I was speaking about Irish Shipping and saying that it met losses out of profits made in the past. On the most recent balance sheet, the present value of the company's assets is shown as £11.3 million compared with £9.3 million capital subscribed by the State. We need a good shipping service for emergency purposes, if ever we should be forced to carry goods under exceptional or wartime conditions. Irish Shipping carries as great a volume of goods from this country to other distant countries as can be carried at profitable rates and imports in the same way. About 20 per cent. of its business is between this country and other countries and it is not neglecting the interests of this country. Irish Shipping is earning foreign currency for us, giving good employment, and setting a splendid example of punctuality and good service throughout the world wherever it goes.
I am not going to close down Irish Shipping or to force them to sell all the most profit-making of their vessels in order to establish a coastal shipping service when I know that all over the world coastal shipping is gradually declining. I do not intend to do it.
Bord na Móna is not in receipt of any subsidy. The Bord is paying interest on the capital advanced to it and repaying capital in instalments in accordance with the provisions of the Turf Development Acts. There have recently been some losses due to bad weather, but, for example, if you take the past three years, there was a clear profit of £1,900,000 after charging all expenses, including depreciation, and its shareholders, who consist of the people of this country who have advanced the money and include a private company, have received £1,700,000 in interest and in sinking fund repayment. That left a surplus of £200,000 to be set off in reduction of the very big deficit that was caused in the very disastrous year 1958 that put the company at a disadvantage. I am certain that Board na Móna is conducting itself in a thoroughly efficient manner, that there is no gold braid as suggested by one Deputy in relation to its operations, or extravagance of any description.
The air companies are in receipt of no operating subsidy, nor are they making operating losses. I made it quite clear in my speech that they had not been able to remunerate State capital but they had met all charges proper to revenue and have preserved the value of their assets representing the share capital amounting to about £12,000,000. The company has no accumulated revenue losses. The performance of these airlines compares very well with those of other countries, many of which have been making consistent operating losses, and many of which have not been able to repay their capital or to pay a dividend on it.
I have discussed the whole question of the functions of the air companies quite recently with the Chairman, and I hope that the time will arrive for them to make some remuneration on their capital. The airline has been deliberately asked by the Government, and by successive Governments, to develop very rapidly without waiting for profits to accumulate from the running of profitable routes. They have been asked to develop new services to various places in Great Britain, leaving aside altogether the transatlantic service, and to do it at a rate which has made it very difficult for them to remunerate capital, but, as I have said, I hope that the position will improve in the future.
All the air charges, the rates arranged by the international air transport organisation, are based on a number of factors over which neither I nor the Irish airline have control. In many countries air companies operate under hidden subsidies. The Government choose to pay for air traffic control or for meteorological services, so charges at airports and air fare structures can be attuned to the fact that the Government are paying for services for which in other countries it is considered that the air companies should pay at least a contribution. Many other factors make it very difficult for a considerable number of air companies to remunerate their capital.
The ESB enjoy practically complete internal monopoly in respect of a great number of their powers. The ESB pays interest and principal on loan capital. The ESB is not in the vulnerable position as some of the other State companies.
I hope I have dealt to some extent with the charges levied against me of being inconsistent and trying to hide the true facts regarding State companies. As I said, it is very important, in discussing the whole question in the House, for people to realise the psychological difference and the financial difference between the kind of subsidy which enables the company to say year after year: "It does not matter what happens to us, the Government will pay"; and a delay in remuneration of capital or a temporary subsidy granted just for a period as in the case of CIE. There is a very great difference between the two types of aid.
I omitted to say that, in the case of Irish Shipping, the law passed in this House provides that there should be no dividend on capital. That was agreed to. If dividends did accumulate, all the money must be invested in new shipping. Irish Shipping will have 153,000 tons out of the 200,000 tons and there will be no necessity to replace any vessels in the immediate future. Naturally, regard will have to be had to current operating conditions in making any further decision for the growth of the company, but I must say that it is unreasonable for us to make the presumption that freight rates are never going to rise again. We can presume that there will be some day some order in the world regarding freight rate structures and that freight rate structures will rise to the point where Irish Shipping, if it is efficiently run, will be able to earn full depreciation.
I am very glad to be able to tell the House that so efficiently run is Irish Shipping that last year, when freight rates were far below the economic level, a number of the newer vessels of Irish Shipping were able to pay depreciation and could be able to pay hypothetically three per cent. interest on their capital. The fleet consists of a number of vessels of different kinds, some of which under prevailing conditions do better than others, but taking the whole picture, we can say that it is a company of which we can be proud and which I hope will have a great future.
It would be impossible to operate any policy in this country on wholly pessimistic presumptions. The whole of the work of the present Government— and to that extent nobody in the Opposition has questioned it—is based on generally optimistic forecasts of the future. We would stop all development if we presumed disaster. We would stop all industrial development and everything else. We in the Government are going ahead on the presumption that the world will remain sane, that there will be no disastrous war, that the financiers of the world and the Governments of the world will be able to prevent a disastrous slump and, where there are cases of unduly low prices for services or goods, that in some way or another, through the gradual intelligent appreciation of these things by modern economists, there will be changes for the better. That is all I can say regarding the future of Irish Shipping.
I have already said in connection with CIE that, as far as this debate is concerned, I can recommend to my colleagues in the Government that the present policy can remain because in the debate on the Transport Bill it is quite clear from the vote cast that very few Deputies are prepared to suggest that CIE should not be asked to cover its expenses by the end of the period allotted to it in the 1958 Act. That makes a great deal of the observations on the closing of stations and on the efforts made by CIE to reduce their deficit quite inconsistent. This is the general expression of opinion clearly recorded in the House when the Transport Bill was voted on.
As I indicated before, the Beddy Committee Report gave the background to the 1958 Act and clearly indicated the position of rail transport in this country. It clearly indicated that redundancy is inevitable and the redundancy provisions in the 1958 Act could have been passed by the Oireachtas, as a whole, only in the knowledge that they would be used. It is quite obvious that if only three or four people were going to be found redundant in CIE as a result of the operation of the Act, there would have been no need for special redundancy provisions. The special redundancy provisions made it perfectly clear that there was to be drastic reorganisation of services. No one could have voted in favour of these provisions without realising their implications.
I was asked by a number of Deputies what I thought the prospects were of CIE paying for itself by the end of the period allotted in the 1958 Act. It is very difficult for me to say. Much depends on the growth of the productivity of the system. A good deal depends on having a system of wage negotiations which have been, in general, approved by both employers and workers which will ensure that productivity can grow in all our services and in all our companies both public and private. I am not unhopeful that CIE will be able to improve its position as a result of changes which are now taking place.
If Deputies look at the accounts of CIE, they will see that a change of from five to seven per cent. in receipts and expenditure on one side or the other of the balance sheet, would bring about balance and that is not an impossible figure at which to aim. All I can say is that the Chairman and Board of CIE are not unhopeful that they will be able to achieve a balancing position round or about the time the 1958 Act expires. Meanwhile my duty will be to examine the whole position of transport in order to bring fresh legislation before the Dáil when the 1958 Act expires.
The next question with which I want to deal is the suggestion that CIE was falsifying the figures for receipts and expenditure in relation to lines the closing of which was announced previously. I want also to deal with the question put by Deputy Corry and some others: why did not CIE give a full picture of all the revenue received at various stations if public bodies were to be convinced that CIE generally was losing money on these lines? I wish, first of all, to say what I have said before on the Transport Bill, that the Board of CIE is a board of responsible people, that a very high level of integrity has been evident for many years in the conduct of State company boards.
There have been some Deputies tonight who have been making lurid remarks about these boards but, on the whole, the more responsible Deputies have recognised the splendid record we have had in that regard. It is inconceivable that the Board of CIE, whose activities can be examined by any Government, either our own or any other, and which can be subjected to any commission of inquiry that any Government institutes, would deliberately falsify receipts and expenditure for the sake of closing a line, particularly when it is the object of CIE to keep as much of the railway service open as they can, and when they are genuinely desirous of giving an accurate picture of the financial position.
The reason why it is useless to ask stationmasters, in stations along routes which are to be closed, for figures for traffic, is that the procedure followed by CIE, and by the industrial consultants in relation to each of these branch lines, was of an entirely different kind. They worked out the expenditure along a particular sector of line and they could only identify with certainty about 70 per cent of the expenditure. The rest they said they could not identify and, therefore, they did not place it to the debit of the line. That surely is fair enough. They were able to identify about 94 cent. of the revenue attributable to the particular sector of the line.
As members of the House are interested in this matter, I shall give them some information which really is entirely a matter of day-to-day administration, on the part of CIE. I want to make it clear that, in giving the information, I am not implying that the members of the Board are not absolutely responsible in what they are doing. I am doing it simply in order to show how foolish it is to suggest that what stationmasters can give in the way of information is relative to the question of revenue and expenditure attributable to a particular sector.
The passenger traffic was calculated by taking a mileage for passenger trains on each branch line and by multiplying that by the fare per passenger mile. It is quite obvious that stationmasters could not give that information. It has to be done in head office. The ordinary parcel revenue was computed by carrying out a study over a certain period; the number of parcels were recorded and then the total revenue attributable was allocated to each line. The freight revenue was allocated to each sector, in proportion to the length of each sector. As I said, they left out all the main overheads that would be attributable to particular branches. They did not attempt to allocate the whole of the expenditure at the terminal stations and headquarters, because they could not fully estimate the amount, and so they did not allocate any of these expenditures to the particular line in question.
Therefore the statement of losses which has been published was an absolutely minimum statement and it was not totted up, or added up, in such a way that it would deceive the public. May I make it absolutely clear that if I should find any of the State companies, CIE, ESB, or Bord na Móna, permitting their local managers, at the level of a stationmaster, to give information on receipts and expenditure in regard to their particular sector of business, I should regard that as grossly irresponsible. It would simply result in the chaotic working of these companies and it would mean every stationmaster and every superintendent——
