottling up of his indignation against the Port and Docks Board, and may I hope that he feels the better now for getting that indignation off his chest. The Dublin Port and Docks Board has nothing whatsoever to do or to say to the amendment in question. The principles that are involved in the amendment are a matter for the Dáil.

Amendment put and declared lost.

Mr. BYRNE

I beg to move amendment 23: To insert after paragraph (b) a new paragraph as follows:—

"Shall provide for the payment of or purchase by the amalgamated company at par within five years from the passing of this Act of the following stock and shares held by the London, Midland and Scottish Railway Company:—

1. £87,000 4 per cent. Guaranteed Stock of the Dublin and South Eastern Railway Company (New Ross and Waterford Extension).

2. 1,268 £100 shares of the Great Southern and Western Railway (North Wall Extension)."

The same case that I made for the last amendment is made for this one which I formally move.

Are we to understand that the object of this amendment is to place a stock-holder of the L.M. & S. in a preferential position as compared with stock-holder Patrick Murphy of the North Wall? I think Deputy Alderman Byrne is entitled to answer that very definite question.

Deputy Alderman Byrne is not going to be drawn.

Amendment put and declared lost.

Mr. BYRNE

I move amendment 24, to insert after paragraph (c) a new paragraph as follows:—

"Shall provide that until the said sums of £100,000 £87,000, and £126,800 be fully paid the Board of the London, Midland and Scottish Railway Company shall be entitled to nominate one Director of the amalgamated company who shall not require any qualifications and shall have equal rights, privileges and powers with the other Directors of the amalgamated company."

This amendment should read after "paragraph (d)" and not as it. appears on the Paper "paragraph (c)." That is the way it was handed in, I understand, and in the third line of the amendment the words "shall not require any qualification" should read "share qualifications."

In moving this amendment, which is a new paragraph. I may say that it is for the same purpose, because an agreement already exists between the various Railway Companies. In 1870, at the time of the loan to the Dublin, Wicklow and Wexford Railway, it was enacted that while any money should remain due to the London and North Western Company by the Dublin, Wicklow and Wexford Company that the English Company should have power to appoint one of the Directors to the Irish Company. This principle was again adopted in respect of the £100,000 loan authorised in 1905, and in the agreement to the Schedule of the London and North Western Railway Act in 1905 the right of the English. Company to have a Director on the Board of the Irish Company was specially provided for. The object of the amendment which I have put down is to preserve the right of the L. M. & S. to nominate a Director so long as any portion of the above-mentioned moneys remains unpaid. I do not think it is unreasonable to say that they should have a Director to see what way their £187,000 is being spent.

It is a fact that the L. M. and S. representative has by Act of Parliament to be a Director of the Dublin and South Eastern Railway Company? Under the amalgamation scheme the Dublin and South Eastern Railway Company disappears as a separate unit, and there is no justification therefore, for the statutory provision regarding the D. and S. E. R. to continue to apply to the new amalgamated company. If we were to accept the reason put forward by Deputy Byrne for his amendment, other groups holding charges against the amalgamated undertaking could claim the right to appoint a Director. We have made provision for the protection of the company in the Second Schedule, and to these provisions we adhere.

I think there is a different principle involved in this amendment as far as I can understand the position. I do not hold any brief for any railway company, but I would like to understand from the Minister how he proposes to discharge the obligations incurred by one of the amalgamated companies. This is a peculiar obligation, and I do not think that in equity we should dissolve it by a stroke of the pen. It is just a principle of equity, and I am interested to see how the Minister will face it.

I would like also that the Minister should consider the suggestion contained in the amendment for reasons quite different from those given by Deputy Byrne in moving the amendment. I think that the existence and continuance of a through rate system and the harmonious arrangements in connection with anything of that kind will depend upon the amount of co-operation and agreement that will exist and remain between the English Companies, whether the Great Western or the Midland and Scottish, and the Irish Companies. I think it would be very injurious that anything should happen that would prevent a continuance of such arrangements, and I think the Government should consider very seriously, if they are not prepared to give way to the amendment which I support for other reasons than those advanced by Deputy Byrne, how best they can frame a Railway Tribunal or the general panel in connection with that Tribunal, so that existing arrangements in connection with the working of through rates should be continued us harmoniously as possible. The development of the trade of the country possibly depends on the continuance and existence of these through rates, and I think nothing should be said or done in the Bill that would injure the traders of this country in keeping up the good relations that have hitherto existed in connection with the working of the through rate system.

I would like to support this amendment from a different point of view to any that has so far been advanced. We had here in this country a good deal of what we may call British capital invested. I think it is the desire that in the future we should encourage the investment of British capital. In connection with that investment, especially of large sums of capital, it is very often a qualification that a Director should be attached to the particular industry in which this large capital is invested. If that qualification were not admitted, the probability is that the capital would not have followed. Now, from that point of view I would like to ask the Minister to consider this aspect of the question very carefully, because we are all anxious that industries should be developed, whether with Irish capital or with British capital. It is a usual qualification, where British capital is invested, that directorships of this character should follow, and hence I think we should be slow to set up any principle whereby such an appointment would be lightly set aside. Here, it may not appear possibly a very important matter, but the principle may follow, that is to say, whatever we adopt with regard to the principle in this particular case, capitalists on the other side may naturally say, "Well, we can get the qualification all right now but we do not know how soon this Free State Government will wipe out that right." That is an aspect of the question that I would ask the President to consider very carefully before he decides on doing away with this right that attaches to the capital invested in this particular Company.

We have not considered this matter very exhaustively but we have been in communication with a very important representative of the London, Midland and Scottish Company, and we have asked what guarantee they required, but we have not got particulars supplied to us. I suppose we would be entitled to expect that we would get them. The capital of the Dublin and South Eastern is approximately 3½ millions. There are probably seven directors, so that each director might be said to represent half a million pounds worth of property. In this particular case the London, Midland and Scottish got a representative on the Board in respect of—if the figures submitted by Deputy Alfred Byrne are correct—something like £187,000. Therefore the representation is far in excess of the interests or of the money subscribed in that particular form. If we take the further figure, that is in regard to this matter of the North Wall extension, and one has to stretch one's memory very far back to go that distance, it would appear that the total interests, accepting the figures as correct, of the Midland and Scottish Company in the Dublin and South Eastern Company and the Gt. Southern and Western Company would total somewhere about £300,000.

Does the President contend that the number of Directors in Railway Companies should be based upon the share capital, because if that is the case the number of directors on the Irish Railway Companies is far in excess of what it should be.

I have not quite completed my statement. The Deputy did not show me sufficient consideration. In the proposal, so far as this particular unification scheme is concerned, the number of directors in the unified company is to be not less than 12 and not more than 15. Assuming it to be 15, if if you divide 15 into £27,000,000 you will get something like £1,600,000. I see that Deputy Good acquiesces in that figure. Now, the proposal in this amendment is to give representation for a sum of £300,000 to a director from an outside company, but as far as the citizens of this State are concerned each director is to represent £1,600,000. I put it in all fairness that that is an extravagant demand to make on the face of it, judging it on sound business principles. If I were, for example, to consult Deputy Good in regard to his business and say I am going into it with one-hundredth part of the capital, and you have got to give me a seat on the Board; there are not less than 12 and not more than 15 directors on the Board and I am bringing in money in the proportion of one pound for every hundred that you have invested, I know the answer he would give me. It would be polite, but it would be a very definite one.

What was the market value of the capital at the time?

I am not prepared to say that. I would have to take into account the value of the £128,000 lent in 1870. That is point one. I would not say that was worth more than two per cent. now. Then I would have to take point two: that a sum of £187,000 was lent between 1901 and 1902. Very few businesses paid more than 3½ per cent. at that time. Certain gilt-edged securities scarcely realised more than that. The other sum, lent in 1905, probably went up one quarter per cent., and at that time was worth three and three quarter per cent., so that all round one could write down the whole of these sums by nearly fifty per cent., or certainly 40 per cent.

As I understand the market value of the Dublin and South Eastern Railway property has not stood high in recent years, certainly not in my recollection, but I may be wrong. In order to use the argument with the force that the President would attach to it we would want to know the full value of the capital. For instance, for the investment of this sum of money they got the par value of the security. These securities at the time might have been purchased in the market at 25 per cent. of their par value, so that instead of investing in that way they had purchased in the market they might have got four times the value at which the investment stands to-day.

This argument could be dealt with in more ways than one. Would a company like the London, Midland and Scottish come in with this money purely for philanthropic purposes? Obviously there was some development anticipated for their business, some increase in traffic was anticipated by them in this particular investment. Apart altogether from such matters as the Deputy cited, if we were investing the money we would not anticipate anything more than dividends unless we were living in Gorey or in Wexford, where probably one would get a voucher to come to Dublin to hear the affairs of the company discussed and to see the sights of the city. Now the point is that there is a claim made in respect of a sum of money of the nominal value of £312,000 for the same rights and privileges that would attach to an investment of £1,600,000. I do not know, and I do not want to anticipate who should constitute the board of the new company. Supposing for a moment that the Dublin and South Eastern were entitled to two seats on the board, and that is on the face of it, according to the figures I have read, a generous assumption in respect of that company, then all the shareholders other than those who hold this particular £300,000 in that form are represented by one director, and the London, Midland and Scottish, in respect of their £300,000, would get the other seat. I do not know that the London, Midland and Scottish themselves would put up such a case as that, and I cannot for my part see that a case has been made in respect of this particular representation. The demand has not been served on us, and in the circumstances I cannot see my way to accept the amendment.

I am still bothering about the equity of the matter. I agree with the President that the representation of the London, Midland and Scottish Railway should be two-sevenths, but I do not know how to realise such a thing. The fact that we cannot have two-sevenths of a director on the new Board does not wash out the claim. The claim is a real thing. It seems like this to me, that I might owe a man half-a-crown and refuse to pay him because I said it was my principle to pay in pounds. The President is a very just man and I think he will admit this claim, which is a real one. I am not pleading on behalf of the railway company or anyone else, but in the interests of what I consider to be equity.

I am prepared to admit the right to two-sevenths, but I want Solomon to come here to say what I am going to do with the five-sevenths.

The President has assumed, in the arguments that he has put up against the amendment, that the qualification for a Director on all the Irish railways was based on a certain amount of share capital.

I would like to correct that misrepresentation of my statement.

That was the argument he used in regard to the D.S.E. Co. What do we find? If I were in Deputy Byrne's place probably I could use other arguments than those I am now going to use. The capital of the Irish railways, as shown in the Report of the Railway Commission, is £46,856,324. In connection with all the Irish railway companies we have approximately 270 Directors. That, I think, puts a different complexion altogether on the amount of share capital which is represented by a Director of the Dublin and South Eastern, as compared with a division of the share capital that I have referred to over the 270 Directors that have hitherto controlled the Irish railways. I do not know whether that is an argument which would have any influence with the President.

I would like to make a short personal explanation. When I was taking of £27,000,000 of capital I was talking of a certain sum, and I was contemplating that each one of the concerns which would be joined together would have a right to claim representation in respect of its nominal capital or of its cash value, if we were to take cash value. But I do not want to have it inferred from that, that if we were to take, say, the Lartigue Railway, on which there may possibly have been three directors, that the value of that divided by three should qualify for membership of the Board in the new unified scheme. I did not intend that.

So far as I am concerned, I would not, under any circumstances, argue on the same lines as Deputies Good, Hewat, or Byrne. I do not admit that the qualification for directorship of a business concern, especially in the case of an essential public service like a railway, should be based on the amount of shares a person holds in the company. It should be a different qualification altogether— namely, his ability to carry out the work for which he was elected.

They usually balance one with the other.

I would not admit the other argument at all. Therefore, it is for quite a different reason that I think this amendment deserves the serious consideration of the Government—I do not exactly say that I am supporting it. Deputy Good has stated that nothing should be done to prevent the investment of capital by British or other people in the development of Free State industries. I contend that if capital is to come from other countries —if Irishmen are not patriotic enough to realise the capital they have invested in Great Britain, and put it into industries in this country—any capital that is imported for the development of Irish industries must be controlled to a certain extent, and perhaps to a great extent, by the Free State. But we are faced with this proposition—and it is just as well that we should take the facts into consideration—that the greater amount of the traffic carried out of and into this country at present is carried by shipping companies that are controlled by British railway companies. While that state of affairs exists, or until we are in a position to raise our own merchant service, I think that the claims of the people who have money invested should get some kind of consideration so long as their working arrangements suit the convenience of the people here, and, particularly, accommodate the traders here, and help to develop the country. It is for these reasons I say that the question might be seriously considered, as to whether the amendment can be accepted, and, if not, as to what representation can be given to these companies on the general panel that may be set up in connection with the Bill, so as to see that the harmonious working arrangement in connection with the through rate system, which exists at present, is continued.

I am sorry Deputy Davin did not give expression to these views when we were considering this Bill at an earlier date. The Deputy is probably aware that this Bill gives particular rights to railway companies and the cross-Channel steamers attached to railway companies. If he is not fully aware of that, I think before we are done with this Bill he will possibly get some information on the point that will remove any doubt he may have on the subject. As to the other point, the President has been good enough to go two-sevenths of the way with us in connection with the amendment. It is only a matter now of the other five-sevenths. As I said before, there is a sort of moral obligation attaching to us in connection with this matter. This particular sum of money was advanced on the understanding that it would carry a directorship of the undertaking concerned. That is a moral obligation. What I am afraid of is, that if we retain the capital and attempt to remove by Act of Parliament the obligation, it may be construed in a wrong sense on the other side and may prevent that free movement of capital into this country that some of us would desire to take place. I ask the President if he would not weigh this point to see if he could not go the other five-sevenths in connection with this matter and not give an opening to people, who are possibly inclined to decry the Free State and warn those who have capital on the other side, and who may be willing to invest it, against the wisdom of doing so in view of what happened to them. All things concerned, I would press the President to make a special effort in this particular instance so that nothing may prevent, what we might call, the industrial development of the Free State in future.

I am afraid I must rather disagree with the last Deputy on this matter. After all, a directorship of one particular railway can only continue so long as that particular railway is in existence. The very terms of this Bill, I think, practically preclude the appointment of a Director to the amalgamated concern just because he was a Director of the other. I quite agree with the equity of the proposal, and I am quite sure it is based on sound commercial law, but at the same time I do not think it is possible to carry it out.

In spite of the difference of opinion between the business representatives, speaking as a non-business man, I would urge the President to consider this point. I know he will do so if he has not done it already. I think there is something in this. I am sorry to say that I am not in agreement with the business men. I feel that Deputy Davin has expressed my view better than Deputy Hewat. I urge the President to look into the matter and not to hastily decide to refuse the amendment. Perhaps he will consider it again on the Report Stage, or that something might be done in the meantime. On the face of it I admit that the L. M. S. Railway hardly have a case for a director on the new Board. They have a claim and I do not see how we can meet that claim by simply striking it out.

Would it not meet the claim quite well by not passing this Bill at all?

Of course, if the D. & S. E. Railway shareholders nominated a representative of the L. M. & S. Railway we would not make any objection. I put it this way. Here is £300,000 and there are £27,000,000. On the face of that there is certainly likely to be some apprehension on the part of business men in this State that their interests are overlooked and that other people's interests are safeguarded. There is that danger. I will consider the matter before the next stage, but in my present frame of mind, unless Deputy Good smiles more affably at me, I would not be inclined to accept it.

If that is all there will be no trouble.

Mr. BYRNE

In view of the President's assurance that the matter would be considered I do not wish to press the amendment and ask the leave of the Dáil to withdraw it.

MAJOR COOPER

at this stage took the chair.

Amendment, by leave, withdrawn.
Amendments 25 and 26 not moved.
Question "That Section 4 stand part of the Bill" put and agreed to.
SECTION 5.
(1) The amalgamating companies may, on or before the 31st day of July, 1924, submit to the Minister a scheme or schemes framed in accordance with the provisions of this Act for the absorption by the amalgamated company of all or any of the absorbed companies, on terms agreed to by the absorbed companies to which the scheme or schemes may relate.
(2) The Minister shall refer to the railway tribunal any scheme so submitted to him, and the tribunal unless it appears to them that the scheme does not conform with the requirements of this Act, or that the provisions of this Act relating to the procedure preliminary to the submission of an agreed scheme have not been complied with, shall confirm the scheme.
(3) If the amalgamating companies fail on or before the said date to submit an agreed scheme or schemes framed in accordance with the provisions of this Act for the absorption of all the absorbed companies, a scheme for the absorption of any such company with respect to which an agreed absorption scheme framed in accordance with the provisions of this Act has not been made shall be prepared and settled in accordance with this Act by the railway tribunal.

I move:

In sub-section (1), page 5, to delete in line 63 the figures "1924" and to substitute therefor the figures "1925."

Of course this is just a delaying clause in the same way as I advocated delay in the other matter. I suppose that my natural argument will be that any delay of this Bill will be an improvement. Therefore I ask that the date be altered accordingly.

I should have thought that this amendment was consequential and would have been dropped. The Dáil has already defeated an amendment to delay the completion of the amalgamation scheme until 1925. This provides that although we are going to have an amalgamation scheme in 1924 that an absorption scheme may be delayed until the 31st July, 1925. I think that is very definitely consequential on the defeat of the other amendment.

I think a certain distinction must be drawn between amalgamation and absorption. I have discussed this matter with the Ceann Comhairle and he was of opinion that it was not consequential. I think the two things are different, and that although the amendment to delay the date of amalgamation has been defeated still it is permissible to move this one and give the companies—if the amendment is carried—a longer time to put forward a scheme of their own. That was the ruling of the Ceann Comhairle, and therefore this and the following amendments are in order.

On the merits of this, just as it is known that there are amalgamation schemes already in existence, I am not revealing any secret when I say that an absorption scheme has to a certain extent been completed and that there were no representations made anywhere that the date July 31st, 1924, is too short.

I think that even the greatest optimist does not expect to see the scheme completed by the 31st July next, not even the Minister, who, I am sure, has more experience than I have, as the Bill has to pass through, another House after leaving the Dáil. Though its progress in the other House may not take as long as it did in the Dáil, from what I know there will be some amendments there. After the scheme has passed and becomes law it has to be brought in the usual form before the stockholders in the several companies. Anyone who has experience of getting these things carried through and complying with the different formalities with which these companies are bound up, knows the amount of time it takes. In view of that experience as far as I am concerned, I believe that anyone who would wager that this scheme would be through by the 31st July next would lose money. If we cannot get the Minister to go the whole way with us in this matter, possibly, like the President, he would go two-sevenths of the way and accept December instead of July.

Amendment put, and declared lost.

I move:

In sub-section (1), page 5, to delete in line 63 the word "July" and to substitute therefor the word "December."

I do not think it would be wise of Deputy Good to wager on my acceptance of this amendment. We are in the position that if this amendment be accepted we are faced with the prospect of an absorption scheme, coming into operation on the 1st January, 1925, but not submitted until the end of December, 1924.

Amendment put, and declared lost.
Question: "That Section 5 stand part of the Bill"—put and agreed to.
SECTION 6.
An Absorption scheme under this Act—
(a) shall provide in such manner as appears necessary or expedient for the transfer to the amalgamated company of all the property, rights, powers, duties, and liabilities whether statutory or otherwise, of any absorbed company to which the scheme relates; and
(b) shall provide for the consideration to be given to the absorbed company or companies, and generally as to the terms and conditions of the transfer, and may provide for the consideration consisting in or in part of securities of the amalgamated company; and
(c) shall provide for the winding up of the absorbed company or companies, and may provide on any such winding up for the holder of any securities of the absorbed company receiving in substitution therefor and in satisfaction of all claims arising thereunder such securities of the amalgamated company forming part of the consideration for the transfer of the undertaking, and of such amounts, as may be specified in the scheme, and may, with the consent of the proprietors, provide for the payment of compensation out of the assets of an absorbed company to any director of such company who suffers loss by abolition of office; and
(d) shall incorporate the provisions of Part V. of the Railway Clauses Act, 1863, subject to the provisions of this Act; and
(e) shall incorporate the provisions contained in the Third Schedule to this Act with respect to existing officers and servants; and
(f) may make such incidental and supplemental provisions as appear necessary or expedient in order to give full effect to the provisions of the scheme and the purposes of this Act.

On behalf of Deputy Hogan I desire to move the following amendment which stands in his name:—

To insert before paragraph (e), page 6, a new paragraph as follows:—

"(e) shall contain such provisions with respect to the management of any superannuation, pension, provident, widows' and orphans' and other benefit fund or funds established by any absorbed company to which the scheme relates as may be necessary in consequence of absorption so, however, as to preserve in all other respects the management of such funds unaltered until other provision is made by the Oireachtas or by agreement between the parties concerned, as the case may require."

This point has already been passed in connection with the amalgamation scheme. All the other provisions required by the amalgamation schemes are incorporated in the absorption schemes, but this provision has for some unaccountable reason been omitted from the adoption scheme. It happens to be a provision requiring that the schemes shall contain certain provisions in respect of the management of any superannuation, pension, or other benefit funds. I cannot call attention to the existence of any such schemes. There may or there may not be such schemes. If there are not, then no harm is done in inserting this new sub-section, but if there are such provident schemes already in operation amongst the absorbed companies or the companies to be absorbed, then that should be brought into this section.

This section was omitted because there was no information that such schemes did exist. We have no information at the moment that there are any, such funds to be transferred. As this amendment, however, safeguards the Bill, I would be inclined to accept it.

I thank the Minister for his agreement, but I would point out that there may be some small benefit funds that might easily be overlooked in the Ministerial Departments, and yet may exist. Further, may I say that there is a possibility, before we finish with this Bill, that new companies may be absorbed and these companies may come within the scheme having benefit arrangements.

Amendment put. and agreed to.
Question: "That Section 6 stand part of the Bill"—put and agreed to.

Before I call on Deputy Duggan to move the amendment which stands in his name I should point out that if that amendment were carried it will have certain effects on other amendments on the Order Paper and these will be ruled out of order. I refer, in particular, to Part 5, Section 59, Amendment 14, and, in the same part of the Schedule, Amendment 30. Perhaps it is well that the Deputy should know this before we proceed to discuss the amendment.

With all deference I would like to point out that Section 7 deals merely with the liabilities of absorbed companies, whereas the last amendment on the Order Paper, and amendment No. 14, do not deal with the absorbed companies.

I may say that in this matter I am merely a loud speaker, repeating, the ruling of the Ceann Comhairle as he gave it to me. I think I will leave the matters over. Deputy Duggan's amendment is in order, and I will leave it to the Ceann Comhairle to interpret when we come to the later amendment.

Amendment 59 is scheduled in your name, so that you are rather in an embarrassing position.

That is why I am anxious to leave the ruling to the Ceann Comhairle.

I was going to suggest that it might be possible to postpone this amendment in view of the fact that we could return to it when you may have an opportunity to deal with it yourself. I suggest that that would be convenient, and it has been done previously in other matters.

Am I to understand that the consideration of this amendment will definitely exclude the consideration of the last amendment on the Order Paper?

I am an interested party and I find a difficulty in giving any ruling. The Ceann Comhairle indicated to me that if this amendment of Deputy Duggan's was carried, he considers that my two amendments would be out of order.

You are not so ruling now?

I am proposing to the Minister that in view of the fact that Deputy Cooper is in the Chair and is precluded from discussing these, amendments, that this amendment be postponed and that the later amendments dealing with this section be taken.

I would agree to that if I were not confident of persuading the Ceann Comhairle that this amendment does not preclude consideration of the two amendments.

Speaking at the moment not as Acting-Chairman but as the person who put down the amendments, I am perfectly prepared to take my chance of the Ceann Comhairle's ruling on that point. I rule that Deputy Duggan's amendment is in order.

I beg to move:—To insert before Section 7 a new section as follows:—

"(1) Notwithstanding anything contained in this Act, there shall not be transferred to the amalgamated company any liability of an absorbed company in respect of any dividends or interest or arrears of dividends or interest on any loan or any mortgage, bond, charge, debenture, debenture stock or other security for money on which there were six or more years' arrears of dividends or interest unpaid on the 3rd day of April, 1924, and no provisions in this Act applicable to an absorption scheme shall apply to such liability: Provided that this sub-section shall not apply to the liability of an absorbed company in respect of any dividends or interest or arrears of dividends or interest on any mortgage, bond, charge, debenture, debenture stock or other security for money the holder of which was by virtue thereof in possession (whether by himself, or by a trustee on his behalf, or by a receiver appointed by him or any trustee on his behalf) on the 3rd day of April, 1924, of the property or any part of the property comprised in such mortgage, bond, charge, debenture, debenture stock or other security for money.

"(2) In the event of the amalgamated companies and the absorbed companies failing to determine, for the purpose of an absorption scheme, the capital value of any loan or security mentioned in sub-section (1) of this section, the value shall be such amount (if any) as is determined by the railway tribunal having regard to the possibility of any dividends or interest being paid on such loan or security if absorption had not taken place."

I think I will be justified in saying that this amendment means that nothing in the Act shall over-ride the provisions in the Statute of Limitations. There are some bank concerns in which dividends have not been paid for six years, and we do not want those bad debts to be made good debts by reason of the Act, and I may further say that we are simply benefitting by a mistake which was made by legislators in another place.

How about debenture interest, which may possibly be over seven years?

If there are six or more years' debenture interest due and each holder has not taken any legal action to assert his rights then he is barred.

Amendment put, and agreed to.
Question: "That the new section be added to the Bill"—put, and agreed to.
SECTION 7.
For the purpose of determining the terms and conditions of amalgamation between the amalgamating companies or of the transfer of the undertaking of any absorbed company, the railway tribunal shall take into consideration all the circumstances of the case, and in particular the value on a net revenue-earning basis of each of the amalgamating and absorbed companies as a separate company, and its value as a component part of the amalgamated company: so, however, that regard shall not be had to economies or accretions of traffic or other circumstances tending to enhance its value as such component part attributable solely to the provisions of this Act relating to amalgamation and absorption:
Provided that, in the case of the line of one company being worked by another company under an arrangement whereby a percentage of the gross receipts of the line so worked is payable to the owning company, the railway tribunal in determining the terms and conditions of transfer shall not take into account any higher charging powers than those authorised in respect of the line under the statutory provisions in force in the year 1913.

I move: "To insert after the word ‘tribunal,' line 50, the following words: ‘before confirming, approving or settling any amalgamation, absorption or preliminary scheme.'"

A considerable amount of discussion has taken place on the basis of this amendment on Section 3 when it was moved for inclusion in the Bill. The Bill provides that preliminary amalgamation and absorption schemes be submitted to the tribunal at any time, and the tribunal shall approve if the procedure necessary to their submission has been complied with. Section 7 applies to a scheme which should be made applicable to preliminary schemes and applicable to the tribunal, and that is the object of the amendment I move. When it was made clear that the British Railway Act, 1921, had to pass through the British House of Commons, every one of the companies now absorbed in the four different groups in England prepared different schemes. The schemes decided questions of capitalisation and every other question in connection with finance in respect to the setting up of the group, and when the schemes were submitted to the tribunal they found they had no power to examine the financial arrangements of the schemes submitted, and that so long as the provisions of the Act were complied with they had no power to interfere. The effect of that non-interference was shown by the statement made here to-day by Deputy Johnson, and in view of the assurance given by the President I cannot see why the Government should not pass this amendment which I now move.

Consequent on the agreement of the President to reconsider Section 3 on the arguments submitted to him by Deputy Johnson and Deputy Davin. I am prepared to have this amendment held over, because I believe if the President gives favourable consideration to the amendment on Section 3 some alterations here would be necessary.

I suggest to the Minister that it is certainly more important to have it here than in Section 3, and I would like the President to agree to have the amendment accepted because it will affect the discussion on Section 9. Sections 9 and 7 have to be read together, and unless there is clear understanding that all the circumstances shall be taken into account before approving either of the preliminary or the final scheme it will mean very considerable discussion on the whole clause at this stage.

The President has agreed to have referred to the tribunal the consideration of circumstances other than procedure. If he accepts that view it will operate not merely with regard to the amalgamation scheme but with regard to the absorption scheme and to determine all schemes where there is no agreement or preliminary scheme.

Does that mean that the Minister will accept this amendment temporarily or that it will save discussing the whole question at this stage of the Bill?

I am not in a position to accept the amendment temporarily. I say the President promised to consider Section 3. That implies that the wording of this amendment has to be considered on Section 7 and whatever amendments there may be in Section 9 so far as they relate to Section 9.

If we are quite clear that this matter can be discussed fully in Committee Stage again; then there is no need to press this point now, but it is a very important point and will require very full consideration unless the purpose of this amendment is definitely accepted. If the Minister gives us the assurance that there will be no difficulty about the full Committee Stage discussion when the President's proposals are brought forward then we can postpone this matter for the moment.

I suggest that a way out of the difficulty would be, now that it is 4 o'clock, that between now and the resumed Committee Stage the Minister and the President should consider this point.

Deputy Davin forgets that we agreed to sit till 4.30 p.m.

This point is being raised again on Section 9. We are not going to get beyond Section 9 before 4.30 p.m., so that if preliminary consideration is given now it would be dealt with in Section 9. At any rate I do promise full consideration on the Report Stage.

The difficulty arises that it may mean almost a full discussion on several clauses and amendments on a future Committee Stage. The difficulty arises that this suggestion governs quite a considerable portion of the Bill. If that tribunal is not to be empowered to take into account anything but what is embodied in the original draft many other things may have to be done. I think the Minister would not like to have a long discussion on a future Committee Stage, having gone through discussion at this Committee Stage. If the Minister is prepared to accept provisionally this amendment, it is quite easy for him or one of his supporters to move the deletion of it on Report Stage. It is not quite so easy to get it reinserted, and if the main purpose of the amendment is not disagreeable I would suggest to the Minister that he should accept this amendment with a view to a possible deletion of it on Report Stage.

I would prefer to have this amendment omitted here than under Clause 9, Amendment 52, and I will give every promise that there will be either such delay before Report or any such further recommitment of the Bill as will enable a full discussion to take place.

On a question of procedure, if this clause is passed now and we proceed to discuss Clause 9, how can we go back to Clauses 3 and 7 in Committee?

Clause 7 is the one we are looking after.

Obviously we cannot go back on Clause 7. The difficulty of the Minister's suggestion that we should postpone consideration of this amendment is exactly that we cannot postpone consideration without postponing consideration of the whole of Section 7. We cannot leave an amendment hanging over and a section in the air.

My proposal is that Section 7 be allowed to pass on a guarantee given that an opportunity for further discussion by a re-committal of the Bill, if necessary, will be given.

I think the procedure suggested is quite possible. My only fear is that it may lead to duplicating the discussion on later sections, which would be avoided if the Minister would accept this motion now.

Is the amendment being pressed now?

I think, in view of the Minister's statement and especially in view of the support he can command when he wants to do anything, we can leave it with the assurance he has given.

At the same time, I would like to congratulate the members on the Labour benches on the success of their comparatively few amendments.

Amendment, by leave, withdrawn.
Amendment 35.—To delete the words "amalgamated company," line 54, and substitute therefor the following words: "company in which it is amalgamated or absorbed."

This amendment is not of the greatest importance. It is partially a drafting amendment, and I am moving it on behalf of Deputy Morrissey. It is one of the possible outcomes of that last amendment. Under Section 9 a company may be formed by an amalgamation scheme before the amalgamated company is constituted. The preliminary scheme allows many things before the final amalgamation is completed, and the company may be formed by a preliminary amalgamation scheme before the final completion of the amalgamated company. This new company will be treated for all purposes as an amalgamating company. The amendment provides that in arranging the capitalisation of such a company so being formed by any amalgamation or absorption scheme the value of the original or newly constituted company is to be calculated upon its relationship with that company with which it is merged and loses its separate identity. Of course with the first amalgamation or absorption the interests of all concerned are in like manner preserved by the provision applying to the final amalgamation scheme. The intermediate stages seem to be omitted in the drafting of the Bill, and this amendment, I think, is an improvement in the drafting and makes sure that the interests shall be protected.

I am afraid I have not been able to understand what is meant by this amendment. I looked on it in the beginning as merely a roundabout way of expressing what was better expressed by the term "amalgamated company," and Section 9, sub-section 7 will have reference to that. It is there stated that whatever previous and preliminary amalgamations there may be any company so formed will not be regarded as an amalgamated company but merely as an amalgamating one. That has reference merely to the final stage.

Is the Minister satisfied that all the requirements are fulfilled by the language of the draft? I will not press the amendment at this stage, but I will reconsider it for the Report Stage.

If Deputy Johnson is thinking of bringing forward the amendment, I would draw his attention to the fact that while a company is a component part of the amalgamated company the new words seem to suggest that it is a component part of something before it becomes a part at all.

Amendment, by leave, withdrawn.
Question put: "That Section 7 stand part of the Bill." Agreed.
SECTION 8.
(1) The amalgamation scheme and every absorption scheme shall be so framed as to come into operation on the 1st day of January, 1925, or such earlier or later date, as the railway tribunal, after consultation with the Minister, may fix:
Provided that the amalgamation scheme shall be deemed to come into operation immediately before the absorption schemes.
(2) Before an agreed amalgamation or absorption scheme is referred to the railway tribunal, the scheme shall be submitted to the proprietors and debenture stock-holders of each amalgamated and absorbed company affected thereby in the manner provided in the Fourth Schedule to this Act.
(3) A scheme under this Part of this Act shall, when confirmed or settled by the railway tribunal, be binding on all persons and have effect as if enacted in this Act, and where any such scheme provides for the substitution of any securities of the amalgamated company for securities of an amalgamating or absorbed company any trustee or other person acting in a fiduciary capacity who at the date of the amalgamation or absorption held and was entitled to hold any securities of an amalgamating or absorbed company shall be entitled to hold the securities of the amalgamated company which may be substituted therefor.
(4) No stamp duty shall be payable in respect of any amalgamation or absorption scheme.
(5) Printed copies of the proposed amalgamation scheme and of every absorption scheme submitted to the Minister or prepared by the railway tribunal in accordance with the provisions of Sections 3 and 5 of this Act, respectively, shall be placed on sale at such places and at such prices as the Minister may direct, and notice that such copies are on sale and the places where they may be obtained shall be published in theIris Oifigiúil, and no such scheme shall be confirmed or settled by the railway tribunal until the expiration of twenty-one days after the publication of such notice.
(6) The amalgamation and every absorption scheme shall be deemed to be statutory rules and shall be printed, numbered, published, and sold, and may be cited, in the like manner as statutory rules are for the time being by law required to be printed, numbered, published, and sold, and permitted to be cited.
(7) If the railway tribunal postpones the date on which the amalgamation and absorption schemes are to come into operation to a date later than the said 1st January, 1925, then, during the period of postponement, the undertakings of all the amalgamating and absorbed companies shall be used, worked, managed, maintained and repaired as one joint undertaking, and the net receipts of the joint undertaking shall be distributed amongst the amalgamated and absorbed companies upon such terms and subject to such conditions and in such proportions as may be agreed upon by the several companies with the approval of the railway tribunal, or in default of agreement as may be determined by the railway tribunal, and the following provisions of this Act relating to the amalgamated company shall apply as if such joint undertaking were the undertaking of the amalgamated company and as if the governing body of the joint undertaking were the amalgamated company.
Amendment 36 not moved.
Amendment 37:—In sub-section (1) to delete in line 68 the figures "1925" and to substitute therefor the figures "1926"; and to delete in lines 68 and 69 the words "or such earlier or later date as the railway tribunal, after consultation with the Minister, may fix."

This is again a question of time. The amendment which I move seeks for an extension of the time. Seeing the spirit in which any question of delay has been received by the Dáil, I merely formally move the amendment.

The effect of this amendment would be to postpone compulsorily the coming into operation of the scheme until 1st January, 1926. If delay is found to be necessary there is power in this clause to delay for a certain period—"at such earlier or later date." The amendment would prevent the scheme coming into operation until the 1st January, 1926.

Amendment put and declared lost
Amendment 38:—"In sub-section I to delete in line 68 the word "January" and to substitute therefor the word "July."—John Good.

I think this amendment is consequential.

It is largely consequential, but as Deputy Good has gone I would like to move it formally in his name with the permission of the Dáil.

I have ruled it is consequential and it cannot be moved.

Amendment not moved.
Amendments 39, 40, 41, 42, 43, 44, and 45 not moved.
Question put "that Section 8 stand part of the Bill." Agreed.
SECTION 9.
(1) Any two or more amalgamating companies may, at any time after the passing of this Act, submit to the Minister for reference to the Railway Tribunal a preliminary scheme for the amalgamation of those companies
(2) An amalgamating company may at any time after the passing of this Act, submit to the Minister for reference to the Railway Tribunal a preliminary scheme for the absorption by that amalgamating company of any absorbed company or companies upon such terms as may be agreed between those companies.
(3) The Railway Tribunal shall approve any such preliminary scheme so referred to them unless it appears to them that the provisions of this Act relating to the procedure-preliminary to the submission of a scheme have not been complied with. or unless after hearing such of the other amalgamating companies as desire to be heard, the railway tribunal consider the scheme to be inconsistent with or prejudicial to the amalgamation scheme to be made in accordance with the provisions of this Act.
(4) Every such preliminary scheme shall, subject to such provisions in that behalf as may be contained therein, come into operation forthwith after it is approved.
(5) Subject to the provisions of this section, all the provisions of this Part of this Act relating to amalgamation and absorption schemes-shall, with the necessary adaptations, apply respectively to preliminary amalgamation and absorption schemes except that a preliminary amalgamation scheme shall, instead of giving effect to the provisions contained in the second Schedule to this Act with respect to the direction of the Company, make such alternative provision in that respect as may be agreed between the companies to be amalgamated.
(6) In the confirmation or preparation and settlement of the amalgamation scheme the Railway Tribunal shall give effect to any preliminary scheme approved by them, but so that the interests of the other amalgamating companies shall not be prejudiced thereby.
(7) Any company formed by a preliminary amalgamation scheme shall be deemed to be an amalgamating company for the purposes of this Act in lieu of the companies amalgamated by the scheme and shall not be deemed to be the amalgamated company within the meaning of this Act.

I move amendment 46 "In sub-section (1), line 52, to delete the words, "After the passing of this Act," and to substitute therefor the following words, "prior to the 31st day of July, 1924." The provision in the Bill is that preliminary schemes may be made at anytime after the passing of the Act—for instance, the provision under Section (1), Sub-section 3, and Section (5), Sub-section 1. Section 5 provides that the amalgamated companies may on or before the 31st July, 1924, submit to the Minister a scheme or schemes for the absorption by the amalgamated company of all or any of the absorbed companies. That scheme must be agreed to by the companies concerned prior to the 31st July, 1924, and on and after that date companies which have not been amalgamated or absorbed by agreement between themselves have to be amalgamated or absorbed under a scheme settled by the Railway Tribunal. My amendment makes it necessary to submit the preliminary scheme before the 31st July, 1924.

This is already provided for, for the reason that the final scheme is to be submitted by the date set down here in the Deputy's amendment, and naturally a preliminary scheme must ante-date the final scheme. I do not think there is any necessity for this amendment.

The phraseology of the section is, of course, senseless if the Minister's interpretation is correct—"Any two or more amalgamated companies may at any time after the passing of this Act..." If this scheme is to come into operation by 1st January, 1925, and if there is to be a preliminary scheme, which may be submitted prior to 31st July, it seems to be forgotten that there may be an intermediate stage between that preliminary scheme coming into operation and the final scheme coming into operation. The Minister seems to be contemplating the possibility of schemes being arranged and capitalisations being arranged by companies of a kind which will involve what has already been suggested in the earlier debate. After the 31st July, companies which have not been amalgamated or absorbed by agreement are to be absorbed or amalgamated under the provisions of the Act, so that the necessity for fixing a date is rather to ensure that there is no hocus-pocus. I think the Minister will be wise in accepting the amendment, and no harm can come of doing so even on his own reading of the present Bill.

I could not quite accept the amendment as it stands. I could accept the insertion of "prior to the 31st day of July, 1924," after the word "Act," in line 52, but not the deletion of the other words.

We accept that.

As a mere verbal matter, would you not want to put the word "and" before "prior"?

I submit that this makes it compulsory for this provision to operate by a certain date, and I do not know that you have any guarantee that you would be in a position to be ready for it: in other words, the passing of this Bill may not be affected by the date you are putting in.

Is the amendment altered?

Yes; to insert after the word "Act,""and prior to the 31st day of July, 1924."

If one might assume that the Bill will not have been passed by the date, what happens then?

A new section.

In that case an Amending Act.

A new Government; a Businessmen's Government.

Amendment, as amended, put and agreed to.
Amendments 47 and 48 not moved.

I move:—

In sub-section (2), line 55, to insert after the words "an amalgamating company" the following words, "or any two or more amalgamating companies," and in line 57 to substitute for the word "that" the word "such," and in line 58 insert after the words "amalgamating company" the following words, "or companies."

I think this is identical in meaning with amendment 48 which Deputy Cooper is not in a position to propose at the moment.

Amendment put and agreed to.
Amendments 50 and 51 not moved.

Amendment 52, I assume, is consequential.

That would remain over for consideration on the same basis as Clause 3 and Clause 7.

I withdraw it on that assurance.

Amendment, by leave, withdrawn.

I move:—

In sub-section (4) to insert in line 68 immediately after the words "subject to" the words "the provisions of this Act and to"; and in line 69 to delete the word "therein" and to substitute therefor the words "in such scheme."

I submit the amendment for the consideration of the Minister.

I am afraid I have great difficulty in understanding this amendment. If the preliminary scheme is to be subject to the provisions of the Act, the provisions contained in the scheme will themselves be subject to the provisions of the Act.

It makes it clearer. I do not think it is of enormous importance.

Amendment put and declared lost.
Amendments 54 and 55 not moved.
Question: "That the Dáil agree with the section as amended"—put and agreed to.
Question: "That Section 9, as amended, stand part of the Bill"—put and agreed to.
Amendment 56 not moved.
Question: "That Section 10 stand part of the Bill"—put and agreed to.

I move to report progress, the Committee to sit again on Tuesday after the Financial Resolutions have been disposed of.

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