The Transport Bill, which is now being considered by the Seanad, has been the subject of public discussion for a long time. As the members of the House are aware, it was the subject of two Second Reading debates of unusual length in the Dáil, and the central point of controversy during a general election. It was debated by the Dáil in Committee over a long period and emerged from that House amended in some respects. Because of its history, I assume that its aims and provisions are well known to members of this House and that it is unnecessary at this stage to give an elaborate account of them. I would ask Senators, in considering the Bill, to keep in mind the provisions of other transport measures enacted by the Oireachtas.
This Bill is only one of a series of steps which have been taken over the past 20 years to endeavour to find a permanent solution of what has been called our transport problem. At all times public transport operators have acted under statutory authority. Every railway was built as a result of the enactment of legislation by the Parliament of the day, which not merely authorised its building, but placed certain limitations upon its operations and subjected it to various controls designed to protect the public interest.
Prior to the first world war, our public transport services were carried on almost exclusively by railway companies. Apart from the limited traffic that passed over our canals, these companies had an effective monopoly of the carriage of goods for hire, and so long as they enjoyed that monopoly they were able to conduct their business in a manner which was profitable to those who had subscribed the capital for the establishment of the railways. Whether they served the public needs adequately or not need not now be discussed.
A situation developed after the first world war which, however, not merely destroyed the monopoly which these public transport carriers enjoyed, but so threatened their existence as to make it probable that their operation would be discontinued or, at any rate, that their continued operation at a profit to the shareholders of the companies concerned would be improbable.
In the year 1924 the Government then in office, faced with the situation which had developed in relation to public transport services, enacted legislation designed to effect the amalgamation of all the railways, other than those operating cross-Border services, in one undertaking. That Act, which became law in 1924, and which was carried into effect in the subsequent year, effected the amalgamation or absorption of 26 railway companies into the organisation which was subsequently known as the Great Southern Railways Company.
It was contemplated at that time that the new amalgamated railway company would be able to provide transport facilities at reasonable rates for the public, and at the same time earn sufficient profit to remunerate the aggregate capital of the amalgamated companies, which amounted to something over £26,000,000. The scheme then envisaged the establishment of a railway tribunal charged with the responsibility of determining in the first instance what should be the revenue of the new undertaking, the standard revenue, as it was called in the measure, and what rates of charge for the transportation of traffic should be maintained and would be adequate to enable the new concern to earn the standard revenue. That measure failed to solve our transport problem, largely I think because those who framed it failed to take fully into account the significance of the growth of road services, the development of the mass-produced motor car and motor lorry, which were only at that time beginning to have their effect upon the volume of traffic carried over the railways.
It is almost incredible that only that short while ago those railway companies had not merely no road motor services but were in fact debarred by statute from the operation of road services. Only in subsequent years was power to operate road motor services given to them and to the Dublin United Tramways Company of that day. The growth of those road transport services and the effect of that growth upon the traffic available to the statutory transport providers were such that, when the Railway Tribunal had determined the standard revenue for the new company and proceeded to consider the standard charges for the transportation of goods which would permit that company to earn the standard revenue, it was compelled to report to the Minister for Industry and Commerce that no system of charges which it could devise would enable the company to earn the standard revenue. Although standard charges were determined and have operated in the years between then and now, the actual charges in operation for the transportation of goods were in all cases substantially less than those standard charges. Even at the present time, despite the increase in rates which was made operative by Emergency Powers Order last year, the charges in operation now do not in any case exceed the standard charges determined by the Railway Tribunal under the 1924 Act.
When the present Government came into office in 1932, they found that the transport situation had so deteriorated that new legislation was urgently necessary. The statutory transport companies were in a precarious financial position, and it appeared probable that the cessation of their operation would occur unless some action were taken to restore the position for them, and to secure more profitable working in future. The 1933 Act took account of the situation as it then existed. It provided for the re-creation of the monopoly of public transport which the railway companies had enjoyed previous to the development of road transport facilities. It did so by empowering the railway companies, each in its own area, and the tramways company in the City of Dublin to acquire compulsorily the services and vehicles of independent transport operators. It provided for the compulsory reduction of the nominal value of the capital of the Great Southern Railways Company from a figure in excess of £26,000,000 to a figure approaching £13,000,000. That very drastic curtailment of the nominal value of the capital of the Great Southern Railways Company was effected without the agreement of the shareholders of the company. The step was decided upon because it was considered that the assets which the original capital figure had represented had largely ceased to be of revenue-earning value, represented as it was in many cases by closed branch lines and facilities no longer in use, and it was felt that a necessary step in the establishment of a sounder transport position was the bringing of the capital obligations of the railway company into closer relationship not merely with the assets in actual use but with their revenue-earning capacity.
Although the railway company exercised in a large measure their powers compulsorily to acquire independent road transport operators given them by the legislation of 1933, the situation did not materially improve. There was a temporary improvement, and then a continuous deterioration, due, I think, almost entirely to defects in management, to the inability of those who had been all their lives engaged in conducting railways to appreciate that technical changes had developed which made it unsuitable to depend entirely upon railways for the provision of adequate public transport facilities. Their efforts were directed not so much to the provision of the facilities which modern industrial and commercial interests require as to the restoration of the value of the railway undertaking, and, to that end, the diversion of traffic from road to railway, even where it was obvious that it could be carried more economically and more efficiently on the road.
A situation developed in 1938 which made it clear that the whole matter had to be considered anew. The management of the Great Southern Railways Company in that year reported to the Government that their financial position had become serious; that their prospects of continuing their undertaking were doubtful; that new capital expenditure was required, but that they saw no prospect of acquiring new capital by public subscription, and that further powers would necessarily have to be given to them if they were to make their position stronger. That indication of the deterioration of the position by the management of the Great Southern Railways Company led to a decision in December, 1938, to establish a tribunal of inquiry. That tribunal of inquiry into public transport reported in 1939, and its report is now available to members of the House. I assume that those who are interested in this measure have read that report. It contains a very great deal of useful information and important statistics relating to our transport problem. Nobody can properly appreciate what the transport problem in this country in normal times is without studying that report. The recommendations in the report were, however, considered by the Government inadequate to deal with the situation, and in fact it is proposed in this Bill to go substantially further than the majority of the tribunal recommended. Prior to the publication of the report, the war had begun and, with the war, a new situation arose in relation to transport services. It was then decided that the preparation of new legislation relating to transport should be postponed until after the war. It was felt that the circumstances created by the war introduced such a large element of uncertainty into the situation that useful decisions upon policy could not then be made, apart from the fact that the members of the Government were necessarily preoccupied with more urgent problems created by the emergency.
As the emergency developed, however, and as it became clear that the public services would play a very vital part in the maintenance of reasonable conditions during the emergency, and as it became equally clear that those public services were not being directed so as to give the best results, from the point of view of the maintenance of the flow of materials and the alleviation of emergency conditions, the Government decided to take temporary control of the operations of the Great Southern Railways. That control was exercised under various Orders. Orders were enacted which required the company to carry goods in an order of priority determined by the Minister for Industry and Commerce, to provide such facilities as were considered necessary for essential traffics and to withdraw facilities from unessential traffics.
Ultimately, it was considered necessary to appoint a person nominated by the Government to be chairman of the company, to exercise day-to-day supervision over its operations and to ensure that those operations were carried on with the efficiency which was necessary and in the manner considered desirable during the emergency. In taking that step, the Government had in mind that one of the recommendations of the Transport Tribunal of 1939 was that Government directors should be appointed to the board of the Great Southern Railways for a period of time, in order to acquire more intimate knowledge than would otherwise be available of the problems of that company and its methods of operation and to report to the Government, so as to give the Government the information which would enable it to prepare new legislation. Senators will appreciate that the recommendations of the tribunal—and, in fact, the whole of their report—was influenced by the fact that the members of the tribunal felt that they had not got sufficient information concerning the detailed problems of the Great Southern Railways to go further than they did.
Following on the appointment of a chairman to the board of the Great Southern Railways under an Emergency Powers Order, and consideration, in consultation with him, of the organisational problems of the Great Southern Railways, as well as of the plans which appeared feasible for the reorganisation of transport in the period after the war, a decision was made that it would be unwise to wait until the conclusion of hostilities before attempting to prepare new legislation. It was felt that, although it would not be until after the war that materials and equipment required for the reorganisation and modernisation of the services provided by the company would be available, we should put ourselves in the position of being ready to utilise those materials and that equipment, when procurable, by creating now the organisation which would be responsible for the administration of the public transport services, giving it not merely the powers and resources but also the responsibility of planning ahead so that there need be no delay when more normal conditions returned in the provision of the efficient, cheap transport services which the economic development of the country in the future undoubtedly requires.
That is why this Bill has been produced. This Bill represents the conclusions of the Government as to the type of organisation to which it is most desirable to entrust the responsibility of reorganising our public transport services. I feel sure that it is not necessary to emphasise the importance of efficient public transport services in the economic development of any country. In the particular circumstances of this country, transport must necessarily play a very important part, not merely in its industrial development but in the maintenance of an export trade which, in the post-war world, will be essential for our economic well-being.
We have a transport problem peculiar to our own country, one which is represented by the unusual distribution of population and industry within this island, as compared with the distribution of population and industry in other countries. That situation requires that those who approach the solution of our transport problems should do so free from prejudices in favour of any one form of transport. The aim of our transport organisation must be to provide, in every part of the country, the form of transport best suited to the needs of the country, a form of transport which will enable transport requirements to be met in the cheapest and most efficient manner.
Various alternatives were considered by the Government before the principles enshrined in this Bill were decided upon. The essential features of the new transport organisation which the Government decide to create must include, it was felt, not merely provision for efficient management but also provision for the reduction of the interest charges which transport has to bear and for a general strengthening of the financial structure of the main transport organisation. It was considered also desirable that the undertaking should be released from the obsolete form of control and regulation which had persisted from the earlier statutes under which independent railway companies were established and that there should be substituted for that obsolete form of control a simpler system more in accordance with modern conditions.
The Bill proposes to provide for the more efficient management of the undertaking by giving the Government powers to nominate the chairman of the undertaking. While the nomination of a chairman by the Government must be primarily defended on the grounds that it is intended to ensure that the public interest will predominate in the determination of policy by the board of the undertaking, it is also hoped to use that position to ensure that the management of the undertaking will not merely be more efficient in itself but will be directed more in accordance with the general principles I have enunciated and not solely by persons who are concerned with the preservation of railways as such.
In this Bill, we are proposing to establish a new statutory transport organisation, in which will be absorbed both the Great Southern Railways and Dublin United Transport Company. That new organisation will come into existence with the capital liabilities indicated in the Bill—capital liabilites which will be transferred to it, by reason of the proposals in the Bill to substitute for the debenture stock and common stock of the Great Southern Railways and the Dublin United Transport Company, the debentures and the common stock of the new organisation, Córas Iompair Eireann. On this occasion, it was felt that it was undesirable to proceed, as we did in 1933, without consultation with the shareholders of the existing concerns. I told the House that, in 1933, the drastic reduction in the nominal value of the capital stocks of the Great Southern Railways was effected without agreement with the shareholders of that concern. I do not think that we should have got the agreement of the shareholders of that concern in the circumstances of that year because they had not yet begun to appreciate the position which their undertaking had reached.