The Transport Tribunal in their report say that the paid-up capital of the Great Southern Railways Company in road vehicles at the date of their report was not more than £1,800,000. Hereafter, the purchase price may be found to be a matter of importance in dealing with the assets which the Minister declares to be obsolete. One would have thought that he would have found out how much we are supposed, under this measure, to pay for obsolete assets. I take it to be at least a sum of £9,000,000.
I understand that, in his opening statement, the Minister pleaded that he should get agreement from all Parties with regard to certain things. I think he could have got a greater volume of agreement concerning a discussion on the transport situation in the country if he had supplied the House and, through the House, the public with more information. We are being asked in an ordinary empowering clause in a piece of legislation, and on the statement of the Minister from which very few facts emerged, to pass over control to an individual, to be appointed hereafter by the Minister, of the allocation of an expenditure of about £20,000,000 capital in transport facilities in this country. We do not know whether what is projected is a rail scheme or a road scheme. We assume that it is going to be a mixture of both, but as to whether the rail use or the road use is to predominate in the future, no information has been given.
In that context, I would like to allude to what members of the House will remember about the electrical development scheme in this country. I recall the compliment that was paid by the Leader of the Labour Party, the Party which was then the Chief Opposition in this State, in connection with that scheme. I may say that it was one of the few complimentary remarks passed by that individual on the scheme, but he did say that there was nothing on which so much information had been given to the public as in connection with that matter. There was, first of all, a very detailed report by the German firm which projected the scheme; there was a full report by five European experts, and, finally, the Government's proposals. All three were sent to every member of the Oireachtas and to the Press. The fullest possible technical advice and criticism were obtained on that measure. The matter was thoroughly discussed in the Dáil, and could be discussed because the information was before the Dáil and the public. The Press had full knowledge, and agitated the matter considerably. There is not the slightest doubt that, after that legislation was passed, the people could say they were well informed in respect of that matter. Certainly, as regards items down to £10,000, every detail of the amount of money which the State was to put up for that scheme was known in the same way that the sub-heads in the Estimates are known in regard to the moneys which are given to the Government for the various services each year.
After the public had got that information and had voted on it it was possible to say that we could then set up a board in some sort of independence because we knew the exact amount of money that would have to be spent and the purpose to which the money was to be applied almost to within 5 per cent. up or down on a running scale. The board was set up and was given authority to do certain things. The chief thing it had to do was to encourage electrical development in the country, to remunerate the moneys that had been given over to it, to pay interest where any money was outstanding, and not to earn any profits. The board was simply to fix charges at such a rate as would bring in the money required for the working expenses, to remunerate the State capital by way of a sinking fund arrangement, and the payment of interest while any money was outstanding. The scheme was put before the people in that way. In that situation it was reasonable to say: "Let the day to day management of those who have the great task of getting a return of that money be free from detailed control." It was accepted by the House as a good consideration in those days that, when this big amount of public credit was put behind this new development, the public was given the assurance that year by year there would be an opportunity offered for detailed discussion of the whole matter. The way that was arranged was this: that the Minister, at the expense of the board, could put in an auditor of his own to investigate the accounts of the board, that the auditor would bring back a report to the Minister who gave him that duty, and that it was the duty of the Minister, thereafter to put such questions to the auditor as would clarify any points that were confused or doubtful. Then the report, with the auditor's remarks, came before the House and it was agreed that if there was any considerable body of opinion requiring it, a day would be set aside for a discussion on the report. As a matter of fact, there never has been a discussion. The reports were very good and very comprehensive and they were referred to here from time to time, but there never was such a crisis in the board's affairs as led to a debate, calling attention to matters of policy or detail, in which the House disagreed with the board.
What have we here, on the other hand? As far as the expenditure of the money is concerned, we have not the slightest evidence from the Minister that either he or his officials, or the man who will, we expect, be chairman of the new company, have a plan before them. The best the Minister could say was that he felt we could not get on without the permanent way, but he made reservations even there. I am speaking from reports of colleagues, as I was not able to be here to listen to the Minister. I understand he made reservations almost immediately, in which he appeared to be still doubtful as between his two earlier moods. He had two earlier moods—one was that we could not get on without the railways and the other was that we had got on without them and could do so again. On which foot he is standing now, we do not know. Nobody knows whether there is to be road development in the main or rail development in the main.
The Minister tells us that it is necessary to have this Bill now. He has a date fixed—the 1st of July—and is working towards that. Why? Deputy Maguire has said that probably the Minister is the best judge of that. Deputy Maguire is asked to be the judge of that, too, yet he has no information from the Minister. The Minister says that it is necessary to plan ahead against the problems that will arise post-war. Apparently part of the use to which these substituted capital moneys will be put is to purchase new assets as against the obsolete assets of the Great Southern Railways. When is he going to purchase them? Not during the war, possibly not for two years after the war. Why are we being asked now to vote on this, when we do not know what the future of rail development or road development will be? The Minister is not certain in his mind regarding any plan or, if he is, I suggest that, even if it is only of a tentative nature and has many reservations, he should give the outline of it to the House. In the absence of that information, why should we be asked now to vote on an expenditure of £20,000,000? We are not told how it is to be spent and there seems to be no possibility that any great portion of it will be spent within the next three or four years.
The Minister says that we might agree upon certain general views. In regard to one point, there is very little disagreement, namely, that transport in this country for years back has been very unsatisfactory. I have met a considerable number of foreigners here from time to time and there was not one of them who, after getting some information about our country and how things are done, did not comment at once on the extremely high charges which the transport services impose upon the public. I have never heard anything but unflattering comparisons between railway charges here and those elsewhere. The condition of affairs has been very unsatisfactory— there is no argument about that.
Having said that, the Minister was realistic enough to say that few people would accept the Government's hope that transport under this particular scheme would be remunerative. In addition to being remunerative, that is to say, that it would repay whatever capital had to be remunerated, the Minister said he hoped we would get extensive, efficient and cheap transport. Undoubtedly, those are very big aims. How are they to be achieved? The Minister simply says that the Government believe it can be done. The Government cannot believe that, unless they have had something on which they rest their belief. Will we not be given some hint as to the circumstances which they feel are likely to operate in the future, different from those which operated in the past? The Minister says his aim is that transport shall not be subsidised. He has said, in a very sweeping phrase, that subsidised transport means costly transport and, eventually, inefficient transport. Therefore, it is not to be subsidised.
Now, without subsidy, transport is to be remunerative. The Minister described that by saying that, by the sale of transport facilities, enough income would be earned to remunerate capital, provide for wasting assets and pay the employees. According to the Minister, in this mood of faith, economies are not going to be effected at the expense of the staff. He says he believes there will be no redundancy and he also holds out against subsidised transport. He does not believe that the State will be called upon to pay the guarantees on these debenture shares, but it is noticeable that he provides against that emergency and says it would be impossible to get new capital except on the basis of the Government giving a guarantee. I take it the Minister has no scheme which he could unfold to the public, which would inspire such confidence that they would invest their money, in the hope of getting a return from the new management, in the new circumstances. Therefore, the Minister provides a subsidy, although he hopes the guarantee will not have to be called upon. In the same way, the Bill not merely provides, but protects effectively, against any possibility of expense falling upon the company in connection with economies in staff.
Although he expresses the hope and the belief that no redundancy will take place, he has a clause enshrined in the Bill that, if any redundancy occurs after six months from the establishment date, there is to be no payment by way of compensation to those who lose their posts. That is, I suggest, providing against redundancy and providing for redundancy without expenditure on the part of the company. I wonder what the Minister's hopes are based on in this connection.
We come, then, to a discussion as to the best method of handling the future of transport—whether it be nationalisation, or something short of it like this, or private ownership. I would welcome any scheme in connection with a public service like transport the nearer it goes to public utility operation, or socialisation or nationalisation. I think the world is moving away from the time when it was completely under the dominance of the private profit motive. We are getting further and further away from that. The more schemes of this kind there are, the larger the field is likely to be widened for future schemes of the sort. To a certain degree, I welcome this, because the Minister has approached it on the lines of going as near as possible to nationalisation, not going further and adopting full nationalisation as it would only mean difficulties and not advantages.
I was reminded very forcibly of the new development of the situation when, recently, after the proposals had been published, the chairman of the Dublin Chamber of Commerce indicated that he hoped there would come from the present proposals better services, in the sense of more extensive services, cheaper rates and a more simple classification. The Minister is not bold enough to say whether we will get that or not. The man who said that might not have been aware of his own position. He is running a particularly big concern, where there is really no public advantage given by having a private operator at all. That man might have been sawing very quickly through the bough on which he himself was standing, but, even so, he welcomed this Bill. That is an indication of the public mind in the matter of transport: the nearer we get to full socialisation or nationalisation the better for the people.
I do not like to have a scheme like this put up, unless there is some chance of success about it. Inevitably, it is so precariously balanced between nationalisation and something short of it, that people say it is a near approach to nationalisation. There will be people who will again vigorously demand that all this type of service should be handed back to private profit, and who will say that if there were private profit and some stimulus of gain, then the newly-fashioned transport monopoly might be successful. What makes for success or failure? The Minister admits that since 1924 the Great Southern Railways Company never found it possible to earn its dividends. The situation is even worse than that, and I am sure the Minister knows it, too. The situation with regard to the Great Southern Railways is that the company, while having losses, paid dividends out of losses, if I may put it that way. The way they did it was by paying out money which should have gone to the replacement of wasting assets. Because they did not replace wasting assets, they have got to the position that their assets are nearly obsolete. At the end of the last war, after the British Government had handed back the railways to the proprietors, the Government of that day did hand over certain sums. They were supposed to be for the arrears of maintenance and renewals which had been allowed to go into neglect during the period of the war. The proprietors distributed those funds; they held them as a fund out of which to distribute dividends in the years in which they were not earning dividends.
The citizen who wrote the Minority Report in connection with the Transport Tribunal, in a table on page 148, column 4, sets out the position as he sees it. It is a position which must appeal to anybody, and must commend itself as a reality to anybody who knows what provision had to be made for wasting assets. He gives the adjusted net income arising out of the company's accounts and he sets out the deficit on maintenance and renewals. He draws the conclusion, in paragraph 61, that the amounts year by year fell short of the sums necessary to pay debenture interest and other fixed charges. Over a period of eight years, according to the table set out there, the Great Southern Railways did not earn sufficient money even to pay the debenture charges. Of course, there were serious deficits, if one took the payments to be made on the guaranteed preference stock, the ordinary preference stock and the 4 per cent. ordinary stock.
The Minister said yesterday that the capital of the Great Southern Railways, as established under the 1924 Act, was considerably less than the combined capital of the companies which were then amalgamated. In that he was right, and that is something in the neighbourhood of £26,000,000. In 1932-33 the Minister carved down these stocks considerably, slashed the ordinary dividends to one-tenth of the original value, cut down entire holdings by more than half, and arrived at £12,500,000. We start off with railway capital higher than £26,000,000. We come to £26,000,000 and they cannot earn dividends on the debentures. You cut it still further to £12,500,000, and even then they cannot earn the debenture interest.
What do we propose to do to ease that situation? We propose to allow a substitution for what the Minister calls dead capital. If the Minister says the assets of the Great Southern Railways are virtually obsolete, and they have to be renewed, then the new company is in a serious position, because we are going to pay almost £13,500,000 in substitution of the stocks of the Great Southern Railways and the Dublin United Transport Company. The Transport Company's stock is stock on which debenture interest has always been paid and on which, except for a few years, ordinary returns were paid. Take out that £2,000,000 as representing good assets and take out £2,000,000 of the Great Southern Railways assets as representing road vehicles fairly recently purchased and in somewhat good condition. We are going to buy £4,000,000 worth of usable assets and pay £13,500,000 in substitution of the stocks of the Great Southern Railways.
The new company that is going to replace the Great Southern Railways, which could not earn debenture interest on the cut-down capital of, roughly, £12,000,000, will pay £9,000,000 for assets that are not there, and it is expected to remunerate not merely the new capital, but the £9,000,000 representing dead assets. What chance has it of doing that? If it does not do it, a subsidy will have to be paid by the Government and, further, if it does not do it, does not the Minister know that the next step will be redundancies in connection with the staff? If this particular situation does not develop inside six months, then any redundancy means that the man who walks out cannot go before an arbitrator to attempt to prove the difficult matters he has to prove under this Bill. That is the reality of the situation.
I do not know whether the Minister seriously meant that the assets of the Great Southern Railways were really so bad. But there are signs that they are bad. The Minister spoke of one thing being a mistake under the 1924 Act, the singling of the Dublin-Galway line. I assume the Minister knows why it was done. I think I know why it was done. Does the Minister see any reason why it should not be made public—or any other matter which reveal the serious situation to which the line had got? The Transport Tribunal Report says that for a long time the railway company had got only a modified certificate regarding the safety of the permanent way. The Minister knows why the singling of the Galway line was carried out. The reason was that the Great Southern Railways Company was warned by the engineers that the main line between here and Cork was in such a seriously deteriorated condition that the passenger trains could only be run over them at a very much reduced rate of speed, and the plea made in those days was that, unless they were able to lift good line along the double track to Galway, and put that into the main line between here and Cork, there might be fatalities.
That was a great sign of the times— an indication that their assets were depreciating. And, actually, all the time the shareholders were getting dividends out of money that should have gone to the replacement of the wasting assets. The assets were getting into such a shockingly bad condition that they were forced to single the Galway line and use the portions of line they lifted to patch up the permanent way between here and Cork. There is a good background of fact to the Minister's statement that the Great Southern Railways assets are not worth very much. We are asked to devote £9,000,000 to the purchase of them and we are asked to believe that the new company will earn enough money to remunerate the new capital put into the replacement of these hopeless assets and also to pay some return on the £9,000,000 not represented by any really usable asset. One may say that a miracle could happen.
One of the matters referred to as indicating the extremely bad cash condition of the railway company is the significant phrase in the report of the tribunal, which discovered that in 1938 the cash position of the Great Southern Railways was so bad that it had abandoned its previous practice of carrying five weeks' stocks of coal and decided to carry only one week's stock of coal.
That is the present position. They were allowed to drift into the war with only one week's stock of coal, although the Government had that report before the war broke out. They have been carrying that limited stock of coal since 1938. There might be some glimmer of hope or optimism if the Minister said: "We are putting all that behind us. There is a new situation developing and we have reason to believe—and here are the reasons— why the new company, overloaded with a burden of dead capital, will give remunerative transport, cheap transport, thoroughly efficient transport and no economies at the expense of the staff."
The Tribunal Report of 1939 goes into a variety of detail as to why transport had arrived at the position in which it was found then. There is no necessity to go into the whole of it. Certain things, however, emerge from the report. They say, first of all —and let us bid good-bye to that—that one of the matters seriously bringing about a decline in the railway situation was, of course, the economic war. They give details of the traffic, particularly the live-stock traffic carried at the time when that unfortunate matter was on and they show the tremendous losses which must have accrued to the railway companies, because they say that the position was serious not because the same number of animals was not carried, but because the company did not recover the loss of revenue in the three or four vital years in which the impact of road competition was being most seriously felt; that at the time when the Great Southern Railways had money to play with the directors might have gone in for some better form of road transport to meet the competition; but it was the falling off in traffics because of that matter which was more serious for them.
However, the report of the tribunal does pick out a couple of things. One of the things is the impact of road competition. Having examined that thoroughly, it is pointed out that the impact of road competition is mainly felt on the passenger side. I do not know whether it has been very specifically stated to the public, but it has been stated as between the railway company and the Minister's office, it has been stated frequently in cases, some of which I have attended; it has not been made exactly public by promulgation to the Press, but I think it is fairly well known that in this country railway transport is in the peculiar position that on the railways here, unlike elsewhere, passengers in the main subsidise goods, and as I understand, high-class goods practically subsidise the lower grades. Therefore you have a position in which if the passenger services of the railway company do not go well, there is bound to be a decline in their fortunes.
The report points out that there was a great decline in the receipts from passenger services and the greatest part of that arose from the fact that private cars came on to the road. They are to be left on the road. Not merely is the private car to be left on the road, but the indications are that, with the development in motor car engines, the new way in which bodies are being built, and the impetus which is being given to motor engine production during the war, motor transport is hereafter going to be very much cheaper than it ever was before and that it will put on the road the man who could not afford a motor car before. If that is the situation, the new company will have to face all the competition the old company had from the private motor car and will probably have increased competition. The tribunal report states that it was the decline in the passenger receipts that brought about the big decline in railway income. That will continue. I think it will increase, but, in any event, it is there.
The other thing which the Transport Tribunal found was that the efforts made by the Great Southern Railways, through passenger services, to meet competition in the old days of the independent bus operators resulted in a loss to the company on the road passenger side. I understand that that loss was continuing up to the war. So that, if the efforts the Great Southern Railways made to meet competition in respect of passenger carriage on the roads had not been a success, there is no likelihood that there will be any better situation in the future.
What about goods? The Transport Tribunal discussed that. They stated that the railway company's chief plaint was that the unrestricted use of motor lorries had brought about a very definite decline. That is examined very thoroughly by Dr. Kennedy, who points out that the decline in the road receipts is very much smaller than the decline in passenger receipts. He gives details as to the number of lorries on the road. Whatever the situation was, the Minister is going to let that continue. The man and the company who are hauling their own stuff are to be allowed freely to operate on their own. They have something in the neighbourhood of 8,000 or 9,000 vehicles on the road and I do not think they will be lessened, because it seems to me that, with what is promised in respect of cheap motor transport, these traders will drift again into running their own vehicles instead of depending on the transport company's vehicles.
In addition to that, we have the licensed hauliers. The Minister does not propose to deal with these; they are to be left on the road still. According to the figures—they are only very rough ones—there are between 8,000 and 9,000 privately-owned lorries. There are something in the nature of 2,000 licensed hauliers, and the number of the company's fleet is 600. In the report it is recognised that the company, with its rigidity of movement, peculiarity with regard to charges, and the fact that its servants are more out of touch than the private hauliers, can never compete with the privately-owned vehicles. I appeared before that Transport Tribunal representing licensed hauliers, and very early in the proceedings the chairman, noticing that I had a large number of witnesses, asked me whether those witnesses were there to give evidence as to (a) their charges; (b) that they could give services of a more flexible or adaptable kind than the railways. When I said that they were there for both purpose, he said that I could dispense with any who were there merely to prove that these private people could give better services than the railways, because the railways did not contest that. My dozen or so witnesses, who were there to demonstrate that point, were put out of the room. The railways gave in on that point. The tribunal report also says that it is clear that for flexibility and adaptability of use the local operator can beat the railway company hollow every time.
What then is the situation? The old Great Southern Railway did not pay its way. It shelled out dividends while failing to meet even fixed charges. The new company is to have heavier charges. The old Great Southern Railway found itself unable to meet the charges, particularly because the passenger receipts were on a terrific decline and the road receipts were on a somewhat smaller decline. The Minister is not proposing to change the situation with regard to the private cars operating against the company, and it was the private car, not the bus, that was the main cause of the decline in passenger receipts. If the Minister does not propose to interfere with the running of the licensed haulier or the private trader or private company carrying their own goods, where is the revenue to be got? Where is the Minister's belief in this? I searched through the newspapers this morning and I asked my colleagues what the Minister said last night. I understand he said at one time that, while other people said that what had occurred in connection with the company was due to incompetent management, he or the Government did not accept that point of view.
