IRISH RAILWAYS BILL, 1924.—SECOND STAGE.

Motion made and question proposed "That this Bill be now read a Second Time."

Mr. GUINNESS

I have much pleasure in supporting the Second Reading of this Bill. I am, however, inclined to think that had the Government been left to itself this Bill would not have been introduced. Pressure was exerted by two important sections of the community from quite independent standpoints, and with the example of the recent amalgamations in England, the Government, in its wisdom, determined to undertake the grouping or unification of the railway systems in the Free State. I welcome the Bill, not altogether for the reasons which induced the Government to undertake this legislation, but from the broader aspect that there are probably very few countries in which unification of the railway system could be carried out so easily as in Ireland. In Ireland there is practically no internal competition, and therefore Ireland is an ideal country for the unification of all the railway systems.

As I have stated, pressure on the Government came from two sources. The travelling public and the commercial communities, weighed down by the heavy transportation charges which came into being after the war, clamoured for relief. The labour community also sought unification, not, however, with the object of bringing down the cost of transportation, but as a stepping stone to nationalisation, under Government control. A bill recently introduced in the Dáil by Deputy Thomas Johnson set out the requirements of the Labour Party, but the rejection of the measure by a large majority was an indication that Government control was not considered a popular solution of the problem.

As stated by the President, when introducing the Bill, unification will undoubtedly tend in some measure to reduce working expenses by concentration of management, standardisation of rolling stock, and the possiblities of placing contracts on more favourable terms for large supplies of coal and other railway stores. It must be remembered, however, that these economies may be disappointing during the early years of unification, and may disappear altogether when the claims for betterment of the newly absorbed branch lines are put forward. These claims invariably arise when weak lines are taken over by the larger and more highly equipped companies operating the main trunk railways of the country. It is, however, in the reduction of working expenses that real relief must be looked for, and so long as the high standard of wages which at present prevails is maintained little improvement can be hoped for. In railway economics there are, as in nearly all commercial undertakings, three partners—first, the capitalist or proprietor, who provides the funds for the adventure, and who is entitled to a reasonable return upon the capital he has sunk in the business. Then there is the workman or employee, who makes the goods or performs the services, and who is entitled to fair and reasonable remuneration for his services; and thirdly, the consumer, who purchases the goods or services, and who is en-entitled to transportation facilities at a reasonable cost.

Very briefly I would like to examine the relative conditions of this partnership applied to the railways in the Free State in 1913 and 1923. The figures are necessarily approximate, but are quite sufficiently accurate for purposes of comparison. The proprietor, who ventured his fortune, received £3 18s. per cent. on his invested capital in 1913, and £2 15s. per cent. in 1923; that is to say, he has suffered a decrease in his income of 30 per cent. The railwayman or workman who has given his labour, received in 1913 an average wage of 20/- for a week of sixty hours, or 4d. an hour; in 1923 his average wage was 54/- for a week of forty-eight hours, or 13½d. an hour. The railwayman thus enjoys an increase of 237 per cent. for his labour. I now come to the customer, otherwise the travelling public and trading community. In 1913, where the customer paid 20/- as a charge for travelling or freight on goods, in 1923 he had to pay 48/-, an increase of 140 per cent. Now, what conclusion can be drawn from these few figures? Is it not that whereas the labour bill on the Irish railways has soared to an unprecedented height, the proprietors of the railways and the users of the railways are suffering most grievously as a consequence, and that although unification may bring about better co-ordination of the railway services, there will be no real relief to the public in the cost of transportation until labour sees fit to accept more reasonable remuneration for its services.

Part VI. of the Act deals with the Baronially Guaranteed Railways, and provides for them in an exceptionally generous manner. When it is remembered that these railways were built with the consent of, and often at the request of the ratepayers in the districts they serve, and that they confer on the resident population most substantial benefits, it is not unreasonable, I submit, that those who derive such advantages should in some measure pay for the cost of the undertaking. Now, what are the facts? 266 miles of railway have been constructed in these districts, at a cost of £1,144,270 guaranteed capital, and as a contribution to the interest on this outlay the baronies concerned were assessed for a maximum contribution of £28,102, which is equivalent to less than 2½ per cent. on the capital involved. It is proposed under the Bill that this contribution should continue for ten years, at the end of which period it is to cease, and the baronies or counties are then to be entirely relieved of this most modest burden. This, I conceive, is most unreasonable, and if it were possible so to alter the Bill I would strongly appeal to the Minister to delete the ten years limit and allow the statutory obligation on the baronies to remain as a permanent charge. As a burden on the population the rate charge is infinitesimal; on an average it is less than one shilling in the pound on the valuation, and I suggest that if it were put to any of the baronies concerned whether they would prefer to do without the railway or provide the very moderate interest hitherto paid, there is no shadow of doubt as to what the answer would be. Apart from these considerations, I welcome the Bill as good legislation. The details have been most carefully thought out, and are the outcome of very arduous work and negotiation. The Minister is, I submit, to be congratulated on the result, and may we hope that when the measure becomes statutory, it will confer a lasting benefit on the Irish Free State.

Mr. J. BAGWELL

This Bill is an attempt to solve the Irish railway problem. The question is, what is the Irish railway problem? That is a question to which one would no doubt receive a very great number of answers from people looking at it from different angles. Some people would say that there is no particular problem about the Irish railways, but a great many people would say that there were several problems. The ordinary citizen, whose only active part in connection with the railways is travelling in their passenger trains, would say the fares are very much too high, that he pays too much for his ticket, and that this constitutes a problem in itself. Traders in the community who use the railways would say the rates are very much too high, that they are a great burden on the trading interests of the community, and consequently on the consumers, and that constitutes a special and very serious problem, and ought to be ameliorated. The railway shareholder would say his dividends are too low. In some cases he might complain of having none, but in most cases he would complain that his income is very low, and that his shares bring him an income, which, having regard to the altered value of the currency is very much less than the income he received before the war, before Government control, before all those various railway phases of an exceptional character through which the railway world has passed during the last few years. The railway trade unions would say, in some cases, that the wages paid by the railways are only enough, and, in other cases, they would say they are not enough, and that this constituted a serious problem. My own definition of this problem is that it really consists in this, and in this everything else is embraced, that the percentage of expenditure to gross receipts is now 82 per cent., and in 1913 it was 62 per cent.

Every problem arises out of that. I do not propose to ask the Minister to give the Government definition of this problem, but I have no doubt that their definition would include all these various complaints to which I have referred, and possibly a good many more than I have thought of. As befits the Government, they have no doubt thought of the thing in the large as it affects all these interests concerned.

The principle of the Bill is clearly amalgamation by compulsion. Personally, I am all against compulsion in matters of this kind. I think it is very much better that changes should take place slowly, that the principle should be rather consolidation by consent, and that they should go about it by the gradual process of pressure of economic laws, and so on; but I do realise that that would take a long time—a very much longer time than the remedy that is proposed by this compulsory Bill. We have had it on no less authority than that of the President that this railway problem has occupied the earnest attention and the consideration of the Government for a long period— two years, I think—and the Government evidently think that this problem will not wait. One aspect of it to which I have not yet referred, and which I have no doubt the Government had in view in bringing forward the compulsory Bill is, that there were certain lines which would be embraced in this Bill which are in so impoverished a condition that it is very questionable whether they would be able to carry on much longer, and that is a reason for doing something quickly, and not waiting for the gradual working of the economic laws. Part I. of the Bill begins with the words "With a view to the reorganisation and more efficient and economic working."

I give the Government credit for believing this Bill to be a solution of the problem as they look at it. They have, I have no doubt, considered, and they will not be alone in this, that there are far too many railways in the Free State and that consolidation of the very much smaller number is better for the community as a whole and is likely to result in economies and generally to solve the problem. Now, I think if the compulsion principle is swallowed—I do not like it, but I see that there is no use in not swallowing it, because nothing I can say would, I believe, alter that principle, on the ground that it is right not to compel the community in this way—then it seems to me, as far as I am able to judge a matter of this kind, that the Bill is well arranged and well thought out, and I wish it every success.

A great deal has been said about the probable bad effect upon the country of loss of competition. That is a matter of which I have had very considerable personal experience, and I think it is quite an illusory idea that there is competition in this country. There has not been competition in this country for many years; at all events, competition of a serious character, nor do I consider that it was very effective to the community. It has not really been effective and, therefore, consolidation and the loss of such competition as does exist is not a serious matter. There is no railway monopoly now. It is quite a mistake to think there is. There used to be 20 or 30 years ago a railway monopoly, but there is certainly not now, because on the roads we have the most effective competition, which in many cases is putting the railway companies to the pin of their collars to retain a great deal of the business that they have got. The trade of the country will always have that form of competition to rely on to restrain the railways, even if there was no tribunal, from charging excessively high rates. There is sea competition and road competition, and I may say in passing that road competition has always seemed to me in its present form not to be in the interests of the community as a whole.

The users of the roads do not have to pay for the roads, at least, not adequately, because the big vehicles, often going at great speed, carrying the traffic previously railway borne, do a tremendous amount of damage and result in the rates being very greatly increased. If they paid their fair share of wear and tear of those roads then I would consider the competition was perfectly fair, and would say that the railways had not anything to grumble about. At any rate there is competition and that is real competition and not the competition of railway with railway. I am not so optimistic as the promoters that this Bill will result in a very much better state of affairs economically and I would suggest that Senators in considering this Bill in detail, as they will do in Committee, should not have the idea in their minds that because of this amalgamation—when it takes place—there will be great economies and that all kinds of things will be done which at present are not possible. I know there is a precedent for this Bill and for this amalgamation. It is a precedent of what has been done also by compulsory measure in Great Britain, but Great Britain presents no parallel to this country at all in this matter. In Great Britain there was a great deal of competition of lines. Lines often run side by side with each other in many parts of that country to an extraordinary extent unparalleled in other parts of the world. That state of affairs does not exist here. Anyone looking at the map will see that, broadly speaking, each railway here serves its own particular area.

That is the reason why there is so little effective competition anyhow, and there being so little effective competition, it follows that there is very little waste of the kind there was in Great Britain arising from excessive competition of an extravagant character. Therefore there is no great asset to rely upon to improve the economic situation as a whole, arising out of economies on that head, because these economies are in my opinion almost negligible. Now, one feature of the Bill no doubt contains some direction in which economies may be made. In the matter of the Wage Bill, that is the personnel of the railways, the economies will be confined almost exclusively to the supervisory grades, those are the people put in at the top, because the amount of work to be done in the railway will not be materially reduced, and no one wishes, least of all the Government, that there will, in the future, be less trains than there are now. The business will go on and they will have to pay wages and salaries. All that will go on practically unaltered. At the top there will be economies but very much less economies than are in the minds of the Senators. With respect to the members of the Board of Directors, the whole of the expense represented by members of Directorates is absolutely trifling as compared with the expenditure as a whole, and in that direction there are no great savings to be made.

When you come to supervisory officers at the top of the tree, you may have a case in which five heads would be superseded by one. It does not mean that you are going to save the difference between five and one. It means nothing of the kind. Very properly provision is made in the Bill that people who lose their employment shall be compensated, so that the saving in a case of that kind is the difference between the salary payable to five people and the salary paid to one, and from that saving has got to be taken the additional amount which will be paid to one man who will have the responsibility of five. Obviously you will have a very much more important position and greater responsibility in the case of one who will have to do the work of five people. A great deal will have to be delegated and not done by him and the people to whom the work is delegated in turn will have to have their remuneration increased. Their responsibilities will be greater and their work more important, so that the saving in a case of that kind is really, at the most, very small, and it will be years in many cases before it will take effect, because people live a long time nowadays, and it will be a long time before the pensioners will cease to draw their pensions. That saving is not near; it is far ahead.

As regards the centralisation of railway works, it is said often that there are too many works, and it is suggested that they might all be operated from one central works. That is quite a light-hearted way of settling the problem, but it is not practicable. Most of the works are fully occupied. It is not true to suggest that consolidation in that wholesale way could take place. It might take place if a great deal of capital is expended, but that is one of the things no one wishes to incur at the present time. So, under the head even of works, my personal opinion is that there will be no very great saving, and I think that Senators, in considering various parts of this Bill, should bear this in mind, that some of us who know a good deal about this subject do not think that the economies are likely to be anything as great as is thought in some quarters. I will refer to one part of the Bill at this stage. I think I am in order in doing so, because the Bill deals with the point of the baronially guaranteed railways. If I were to leave that to the Committee Stage I might be ruled out, and I would like to raise it at this stage as a matter of principle.

It is proposed by Part VI of the Bill to transfer the burden of those baronially guaranteed lines, and it is a burden, to the amalgamated company. As regards the loss in working, there is a loss in a number of cases. Those lines were built 25 or 35 years ago under the Light Railways and Tramways Act. At that time the guarantees were approved by representatives of the localities through which the railways were to go, and the inhabitants of those localities were very glad to have them, and shouldered the burden of the guarantee. They have enjoyed those railways ever since. They have been a benefit to the life of the country through which they have gone. But for that guarantee those railways would not have been made. As ordinary commercial undertakings you would not have found money to build them. It is now proposed to relieve the ratepayers, and the districts that benefited entirely by those lines in ten years' time. I do not think that is fair. It would saddle the amalgamated company with a loss which might amount to £48,000 a year, which is a large sum. I admit my suggestion is one which still leaves undisturbed the principle of transferring this burden, but I feel it would be unpractical on my part to suggest an amendment which would strike out that principle, because it would mean entirely remodelling the Bill. I do not propose to do that, and I would invite the Minister to consider whether the ten years might not be extended to twenty. It puts off the evil for ten years and I admit there is a certain amount of opportunism about it. I would suggest to the Minister that he should consider it. I do not propose to say anything further at present. There are certain parts of the Bill which might be improved by amendments but those will come up on the Committee Stage.

EARL of KERRY

I rather hesitate to follow anyone who has the expert knowledge which Senator Bagwell can bring to bear on this subject, but as I once occupied probably the much less responsible and onerous position of a director on the other side of the Channel, I should like, if you will allow me, to say a few words on the subject. I have been following the discussions that took place in the Dáil, and the Press, with very great interest, not intermixed with some apprehension. It is true that the Bill has been received with great unanimity, in a sense, but, I think, it is true to say that it has been a somewhat negative kind of unanimity and that scarcely anyone has shown much enthusiasm for it except the Government, which no doubt it is right and proper they should do, with regard to their own offspring. As to myself, I am afraid I feel compelled to join the band of croakers, as, I must confess, I do not like this Bill. At the same time I say at once that if anyone had suggested voting against it on the Second Reading I should not have been a party to that, as I fully realise the immense difficulties that confronted the Government. I suppose it is possible a better solution might have been made some little time back, if the Government had been free to deal with the matter, but things did not get better, but got worse, and the Government, as already stated, were compelled to take action. In their wisdom they produced this considered plan as the best form of action, and therefore I feel that it is our duty to let it go through, reserving to ourselves the right to amend it where it may seem fit to do so.

The problem confronting the Government has been stated by previous speakers. To put it in slightly different form, it consisted of the very uncertain financial position of the railways, diminishing dividends, and the prospect even, in many cases, that these dividends might disappear altogether. Now that is a question which has had a double effect—first of all, a very obvious effect—on the shareholders. In these democratic days I think it is sometimes very often said that shareholders are very rich people, and must suffer if it is a matter vital to the State, but I think it is true to-day to say that shareholders in railways, especially in Ireland, are not millionaires, but are gathered from every portion of the population of the country, many charitable institutions, and so forth. In effect, they are widely spread, and are people, as a rule, who cannot afford to lose any part of their income. Another effect that, I think, has not been touched on this afternoon is the depreciation of the stock of railways. I believe it is an axiom—subject to correction by the experts—that in railways as in many other industrial undertakings, you cannot stand still. You must be advancing with the times, and if you do not actually increase the mileage of your railways, there are all sorts of new adjustments and new inventions to be considered, as well as the widening of the line and such things. In other words, you must be able, from time to time, to raise more capital, and if your enterprise is on the rocks, and if your shares stand at a very heavy depreciation, it becomes, of course, prohibitive to raise fresh capital, and the enterprise must be, not only stationary, but must practically go down hill. That is part of the problem affecting railways. The subject of the excessive fares and rates that exist in this country, and which everyone wishes to see reduced, has already been touched upon. They constitute, of course, a sort of stranglehold on the industries of the country that everyone is agreed cannot continue. It seems to me that it is likely these two difficulties, that of the financial position of the shareholders in railways, and that of the rates, cannot be really solved by one measure such as this. You run a very great risk if you try to safeguard the shareholder in the manner proposed. There is not likely to be any reduction in rates. If, on the other hand, you do reduce the rates there is not likely to be enough money to safeguard the shareholders. That seems to me the way it is likely to work out. As Senator Bagwell has said, it is a matter of £ s. d. Somehow there must be more money earned to keep the enterprise going.

Senator Bagwell has dealt with the question of economies under the Bill, and I was very glad to hear him saying, with a full knowledge of the subject, that these economies are not likely to be very great. He has dealt with the question of directors, of whom, no doubt, there are too many in this country, as there were too many in England, but whose remuneration constitutes a really infinitesmal part of the turnover of a big railway undertaking. Then there is the other side of economy which can be met by centralisation, standardisation of stock and stopping overlapping. So far as that goes it will be all to the good, but is there not a risk that by perhaps excessive centralisation you may lose something as well as gain something? Speaking from my own experience, on the other side of the Channel, anyway, and I am sure it is true everywhere, there was a very great esprit de corps in the various railways before they were amalgamated. I cannot help thinking that a great deal of that esprit de corps, which produced good work for the undertakings concerned, may be lost, when you widen your net so as to take in a lot of railways under one group.

Senator Bagwell says that the question of competition does not amount to very much. I have no doubt that is absolutely true. But there is also another side to the picture, because so far as you reduce it you surely also reduce, to some extent, the incentive to work and to push one concern against another, that each institution should make the best of its own concern. It has been stated that this is following to some extent the precedent which has been set in England by the amalgamation which took place there two years ago. I believe that that has been successful up to a point, but I make bold to say that the success of that amalgamation has not yet been proved, and there are people I know, and people who know what they are talking about in the railway world who are not at all confident of the future of the British railways and of the advisability of investing money in them. It is quite true that things are very much better than they were under Government control, and if you look to England the experiment has certainly proved one thing, and that is how disastrous Government control can be, for Senators will remember how, when the British railways were taken over by the Government in 1914, they were in a flourishing condition. When they were given back in 1921, I think it was, they were in a state in which they were barely earning a dividend. A great many of them were not. Since then they have improved, and that improvement has gone on under amalgamation, but I think it is quite an open question whether that improvement is in any sense due to amalgamation: whether it is not due to the fact that what is called the dead hand of the Government was removed from the railways, and that private enterprise was once more allowed to have its way.

The Bill is, admittedly, I think, in the nature of a compromise or a half measure, and it seems to me that there is great danger that one of the two things will happen: either that you will bolster up the present conditions largely under present management, and to a great extent take away the initiative to better the conditions from the point of view of the user, or else what would be perhaps the more disastrous alternative of the two, that you might prove to demonstration that the system perhaps will not work, and then there will be nothing for it but nationalisation, the taking over of railways which are not financially sound, and a consequent charge on the taxpayer, and probably an increasing charge. The railways may be compared to arteries of the State economically. They have in the past, I believe, been generally taken as an index of the prosperity of any State. I suppose in Ireland they loom really larger than elsewhere. Our country being mainly interested in agricultural produce, and such a large proportion of the value of that produce being represented by freights, the railways are perhaps more important to us in the sense of taking a larger part of the picture, than they are elsewhere. Therefore we must all devoutly pray that they may continue healthy. But if you adopt the simile of the body it is no use if the head and limbs are healthy if the arteries are not in a similar state. I shall continue to hope rather against hope that this Bill will prove a success, and if my somewhat gloomy prognostications are proved in that event to be without foundation nobody will be better pleased than I shall be myself.

Mr. BENNETT

I wish to support the Second Reading of this Bill, because I feel it is a very honest attempt to try to meet the conflicting interests of the country. At the same time, I feel it will be necessary that we should try to amend some clauses and in particular the clause dealing with the baronially guaranteed railways. These will need particular thought and care. But I would not approach that matter from the point of view of the previous speakers. They have approached it from the point of view of the handicap on the amalgamated company. I would be inclined to approach it from the point of view of the injustice done to the shareholders and people who enjoyed and who had a guaranteed income from the railways. These will not in the future have any guarantee. It seems to be an absolutely confiscatory clause, and for that reason when it comes up for discussion, I will have something to say on it. Further, the railway tribunal might have been larger. There seems to be a small number to take over what was practically the work of three bodies in England. I would like to say that we private members have not been given an opportunity of thoroughly entering into the intricacies of this Bill by reason of the fact that I have pointed out before; namely, that the various Acts that are cited are in no way capable of being obtained by the ordinary member of the Seanad. I think it is a pity that when a measure of this magnitude is introduced, the Government would not arrange that the important measures cited should be available for Senators. I hope that when a Bill of this importance is brought in in future the Government will make opportunities for Senators to have access to such Acts.

The PRESIDENT

I can undertake that in this connection any Acts that are affected by this measure or which would be in the opinion of the Senators necessary for them in order to form an opinion on the Bill, will in future be placed on the table.

Mr. O'DEA

I wish also to say that I intend to support this Bill. I do not think it is a perfect Bill, but something has to be done. I have gone to the trouble of taking out the rates for 1914 and the rates for 1924. Both rates are actual and not paper rates. I do not want to read over the whole litany, but I will give you a few extracts from the different railways. The Midland Great Western Railway Company's charges for merchandise are 122 per cent. above pre-war rates. I cannot discover any change from that level except one in Sligo, and the rate there is 100 per cent. above pre-war. Probably the competition from the Great Northern Railway would account for that. But on the whole, taking them as they are, they are fairly clear and satisfactory, and they nearly approach to a standard rate. I take the Great Southern and Western Railway, the largest of our railways, and I find that there is not a standard rate at all in the whole long list of stations. They vary from 133 per cent. to 162½ per cent. above prewar.

There is not a single rate to any town, that I can discover at all events, that I have had traffic to, that is of a standard nature. The whole rate seems to be in a topsy-turvey position. That is a condition of things we cannot go on with; it is impossible to carry on business under a system of that sort. I have one case which is a remarkable one. It happened to be a ton of Indian fibre sent from Kingsbridge, Dublin, to the Great Southern and Western Railway Station at Tralee. The weight was one ton precisely; the railway charges were 76/4, and the value of the mercandise £10 10s. 0d. The freight from Ceylon, the whole way through the Indian Ocean, the Red Sea, the Suez Canal, the Mediterranean, transshipped and sent by direct steamer from Antwerp, and delivered in our warehouse, was £5 15s. 0d. The rate from here to Tralee was 40 per cent. of the value, about five times the profit we get on the merchandise. That, I think, would be sufficient for the House to see the absolutely urgent necessity that something would be done, at least, to standardise the Irish railway rates, if we can do nothing else. I have gone to the trouble of reading the Reports of the different Commissions that have been held on Irish railways. The first, the Drummond Commission, of 1836, reported for unification. They also estimated that the savings would be £32,000 per annum. The next was the Devonshire Commission of 1868, which also reported for amalgamation of all Irish railways. Their report is, to my mind, the simplest and best. Then there was the Alport Commission in 1888, which recommended the amalgamation of the Irish railways under a Board of four leading commercial men, representing different districts. These men were to be actively engaged in commercial business and have an intimate knowledge of the requirements of their own districts. The estimated saving was £50,000. Of course, at that time wages were very much lower than they are to-day, and superannuation would probably be one-third of what it is to-day, so that that would have very little bearing on the savings to-day.

The next Report was the Scotter Report of 1910. That was a most extraordinary Report. It occupies about 1,000 pages, and is very exhaustive. In fact, it is more of a historical record of the whole work of the Irish railways from their inception to the present day. They also recommended unification, but on a different principle from that which the Government is bringing in. They strongly recommend unification under a compounded board of twenty members, representing all the industrial interests of Ireland—agriculture, cattle, manufacturing, distributing, and the workers—a very effective programme. They also recommend what the stockholders would rush at to-day, that the stockholders of the Irish railways should be paid on a percentage basis, and if the revenue realised were not sufficient to pay, I think, 4 per cent., the Government was to subsidise the deficiency. There might have been a grant to be given to the Irish Railway Board of £150,000, which they estimated might be the deficiency. It was not a very extravagant grant, but, whether their estimate was right or wrong, nothing was done. In that Report they go further and they say, and this is very interesting. "The decay of Irish industries which flourished for generations coincide with the rapid decline of the rural population after the famine years of 1847-48. The rapid leakage of our population from 9,000,000 to half the number in sixty years is a fact which should make statesmen pause and consider the causes. Were they attributable to the destruction of all our rural industries by the advantages given to importation of foreign goods competing with our native goods, and generally destroying them, or was the destruction of our native rural industries affected by other causes than railway development in Ireland, and, if so, what are the causes?"

A thing that I think we ought to consider is whether these railways have any economic value at all. I am not sure that under the present conditions they are of any economic advantage; in fact, I am certain that these baronially guaranteed railways are not of any advantage. I know counties in which these railways were built about fifty years ago. I do not see any development in these counties. I do not see that the towns have developed or improved; in fact, I find a great many of them have retarded and gone back, particularly in Clare and Kerry. The question is for the Government. I am not going to lecture the Government; I am not going to advise them. Is it a sound problem to have these light railways at all? I quite agree with Senator Bagwell that the opposition to the Irish railways is not coming from the railways themselves, but is coming, and will come, from the motor. The motor is making headway and is running the railway traffic off the lines. We find that for distances within a radius of thirty miles nearly all the people send in their motor cars for goods. It is twice as satisfactory. They send in to-day and get their goods to-morrow. The transaction is done under one hand. There is no carting, no looting, no damage, no re-carting at the other end. The competition in the future will be motor traffic, and I am afraid that the chances of keeping the railways, particularly the smaller ones, in an economic state will be a difficult one for the Government. There is nothing in the principle of the Bill that I wish to oppose.

There are a few matters that I would like to see the Ministry deal with. One is the matter of the two panels, one of twelve and the other of four. I would like to know what the functions of these panels will be. What will be their business or their powers? Are they merely spare men, or stand-by men? Are they merely Advisory Committees? That is a small thing to answer and one that can be very easily settled.

Another matter to which I wish to call attention also is the section dealing with special charges. I am opposed to these, as they are thoroughly unfair. They have the unfortunate habit of destroying small traders. The big man in Dublin—Guinness, for instance— gets a special rate, and the small brewery in Sligo has not an earthly chance. It is crushed out, and the same applies to other places. I certainly oppose all such rates, except for the Post Office, or for Government work. In every case where a special rate given hurts another trader, I do not think it ought to be allowed. Everybody, I think, ought to have the same chance. I had the pleasure during the Scotter Commission, of listening in London to the evidence of Sir Joseph Ward, who was then Premier of New Zealand, and he stated clearly that if these special rates were allowed to continue in operation in New Zealand the country would not be worth anything, because the large man would always get his stuff carried at less than half what the small man could.

Mr. McLOUGHLIN

Seeing that the Bill leaves out of its scope that part of the country I come from, I do not feel too enthusiastic about it. Still, it is my duty to support this, not because it deals completely with the Irish railway problem, but because the principle embodied in it represents what appears to me the best way of dealing with the situation in the Irish railway world. It was fast becoming a comedy, if not a tragedy of the national life. I also support the Bill because, in my opinion, the advisers of the Government were actuated solely by what they considered best for the national welfare, by a desire to preserve the independence of the Irish railways, and to make them as serviceable as possible for the public and for the commerce of the country. No doubt when the scheme is put into operation some defects or weaknesses will be discovered, which will have to be remedied, but this need not cause us any worry, because it is almost certain that this measure will not be the last word in Irish railway legislation. The success of the Bill will, to my mind, largely depend upon the constitution of the tribunal and of the panels referred to in Part II. It is hoped that in these matters the Government will be guided solely by the consideration of securing the services of the men who are most capable of administering this part of the Bill, and to serve the country in this very important matter.

Whilst giving the Bill whatever support I can, I would like to urge upon the Government the necessity, as it seems to me, the absolute necessity, of increasing the scope of the Bill a little. As the House is aware, I am naturally interested in Donegal, and notwithstanding the explanation given by the Government as to why the Donegal lines were not included in the Bill, the people up there are very much disappointed at the exclusion of their railways. The railways of Donegal are all of the three-feet gauge. One has 98 per cent. of its total mileage in the Irish Free State, and the other about 99 per cent. of its mileage in the Irish Free State. The remainder of the lines, representing about two miles for both railways, is in the Northern area. Now, although these two railways cross the much-talked of Boundary, considering the predominating extent of their lines in the Free State, I think they should be included in this Bill. Donegal is the only county in the Free State which is in the unique position of being completely served by narrow-gauged railways-as nearly self-contained as they possibly can be—and occupying a somewhat isolated geographical position in regard to the Free State, it hardly seems reasonable that because of this Donegal should not participate in whatever blessings and advantages the amalgamation scheme will bring. It is hardly fair that Donegal should be left, like the Peri, standing disconsolate at your gate. It may, of course be urged that there is no connection between the Donegal lines and other lines at present included in the Bill, but that should not be an insuperable objection, and could be easily overcome from the point of management and maintenance. These railways are subject to the general provisions of the Bill as laid down in Clauses 31, 58 and 61, and it is of extreme importance to the county, and, indeed, in the general interests of the country, that the railway services of Donegal should be directly associated with the other railways in the Free State.

Senator O'Dea referred to the excessive railway charges. There is no place in the Free State where industries suffer more, or are so heavily hit by the excessive railway charges, as Donegal. I will give an instance of how the freights affect the industry with which I am connected. When we have to send goods to Kilkenny, or Limerick, or Cork, or even Galway, the carriage on a consignment of four or five cwt. is so excessive that it is cheaper to take the thirty or forty parcels of which the consignment is made up, and send them separately through the Parcel Post. That is a very heavy handicap on industry. The manufacturer in Donegal is simply not in it with the manufacturer in Dublin. As far as the Bill is concerned, it gives the promise of bringing us little relief. I would, therefore, strongly urge that Part I, Section 2 of the Bill should be extended to include the Donegal Railways or alternatively that a clause should be inserted giving any company crossing the Border and working 75 per cent. of their line in the Free State the option of joining in the amalgamation scheme, with a limit of six months in which to make their application.

Mr. O'FARRELL

I am not surprised that Senator Guinness, as a railway director, and Senator Bagwell, as a railway manager, should whole-heartedly welcome this Bill. Whatever else the Bill may be it is obviously a Railway Companies Bill. In fact, the whole Bill was drafted in close consultation with the representatives of the railway companies and without consultation with the other bodies in the country affected by such a great public service as the railways. Clauses 53 and 54 of the Bill guarantee in perpetuity to the railway companies their net average revenue for the three years 1911, 1912 and 1913. As almost everybody knows these were the very best years in the whole of the railway history. Senator Guinness told us that the average dividend paid was £3 18s. 0d. per cent. in 1913, and that £2 15s. 0d. was the dividend paid in 1923. The Bill proposes to restore the practice of the 1913 dividend, notwithstanding the difference between 1913 and 1923. Consequently, it is not to be wondered at that the railway shareholders, in spite of certain show of objection for the sake of bluff, should whole-heartedly welcome the provisions of this Bill. In addition to guaranteeing them an average of the three years before 1914, the Bill also provides that thirty-three and a third per cent. of any excess over and above the standard revenue that may be secured as a result of the rates fixed, shall also accrue to the railway companies, and that the old standard, together with this addition, will then become the new standard revenue, and shall not be changed unless the revenue at any time falls below the average of the three years prior to the war, when there will be another revision of the rates to bring them up again to that particular standard.

One result of this will be that if, as I believe, this Bill eventually proves not to be a success, the new amalgamated company will fail to meet the national requirements, and it will be generally agreed that State ownership and control is inevitable in the interests of the community. But the railway shareholders will have entrenched themselves to such an extent through this Bill that a far higher price will then have to be paid for the railways if they have to be purchased for the community afterwards. In other words the amalgamated company will be able to capitalise against the State the assistance which the State extends to the companies through, this Bill. It seems extraordinary that with regard to purely private enterprise, without any effective Government control, the State should accept responsibility of supporting the companies against the requirements of the traders and the public, whatever may be the economic or financial conditions of the country, in order to maintain the financial equilibrium of the railway undertaking on the same basis. Labour might reasonably demand, that in this Bill there should be an economic wage fixed upon the three boom years of railway wages. Now, the financial provision of this Bill rests upon efficient and economic working and management. But there is no provision in the Bill enabling the Minister or the control. In other words, there is direct Government to interfere in the management or control. In other words, there is direct financial responsibility so far as the railway tribunal is concerned, but no real power of management or control.

Section 58 gives power to the Minister to make certain orders calling upon the railway companies to give certain public facilities up to the extent of £10,000, but if the companies can come forward and show that to carry out these orders would in any way detrimentally affect the financial equilibrium of the company, the order will not be operative. Consequently, it is mere eye-wash. Now, in order to get the net revenue provided in the Bill, it will be necessary to provide a revenue of about £107,000 more than the net revenue of the railway companies in 1923, and this is guaranteed in perpetuity no matter what the conditions of the country, and although we might have another year like 1923. It is true that 1923 was a very exceptional year, and that large tracks of line were closed down, and that the conditions altogether were abnormal; but, unfortunately, we have no guarantee that another such year, or perhaps a worse year, may not come along, yet in the terms of the Bill railway shareholders, out of all the other shareholders in the country, are guaranteed their net income. Senator Guinness repeated the plaintive cry of high wages which we hear with monotonous regularity from the chairmen of railway companies year after year, and he quoted the very impressive figure, 237 per cent. of increase in wages in 1923, as against the year 1913. But then he gave away the whole case when he told us that the 237 per cent. was an increase on the wages of 4d. per hour per day, paid by the railway companies in 1913.

That is just an indication of the type of comparison of percentages and statistics that the railway companies put up to the public, and they are swallowed with greed by those anxious to make a case against Labour, and to express the opinion that until Labour is able to concede a lot of that very luxurious wage of 1s. 1½d. per hour, we are not going to have a really progressive railway system in this country. If I might speak on behalf of the railway workers, I would say that if we can only have a really progressive railway system when that 1s. 1½d. rate per hour is reduced, then you are not going to have a progressive railway system in the time of this generation. Senator Guinness is a bank director, and as such he agrees to pay his clerks £450 per annum. As a railway director he agrees to pay his clerical workers—clerks, supervisors, stationmasters—who have entered the service by open competition, the sum of £200 per annum. I leave the House to say if there is such a difference in the value of the services rendered by railway clerks in a service which is the mainstay of the community, and by people who hold the spare cash of the nation. I contend that the service rendered by one is at least as valuable as the other, and yet you have the extraordinary position of a man who is a director of the two services dealing out to one class of clerks half what he deals out to the other, and still seeking to take from the man with the smaller amount some of what he has.

I will be told that banks are able to pay higher dividends than railway companies. Banks use stationery and every other class of commodity as railway companies do, but the railway companies do not get them cheaper because they cannot pay higher dividends, and the only commodity to which they seek to apply this rule of reduced pay in connection with railway work is the human element. The workers have already given up two and a half million pounds in bonus reduction and so on in two or three years, and that is a very respectable contribution towards making the railways a financial success. The railways have reserves totalling over three and a half million pounds, against which they allege there is a certain amount of arrears of maintenance, but railwaymen know that this question of arrears and maintenance is largely a bogey so far as the greater part of the companies are concerned, and that the railways were never in a better position than at present. Senator Bagwell asks what is the railway problem. I would venture to reply that in many respects the railway directors are the particular problem. Senator Bagwell brought us back to 1913, and admitted that, out of every £100 paid by the community for railway services, £38 had to go in interest and dividends. He wants evidently that that balance should be restored.

Mr. BAGWELL

I do not remember saying anything of the kind.

Mr. O'FARRELL

Senator Bagwell quoted a well-known truth that the working expenses covered 62 per cent. of the revenue. You can tell the same truth in different ways. He has told it his way, and I propose to tell it my way. The plain, unvarnished truth is that, for every £100 paid by the community, £38 went in interest and dividends. That is the state of affairs railway directors want to be restored. His speech was an example of that extraordinary kind of conservatism which takes alarm at any change from old conditions. This is an extraordinarily gloomy outlook which ventures to prophesy disaster, immediately the old order of things is to be changed. Reference has been made regarding the deficit on the baronial lines. This deficit will fall on the whole community, and not on the amalgamated company, because the shareholders of the new undertaking are guaranteed their dividends. It does not matter to them how much is put on that combine from the baronially guaranteed areas, because it is the trading and travelling community that will have to pay for it, in any case. Senator the Earl of Kerry said that the Government control was disastrous. I can tell the House that the railway directors took very good care it would be disastrous, by the manner in which it was exploited. It was another case of the Government having financial responsibility, with no effective control at all. When one hears a statement about all the wrongs that were inflicted on companies owing to State control, one is tempted to tell a little of the inner history and to state exactly the other side of the story. It has not been told yet, for obvious reasons, and there is a certain amount of reluctance on people to tell it.

Some day we shall be provoked to tell the story, and then the people will be able to see the facts. Government control was exploited. He stated that when the dead hand of Government control was taken off, immediately the railways began to show splendid progress. But when the dead hand was taken off the Government had to leave behind them £60,000,000, and to the Irish railways £3,000,000, as compensation, moryah, for having kept them in a sound financial position during the years of the war. State control is the greatest blessing the Irish railways ever felt, because they filled their stores with materials of all kinds at the expense of the Government and they did a lot of other things, about which, perhaps, it would be better to say nothing. But, by all means, it would not be an unmixed curse. Senator O'Dea mentioned three commissions which recommended unification, and went to the extent of saying that the majority of the Scotter Commission reported in favour of unification. It, of course, favoured nationalisation, with a Board of popular control, but he omitted to state that a Commission, sitting as late as 1922, after having investigated the whole circumstances of the railways, and on which Senator O'Dea himself sat, by a majority of three to one, recommended the nationalisation of the Irish railways. In fact, another Commission that has sat and taken evidence from all points of view, has, by a majority, come to the conclusion that nationalisation is the only solution of the railways in the interests of the community. It takes a newspaper editor who knows no more about a railway than he can gather from the inside of a first-class carriage, to tell the community that those Commissions are all wrong and that you must not interfere with private enterprise.

Senator O'Dea has talked about high rates. They are undoubtedly exceptionally high. I would suggest to him that Irish traders and agriculturalists could assist the railways materially if they acted on business-like and cooperative principles in the despatching of their agricultural commodities. This is done in Denmark to-day, where there is co-operation between traders, large and small, to see that there is no waste in the despatch of goods, livestock and so forth. The produce of a particular district is gathered through the medium of societies, formed for this purpose, and is despatched in bulk, with the result that cheaper rates can be given. There is no waste of labour, locomotive power and so forth, as happens here, where everyone sends his own parcels when he likes. The traders can assist the railways in this respect if they display a little enterprise. I welcome some of the alterations made in the Bill in the other House. In the main they tend to make it a better measure, though, undoubtedly, it has shortcomings. I certainly welcome the provision making open competition for the clerical staff compulsory. Already there were provisions by which most of the companies recruited most of their clerical staff by open competition, but there was a certain looseness displayed by some of the companies which the Bill seems to correct. I hope the new management, when making promotions to the higher positions, will have greater regard to efficiency and stability, and less regard to extraneous influence, than there has been in the past.

There are bitter complaints, even to this day, that the particular political persuasion to which a man belongs, or the altar at which he may worship, is taken into consideration when promotions to the higher posts are being made. I do not say that happens in all the companies, but I am afraid it does happen in some companies, because no other explanation can be given why some people find themselves in certain positions. The companies suffer from it themselves. It is a deplorable example in those days of progress when everyone should be judged on his merits, and not on extraneous influences like politics and religion. Section 55 of the Bill embodies a rather dangerous principle in view of certain recent conditions. Under that section it is possible for sectional movements to take place among railway trade unions. It enables any section of employees at any time to go out on a strike of their own and really take it for granted that the railway companies will negotiate with them, and thereby bring anarchy into the railway trade unions. We know the attitude the Government took up in the case of the recent revolt of the gas workers where they refused to deal with a section of the workers who had repudiated their union and gone out on a fight of their own. Yet in this Bill it is made legal for small sections of disgruntled people to create chaos throughout the railway service by going forward on sectional movements of their own, instead of through their own accredited trade union.

I think, in the long run, if the section is left as it is, it is the railway company and the community that will suffer. The railway trade unions can deal with their own loyal members, but from those who cause turmoil it is the community and the company that will be the sufferers. There are some other points, more or less of detail, that will certainly require amendment on the Committee and Fourth Stages. The manager of the new combine will have a very big task. He will have to try to co-ordinate the various elements, some of them of a very conflicting character, which will form the new combine. In this respect I would sincerely express the hope that the policy of the principal company in the combine is not going to be the policy in the amalgamated company. Mention has been made by Senator O'Dea of the irregularity with regard to rates that occurred on that line. I am sorry to say the instances he quoted are only symbolic of the general irregularities regarding the policy adopted by the board of that particular company.

Some people who may exercise a very important influence on the policy of the new railway live in an atmosphere which is clearly mid-Victorian. They are non-progressive, and autocratic in their outlook, and I am very much afraid will tend to hamper the enlightened progressive management which would be necessary to make this railway company a success. Amongst the Irish railway managers we have more than one of progressive and enlightened ideas, but we have also more than one who, because of the restrictions placed upon them by people who form the Board of Directors—but whose knowledge of railway affairs is in no way comparable to the knowledge of these men-are of a non-progressive type. I believe it would be disastrous to the success of this line if the new manager, whoever he may be, does not get a free hand. He must be a man of strong personality, with moral courage, and not afraid to act, as some Irish general managers are, being mere marionettes. They simply dance to the tune of one or two railway directors, whose only authority is the weight of their money bags, and who, although they may be acting sincerely, certainly tend to retard the efficiency of the railway service.

Mr. LINEHAN

As this Bill was introduced in the Dáil, I could give it my support on the Second Reading. In my opinion it dealt fairly with all concerned. It provided a standard revenue to the shareholders, and it provided for the officials and the railway directors. On the Committee Stage a very extraordinary amendment was introduced which entirely alters the character of the Bill. It brings in a principle of confiscation, which, in my opinion, will not be supported by the Seanad. I refer to the amendment which brings in Section 63, sub-section (6). As will be seen from the Official Debates, the effect of that amendment was explained very shortly by the Deputy who introduced it. The amendment deals with a particular liability which may arise in connection with a railway that had a baronial guarantee, but which has now lapsed. That amendment was put in, in order to deprive three very poor baronies in Co. Cork of their rights, under a judgment of the House of Lords. That judgment was given unanimously by all the courts in which the case was tried, both in this country, as well as at the other side of the Channel. Surely that is a proof that the ratepayers of these baronies had a genuine case, seeing that it was able to go through all the courts successfully. I believe our Cathaoirleach was a member of one of the courts when the case was tried in this country, possibly President of the Court of Appeal.

The facts of the case are, shortly;— This is a railway that owes the ratepayers something. In all the railways in the Schedule it is a case of the ratepayers being liable for the railway. It is the reverse here, in the matter of the Bantry Extension Railway. The line was constructed under the Island Valley Railway (Bantry Extension) Act of 1878. The share capital was £70,000, consisting of £40,000 baronial guaranteed stock, and £50,000 ordinary stock. The Grand Jury of the County Cork gave a guarantee of 5 per cent. on the £40,000 for a term of 35 years from the opening of the line, to be a charge on the baronies of Bantry, Bere, and the West Division of West Carbery. I should say that these three baronies are the three poorest in Ireland. The principal monument of the barony of Bere is known as Hungry Hill, a name thoroughly descriptive of the character of the land, and the locality. This amendment seeks to deprive the people there of their right to an award of £50,000 made by the House of Lords. The line was opened for traffic on the 1st July, 1881, and the guarantee expired on the 30th June, 1916. The Grand Jury and their successors, the County Council, had paid sums in the aggregate amounting to £59,133 13s. 1d. during the 35 years that the guarantee existed. The gross amount involved in the guarantee was £70,000, but for some years before the guarantee expired no money had been demanded from the County Council, as, under a working arrangement with the parent company, the Cork and Bandon Railway, the undertaking was paying. The total amount paid during the 35 years was £59,133. The guarantee having expired, the County Council made a claim on the Cork, Bandon and South Coast Railway for a charge on the railway, authorised by the Bantry Extension Act of 1878, and the net receipts from the same, and that the said sum of £59,000 and all costs and expenses should be repaid to the County Council of Cork in priority to the payment of dividends on any shares on the said Bantry Extension Railway.

This action came on for trial in the Chancery Division of the High Court of Justice in Ireland before Mr. Justice Powell on the 22nd January, 1919, and on the 22nd February, 1919, Mr. Justice Powell gave his decision in favour of the County Council, and held that the sum of £59,000 already mentioned, with costs, and expenses of levying same, were well charged on the railway and undertaking known as the Bantry Extension Railway, already mentioned, and that the money was repayable to the County Council in priority to dividends on any shares of the Company.

The Cork, Bandon and South Coast Railway Company appealed from this decision, and the High Court of Appeal upheld Mr. Justice Powell's decision. The company then appealed to the House of Lords, which also upheld the decision of the court below. As a result of this decision of the House of Lords a sum of £61,133 was charged on the Bantry Extension undertaking on the certificate of the High Court, dated the 16th June, 1922, and the County Council have since been paid "sums amounting to £9,000 on account of the sum due to them, for the benefit of the baronies. At present £51,874 4s. 7d. is due to the baronies, and it is proposed to wipe out that and deprive the people of the baronies of the right they acquired at considerable expense in the House of Lords. I was very much surprised that such a thing could happen, but Senator O'Farrell suggested that a good deal of this Bill was prepared in conference with the railway directors. The thought has occurred to me that the railway directors, especially local directors, must have had a good deal to say in inducing the Government to agree to this. It is purely confiscation. This judgment stands. The people are not asking the Government to take this line. The line could be left with the ratepayers, as the Ballybunion and Listowel line—the Lartigue line—is; it could be left to the ratepayers, as the Dublin and Blessington line is. These people are the real owners of this line. You can see from the judgment that their claim is in priority to the dividends of the shareholders, and a remarkable thing is that you are providing for the shareholders, who should come on after these people. You are providing the standard revenue for them, and you are providing for the directors, compensating them for their loss of office. Nothing is thought of the poor ratepayers who are really the owners of the line. I would be very much astonished if the Seanad, knowing the facts of the case, would support this proposal. They must have imagined that it was all the other way, but now that they do know that it is proposed to perpetrate this great injustice on the ratepayers of those baronies I am sure that they will not agree to that principle of confiscation, because another day may come when another Government will be in office, and when there might be very much more interference with what they consider their property; and if it could be proved that you agreed to the principle of confiscating the property of a certain number of people, even though they are poor people, I think it would establish a very bad precedent. As long as this sub-section is in the Bill I shall not find myself able to support even the Second Reading, and I shall not do so unless I get an assurance from the Minister that this sub-section will be reconsidered and that justice will be done to the ratepayers of these three baronies.

Sir THOMAS ESMONDE

I have noticed that all the speakers who have dealt with this measure have criticised it, and I do not know that in any direction it has found enthusiastic support. But the interesting thing about the situation is that everybody, apparently, is going to vote for the Bill; that seems to me to be the decision at which the Seanad has arrived. I do not propose to interfere in this arrangement, not at all events at the present stage. I think that members of the Seanad, and others, have taken a somewhat gloomy view of the future of the country when the Bill is passed. I presume the Bill will be passed, but, of course, that remains to be seen. I do not know that the situation is particularly gloomy. It was somewhat gloomy about a year ago when the Government was forced to take this matter in hands, and to endeavour to deal with a very complicated situation, and I think that everybody recognises the difficulties that the Government had to face at that time. But whatever differences of opinion we may have on the Bill and the details of it, we must all admit that the Government have faced a very difficult situation with a good deal of courage, and unquestionably, with a good deal of skill. Personally, I am very sorry that the Government could not see its way to encourage somehow the spirit of competition amongst the railways, and I am sorry that the Dáil apparently took that same view. But I was particularly grieved to hear that view endorsed by such an eminent authority as Senator Bagwell, because, after all, we are all children compared with him in the matter of railway management, and when he tells us that even his ingenuity cannot arrange competition between the Irish railways the situation looks rather gloomy. However. the Bill must go through Committee yet, and there will be other opportunities, and conceivably before it receives the Governor-General's approval some little element of competition may be slipped into it.

The question of the light railways and of these baronial railways is undoubtedly a difficult one. Some of them are apparently paying their way. Others are not paying their way, and it is proposed that the taxpayer generally shall be made responsible for the amount of this deficit for a period of ten years. The Senator opposite took exception to this proceeding. He thought that was a very wicked thing to do, to spend the taxpayers' money in relation to these light railways. even for ten years. Of course, when his policy is carried out, as it may be some day or other, I think it will be found that the taxpayer will have to pay rather more for the carrying on than we will have to pay during these ten years in connection with the light railways. Senator Bagwell has made a suggestion which possibly the Government may entertain later on, of extending this guarantee if it is found that these railways constitute too great a burden upon the general railway economy. There are some of these railways, unquestionably, that are paying their way. The Senator from Donegal objected to the exclusion of his light railway. I know some of the light railways in Donegal; I have done myself the pleasure of travelling on them; they are extremely well managed, and I congratulate their management. I do not imagine that there will be any objection to those being amalgamated, and there is no reason why they should not be amalgamated with the other railways by constructing a very short loop line to join them in the Sligo direction. That would be quite easily done if the Senator would assist that project.

For years past we have had complaints about the high railway rates. Well, after all, everything has increased. The cost of living has increased, and it is only natural that the cost of railways generally should increase. People contrast the Irish railways and the English railways, but they quite forget the extraordinary difference there is between the railways in the two countries.

I have gone to the trouble of getting out some figures because this seems to me to be a very instructive point, taken in connection with the subject we are discussing. I find that compared with the English railways, our traffic either in passengers or goods is comparatively infinitesimal. Last year in the whole of Ireland there were twelve millions of passengers. Now contrast that with the number of passengers on the four chief British railways in the same period, the figures for which are 934 millions. Contrast our twelve millions with that enormous figure of 934 millions. It is interesting, further, in this discussion, to point out that of these twelve million people who travelled in this country last year 5,100,000 travelled by the Dublin and South Eastern Railway, so that only leaves a little over six million passengers to all the rest of the Saorstát railways. That shows the extraordinary difference that exists between our railway situation and the situation in England. I need not go into the figures of traffic and so forth, because the disparity would then be seen to be very much greater still. That really is one of the great troubles in connection with the high rates. There is no traffic on the railways in this country compared with England. We have not the large population nor the industries. Whatever happens, I do not think there will be any very great reduction in the matter of rates on the Irish railways. We were told there would be great economics. I do not see how they can be made. You may abolish the railway directorates, but that will not be an economy of one per cent. It will be a mere drop in the bucket. I do not know how you are to economise, but if it is a question of reducing the personnel we shall find some little difficulty in relation to that. The railway shareholders, in the course of the discussion, in the last year or two have come in for many hard knocks. But, after all, railway shareholders are the most important section of our community. They are the section of our community whose prosperity is vital to the future of this country as it is vital to the future of any other country. Railway shareholders are the people who develop the country and who endeavour to make the most of the natural resources of the country, and these people have got the right to claim, morally and otherwise, a fair return on the capital they have invested.

I was interested to hear from the Senator opposite a very practical plea for co-operation between the railways and the railway users in the matter of transport of goods. I presume he meant in the arrangement of goods in bulk and so forth. I think we might go a step further in connection with the Irish railways. I do not in the least despair that some day or other that step will be taken. I think you should have co-operation not only between the railways and the public—that is, the railways and the users of the railways —but you should also have co-operation between the railways, the public and the labour concerned with both. In spite of the various difficulties and in spite of the things that have been said and the arguments that have been used—and of course one has to use certain arguments—I do not see any fundamental reason why these three great classes should not co-operate. They are all concerned in the country's welfare. We are all endeavouring to develop the country's welfare and to make it a better country for people to live in. A little co-operation would go much further in that direction than any amount of harsh criticism. As far as the Bill is concerned, I do not propose to vote against it. In the Committee Stage I may find it necessary to move certain amendments to the Bill.

Mr. BARRINGTON

I do not propose to follow Senator O'Farrell into all the heresies to which he treated us, and in which he seemed to make out that everybody was wrong but his own party. But in the Bill there are one or two things that I would like to call attention to. As one who has devoted practically the whole of his life to the extension of railways, I should like to point out that there is a vast difference between the wages which I for one am not out to cut down in any drastic manner, and the labour bill. I think it will be found if you take statistics and figures, that about 30 per cent. of that wages bill can be reduced without affecting the rate of wages paid to the workmen at all. I think it is time enough to ask for a drastic reduction in the rate of wages paid when the cost of living in this country comes down; and I would urge on the Government to take that matter in hands at the earliest possible opportunity. Somebody or other is responsible for a vast deal of profiteering. I know that the price of bacon is as high now as when pigs were sold at 180/- per cwt., though to-day pigs are only 80/-. The same thing runs through every branch of living and in my opinion it is time enough to ask the workmen to accept drastic reductions in their wages when the question of profiteering has been dealt with. But there is another question, and that is the unnecessary number of men employed to do a man's work.

I know of many cases in the West of Ireland where two trains enter and leave a station each day. But because these two trains are more than eight hours apart in point of time, two men have been brought in. I know that a great part of their time these men spend digging their gardens, and if they were only the ordinary inhabitants of the district they would come down to the station to see the trains coming in and going out (which is almost all they do) and get all the information which was available. I know of cases where an engine-driver starts in the morning after eight o'clock, and he runs four miles. He is idle then several hours at the junction. He has four trains to serve in the day, but because the last train comes in a a little bit beyond the eight hours, a second crew have to be engaged for the work. I do not think it is unreasonable to ask that that should not continue. I, personally, have not had any great difficulty in dealing with labour, but it would not be unreasonable to demand that the railway companies should get rid of all that redundancy of labour, and if they did they would do away with about 30 per cent. of the wages bill. The whole wages bill could be cut down without interfering with the rates of wages paid at all.

As regards the light railways, I was going to direct attention to the same point as Senator Linehan pointed out with such force, that there are two forms of guarantees. What people generally allude to as guaranteed lines are the guarantees under the Tramways Act of 1883. There were guarantees in force long before the passing of the Tramways Act of 1883. I was myself concerned with the passing of a Bill in connection with the railway to which the Senator alluded, namely, the Bantry Extension; but in addition to the Bantry Extension there were other railways to which the same thing refers. I urge the Government with the sources of information at their disposal to find out whether other people and other baronies would not be equally injuriously affected by sub-section (6) of Section 6. Now as regards the Light Railway Grant of 1883, the sum of £40,000 was voted by the British Parliament for the extension of railways in districts in Ireland where railways would not otherwise pay and where nobody would be likely to construct them. That £40,000 a year was only absorbed to the extent, as well as my memory serves me, and I am speaking from memory, of something like £23,000, and the balance of it was subsequently applied to the construction of light railways under Mr. Balfour's Act of 1889. Of that £23,000 a small portion was afterwards wiped out by the capitalisation and paying off of the Grant, but some of it still remains. It was charged on the Irish Church Surplus Fund, which was a purely Irish fund and which belonged to Ireland. I remember, when the Act was before the British Parliament, somebody said that we were only turning bishops and parsons into puffing railways. If the Government could secure the balance left over from that fund it would be something in the neighbourhood of £20,000, and why should they not pay that after the ten years? It seems to me it would be a reasonable thing to expect. It ought to be available, and I cannot understand why it is not available, and if it is available why should it not be paid to the people who undertook the liability of working these lines.

There is one aspect of this Bill upon which I do not think the country can be congratulated. It will, as the Earl of Kerry pointed out, stereotype things as they are. One of the great advantages of competition is that although perhaps live competition does not exist in the sense of cutting rates, still there was always a chance that if one company did not do their work and keep up to date, another company might come in and do it, and it was an incentive to the officials managing the lines to put their best foot forward and to do the best they could. If all the railways are amalgamated into one central company that incentive will disappear. In addition, there was always the chance, while there was the possibility of competition to which Sir Thomas Esmonde alluded, of the extension of the railways. There are some districts in the country where further railways are wanted. Some people may smile, but there are such districts. There is a place that I come from, Limerick, not unknown in history, and there the railway stops short within a couple of miles of the port. There is no connection, and there will be no incentive to make that connection if this Bill passes unamended. There are several other places. There is a very large area of country which lies to the east of the line that runs from Limerick to Athenry, and south of the Midland Great Western, and west of the Great Southern and Western from Athlone to Portarlington, and this, with the exception of a few trifling branches, is quite without railway communication. I think that area without communication is roughly 50 miles by 50 miles, and if there is no amendment to this Bill all possibility of further development in that district taking place will be lost. I think that probably the Government has done the very best they could in all the circumstances. I should like to see two or three amendments of the sort I have indicated, made in the Bill before it is passed into law.

Sir JOHN KEANE

I feel somewhat pessimistic after hearing this debate. A great deal of criticism has been directed against the Bill, and there has been apprehension as to its effects, yet there is agreement that it is the best that could be done. As I am not a railway director or a railway shareholder, at any rate as a beneficiary, I rather hesitate to join in this debate, but some remarks made by Senator O'Farrell surprise me, and require, I think, to be replied to. He referred to the generosity of taking the pre-war revenue as the standard revenue upon which future dividends should be fixed, and he also uses the term "financial equilibrium." I would suggest that in matters of finance some definitions of greater precision are required, because after all financial equilibrium either means something or it means nothing. But when you apply what is in his mind, "financial equilibrium" to the standard revenue, I think he seems to suggest that all those who in the past supported railways and put their capital into railways, are going to receive an adequate recognition under the basis of this standard revenue.

I would suggest to the Senator that all the capital sunk in railways in the past years is by no means adequately represented by taking the standard revenue as the basis for the dividend paid and that there exists a large amount of dead capital, which under the present arrangements never can receive a penny. That dead capital raises a very interesting line of thought. We hear attacks made from certain quarters upon the bloated capitalist, and we hear it in reference to this present Bill. In certain quarters you visualise the capitalist, as in Punch, as a bloated individual in a Rolls Royce car. There may be occasionally persons who do indulge in these practices, but we hear nothing about the person who lost all his capital in enterprises, while the labourer is still employed and is in receipt of high wages, whereas the person who set up the machinery whereby the labourer receives his just reward is himself not receiving one penny. We have to carry that line of thought to the present Bill and see where it is leading us. I suggest this is going to be the result of the present Bill. If the amalgamated company is to effect economies, I say it must be remembered that economies are largely a question of capital. If you introduce labour saving machinery, you can only do so by the expenditure of capital. If you replace five men by three, even though you compensate the other two, it requires capital. Where is this capital going to come from? Would the Minister give us an idea where the Government are going to find it? I cannot conceive that any private investor, with this Bill before him, and the railway tribunal, and economies with regard to baronial guarantees and economy arrangements with regard to standardised revenue, will supply it. Senator O'Farrell says that there is to be thirty-three and a third per cent. in excess over and above the standard revenue. I see only about twenty per cent. available of increased revenue with this prospect, and general insecurity. If there are other investments where you can get 5 per cent. on your money without doing anything but smoking your pipe, I see very little prospect of getting in this capital which in my opinion is essential for effecting these economies. It seems to me if you are going to have these economies and have the rates reduced, the State will have to find the capital. Although we hear these glowing prospects and what nationalisation could produce over private enterprise, I ask whether anywhere except in Prussianised Germany before the war, where the railways were run as a military machine, you ever got efficiency under State control. So I am going to vote for this Bill with a feeling of pessimism, and I want to be enlightened by the Government as to where the capital for the development is going to come from.

Mr. FARREN

I have only a few remarks to make. I did not intend to say a word at all were it not for some statements made by Senator Barrington, and which, I think, were not fair. Senator Barrington told us that the railway workers refused to work a longer period than an eight-hour day on these side stations where there was not sufficient work to keep them employed all day. As a matter of fact, that is not correct, for in these wayside stations where there is not sufficient work to do in the eight hours they agree to have their work spread over twelve hours. Also, the statement made by Senator Barrington that they had nothing to do but till their gardens is not correct. If it were correct, I think they would be giving a better example than the engineers of the railway, who spend their time playing golf. Senator Sir John Keane made a savage attack on Senator O'Farrell regarding the statement he made about financial equilibrium. I will not be so foolish as to enter into a discussion on that subject; I will leave it between Senator Sir John Keane and Senator O'Farrell. But this much I do say: he spoke about the question of the dividends to be paid to the railway shareholders, dead capital, and all that, and I want to say that the Government are extremely generous in this Bill to the railway shareholders, for it is admitted that under private enterprise they cannot pay more than 2¾ per cent. on the Irish railways to the shareholders in 1923. Under the Bill the Government propose to guarantee them a dividend of 4 per cent. on the capital invested, so I think that the Government are very generous. I do not think that this Government intervention, or Government control, will be so bad for the Irish railway shareholders, for they are guaranteed a good deal more than would be got by private enterprise. That is one argument in favour of nationalisation. I believe that the Bill is a good one, and I will support it right through, because I believe the passing of this measure will be the first step to where we want to get, and it will be much easier to accomplish the nationalisation of railways if this Bill is passed.

The PRESIDENT

I apologise for the absence of the Minister for Industry and Commerce. He is engaged in the other House, but to some extent I took his place in the other House in dealing with this measure. I should say that, on the whole, I would be prepared to take it that this measure has got what we will call a conditional baptism from the Seanad. It does not seem to have commended itself very cordially to any of the Senators who have spoken. To those who did agree to vote for it, I think that the recommendation was rather in the shape of a very cold douche of water on the other Senators, for I take it that a step towards nationalisation would not appeal to the majority of the Seanad, and to that extent the most cordial support it has got is perhaps the greatest possible discount on the other side. I think if we were to take the full-blown capitalism of Sir John Keane and balance it with the financial equilibrium of Senator O'Farrell, and take the mean between the two, we would arrive at the conclusion that there is scarcely any other manner of dealing with the railways than what is proposed in the Bill. Senator O'Farrell, I think, made the mistake that we were taking the three best years as the average. The three best years were not taken, but he will be correct in saying that we took the three best pre-war years. I think the years 1916 and 1917 were better than the years 1911 and 1912. For that reason shareholders might have a slight cause of complaint, though the amount involved might be inconsiderable. I think we might balance the statement made by Senator O'Farrell with this generous gesture towards the railway shareholders by saying that it is a just Bill to the shareholders, and that they are getting more than they got in any pre-war period; not much, I admit, but on that basis they are getting a fair square deal, and they are entitled to that. Men who in time of need came forward and put a lot of money into a great big transit machine, such as we have in the Irish railways, are entitled to have due consideration given to their property, and we have given that due consideration. We have, in addition, stereotyped, if we like to put that term on it, individual enterprise in the management of railways. To that extent, there is given a very good chance to private enterprise to work this big machine. The Bill is one thing, the conditions in the country another. I do not like to hear statement after statement made either here or in the Dáil to the effect that business in the country does not look very bright. The business of the country is our business. It is what we make it and what the people of the country make it, and if the statement read out by Senator Sir Thomas Esmonde is correct, you will see at once what any Government will be faced with in considering the transit problem of the country. There is not very much there to work upon. The question arises whether every foreigner who comes here and tells us we have a country capable of development and rich in potentialities is wrong, and that the pessimists who come here and say depressing things are right. I am inclined to agree with the foreigners in that respect. I cannot see why in a fertile country like this, all the good things that were prognosticated before the Seanad and the Dáil were set up, should not materialise if we bring sufficient punch, industry and intellect to bear upon our problems.

Sir THOMAS ESMONDE

Sufficient faith.

The PRESIDENT

Sufficient faith and sufficient hope. One thing was not dealt with in the manner it deserved-the railway tribunal. Some Senator asked as to what part outside members would play in the railway tribunal. Where they act on the railway tribunal they are as much members as the Chairman or the permanent members. They act in cases where the particular interests which they represent are concerned. I think it was Senator the Earl of Kerry who said that the economies that would be effected in the case of the railway management and the directors, etc., would be negligible. I believe the sum mentioned was £30,000. I think that sum will bear some comparison with the amount which we estimated for relieving the baronies after ten years. I think the matter of the treatment of baronies would be best met when the Committee Stage is reached. We dealt with them at great length in the Dáil and we anticipate with respect to this large sum that there will be some revival of enterprise on the part of the whole unified undertaking. If there are blocks of country 50 miles square, offering any inducement for development, surely it would be the business of this unified undertaking to enter into a matter like that. If they did not they would not be capable of doing so well the work that it is hoped they will do under this Bill. Every possible means of bringing money into the undertaking and improving it, and of relieving the trade and industry of this country of the enormous sums they are called upon to pay in rates and fares ought to be one of the first considerations which the directors should enter into. I have observed in the course of the debate that the more hopeful outlook comes from those who have had actual practical experience of the direct working or engineering of the railways. During the debate the notes that I took were so voluminous that by the time I had finished they extended to some half a dozen pages. I think it would be unfair on a warm evening like this to keep the Seanad listening to matters that will all be dealt with when the Minister takes the Committee Stage of the Bill. With regard to the general lines of the Bill, as Senator Bagwell said, we have been something like two years considering it. Many suggestions have been made from various sources as to the best means of dealing with it. Except in two cases that were brought forward here we have not heard alternative proposals.

There were alternative proposals which did not commend themselves to us, namely, grouping as against unification. The grouping system might ultimately lead towards unification. In the case of the amalgamation that has taken place in England the sums involved certainly in one undertaking amount to something like twenty times what the whole unified undertaking is worth here. That is the capital involved. If it be possible to run a great big concern with a capital of five hundred millions it ought surely be possible here, with the experienced business men and railwaymen in this country, to run a company with a capital of £27,000,000 as efficiently as companies are run in other places. If we have faith and hope in the country's future the Bill ought to be a success. I will only say that as far as the treatment of the shareholders was concerned, it was not considered in a generous spirit; it was considered in a just spirit. Our opinion was that railway shareholders were entitled to their dividends if the concern is able to earn it. If the management of it or the business is not capable of producing it, then that is a matter the Government must take into consideration in an Amending Bill.

Mr. CLAYTON LOVE

There was one little matter referred to by Senator Linehan as a blot on the Bill. It might adjust matters if consideration were given to it by the Minister. I think Senator Linehan made a very good case and impressed many members of the Seanad, and I am sure the Minister will give it his consideration when the matter is brought forward.

The PRESIDENT

I would not like to mislead the Seanad. I do not think the Minister will be able to give that consideration. The information put before me is that the percentage of receipts or expenditure to receipts in the case of the Bantry Extension line stands where it did in 1913, that is, at 70 per cent. of the gross receipts. Now, no other company in this country runs its concern at that price, that is, at the cost of 70 per cent. of its gross receipts. In the case of—

Ballinascarthy and Timoleague, and Timoleague and Courtmacsherry Railway the expenditure is 151 per cent. of traffic receipts.

Cavan and Leitrim, the expenditure is 125.96 per cent. of traffic receipts.

Cork and Muskerry, the expenditure is 128.64 per cent. of traffic receipts.

Donoughmore Extension, the expenditure is 267.42 per cent. of traffic receipts.

Schull and Skibbereen, the expenditure is 215.37 of traffic receipts.

Tralee and Dingle, the expenditure is 195.66 per cent. of traffic receipts,

West Clare, the expenditure is 102.04 per cent. of traffic receipts.

Now, it is reasonable to ask how can we get an expenditure of more than twice what the receipts are? The answer is, somebody else pays it, and the answer in connection with the Bantry case is: you can have a paper return regarding these matters. It is worked by another company, and it is not, I think, a fair and just deal in the case of the Cork County Council. I believe if it were to stand, someone would come forward demanding a Bill to amend that particular restriction which gives the Cork County Council 30 per cent. of an advantage. In that connection I do not think it possible to do what Senator Linehan asked, and I think that the Cork County Council, by losing on that transaction, will gain on the other. They can scarcely claim all the advantages in one direction and absolve themselves in the other.

Question—"That the Bill be read a second time"—put and declared carried.

Mr. O'FARRELL

Would it not be well to fix a date for the Committee Stage now?

AN CATHAOIRLEACH

I was going to consult the Seanad about that. It has been suggested to me by one or two Senators—I am not pronouncing any opinion at all, as my personal view is that this is such an important Bill it should be left to the whole House—that the Seanad might consider the desirability of referring the Bill to a strong Select Committee.

SENATORS

No, no.

AN CATHAOIRLEACH

I thought that would be the view, as this is such an important question. Nevertheless. I mention the matter to the Seanad. I do not see that we could reach the Committee Stage of this Bill before this day week. In view of the early termination of the Session, I do not think we ought to put the Committee Stage off any later. I think at least one week is necessary in order that Senators might draft amendments. I hope amendments will be sent in as soon as possible, as it would be desirable that they would appear on the Orders of the Day for this day week. Some very important questions arise on two Bills mentioned on this day's Orders of the Day, but I do not know if it is the wish of the Seanad to dispose of them now, or wait until tomorrow.

Seanad Éireann díospóireacht - Wednesday, 18 Jun 1924