Seanad Éireann díospóireacht -
Wednesday, 17 Dec 1924

Vol. 3 No. 26

RAILWAYS (DIRECTORATE) BILL, 1924. - SEANAD IN COMMITTEE.

Question—"That Section 1 stand part of the Bill"—put and agreed to.

SECTION 2.

The nomination of a director by the London, Midland and Scottish Railway Company under Section 1 of this Act may be made at any time after the formation of the amalgamated company and the director so nominated shall exercise the same rights and authority as any other director of the amalgamated company.

Mr. MacKEAN

I move:—

To delete all after the word "exercise" in line 14 and to substitute therefor the words "his right and authority to sit and act on the board of directors of the amalgamated company only when matters relating to the agreement between the London, Midland and Scottish Railway Company and the Dublin and South Eastern Railway Company come before the board for consideration.

The Bill now before the Seanad in virtue of certain concessions by the London, Midland and Scottish Railway to the Dublin and South Eastern Railway asks permission to allow for the nomination of a director on the board of the amalgamated company. When the Railways Bill, 1924, was passed, and a railway tribunal set up, those interested in railway matters in Ireland looked forward to a board of control of the railways which would act in harmony with the wishes and wants of the Irish people, one that would sympathise with the Irish Ireland movement and eliminate, if possible, Irish railways from English control. In 1904, when the first agreement was made with the Dublin, Wicklow and Wexford Company we understood that a condition of things existed then that does not exist now. Our exports were much in excess of our imports and therefore for the benefit of the country, to facilitate rapid transit and the transport of our goods it was necessary that an agreement of this kind should be entered into. For the last few years the balance is on the wrong side, our imports now exceeding our exports, so that the agreement entered into by those two railways has to be materially altered.

The Minister stresses a good deal the good business done in getting £20,000 yearly from the London, Midland and Scottish Railway brought into the funds of the new amalgamated company. I think the appointment of a director in consideration of this payment is setting a bad precedent. I might quote the remarks of President Wilson when he said: "The claim of foreign capital to get control of the vital interests of the country in which it is invested should be resisted the same as an invading army." That is a sound economic principle, and the experience of such a statesman should receive a great deal of consideration. The claim of foreign capital to control in any way vital concerns in this country should be resisted in the same way as an invading army.

With regard to the director who is to be appointed on the railway, it has been argued that one director out of sixteen would make very little difference. Under normal conditions, perhaps not, but we must remember on the new directorate of the amalgamated company, on looking over the list, we find that 85 per cent. of the directors are men who some years ago sympathised with English rule in Ireland,. Their outlook was English, and, therefore, a director with expert railway knowledge could, if he has plastic minds to work on, carry his own point when dealing with such men.

In bargaining with England or English companies, I think we should remember the celebrated Dr. Johnson's advice to an Irish friend. He said: "Do not unite with us; we will rob you." I think the same principle, applied in connection with railways, would be a very wise one. This new director will hold his position on this company in virtue of the concessions granted by the London and North Western Company to the Dublin South Eastern Company, and I think it would be only right his activities should be confined really to this line. The director, if appointed, will obviously hold his position through the connection with the Dublin, South Eastern Railway Company and the London, Midland and Scottish Railway Company, and it would be unreasonable that he should be allowed to interfere in the general management of all the railways in the Saorstát. To restrain this undue influence and to confine his activities to their legitimate sphere, is the purpose of my amendment.

Mr. DOWDALL

I beg to second that amendment. The appointment of this director arose in the first instance out of the existing agreement with the Dublin South Eastern Company, under which, in consideration of some moneys paid and some concessions made to that company, the London, North Western Railway as it then was, had a seat on the board of the Dublin, South Eastern Railway. The only advantage that that seat on the board of the railway could be to them would arise out of the traffic that passed over or through the Dublin South Eastern Railway, and for that purpose a director was very useful. I know the Minister made a point of what I am coming to now, but we quite understand each other. This was a voluntary and variable contribution, and it might be terminated at any time by the London, North Western Railway Company. Now, a specific agreement is come to, a contract which is ratified by an important Act of Parliament, by which the payment of this sum is stereotyped and will remain permanent. But for a payment of practically the same amount of money, this director of a relatively small company, the Dublin South Eastern Company, is made a director not only of the Dublin, South Eastern but of the Great Southern, the Midland Great Western and all the branch lines which they have absorbed or with which they have become amalgamated. As a mere bit of business it is a wretched bargain. If there is a company which has a turnover of £1,000,000 in which I invest £1,000 and am appointed a director, and if that company amalgamates or is absorbed by a very much larger company, which has a turnover of £10,000,000 a year, if I were to secure a directorship on that company I am not going to get it for the same qualification as in the case of the smaller company. The advantage will be that the London, Midland and Scottish Company will be able to order, suggest and argue for alteration of rates on all these lines and from such ports as Cork and Dundalk, where they have never previously had any influence arising out of the bargain they had made with the Dublin South Eastern Railway Company. I think, accordingly, the activities of the director should be limited, if possible, by this amendment; otherwise they are getting advantages which they previously had not without contributing anything materially more.

Really, the insatiable desire of the London, Midland and Scottish to give the benefit of their knowledge, resources and capital to the Irish railways is rather suggestive. They own and control the Belfast and Londonderry Railway; they own and control the Strabane to Derry Railway; they have half the capital, half the control, of the Strabane and Glenties Railway, and half of the line from Stranorlar to Killybegs. Is it seriously contended that is in the interests of the Irish trader? A jibe was thrown at me that I was speaking as a patriot. I am not. I am speaking in the interests of the Irish trader and in no other interest, and this appointment of a director is not in the interest of the Irish trader. It is primarily in the interest of the London, Midland and Scottish Railway. It was for some substantial consideration this director was appointed on the board of the Dublin, South Eastern Railway Company, and for no greater consideration he is appointed on the board of all the railways in Ireland.

Mr. McGILLIGAN

Senator McKean, in moving this amendment, made what I think was really a Second Reading speech, and I think in that he was wise, because the point is, to my understanding, one that has already been decided by the House in its last vote. This Bill sets out as a consideration certain concessions on the one side, and the appointment of a director, obviously a director with full and coherent powers, on the other.

This amendment seeks to limit his powers, and to that extent it is contrary to the principle just accepted by the House. Senator Dowdall, in arguing for the amendment, has made one point. First of all, he assured me he knows the difference between the two agreements. He speaks of considerations, and then he proceeds to mix both up.

Let me put it this way clearly if I can. There was an old standing agreement whereby in consideration of the payment of £100,000, the London, Midland and Scottish Railway had a right to appoint a director on the board of the Dublin, South Eastern Railway. That directorate was in return for the £100,000 paid down at one time; that was the only consideration. The Bill seeks to provide that a director be appointed on the board of the new amalgamated company in return for a legal contract, binding on the London, Midland and Scottish Company, to continue concessions, etc., estimated by the tribunal at £20,000 a year. The two things are distinct; the old consideration to the Dublin, South Eastern Railway Company is still there.

Mr. DOWDALL

Did the £20,000 not exist before?

Mr. McGILLIGAN

As a matter of fact it did. That is a point where there is some convergence. What would Senator Dowdall think if he approached an employee of his and said to him:—"I want to take you into my employment. For a number of years I have been in the habit of paying employees so much per week, and you can rely on it I will continue that payment for years to come if you continue to work for me." Supposing Senator Dowdall were to say to another employee:—"Go on working for me and I will enter into a contract to give you so much." Both sums were the same, but would the Senator consider there was no difference in the terms of employment offered? Would he think there would be no difference in the retorts made by the two men when the two propositions were put before them in that way? That is the difference here; there is now a binding contract to continue a payment that was hitherto voluntary and discretionary. That happened to continue for a number of years; there was no guarantee it would continue this year. On the main point of the amendment, it is simply an amendment to tear up an agreement, and would make the Bill absolutely useless.

The consideration that has been agreed to is on foot of a guarantee of a director; that the director is to be a director with full powers, not to be limited to certain business, and the analogy made that previously this director had only the right to consider the traffic arrangements of the Dublin, South Eastern Railway Company, and that, consequently, he should be confined to that portion of the amalgamated board's work is not a true analogy. To start with, it tears up the agreement and it is absolutely impracticable.

Mr. DOWDALL

Where is the false analogy?

Mr. McGILLIGAN

As I explained previously here, this director was limited to the Dublin, South Eastern Railway for a consideration given to that company. The value of that £100,000 is still there. It is somewhere in railways. Now, we are leaving that aside. We have got a binding agreement with regard to concessions estimated at £20,000 per year. That is an entirely different proposition.

Colonel MOORE

Another £20,000?

Mr. McGILLIGAN

It is the only time that the payment of that £20,000 has been agreed to in any contractual binding way. If you look at it from the point of view of the London- Midland and Scottish Railway, and supposing these concessions continue, and they were estimated at a certain sum, their books will show, on a particular side, the same sum of money undoubtedly. From their point of view it is exactly the same. But a director might go to a meeting of the London, Midland and Scottish and say: "We will save £20,000 a year at any time if we consider it worth saving." Now they have bound themselves to pay the money. Looking at it even from the point of the London, Midland and Scottish it is a big difference. The amendment would tear up the agreement, and the amendment is aimed directly at the principle of the Bill on which we have just voted.

Colonel MOORE

I think that this is a very reasonable amendment. The Minister has stated that it is entirely out of order. Why he should say so, considering that you, sir, have permitted it to be brought forward, I do not quite understand.

AN CATHAOIRLEACH

I was not asked to determine the question, Senator, and I do not think it would be wise for you to ask me now. I will let it go on. No one asked me to rule it out of order.

Colonel MOORE

It seems to me that the London, Midland and Scottish Company are getting something for nothing. They were already paying £20,000 a year for certain contingent advantages over a small line of railway. Now these contingent advantages will be secured over all the railways. Therefore, they are getting a good deal for nothing. If they were giving another £20,000 there would be something to be said. A very generous Government gives away quite lightly all our rights and privileges, merely for the sake of £20,000. I think that that is a very improper thing. The challenge was made just now: Would I go out and lead a revolution against this ridiculous clause. I do not think that I am prepared at the present moment to do so, but on the other hand, I will say this, that this handing over of these rights is likely to cause a revolution. If you go on handing over the rights of Ireland and the control of Irish industries in this way you will have a revolution in this country, and I am not at all sure that one of these days Ministers may not find themselves up against something pretty stiff. Whether I should be in it or not I do not know, but there it is. I entirely agree with the amendment.

Mr. BENNETT

I am rather anxious to know one thing. I did understand previously that the agreement that had been made was an agreement between the railway tribunal and the London, Midland and Scottish. I thought that that was the agreement with which the Bill was dealing, but now we are apparently dealing with the agreement between the London, Midland and Scottish and the Dublin, South Eastern Railways.

AN CATHAOIRLEACH

You see, the Senator's amendment, if it is in order, and I am assuming that it is, properly refers to the antecedent agreement. In the old days, prior to the Railways Bill of 1924, there was an agreement between these two companies, and the Senator's amendment is that the authority of the new director to be appointed under this Bill is to be limited to matters that would have arisen under the old existing agreement.

Mr. BENNETT

It would be an almost impossible thing for any particular directors to have a chart before them and say that this director hitherto had certain powers with regard to this line and must be confined to that. If it meant that I should certainly vote against the amendment.

Amendment put and declared lost.

Question—"That Section 2 stand part of the Bill"—put and agreed to.

Amendment by Senator O'Farrell.

New Section.—Immediately before Section 3 to insert a new Section 3 as follows:—

"3. Section 55 of the Railways Act, 1924, shall apply to the London, Midland and Scottish Railway Company in respect of its officers and servants employed in Saorstát Eireann in the same way as it applies to the amalgamated company, and the first appointment of a director of the amalgamated company by the London, Midland and Scottish Railway Company under this Act shall not be made until after the Minister for Industry and Commerce has been satisfied that the rates of pay of officers and servants of the London, Midland and Scottish Railway Company in Saorstát Eireann are not less favourable than those enjoyed by officers and servants of the corresponding grades of the amalgamated company."

AN CATHAOIRLEACH

You have made me a little suspicious, Senator O'Farrell, about this amendment of yours, and, on the whole, I do not think it is relevant. I would suggest to you that perhaps you might be doing more harm than good to the people in whose interests you are moving, if it is a fact, as Senator Moran has stated, that these individuals, whatever their rate of pay may be, have a number of very great advantages which their colleagues in Ireland in other companies do not possess, and if you were to succeed in getting their pay raised, probably you might be imperilling these other advantages. Apart altogether from that, I find it difficult to see how I could rule in favour of an amendment that would make this whole amalgamation scheme depend on an alteration in the existing rates of pay of a small section of officials of a company which is not part of the amalgamated company. I am afraid I could not allow it, and I do not think you are much surprised, Senator.

Mr. O'FARRELL

I expected that after the remarks you made, sir. Of course, I cannot argue points of order with you.

AN CATHAOIRLEACH

Oh, yes, if you think you can convince me that it is in order I am quite willing to hear you.

Colonel MOORE

I understood An Cathaoirleach to say that he was going to allow Senator O'Farrell to speak.

Mr. O'FARRELL

My belief that it would be in order was because we were only seeking to exercise a certain amount of supervision, so to speak, over the Saorstát employees of this company that is now to have a representative on the Amalgamated Company. Section 55 of the Railways Act would apply to it. It is a sort of fair wages clause in this contract which is made.

AN CATHAOIRLEACH

That was just the reason that made me hesitate, having regard to the fact that it is an analogy to the fair wages clause which you find so often inserted in a Bill, though more or less foreign to the subject matter of the Bill itself. Therefore, I would not preclude you from moving, if you are satisfied that you may not be doing more harm to these people than good if you succeed.

Mr. O'FARRELL

I will move it then, just for the purpose of clearing up a misapprehension. It would not be fair to these employees if the statement made should go uncorrected, because after all what we want is the facts, without any exaggeration whatever. The London, Midland and Scottish Company are, on the whole, as good as any other company in Great Britain, and in some respects better, and I am not going to be the person to take away any credit that they have. If it is stated that they give better rates and better conditions of service than any other company in Great Britain and Ireland, I must contradict the statement and say that that is not the case.

AN CATHAOIRLEACH

I do not think that the Senator put it on as high a pinnacle as that. I think the Senator admitted that the rates of pay for the individuals in the service in this company were lower than were obtained by other railway companies servants in this country; that apart from that, they had corresponding advantages which servants of other companies in the Free State did not possess. I think that that was his point.

Mr. O'FARRELL

That is true, in a sense. It means this in effect, that in their very old age, that is, if they are able to survive the poverty of their earlier years, they will, at the age of 65, be able to have a slightly better retiring allowance than if they were employed by an Irish railway. That is under the new arrangement which came in within the last couple of months. It is a new superannuation condition, to which the staff themselves are contributors, and it means that a man, when he gets to the age of 65, can retire with 50 per cent. of his salary. That is not an exorbitant allowance for a man with 40 or 45 years' service or more. He can also get a maximum of a year and a half salary if he is fortyfive years in the service. The Irish companies have another fund which is breaking up because of these amalgamations in England. The Railways Act provides that the new company shall submit a new scheme in one year from January 1st, and we hope and believe that we shall be able to have as good superannuation conditions as the London, Midland and Scottish employees. Apart from that, there is no advantage whatever, except a slight improvement in Sunday rates of pay. But the rank and file clerks who are a fairly substantial number and are working side by side with the other employees here, are far worse treated. It means that with the London, Midland and Scottish they have to wait until they are 31, when they have had 15 or 17 years' service, before they can get 77/- a week. They reach that at the age of 26 with an Irish company. These new conditions for Irish companies were decided upon by a judge of the High Court, so that they are not the result of any communistic or wild trade union activities. We simply ask that the London, Midland and Scottish Company will accept these conditions as far as their staff here is concerned, particularly in view of the fact that the cost of living in the Free State is seventeen points higher than in Great Britain. We have another way of enforcing it—we think that it would be very deplorable if we should have to do it—and that is to stop the mail boats from running and hold up the London, Midland and Scottish work at the North Wall, which we can do by withdrawing the Customs staff, who belong to us.

We think that a great corporation like that should not set a bad example by treating its Irish employees less favourably than its English employees. For instance, they have a special allowance in London because the cost of living is high. At least they might extend that to Dublin, which is, I think the most expensive city in Great Britain and Ireland. We suggest to the Minister that he should give a hint to the London, Midland and Scottish Company that it is undesirable that we should have to create chaos at the ports and stop the mails in order that these men should get this miserable 77/- at the age of 26, after passing a competitive examination, and in charge of very responsible duties, seeing that a judge of the High Court thought it was reasonable, taking all the circumstances into consideration, that the Irish companies should pay that.

Housing facilities were referred to by Senator Moran. These are facilities offered by the company to their staff, whereby they give 90 per cent. of the price of the house, I think, to any man who will build, at 4 per cent. interest, to be deducted over twenty years from his salary. But when members of the Irish staff applied for this they were told categorically that the scheme did not apply to Ireland, and it was only when this Bill came along and when it was sought to use influence in order to carry it that they were told that it was never intended to withhold it from the Free State, but that the cost of insurance here was so exhorbitant that they could not extend it until they had got an insurance company to give better terms. They were told that the staff would pay the difference, but even then they would not give a definite reply, because the policy, I believe, is merely to get over the trouble of this Bill, and then, of course, they can snap their fingers.

I think when an unprecedented action is being taken in favour of a particular railway company—and I am not saying this because they are English, because I have found English companies in many respects far more reasonable than some of the Irish companies, and I should prefer the policy of an English director to the mid-Victorian policy of some of the Irish directors that will govern the new combine—we might at least insist that they should be as good as a company over which they will exercise a very important interest, and that is the reason why I put down the amendment.

Mr. McGILLIGAN

It is very difficult for me to argue against this amendment, at least to enter into the reasons for which I object to this amendment, because it almost seems to be urging the case of one set of railway employees against another. I think the Senator will agree that until the Wylie award the conditions of these London, Midland and Scottish employees were better than the conditions of other railway employees in Ireland, that a new programme has been embarked upon in England, and if that be carried the rates of pay, etc., of the employees of the London, Midland and Scottish will be better than the Irish. When Senator O'Farrell says in this amendment "not less favourable," would he be willing to change it and to stereotype for all time that the rates of pay will always be the same, that if the rates of pay in England are put on some basis with which we are not concerned, the rates of pay here for the London, Midland and Scottish employees could not go up.

Mr. O'FARRELL

Is the Minister in a position to make that offer?

Mr. McGILLIGAN

I am putting this merely by way of argument. Is the Senator prepared to submit an amendment in that form, and is he prepared to stand by it? I have other objections to this amendment. One of them is this: Section 55 will be applied if this amendment is passed, to certain people. Section 55 deals with voluntary agreements to be made from time to time between the directors and the servants of the company. We are to have then, by means of this amendment, the inconsistency of a voluntary agreement, portion of which is compulsory. That in itself is an objection to the amendment. It is bringing in the question of the payment of wages and making that a part of the consideration that is not in the agreement, and this Bill is founded on the agreement. I think that any change in the terms of the agreement would be tantamount to a rejection of the Bill. It would set up some new agreement, and some consideration on the other side would have to be made.

Mr. O'FARRELL

In view of the doubt as to whether the amendment is in order, I will, with the permission of the House, withdraw it, but I would ask the House if hereafter trouble does develop and it is necessary to take industrial action, that they will realise that the unreasonableness is not all on the side of the workers.

Amendment, by leave, withdrawn.

Sections 3 and 4, the Title, and Preamble agreed to, and ordered to stand part of the Bill.