Seanad Éireann díospóireacht -
Wednesday, 25 Oct 1944

Vol. 29 No. 2

Public Business. - Transport (No. 2) Bill, 1944—Second Stage.

Question proposed: "That the Bill be now read a Second Time".

Minister for Industry and Commerce (Mr. Lemass)

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.

Mr. Counihan

You would not have got it yet.

Mr. Lemass

On this occasion, however, we sought to secure that there would be agreement between the Government and the shareholders as to the terms upon which stock in the new company would be substituted for stock in the old companies. That agreement was secured. In the case of the debenture holders of the Great Southern Railways, the proposal was to substitute for their existing debentures, on a £ for £ basis, new debenture stock, bearing interest at 3 per cent. in lieu of the 4 per cent. which they had been receiving, and to give them, in return for that sacrifice of 25 per cent. of the interest they had previously received, the greater security of a Government guarantee. In the case of the guaranteed preference shareholders, who had received their interest at the rate of 4 per cent. up to last year, although they had received it irregularly—there were many years in which the interest was not paid although those shareholders had the security of the condition upon which they had acquired their stock which gave them a claim to the payment of their interest in arrear in priority to the payment of dividend on any of the subsidiary stocks of the company—it was proposed to substitute 3 per cent. Government guaranteed debentures to the extent of half the nominal value of their holdings and common stock to the extent of the other half. That guarantees them, in effect, a return of 1½ per cent. on their investment, with the prospect of a higher return if the common stock earns a dividend. That is in return for their existing 4 per cent. dividend. In the case of the preference and ordinary stockholders, it was proposed to give them common stock in the new company on a £ for £ basis.

In the case of the Dublin United Transport Company, it was proposed —and the shareholders agreed—to substitute for the existing preference and ordinary stocks—the preference carried interest at 6 per cent., while on the ordinary stock the dividend varied, but 6 per cent. was paid in 1943— Government guaranteed 3 per cent. debentures at the rate of £145 for £100, nominal value, of the existing shares. By that system we have not merely secured the consent of those various debenture holders and stockholders to the proposals in the Bill, but we have effected a substantial reduction in the interest charges which the new undertaking will have to bear.

By amalgamation of the Dublin United Transport Company and the Great Southern Railways, we bring to the new organisation a substantial accretion of revenue. We make possible economies in administration and a higher degree of standardisation of equipment and repair facilities. The capital proposals in the Bill, plus the amalgamation of the two companies, ensure that the new concern will start off with a capital structure and a general financial position which will make it reasonably possible for it not merely to maintain existing services but to improve those services and to improve also the conditions of employment of its workers without increasing the charges for transport. I should say that, amongst the various principles upon which the Government framed this legislation, was one which required that those employed in public transport services should not merely be given, so far as possible, reasonable security in theeir employment but also security, when their employment terminated, by the inauguration of a satisfactory system of superannuation. One of the provisions of this Bill requires the new company to devise and bring into operation a superannuation scheme for such of its employees as have not a right to superaannuation at present. In fact, following the introduction of the Bill a second time and the certainty of its enactment, in view of the composition of the Dáil, the Great Southern Railways have already brought into force a new superannuation scheme for the conciliation grades of workers—a scheme which, I think, is giving general satisfaction to those workers and which was, in fact, the scheme contemplated when the Bill was being devised.

I have said that one of the aims of the Government was to get rid of all the archaic controls which were considered necessary when the various private Acts were being passed to establish the railways. I told the House that, in those days, the railways had a complete monopoly of public transport services. Because they had such a complete monopoly, it was considered necessary by the legislature to impose many regulations, which are inappropriate in modern conditions. All these regulations are being swept away and it is proposed in this Bill to subject the new organisation only to such controls as are considered necessary to protect, in the future, the public interest. Those controls are simple—a system of maximum fares, determined by the Minister for Industry and Commerce as representing the public interest; power to the Minister for Industry and Commerce to require the provision of adequate transport facilities in any area where he considers such facilities are not available, and an obligation upon the undertaking to secure that there will be equal treatment of all citizens, that there will be no undue preference of one citizen as against another.

It is proposed in the Bill that an advisory committee should be established to which questions relating to conditions of carriage, rates of charge, the provision of facilities and matters of that kind may be referred if public inquiry appears to be necessary. It is not proposed that such a committee should be other than advisory. The responsibility for orders made will rest upon the Minister for Industry and Commerce, who will be answerable therefor to the Oireachtas. The advisory committee will be empowered to conduct public inquiries when matters are referred to it and it will be given ample power to ensure that all relevant facts and evidence are brought before it. While it is to be assumed that the recommendations of that committee on the matters referred to it will, almost inevitably, be acted upon, it is not made mandatory on the Minister so to act. It is considered more desirable that the Minister should act on his own responsibility and defend his actions in the Oireachtas in the ordinary way.

In the course of the discussions on this Bill, alternative methods of controlling transport have been advocated. Somewhat to my surprise, I found that various sections of the Dáil, in opposition to the Government, had apparently come to an agreement upon the principle of State ownership of public transport facilities—the nationalisation of transport, as it was called. The possibility of the nationalisation of our transport services was fully considered and, on consideration, was rejected by the Government. It is true that the Bill before the House does, in fact, provide for nationalisation in a large measure but it avoids what we regard, in our circumstances, as the objectionable features of nationalisation. It was felt that to nationalise transport services would almost inevitably mean that they would become the subject matter of Party political controversies. In our circumstances, it is almost impossible to contemplate the operation of nationalised transport services without having to face the fact that public representatives—members of the Dáil and Seanad and other public bodies— would be requested to use their influence in matters affecting the employment of staff in the undertaking and the promotion of staff. The adequacy of the facilities provided for particular localities or the rates charged for these facilities would be matters of debate, matters upon which members seeking election to the Dáil and Seanad would give promises to have local wishes met, and in that way it would be impossible to keep transport out of Party politics. It was regarded as undesirable that transport should become a central feature of Party political controversy, as nationalised transport services in other countries have become. It is undoubtedly true that we must provide that true public interest will predominate in transport policy, and the scheme of this Bill does make ample provision for that, but the further step of making transport a national service operated by Government Department or through some body directly responsible to a Government Department, is in our opinion undesirable.

We feel, apart altogether from the matters to which I have referred, that a nationalised transport service would almost inevitably mean a subsidised transport service and that eventually the operation of public opinion upon elected representatives would produce a demand for the subsidisation of transport, the provision of facilities for special trades or special localities below their economic cost and that eventually we would be driven into a wide-scale policy of subsidisation. Subsidised transport services are, in our opinion, undesirable. Inevitably it would mean dear transport, dear transport from the point of view of the nation as a whole. It would mean probably that inefficient methods of working would be persisted in without the compulsion to adopt new technical processes, that efficient administration would be reduced, and that eventually we would, as a nation, lose rather than gain by any application of public subsidies to transport.

This new organisation which we are proposing to establish will be instructed to provide transport at charges which will cover the cost of providing them. There will be no inducement held out to it in any case to operate transport services below cost. The organisation will be charged with the responsibility, not merely of recovering operational expenses but also to earn sufficient to meet the interest charges upon the debenture stock and, if possible, to earn a revenue which will permit of the payment of dividends upon the common stock. We are imposing on the organisation the further obligation of redeeming the substituted debenture stock—that is the debenture stock issued in substitution for the stocks of the existing companies— before 1960. Some members of the Dáil thought that was an undue burden to place on the management of the concern, that it would mean that transport charges would have to be maintained at a higher level than would otherwise be necessary, and that the full benefits of the measure would not become operative until after 1960 when all liabilities in respect of debentures will have been disposed of. In our view it is possible to produce by economies and administration alone the additional revenue which can be applied to the redemption of the substituted debenture stocks.

I should explain, and I hope I am making it clear—I think I did not make it as clear I should have liked in the Dáil—that it is not proposed to require the management of Córas Iompair Eireann to redeem the substituted debenture stock by annual appropriations to a fund for that purpose. The redemption of stock will proceed as the management of the concern may think best itself, appropriating for that purpose surplus revenue in years in which it considers it the wiser step to take, utilising exceptional revenue that may come from the sale of assets no longer required for the operation of the undertaking and having at the same time the power to redeem this stock by voluntary purchase at any time, provided it does not pay more than the par value of the stock for it. It can redeem the stock compulsorily any time from 1955, but it is required to have it redeemed for cash by 1960.

The nominal capital liabilities of the company are fixed in the Bill at £20,000,000. The company will start off with a capital of £13,500,000, but new debenture stock guaranteed by the Government, bearing interest at whatever rate market conditions may require but guaranteed by the Government only to the extent of 3 per cent., may be issued from time to time for the purpose of securing capital for development purposes. It is contemplated that substantial capital expenditure will be necessary to put the company in a position to provide the transport services we consider desirable. Not merely will a large part of the existing rolling stock have to be replaced gradually—because at the present time it is not only unsuitable for many of the operations in which the company engages but it is almost entirely unstandardised — but also many of the termini and some part of their other works will have to be reconstructed. While the company will, in the main, endeavour to provide capital for these reconstruction purposes out of revenue or funds appropriated from revenue in the past for such purposes, if new capital is required, the company is assured of getting it by reason of the arrangement for a Government guarantee to the limit of £20,000,000, which is the maximum capital liability which the company can undertake without new legislation. I should like to make it clear that the £20,000,000 represents the aggregate of the capital liabilities which may at any time be undertaken by the company and if debentures are issued and redeemed they cannot be reissued if the £20,000,000, the aggregate total of the issues which may be authorised under the measure, has already been issued.

I do not know if it is necessary to refer in any greater detail to other provisions of the Bill. Many of the provisions of the Bill relate to road transport services and a number of them to canal services. We are taking advantage of the introduction of this measure not merely to get rid of some of the defects of the legislation enacted in 1933 for the control of road transport services, but also to remove many of the anomalous or unnecessary provisions of existing statutes relating to canal and other forms of transport. These sections of the Bill are no part of the general scheme. It is merely that it was considered desirable that this measure, when introduced, should be as comprehensive as possible and that we should endeavour to establish a situation in which, if our hopes are realised, further transport legislation will not be necessary in the future.

One of the matters that gave concern to members of the Dáil was the possibility of employees of the absorbed companies being rendered unnecessary and, consequently, losing their employment as a result of the amalgamation. It was natural that fears should be entertained on that score, because railway workers in this country have vivid recollections of the result of the 1924 Act. The 1924 Act amalgamated 26 railway companies, many of which were operating competing services, and frequently, overlapping services, and their amalgamation created considerable redundancy, resulting in the loss of employment by a number of workers. Although the 1924 Act contained provisions which, at the time, were regarded as ample to ensure compensation to workers who lost their employment because of redundancy, in many cases the application of these provisions did not succeed in securing compensation for the workers concerned. On this occasion we do not contemplate that there will be any considerable redundancy at all. There is, obviously, a very considerable difference between the amalgamation of 26 railway companies of that kind and of two organisations operating different forms of transport in self-contained areas, with very little overlapping between them. Any economies that may become possible or necessary will be in the administrative and executive grades, and not in the operative grades, and it is, in fact, anticipated that the number of individuals who may be affected will be only a very small fraction of the number affected by the 1924 Act. To provide, however, against the possibility of persons being disemployed as a result of this amalgamation, the Bill contains ample and water-tight provisions to ensure that such persons will be given compensation, if disemployed, or that they will be compensated by lump-sum payments if their conditions of employment are in any way worsened by the change.

Another matter which aroused a great deal of discussion in the Dáil was the proposal to give to the chairman appointed by the Government certain unusual powers so as to ensure that, on the board of the company, he would have an effective voice in the direction of the company's policy. May I say that the powers which the Bill proposes to give to the chairman of Córas Iompair Eireann are at present exercised by the chairman of the Great Southern Railways Company, appointed by the Government, and that they have been given to him under an Emergency Powers Order? In fact, however, it is not considered that the powers conferred on the chairman will actually be exercised. It is hoped, and confidently expected, that the board of the new company will work harmoniously and that there will be general agreement between the Government-appointed chairman and the directors appointed by the stockholders as to the general policy to be followed in regard to the direction of the undertaking. It is necessary, however, to ensure that if this hope is not realised, and if there should be a clash of interests between the representatives of the stockholders and the Government-appointed chairman, the views of the chairman, which, presumably, will be the views of the Government, will predominate. I do not want a misunderstanding of that part of the Bill. The aim is definitely to ensure that in the event of a clash of opinion between the chairmana, appointed by the Government, and the directors, elected by the shareholders, the chairman, appointed by the Government, will have the right to ensure that decisions contrary to Government policy are not taken or made effective.

No doubt, there are many matters upon which Senators may wish to express an opinion, and which can be more conveniently discussed in Committee. This, as Senators are aware, is a large Bill, containing 135 sections and ten schedules, and many of these section and schedules deal with separate matters which can be dealt with separately in Committee, and are not necessarily part of the scheme or principle of the Bill. The scheme of the Bill is, as I have outlined here, and I recommend the Bill to the Seanad as being the best possible method for the direction of the transport services of this country, both at the present time and after the war. The Bill represents the experience of many years in the operation of these transport services, and the experience of previous attempts at legislation for their improvement. It provides a system which is not merely capable of being operated efficiently, not merely capable of giving us the services we require, but one which enables this undertaking to be carried on with a minimum of political interference, and I regard it as desirable that in a matter of this kind political interference — by which I mean the interference of the Government with day-to-day management—should not be possible at all. The powers of the Government should be confined to ensuring that the general direction and policy of the undertaking are in accordance with its own ideas. Subject to that, however, the organisation should have the same freedom as any other commercial organisation in the management of its affairs. I recommend the Bill to the Seanad.

Mr. Douglas

This is a very long Bill, and a Bill containing a great deal of detail. It is also surrounded by many matters of great interest and it would be comparatively easy, at any rate for me, to make a long and rambling speech on and around the Bill, even though, possibly, keeping within any strict rules which you, Sir, might feel inclined to make; but I can assure you, that I have no such intention. The reason I mention the matter is this: that I want to give reasons to show why the Second Stage of a Bill of this nature, in a Second Chamber of this kind, must be largely a formality. In the first place, it is always doubtful wisdom for a Second Chamber to reject any measure on its Second Reading unless the Seanad considers that a very grave principle is involved which would render it necessary immediately to give a different decision from that taken in the other House. Clearly, however, on the present occasion, this House, even if there were a majority here opposed to the Government, could not take any such step. Whatever may be said for or against this Bill, we must remember that it was introduced to the Oireachtas before the general election and that the Government went to the country on that issue. Now, while I must confess that I have never been able to find out, in connection with any general election, what the people thought they were voting for, the fact remains that, so far as the issues contained in this Bill are concerned, the people could have put out the Government, and yet they did not do so. Instead of that, the people returned the Government with a majority, and accordingly it would appear to be obvious that it would not be a proper course for a Second Chamber to vote against a measure in these circumstances. At the same time, it is equally obvious that we have a duty here to voice any misgivings that we may have as to the structure of the Bill itself, and certainly to see, on the Committee Stage, whether the Bill can be improved or made more workable. The fact that you may not like the structure of an organisation or that you may think it is not what you would choose or design, does not necessarily indicate that you cannot make improvements from the point of view of the working of that organisation.

I think it must be admitted, in fact I think it will be admitted on all sides, that transport reorganisation of some kind was absolutely necessary, and, things being as they are, that had to be done by legislation. This Bill, to my mind, is really not a transport Bill. Its long Title indicates far more accurately what it is. Its short Title, which the public see, is really a misnomer. The purpose of the Bill is to provide for the incorporation of a transport company. I believe that, in passing the Bill, the Oireachtas will not have done very much to solve the problem of transport and of transport necessities. Even from the most optimistic point of view, if the House approves of the Bill in every detail, the most that it will have done is to create some organisation which it hopes will solve that problem. The Minister made it pretty clear himself that he does not regard it as, in any sense, a Bill to solve that problem. That problem, to my mind, is one of very great importance. It will be of supreme importance in the years immediately after the war. If we are not going to have a reasonably efficient transport system, and if the cost of that transport is not going to be reasonably cheap, then it seems to me that the best post-war plans for agricultural and industrial development are almost certain to fail. In my opinion the problem is a national one, and, therefore, it is not at all surprising that it is likely to be a matter of very considerable controversy.

It is very hard to say what exactly is the essential principle of the Bill. It seems to me to be that there should be a company, and that that company should control both road and rail transport, or at any rate should have the power to take over and control road and rail transport, and that the company itself should be half private and half State-owned or State-controlled. It is as regards that last principle that I have the gravest doubts and misgivings. I would like to believe that all the optimism of the Minister to keep politics—and I am not referring only to Party politics—out of this new organisation will prove to have been justified in the future, but I doubt it very much. I think that this Bill is another step towards nationalisation. I do not at all agree with the Minister that we have avoided all the drawbacks of nationalisation. My own feeling is that you will find in practice that most of these drawbacks have been retained, and that very few of the advantages of nationalisation—I admit that there are and can be very definite advantages in nationalisation—will have been achieved. I am assuming that the present chairman of the Great Southern Railways Company will be the chairman of the new company. If I also assume that the present Minister will be in his present office for a number of years and that the present shareholders will elect, more or less, the same directors, then I think this new measure will work for a period, but after all we are not legislating merely for the next two, three or four years. The Minister himself has expressed the hope that it will not be necessary to have a further Bill.

I was trying to picture to myself the possibility of Deputy Norton, or, if you like, Deputy McGilligan—one could mention many others—being in the Minister's place, with another chairman and with the shareholders in the new company being dissatisfied with Government policy—feeling that they were not getting their rights, and proceeding to elect directors who would fight for their interests. That is not an altogether fantastic picture, because the Bill has to be read from this point of view: will it work under those conditions? I doubt very much if it will. I think that the Minister—perhaps not thinking of the names that I have mentioned because these were not meant very seriously—was also thinking of the possibility that something of the kind might arise. I say that, judging by the powers which he has thought fit to give to the chairman of the new company. I can easily see why the Government decided that it could not avoid taking some such step with regard to the chairman. The reason why it could not avoid doing that is because he is to be the principal of a privately-owned concern which is to be virtually Government-controlled. At any rate, there is to be Government control up to a certain point, and in order that the measure will work there is provision in the machinery itself by which the Government can get its will at all times.

I think I am correct in stating that the powers of the chairman, as set out in the Bill, are simply the powers of veto. My candid opinion is that the powers of veto are, in practice, complete powers. I have had a certain amount of experience of the powers of directors, and I am perfectly certain that the power of veto will be virtually enough, in 99 cases out of 100, to achieve what the chairman wants. Most of us know that there are very few things that can stand still. It is certain that no company operating transport, or a business, can stand still. If the chairman has the power to say that he wants a certain thing done that, in effect, means that he will get his own way. The Minister hopes—and, I hope, though frankly I doubt it—that the chairman, with the power of veto and the power of control, will have a harmonious board. What, I think, he will get for a time is a method by which he can have the most complete control of a company which, mind you, will have to tackle immediately a very serious national problem. I refer to the problem of the reorganisation of our transport which has been very seriously affected by world war conditions and that at a time when transport is absolutely vital to our economic future in the post-war period.

I have a very clear recollection of the time when we had no Whips in this House. At that time you did not know in advance what the voting would be on the Second Reading of a Bill. I can assure the House that on occasions of that kind one thought very carefully, indeed, before one decided to vote against a Government measure, even though one might be opposed to the Government. Nowadays, when one is in a minority, there is the temptation to go in for a wilder type of criticism, because you know in advance what the result will be. I suggest that is what is likely to happen in the case of the board of the new company. The members of the board will know that there is only one alternative—either to make no change at all or to agree with the chairman's wishes. I give that as an illustration as to why I doubt very much that this measure will work.

I do not propose on this stage of the Bill to go into it in any serious detail. I was rather amused to find in one section that the Minister can make an Order requiring the company to carry out certain alterations or operate certain services. If the company fail to do that it can be proceeded against in the courts and may be fined £25 a day. I think it would be much simpler to take power to get rid of the chairman if he fails to do what the Government wants. I think it is quite silly to go to the courts if the chairman fails to do what the Government specifically orders. While I do not know what will happen in the immediate future, because I think there is probably very considerable understanding between the Minister and the anticipated chairman, a future new chairman, appointed possibly by a new Minister, will almost certainly feel that the Minister is his boss. He will feel, "He appointed me; he can remove me; he can make specific conditions, one of which could be exactly what I am to tell him and the extent to which I am to consult him," and he would very naturally run to the Minister or to the Minister's Department on every serious matter in order to find out what was the policy of the Government or of the officials concerned. Frankly, I do not see what else he could do because he is not only appointed, but removable, even during his term of office, by an Order for reasons stated. I do not say that that is necessarily bad when you have the dual system, but I think it is one of the reasons why I, at any rate, have grave misgivings as to the working of the dual system.

The Minister made a reference to the Transport Advisory Committee. When I examine the Bill I find that the Transport Advisory Committee is the Minister, or, at least, people entirely appointed by him. He is most anxious, I am sure quite genuinely, to try to keep politics out of it, but I should like to suggest to him that he might take a step there by making use of, say, the Trade Union Congress to nominate to him the member of the committee who is to be experienced in labour, and of the Federated Union of Employers to nominate to him the person who is to be experienced in commerce. By that means, even if he would not go so far as to allow them to appoint the members, I think he should provide in the Bill that he should take them from a panel of two or three. In the same way, in regard to Section 108, dealing with the assessors to aid the High Court, I think the names on the panel need not be nominated by the Minister. I think it is reasonable enough that when the High Court requests the Minister, the Minister should choose one out of the panel, but I do not think the panel should be nominated by him. I think it should be nominated by outside bodies, such as the Chamber of Commerce or the Federation of Irish Manufacturers, or, possibly, the Federated Union of Employers, or similar bodies. You have now got organised statutory bodies and while in that latter case, I think the Minister should definitely pick the particular person who is to act, I do think the panel should be chosen from outside.

I make these suggestions because I think they would have the effect of widening the interest and the more people you can bring into a scheme of this kind to try to make it a success the better. Although I have referred to perfectly genuine difficulties that occur to me as to the working of the scheme, I hope it will work. I believe that, as it is now becoming law, it is the duty of everybody and of all associations to realise that this new body has to get for us a transport system which will be efficient and economic or else we are going to be very much behind other nations in a period in which I think there may be keen competition. I think there may be a period of scarcity at first when you will have a lot of control but after that there may easily be a period of keen competition and this country may find itself very much left behind.

Sir John Keane

I am afraid in my approach to this measure I will not be quite so apologetic, if I may say so, and hesitant as the last speaker. I have no objection whatever to a complete new outlook in regard to our transport system. I think it is long overdue. When we had capital working on the old basis in competition to a certain extent, offering competitive services, there was some protection for the public, but those day are gone. We no longer have anywhere in this country the beneficial effects of free capital offering competitive services and so benefiting the public by reductions in price. So, I am quite prepared now to see our transport system nationalised or brought under public control, or, in fact, as it is proposed to do in this Bill, carried on on monopolistic lines. But I feel uneasy.

I have listened to the Minister and I have read his speeches in the Dáil, and the last thing he seems to have uppermost in his mind is the interest of the users of the railways. He is going to tuck away the directors quite snugly. He is going to tuck away the shareholders nice and comfortably, safeguarding all their interests. I do not object to that. He is going to look after labour. In fact, he is going to take care of the existing vested interests very completely. But when have I heard the Minister or anybody else say: "Our primary object is to obtain the utmost efficiency in the management of our transport system and to give the public by means of reduced rates the benefit of that utmost efficiency"? It is a question of stress. It is that spirit that I object to in the Minister's attitude and, in fact, the attitude of all critics of this measure.

I should like to deal, in a Second Reading manner, with certain sections of this Bill with a view to seeing whether or not the Minister is prepared to offer any hope of concession by amendment on Committee Stage. The first criticism I have to offer is in respect to the decision to incorporate the Dublin Transport Company. I can see no necessity for that. I think it is bad in principle. First of all, I cannot see how it is going to add any-think to the efficiency of the new concern. The railway and country bus services are quite large enough of themselves to provide efficient management and efficient services. They would not be too small a unit to give the very best value for the kind of overheads that should be provided, salaries and so on, of the management. I feel there is a principle involved. I feel it is not right to deprive the citizens of Dublin of any benefit they can get from a municipal bus servce. They have various handicaps to contend with. They have high rates. They have high charges for a lot of their necessities, high rents, and in many ways they are handicapped over the country dweller, in their amenities, and I do think they are entitled to any benefit they can get, as a result of density in population, from their own local transport services. I do not want to pursue analogies but I do think it would be an astounding proposition that the London, Midland and Scottish Railways should gobble up the transport system of Glasgow or Liverpool. There is nothing in this Bill different from that. I feel it is wrong that any surplus revenues and any earning power the Dublin Transport Company make should be pooled for the benefit of the country as a whole. I think, in principle, they should be allowed to have their own individual transport service. I do not think it was sufficient, before this company was taken over, merely to put a pistol to their heads and say to them: "We are going to give you no chance. We are going to take you over asking merely for your agreement as to price." I do think the corporation, who have certain interests and rights in respect of the Dublin Transport Company, should have been consulted. The citizens of Dublin, in fact, should have been consulted. I think this is an arbitrary act, without justification and I think it is not going to add to the efficiency of the new company. One person said to me: "You are going to stand up in the Seanad a defeated man before you begin." I know that perfectly well. That has been my lot while I have been in this House. I know that even if my arguments prevail the Minister has his S.S. men on one side and the Wehrmacht on the other side.

Mr. Baxter

It is not as bad as that.

Sir John Keane

I am merely satisfying my own conscience by expressing by own view. I hope that the Minister, if he is in any way persuaded by argument, will make certain concessions, however small, when it comes to Committee Stage. It is stated in the Bill that the debentures have got to be redeemed. That may be a Committee matter, but I should like the Minister to say what priority the redemption provision takes. Has redemption got to be made in priority to depreciation? The Bill does not seem to indicate that. As I read it, redemption has to be provided, but where is the priority? I know that it comes after interest. Does it come after depreciation and other necessary charges? The Bill refers to obligations in general. It is very important in respect of redemption that it should be the counterpart of a liquid fund. The Minister may know the Dublin United Tramways Company had very large reserves, but they had no reality. If there is to be redemption of debentures in cash out of a fund built up out of cash that fund should be earmarked from securities which are of a liquid character. I should like to see that fund vested in trustees. I do not mind if there is to be a liquid counterpart of the redemption fund.

The next point I wish to raise is a novel one. I would not be surprised if the Minister said that it was a most audacious proposal. It is in relation to the audit. We all understand what the ordinary audit consists of, vouching accounts and seeing that the financial appropriations are correctly made. I want the Minister seriously to consider this question, and not to think me frivolous when I ask him, arising out of his desire to safeguard users of the railways, to break fresh ground, to make a headline in administration— not that that is entirely new, seeing that it has been done in America and was mentioned by Mr. Morrisson at London County Council—to introduce the principle of an efficiency audit. I can see in the course of time vested interests nicely tucked in with the ball at their feet. The Minister cannot help that. It is in the nature of things, when nice and comfortable, and up against no competition, that the railways might, without the knowledge of the public, provide services very much below what should be expected from the highest standard of management. I should like to see a statutory provision whereby every three or five years— I should like three years—there would be an obligation on the Government to call in an acknowledged authority on transport matters, to look into the whole management of the railways, and to report whether in his opinion— I do not mind about the shareholders or vested interests—the public were getting the best services to which they were entitled in the circumstances. That proposal would appear to be a novel one, but it is one that we will hear more of in the future. For that reason we might now set a very valuable headline in a matter where more and more the unorganised public, housewives and other people, have become powerless in the hands of big machines. Even with democracy, in fact, the ordinary person has very little power. I am going to show that later. The principle I suggest is a periodical efficiency audit, and a report for the public on the management of the concern.

I now come to Section 5, dealing with the board of directors. Here I feel that we are concerned with our good name and prestige, seeing that we put into a statute a provision so unique, or disturbing, when it could be done in another way. I thought at first that this provision was put in under an Emergency Powers Order, because we had lately discovered a genius in transport matters, and felt that we had to give him the powers and authority to which every man of genius is entitled. I find that is not the case at all, but even when that man passes away his successor is going to have the same powers—practically dictatorial powers, and without any notice to his colleagues he can say: "I am the board, I am going to do this, that and the other thing." There is no question but he is a dictator. We need not mince words. The Minister said that that was necessary in order to safeguard public rights with regard to the company. Let us look at the matter. What are the public rights with regard to the company? Surely the Government does not own the company? The company is the result of the long built-up efforts of a number of citizens who, in the past, put their finances into it—to their misfortune for many of them. The company got into difficulties by reason of changes in methods and so on, and much of these finances were lost, inevitably through the changes that have occurred and partly through the fault of the Government, as debenture holders should not have been treated as they were some years ago.

The fact remains that the company belongs to the shareholders, and the Government's interest by its dictatorial powers, is merely a contingent liability. Until the guarantee is in default the Government has no legal or equitable rights there. The Minister told us that he believed a public company should work in this way. He has reason to believe that where a chairman is a large shareholder in a public company he very often does things on his own, or tells his colleagues to do what he tells them. The Government are not shareholders here but are merely guarantors of a contingent liability, and until the interest is in default, they are in no way owners of the concern. It is important that their concern should be for the users of the railways primarily, and secondly the interests of the taxpayers under the guarantee. The argument that the Government has to take these powers on account of preserving such interests is I feel misleading. I put it to the House that they are taking these powers because they wish to control transport management. If that is the case I might reply: "Very well, you are possibly the best people to have in control." It is a matter of nationalisation or call it what you like. The giving of dictatorial powers will not make for better management. Unless you have the co-operation of labour in maintaining the utmost efficiency, unless there is an intention on the part of the management to sweep away some of these archaic Board of Trade restrictions in the interests of safety, some of which, I am told, are long since out of date, you will not make very much change by altering the nature of the governing element.

The Minister justifies the new arrangement by saying that it is working very well now—as much as to say, I suppose, that they have not had any rows and that the directors have co-operated in a friendly manner with the chairman. I do not deny that, but I cannot shut my eyes to what I see on the railways to-day. Even making allowances for all the difficulties of railway management and maintenance at present—and they are very great— I do not think the management can claim that they have made, within the province where it was possible, any substantial improvement. Lavatories are sometimes very disagreeable and unsavoury; the cleaning is by no means what it should be; and punctuality—I know that in some cases there are good reasons for it—leaves much to be desired. Only the other day I heard that the mail train arrived from Cork two hours late, in darkness for the last part of the journey. No doubt, these things can be defended, but does anybody who uses the railway notice, apart from revenue which has improved because the rates have gone up, any vast improvement in the actual amenities of travel? My information is that there is none, where there might be in spite of the difficulties of the emergency.

The Minister says with regard to the giving of these powers that Parliament is always there and that if there is dissatisfaction with what the railway does, it can always be brought up in Parliament. I should like the Minister to elaborate on that and to indicate to what extent Deputies and Senators will be allowed to bring up in Parliament questions in relation to railway management. I thought the idea of the whole Bill was to keep these matters out of the province of Parliament, but if Government takes these dictatorial powers, it should at least give Parliament a ready opportunity to criticise any matter about which the public is anxious.

I now pass to the question of the advisory committee. As I read the Bill, this provision for an advisory committee is all in line with the intention of the Minister to keep everything in his own hands, to have this a dictatorial affair and to deny to the citizens, the people who really should be served and whose interests should be paramount, ready means of voicing their feelings on the day-to-day questions of services and rates. Senator Douglas has already dealt with this matter. I think it is totally unnecessary that the members of the advisory committee should be nominees of the Government and it would be quite possible to get independent men to serve on that committee. It may be said that the Government will appoint independent men and I do not say they will not; but Governments are human and they do not want people who will raise questions and give trouble. The public may say that they want a man who will raise questions and give trouble, and I say that they are entitled to have such a man. Senator Douglas put it very clearly when he said that the trade union movement should be given representation independently, and I think agriculture should by some means have representation and that employers should have representation.

Having brought this body into being, what is the objection to giving them power on their own initiative to raise matters and bring them to the notice of the Minister? I want to make this a democratic body. We all talk of democracy, but I can see less and less real democracy in this country. We have a facade—we have habeas corpus and all the window dressing of democracy—but so far as I can see we have very little of the real essential of democracy in our public life. Here is an opportunity in a small way. Let this advisory body be composed of interests which will have initiative and make it a statutory obligation on the Minister to refer to it any matters brought up, not by every Tom, Dick and Harry, but by organised interests. We are always told that such a phrase is far too general; we are asked who are organised interests, and told all kinds of people will come together and call themselves organised interests. But that is not really so. The organised interest is quite as clear as the way to the parish church. You may not be able to define them by Act of Parliament, but we all know what they are, and there should be an obligation on the Minister to refer any complaints from such organised interests to the advisory committee.

With regard to road haulage contractors, I hope the Government will gradually get rid of these independent haulage contractors when the company is in a position to operate. Once we go in for a monopoly, we may as well be hanged for a sheep as a lamb, and it would be far better to administer the whole transport system if road services as well as rail services were under one control. We should all like to see a system whereby there would be a regular organised schedule of merchandise services on the main roads, so that a farmer would know that, within a mile of his farm at a certain crossroads, a certain transport vehicle would come at a certain time and take his merchandise on a simple consignment note to the market town and thus save him wasting his day by having to go into the market town. I feel that that efficiency will not be got until all the transport services are brought under one control.

I hope the Minister will not take what I have said in bad part, and I hope also that he will give sympathetic consideration to the suggestions that there should be a liquid fund supporting the redemption moneys in relation to the debentures and that we should have the principle of an efficiency audit. In that connection, I omitted to mention my proposal for the chairman-dictator. It is that there should be an ordinary board, and if the chairman thought that any decision of the board was not in the public interest, he should have power to suspend that decision and refer the matter to the Minister. That would be a much cleaner and better way than this ridiculous procedure of saying that the chairman can form a quorum, call a meeting and override his colleagues. The whole principle which the Minister seeks to establish could be effected much more simply in that way, and I very much hope that, in relation to the putting into force of the measure, the interests of the public will be paramount and that the legal side, all these niceties of organisations and paper, will be subordinate.

Mr. Baxter

I would be glad if I were in a position to give my enthusiastic support to this measure. I have read it and I have given it consideration entirely from my own angle and uninfluenced by much of the controversy that has raged around the whole problem of transport for many months. It may be that the Minister is quite satisfied that he will obtain what he is getting after in this Bill. It may be quite futile for us in this House to address ourselves to the various issues raised in the measure, which is a very complicated measure indeed. He may be intent on going through with the Bill as it stands. If I were satisfied about that, I would desist from any further debate in the matter. But I would hope that the Minister would act as any of us must in this matter and look at this problem of transport, not from the point of view of a man in a Ministry who has control and who believes he will have control and be able to keep control for a very long time, but look at the problem as it affects the country and also the countryman and the townsman both as producers and consumers and the other interested parties in the transport system, namely, the workers in it. In the first place, I should like to ask at this stage who will own the railways when this measure is through. Senator Sir John Keane appears to believe that they will still be the property of the present shareholders.

Sir John Keane

They are still.

Mr. Baxter

I should like the Minister to tell us who will own the railways when the Oireachtas has passed this measure. Then I should like him to tell us who is to administer the transport system of the country. Because, taking this Bill as it is, it is the queerest cross between private and public control, between the dictatorship of one man and the power of the Minister and his staff in the Civil Service, that one could conceivably get together. I have tried my best to disentangle the whole problem as to how the scheme is to work and I can only come to the conclusion that if the Minister persists with the Bill as it is, he is trying to get himself the very thing which he said towards the end of his speech he wanted to avoid. When the Minister went so far as he has gone I cannot understand why he did not boldly go out and nationalise the railways. It would be much more honest and, in my opinion, they would be much more efficiently managed in the end.

Let us begin at the beginning. We must all be interested in the transport problem in the country. There is nothing more essential in the life of a nation than an efficient transport service. When we speak of an efficient transport service, we mean efficient from the point of view of being able to give the people a cheap and easy means of transporting their goods and themselves, and efficient also in the sense of its being able to give the servants of the railway a decent standard of living. If I were invited to give my view, I would much prefer to see the Minister trying to get an organisation to manage the railways drawn from the producers and the consumers and, perhaps, the commercial community in so far as they would be represented in either of these sections of the community, allied to the people who work the railways. These essentially are the people most interested in the transport system. There is no use in the Minister's pretending that he or his Department can have anything like the same interest or the same understanding or appreciation of the problem of transport and the job that has to be done as these sections of the community have. If I were asked from whom you would expect to get the most efficient and better service, I would say you will get a much better service from the latter and a much more sympathetic understanding of the problem that is there; sympathetic, too, in the sense that they will have their ears to the ground and be much closer to the people for whom the job of work is being done. If there were complaints, they would be much more approachable than those under the Minister's scheme.

What puzzles me about this Bill is this. The Vocational Commission in its report referred to transport in these terms:—

"Yet the maintenance of railway transport is not a matter which concerns directors alone, and the mentality which frowned on all suggestions from workers, stockholders, or the general public as a reflection on directors or management is no longer admissible in control of a national service which concerns not merely the capital of stockholders and the employment of workers, but also the economic welfare of the whole community."

Is there any other branch of administration in the country's life which to-day lends itself in greater degree to the possibilities of vocational organisation and control than the transport system? In my opinion, there is not. I think it is a very remarkable decision on the part of the Minister and the Government, at a time when they have actually in their hands and have circulated this voluminous and magnificent report from the Vocational Commission, set up by themselves, which deals with this problem of transport, to ignore completely this reference to the method by which the transport system should be reorganised both in this Bill and in all the speeches of the Minister. I think it is a very undesirable decision.

The Minister's method is to set up a monopoly. Who can welcome the establishment of a monopoly in transport on these lines? I agree absolutely with Senator Sir John Keane that, when it is long enough in existence and when it is old enough, it will become a dead head. I have no doubt that, from the point of view of what many of us would like to see put into operation, the point of view of wider ownership, you are putting a definite bar to wider ownership, in so far as people might be owners and become sharers in the labour and in the work of transport, by the establishment of this monopoly. I think it is very undesirable. I think it will not give us efficiency. In any sense, I doubt its capacity to be really efficient.

When all is said and done, transport is a very complicated problem. It is so very complicated that there is such a variety of aspects to the question, that it is inconceivable that an organisation set up on these lines can be anything like reasonably efficient to deal with the problem. It will be all-powerful but, on the other hand, an organisation like this will be a terribly sensitive organisation. If it be a great factor in the nation's life, it can make the nation's life very vulnerable—it can be very easily attacked at its most vulnerable point. That is very undesirable. If you had conceived a plan in which the transport system might have become, in part, owned by producers, consumers and the people who work on it, then the difficulties, and the fears which I have for the scheme outlined here, might vanish. But this leaves it possible, at a moment's notice, to hold up the whole life of the nation and, unlike the situation with which the English people were confronted some years ago, we will have no alternative if anything like that should happen. From every angle, I think it very undesirable that we should have this mammoth organisation set up, taking over complete control and wiping out all competition. The simple people, the consumers and the producers, will be totally at their mercy.

A great deal has been said about the powers of control of the chairman of the company. That is where my problem really begins. We have this chairman nominated by the Minister. I endeavoured to ascertain how far he is to have such absolute power as it is argued he has, and how far he will be in the hands of the Minister, merely the instrument of the Minister. In so far as he is an administrator at the head of a board of directors, he can say yea or nay to every proposition. He occupies an all-powerful position. This man will be in complete control of a transport organisation with a backing of £20,000,000. I do not know that anybody in Imperial Chemicals or in any of the great capitalist concerns of the world as they were pre-war was in anything like the same powerful position as this railway dictator will be in this country. It may be all very fine while this gentleman is in office—I do not know the gentleman at all—but is it a satisfactory position to envisage for all time?

Let us look at another aspect of the matter. When you come to examine what are the conditions under which this gentleman is to administer public transport, what do you find? He will preside over the board meetings week after week, but you will find that it is in the Minister's Department that all the decisions will be made with regard to the classification of the goods to be carried on the transport system. The Minister and his officials will determine into what classification eggs, butter, feathers, cattle, turf and other commodities will be put. They are the people who will have the last word in that respect. Having classified the goods, the Minister and his advisers will determine what the charges are to be for the transport of those goods. When that scheme is settled in the Minister's Department, it will be passed over to the chairman and the directors to administer.

You have, it is true, set up an advisory committee. I want the Minister to be more informative about the functions of and the intentions behind the establishment of this advisory committee. From my reading of the Bill, it would appear that the Minister will require the transport company to make proposals with regard to the classification of goods. The Minister and his staff will boss the railways from that angle, anyhow—I am not saying that in any offensive manner. They will be the controllers. If the company put up proposals and the Minister is not satisfied with them, what is the position? The position is that the Minister has to be satisfied.

If there are objections on the part of interested people in the country what will the position be? Suppose farmers want to appeal against the classification of potatoes, eggs or other commodities which they want to transport. Suppose, they appeal against the classification. They may appeal to the Minister, but the Minister has already got this proposal through. It is to his court they have to appeal—to the people who have made the decision. What liberty is there in this procedure? Senator Sir John Keane is quite right when he says that the public ought to be considered and they should have some court of appeal. So far as I can see, there is no such court available to them.

The constitution of the advisory committee, if it is to be an effective instrument, is not satisfactory, I would say, from the point of view of the country's main industry, agriculture. It is the biggest thing we have got, and it must be considered seriously in the classification of goods. When we make an appeal we make it to the Minister and the Minister may, if he thinks fit, refer certain matters to the advisory committee. If we could be satisfied that we would have some sort of independent court with regard to classification and charges for goods, we would be in a happier frame of mind. There will be times when people will be dissatisfied with decisions, and it is very desirable that there should be some court of appeal.

As we see the position to-day, the Minister tells us that nationalisation has been rejected by the Government because of the political implications and activities which must arise as a result of nationalisation. What are we to do if the Minister makes a classification with which we do not agree? Are we to be at liberty to raise such matters in the Oireachtas? Can we debate these things with officials in his Department? What avenue is open to us? Will the proposition be discussed at the Fianna Fáil club or the Fine Gael club, and will there be an alliance between them about the classification, say, of turf sent from Mayo or Donegal to Dublin? What is the method by which we can get the ear of those people, get their minds open to the peculiar situation in which they place the consumers? I do not see that the argument which the Minister makes against nationalisation holds. The advisory committee ought to be an active organisation, weighted more in favour of agriculture than it is, if agriculture is to get a fair chance. The Minister should definitely undertake that objections made by interested parties not only "may" but "shall" be referred to the advisory committee.

There are other matters in the measure that will come up on the Committee Stage, and can be more satisfactorily and adequately dealt with then, but, in regard to the points which I have mentioned, unless the Minister gives more evidence of openmindedness than he did in the Dáil many of us will be very dissatisfied to see the Second Reading going through here. There are one or two other matters on which I should also like to have some information from the Minister. There is a reference in the Bill to the old agreements that were made by the organisation which is now going out of existence. I want to know in how far that relates to agreements that were, and are at the moment, I understand, in existence between the Great Northern and the Great Southern Railways Company with regard to a division of the income received for the carriage of goods into certain towns and districts in the country. In my part of the country there are certain places where the Great Northern and Great Southern lines meet, and I understand that for a very considerable period agreements have operated under which there was a division, in the proportion, I think, of 40 to 60, of the revenue obtained from the transport of goods for those areas. Is that agreement to be terminated with the passing of this measure, or is it to be recognised and honoured by the new organisation?

There is a very long section here which gives power to the new organisation to abandon certain railway lines in the country. Possibly that is merely a precaution, but towards the end of his speech I think the Minister said something which rather implied that it is quite conceivable that the abandonment of certain railway lines might be undertaken because a more economic and efficient transport system could be organised. I should be glad to hear the Minister's views as to the possibilities in that direction, because I know that there is a fair amount of support for this measure in the country. The people want the railways; they know that they are essential to our existence, and their reasoning is that if we do not get this measure we will not have them. Are we really going to give the country a transport system under which there is power to abandon a considerable mileage of railway lines, or does the Minister see any possibility of further developing our railways in the course of the reorganisation? Has the Minister or his Department ever contemplated the possibility, say, of widening the gauge from Belturbet in my county to Dromod in Leitrim, joining up the Great Northern and the Great Southern railway at that point? Have those points been considered, or what has the Minister to tell the House about them?

Generally, I cannot regard this measure with enthusiasm. I can only say that it seems to me such a combination of various contradictory conceptions that I wonder how it will work. On the other hand, we must have a transport system, and if the Minister is in a more amiable frame of mind than he was in the Dáil perhaps it might be possible for this House to make this measure a far more satisfactory one.

Mr. Sweetman

Almost the entire claim of the Minister for the success of Córas Iompair was based, so far as I could understand it, on the assumption that the management—the reconstructed management if you like—of the Dublin United Transport Company in the four years before the war set a headline, and that what that company had been able to achieve, or more accurately, so far as I understood him, what the managing director of that company had been able to achieve, must necessarily mean that, when the same method of reconstruction and the same management was brought to Córas Iompair, it would be possible for that concern to be a success. In that argument, I think perhaps the Minister forgot that the main success of the Dublin United Transport Company in the years prior to the emergency was due not so much, in fact very little, to efficient management as to the effect of the monopoly which was given to them by virtue of the 1933 Act. There was, I admit, efficient working of the monopoly position, but the monopoly position it was which enabled the transport company to become more solvent. But even that is not quite the point. The Minister is aware, very much more so than I am, that when the tribunal which he set up in 1939 was bringing in its report it laid stress on the fact that it was the monopoly position which gave rise to the change in policy of the transport company, and not any question of changed efficient management. In paragraph 244 of their report they state: "The favourable position in which the company was placed by the Road Transport Act, 1933, gave rise to a change in policy."

Later on in that report both the members who signed the majority report and those who signed the minority report made it very clear that they regarded the policy of the Dublin United Transport Company as being one of charging fares that were too high in order that the company might amortise, in a short term, a debt created for long-term purposes. That is stated very clearly both in the majority and in the minority report—in paragraph 244 of the majority report, and again in the summary of their recommendation. They were very clear that the Dublin United Transport Company should not be allowed to do that. Of course, so far as any question of the implementation of that report in reference to the transport company was concerned, the emergency and the introduction of this measure made it unnecessary, but the matter is of particular importance when we remember that in this Bill there is a special provision on exactly the same lines that the tribunal rejected, namely, that the debt which is created by Córas Iompair for long-term purposes would, under the provisions of the debenture redemption which is compulsory before 1960, mean that fares and freights must be raised in the same way as they were raised by the Transport Act, 1933, in order that that amount might be provided.

I listened to the Minister speaking here on the question of debenture redemption. It was the first time, I think, that he indicated a rather changed outlook on the manner in which these debentures will be redeemed. The position seems to be that either the debentures are to be redeemed by 1960—and in that case, they cannot all be redeemed suddenly, in the last five years, and some provision must be made for them earlier —or else they are not going to be so redeemed. I gathered from the Minister's speech to-day that he was in some doubt as to whether they would be redeemed or not. So far as that particular phase of the situation is concerned, it would have been equally fair —to put it on no stronger a basis—to all parties concerned, and very much better for the railway and for the community, if those debentures were redeemable by the company after 1960. I would be glad if the Minister, in his reply, would make clear the necessity to redeem the debentures in such a short period, having regard to the fact that the debt is created for a long-term purpose.

As an example, to stress my argument about the method in which the transport company is carried on, I might give a comparison of the fares in such one or two other cities as I have been able to ascertain. I think I am right in saying that the Dublin United Transport Company give just under three miles for 2d. and that the fare for five miles is approximately 3d. Of course, there may be special circumstances of which I am not aware, but until such time as those special circumstances are put forward and explained, we are entitled to ask why, in Leeds, for five miles, there is a maximum fare of 2d., as against our 3d.—a two-thirds reduction. In Edinburgh, the same applies; while in Aberdeen they go very nearly half as far again for a 1d. fare as we do in Dublin. In Sheffield, the fare for the distance from Nelson Pillar to Blackrock is only 1½d., whereas here it is 3d. In Sheffield, nevertheless, in spite of the fact that they have a most modern system, there is only a debt of £500,000, as compared to the debt of £2,000,000 of the Dublin United Transport Company. They have been able to set aside a sum for redemption, notwithstanding the fact that they have these cheap fares—fares on the average very much under those that the workers in this country have to pay for urban transport. The Minister will agree with me without any question, I think, that if we spend a large sum on housing, if the Dublin Corporation embarks on large housing schemes, the value of those schemes will be lost completely unless there is cheap transport for the people to their daily work. Without that, the schemes themselves will not be of any real assistance, and the standard of living of the people in those housing schemes must be depressed. The Minister will find, as the Transport Tribunal found in 1939, that the management of that company were looking at the concern from the point of view of the concern itself and not from the point of view of the cost to the community. I suggest to him that that is a bad example to give in putting forward reasons why he believes that the new reconstructed company will be a success.

I was rather surprised to hear the Minister suggest to-day that it was not anticipated that there would be redundancy to any considerable extent in the workers employed in the two amalgamated companies. I understood the Minister to say that to-day, but I do not know if I heard him correctly or not. I was so surprised to hear it that I would like him to correct me, if I have misinterpreted him. I find it quite impossible to reconcile that statement with the speech made by Mr. Reynolds in April, 1942, in which he said:

"I hope I have succeeded in making it clear that, in my view, obsolescence and the excessive number of workers required to operate the system has brought the railways to a time in the history of transport in Ireland when they can no longer compete with road services."

If Mr. Reynolds was correct in making that speech, as the Government nominee in the company, I find it difficult to see how it can be reconciled with the Minister's statement that there will be very little redundancy. The facts are that there are six railway men employed in this country for every mile of route, while in Great Britain there are 30—which is five times as many. In this country, there are six men employed on the railways per 1,000 of our population, while in Great Britain there are 13—which is twice as many.

Mr. Lemass

What are the numbers per tons of traffic carried? That is the important figure.

Mr. Sweetman

Perhaps the Minister would correct me, in his reply, if he can do so. From everything I can get, it would appear that per passengers and per tons carried the proportion is not at all as it was indicated by Mr. Reynolds on that occasion. If Mr. Reynolds was correct in stating that the number of employees was excessive, I would like the Minister to explain how no redundancy will occur, as it does not seem that both statements can be correct.

I have found a little difficulty in ascertaining the exact position of the canal companies and railway companies in regard to the maintenance of bridges across public thoroughfares. So far as I can understand the existing legislation, the transport concerns must keep a bridge in a satisfactory state of maintenance to meet existing traffic, but if it becomes necessary to improve that bridge, then, as a result of the improvement carried out by a local authority, the transport concern not only avoids any increase in liability, but avoids the liability altogether. That does not seem a correct method of accounting, as between transport concerns and a local authority.

My next question is rather on the same lines as that put by Senator Sir John Keane. Would the Minister make it clear exactly to what extent the operation of the new company will be considered as the operation of a company incorporated under the Companies Acts or the operation of a Government Department?

Sooner or later, some Government will have to take steps to ensure that members of the Dáil and Seanad will not interfere in any way with the routine organisation of Government Departments. It is, in my opinion, a most unfortunate phase of our public life that Deputies and Senators should be asked, expected, and able to go into Government Departments and secure that certain matters be dealt with by civil servants there. It appears to me that the proper place to deal with those questions should be across the floor of the House. While it should be the duty of public representatives to make constant recommendations as to the manner in which justice should be dispensed to citizens, those recommendations should, nevertheless, be so framed as not to constitute an interference. I am sorry to say that certain public representatives seem to consider that their duty lies more in interfering in Government Departments than in performing the function for which they were sent here—the consideration of legislation and its effect on the people they represent. I sincerely hope that, in the case of Córas Iompair Éireann, it will not be a dummy company, such as those to which reference has been made, and that the Minister will take responsibility across the floor of the House for anything done in connection with it, instead of saying that the capital in the company does not belong to him, and that, therefore, he is not concerned. While hoping that the Minister will take responsibility across the floor of the House in this matter, I sincerely hope that public representatives, whether belonging to my Party, the Government Party, the Labour Party, or any other Party, will not allow the cancer that has crept into public life to creep into Córas Iompair Éireann.

Mr. Duffy

Judging by the speeches which have since been made, I take it that the statement of Senator Douglas as to the function of the House in regard to this Bill has been accepted. I understood him to express the view that it would be an improper thing for the House to refuse a Second Reading to the Bill. If that is the position, our contributions to the debate must, I think, be in the nature of representations to the Minister or an indication of what we ourselves should like to do on the Committee Stage rather than an appeal to Senators to vote against the Second Reading. I do not think that anybody will be asked to do that. One has to be impressed by the case made by the Minister for a measure of this kind. He reviewed what had been done for more than 20 years to reorganise the transport industry, and he explained the failure of the measures taken, including the measures recommended by himself 10 or 11 years ago. It may be said that the history of transport legislation here has been a history of failure—long prior to 1924. Inquiries have been held every 15 or 20 years during the past century to ascertain what was wrong with the transport industry in Ireland. An opinion was generally expressed that the whole transport system was wrongly organised. It is strange that, whenever Irish representatives—that is to say, representatives of the plain people of Ireland—expressed a view in regard to the organisation of transport, they were insistent that the transport services should be organised on a nationalisation basis. The Minister himself, I think, took that view in 1933. In 1931, he was certainly convinced that there should be nationalisation of the transport services outside the Dublin municipal area. In that area, I think, he favoured municipal ownership. I know that the Minister has argued very effectively that he was entitled to change his opinion and I think that he has defended that change of opinion. Of course, he is entitled to do that, but I suggest that the weakest part of his statement in this House this afternoon was the part in which he rejected the idea of nationalisation. He told us of the difficulties and disadvantages that would arise if a State-owned concern had charge of the railways—power politics, people pulling strings, discussions in the House, and so forth.

That is strange in view of the fact that we have the Electricity Supply Board, a self-contained body, responsible to the Minister's Department. I do not remember having heard any of the candidates of any of the Parties in any of the past three or four elections promising to reduce the charges of the Electricity Supply Board for current, or promising to introduce supplies of electricity to districts in which no current was available. I have very vivid recollections of the refusal of the officers of the other House to permit the putting of questions to the Minister regarding the administration of the Electricity Supply Board. Yesterday, I saw a letter addressed to a member of Dáil Eireann informing him that he was not permitted to ask the Minister for Agriculture why the Sugar Company refused to enter into contracts with certain small holders who were anxious to grow less than one acre of beet in a certain part of the country. The question was ruled out by the Ceann Comhairle on the ground that the Minister had no responsibility in the matter. For that reason, the question could not be placed on the Order Paper. Similarly with the Electricity Supply Board. Questions of that kind are not permitted on the Order Paper and I respectfully suggest that, if an organisation were established to operate and control transport, there would be the same freedom from interference so far as both Houses of the Oireachtas are concerned. So far as I can judge, there would be the same disinclination, too, on the part of candidates at elections to make a subject of that type an issue at the elections. In fact, it would be a good thing if candidates would make a subject of that kind an issue at an election rather than the kind of subjects which are made issues and which so frequently determine the result.

I do not think the Minister was very happy in his allusions to the question of nationalisation, because he showed us that, to all intents and purposes, this is a Government-controlled concern. That is obvious. The Minister is taking power in this Bill to dismiss the chairman at will. He has already said that the chairman will, more or less—I should say more rather than less—represent the views of the Government in his capacity as chairman of the company. So far as his fellow directors are concerned, there is only one thing they can do with any confidence—that is, draw their fees. They will have no power to reach any decision if the chairman dissents. He has power to reach any decision he thinks fit without even consulting his colleagues.

As I understand the position, in case of a conflict of opinion on the board between the chairman and his colleagues, no decision at all can be reached. I think that is the position, that the directors will have no power to reach a decision which they favour unless the chairman is agreeable and will acquiesce in that decision. On the other hand, he can reach a decision by himself, though I believe under the Bill he cannot reach a decision which is contrary to the views of his colleagues. I therefore clearly foresee that you may reach a stage at which, if there is not good will between the chairman and the other directors, a stalemate will arise and no progress can be made at all. Senator Sir John Keane was very anxious about the position of the directors and I think it was he—or was it Senator Douglas?—suggested that the shareholders may in fact change the directors. Of course any of us who are realists know that that is not so. Influence in the share-holding body is exercised very largely by the banks. They are the holders of the great majority of the shares in trust and the chairman of the company or somebody else—previously it was the chairman, now I understand it is one or other of the directors—carries all the proxies of these shareholders. It is they decide who will be the new directors; there is no change there. Senator Sir John Keane knows how that system is operated much better than I do.

One of the things that made me feel uneasy about the spirit in which this legislation is being put through was the statement of the Minister that he expected this to be a permanent solution of this problem. I do not know why he is sufficiently optimistic to think that the proposals in this Bill can effect a permanent solution of the transport problem which has been the subject of very many experiments in the course of 70 or 80 years. Every one of these experiments proved ineffective. I think the Minister himself feels some anxiety on that score as he said that the railway system may not last for ever. I think he has in his mind that the people who are to be responsible for the new company must not be wedded to railway transport as the sole or principal method of giving us a transport service. He and his advisers, I would suggest, seem to have in mind the possibility that in fact the railways may disappear in the course of the next 20 or 30 years. Should they disappear in the course of the next 15 years, there will be practically no assets left in 1960 when these debentures are due for redemption.

I have been wondering who is to provide an alternative system because the roads we have now, and the number of vehicles these roads could accommodate, would be totally inadequate to deal with the passenger and goods traffic now carried by the railways. Even in 1938 the railways carried almost 12,000,000 passengers and the bulk of these passengers were people travelling long journeys. Imagine that volume of traffic being turned on to the roads and then imagine the traffic in goods—cattle, live stock, merchandise, coal and minerals—also being carried over the roads. It seems that we must contemplate a completely new network of roads to carry the vehicles that would be required to deal with such traffic. Who is going to build these roads? Is it going to be a function of the new transport company to utilise their capital to provide this alternative road traffic? If not, will the county councils be called upon, out of resources derived from rates, to provide the transport company with the roadways which they need for their purposes? I would imagine, therefore, that the Minister is not a realist in regarding this Bill as a permanent solution of the problem with which we have to deal.

When the Minister was speaking on the subject of nationalisation of transport and what a nationalised system might be expected to do, the thought occurred to my mind that some of the things he complained of were really the kind of things we might reasonably be asked to provide. For instance, what is wrong with providing cheap fares for workmen? Other speakers have referred to what is likely to happen in the case of a big housing scheme promoted by the Dublin Corporation as a result of which people may have to travel four, five or six miles to their work. Fares are going to be a very important consideration in their cost of living. I came across a case quite recently of a young girl working in a business some three miles from the centre of the city. She lives in Dun Laoghaire and, when the trams were taken off the road, she complained to me that the cost of travel for her had increased by 50 per cent. In other words, she had been paying fourpence on the trams from the terminus in Dun Laoghaire to the centre of the city. When the buses came on, that fare became sixpence. She paid another twopence from the centre of the city to her place of business. That meant that she had to pay eightpence in the morning and eightpence in the evening. Actually, when this girl had completed her week's work for which she drew 32/- in wages, she had paid 8/- for travelling. Twenty-five per cent. of her total week's earnings was expended on travelling. That is a very serious matter and will have to be faced by somebody. I do not see how it can be faced by the company established under this Bill because it will be their function, and in fact their obligation, to meet certain charges out of revenue. The Minister said that a nationalised company is a subsidised company. One might say that provision is made in this Bill for subsidising this company inasmuch as £16,000,000 of its capital will be guaranteed as to principal and interest but it is quite obvious that the Minister, or at least the Minister for Finance, will take good care that that guarantee will never become operative and that the company will be required to meet all charges out of its own revenue. I have been endeavouring, however, to calculate what these charges are, and some figures at least can be relied upon. Now, £10,000,000 of debentures will cost, in interest charges, £300,000 a year, and if the company issues an additional £6,000,000 of new debentures the additional cost will be another £180,000 a year. The question now arises as to the cost of the redemption of debentures. I understand from what the Minister said just now that there will be no annual provision for the redemption of debentures: that in a good year a large sum will be set aside while in a bad year nothing will be set aside for redemption of debentures, but all the debentures must be redeemed 15½ years after the company comes into existence. The following, however, is the reply which the Minister gave in the Dáil on the 18th of this month to a question bearing on this matter. I may say that the question was asked because an answer the Minister gave to another Deputy in May of this year did not seem to us to harmonise with the actual position. The question put to the Minister in the Dáil on the 18th of this month was as follows:—

"To ask the Minister for Industry and Commerce if he will state the amount of the annual allocation which it is calculated Córas Iompair Éireann will require to make out of revenue for the purpose of the redemption of its substituted debenture stock on June 30th, 1960."

and the Minister's reply was:—

"The annual amount which Córas Iompair Éireann would require to provide out of revenue for the redemption on the 30th June, 1960, of its substituted debenture stock, amounting to £9,890,660, is £547,456.

In calculating this figure, it has been assumed that none of the stock would be redeemed before 1960, that equal half-yearly allocations to the sinking fund would be made for 15½ years, and that the effective rate of interest earned by the accumulating sinking fund would not be more than 2 per cent., after deducting income-tax.

In an answer given to a question asked by Deputy McGilligan on the 9th May last as to the amount necessary to redeem the debenture stock substituted for stock of the Great Southern Railways Company alone, a figure of £640,800 was given which, I regret, was not correct, due to a miscalculation."

Now, that seems to me to suggest it is contemplated that an annual sum of £547,000 will be set aside for the purpose of redeeming the substituted debenture stock, and in reply to another question the Minister estimated that the fixed charges mentioned in the Bill will total, roughly, £55,000 a year. There will also be required a further £300,000 for the redemption of £6,000,000 new debenture issues. I draw your attention, Sir, to the fact that these figures combined tot up to £1,300,000 a year—£300,000, £180,000, £547,000, another £300,000 and £55,000. On top of that figure there is due, by the Dublin United Transport Company, for redemption in 1947, the sum of £300,000. I assume that sum will be redeemed in a period of three years, at £100,000 a year. If not, some other method will be discovered, I imagine, for financing the redemption. So that we are in this position: that the new company will require at least £1,500,000 per annum in revenue to meet its fixed charges, and we have got to find out where it is coming from.

In 1941, the total net revenue of the Great Southern Railways Company was £566,000. In 1942, its total net revenue was £567,000. In 1943, the total was £641,000. On to that has to be added the net revenue of the Dublin United Transport Company, which, in 1943, was £330,000. So that, actually, for 1943 you had, roughly, available slightly under £1,000,000.

Now, reference has been made already to the considerable increase in charges permitted to the Great Southern Railways Company, and, of course, the Dublin United Transport Company also had its rake-off. In 1938 the Dublin United Transport Company earned 11.2d. per mile run. In 1943 they earned 28.8d. per mile run. Now, everybody knows that there is a great outcry against these charges, and I am very much afraid that it is on increased charges rather than on economies that the new company must rely in order to earn the sum which it will require to meet its fixed charges, without paying one penny at all on the common stock of £4,000,000.

I suppose it would be futile to suggest at this stage that the whole principle of financing the undertaking is antiquated and absurd. Had the State taken courage to assume the ownership of the present concern, such as it is, and had it paid the owners of the capital the average price at which their shares were quoted on the Dublin Stock Exchange between 1933 and 1943, it would have cost £8,500,000 instead of £13,500,000, and if that money were provided by the State for a State concern, without going to banks or money lenders, or pledging the credit of the State to those who make profit out of the use of credit, then the country would have been saved well over £500,000 a year in interest charges.

I should like to say this: the Minister did indeed make very valuable amendments to the Bill during its progress through the Dáil. A number of amendments were submitted by the Minister himself, and a number that had been tabled by others were accepted by the Minister, in principle, at any rate, which have improved the Bill from the standpoint of the employees, but I do not think that anything has been done to improve the original Bill from the standpoint of the users of the railway. When I say that, I do not want to be understood as thinking of railways as the only form of transport: I am thinking of whatever form transport services may take in the future. The Minister, however, indicated, in his Second Reading speech in the Dáil, and subsequently in the course of later discussions there, that he was willing to listen to suggestions—I think he actually invited suggestions—for the improvement of the Bill. Now, there may be disagreement, perhaps, between the Minister and those of us who would like to improve the Bill, as to what is meant by improvement, but at any rate he gave me the impression that he was willing to listen to suggestions, and I hope, now that he has come in here, he will not close his ears to the suggestions we may have to offer. I move the adjournment of the debate.

Business suspended at 6 p.m., and resumed at 7 p.m.

Professor Johnston

I had not intended speaking in this debate to-night, chiefly because I was in greater danger of infecting the House with my microbes than with my ideas. However, as I gather that the debate is likely to come to an end to-night, there are some things that I would like to say on the Second Reading of the Bill. To begin with, I would like to say that, all things considered, I am inclined to give the principle of this Bill my solid and substantial support. That is not to say, of course, that I think that the Minister's conduct of railway policy during the last ten years has, in every respect, been ideal. Nevertheless, I feel, looking at the matter broadly from the national point of view and narrowly from the point of view of the owners of the capital assets—the shareholders and debenture holders of the Great Southern Railways system—that the latter should acquiesce in the terms of this Bill, even if they do not regard the Bill as ideally satisfactory. The Minister's present attitude to those interests, as compared to his former attitude some years ago, reminds me of a domestic incident that took place in my family some 20 years ago, when a raid was taking place by certain khaki-clad soldiers at a convent a few yards up the Sandford road where I lived at the time. A certain member of my family, who is now pursuing matrimony and medicine down in the country, then aged three, looking through the window at a soldier said: "That is a nice kind of soldier.""Oh!" said we, "how do you make that out?" He answered: "He pointed the gun at that man and did not shoot him."

Well, now, I think that the Minister was perhaps less kind than the soldier, because some ten years ago he went to the legislative gun-room and, pointing the legislative gun at the shareholders of the Great Southern Railways Company, shot away nine-tenths of the nominal value of their ordinary shares and various other proportions of other shares. That being so, when the affairs of the company were again in a somewhat parlous condition, it is quite understandable that when the Minister announced his intention of going once more to the legislative gun-room, when it might be anticipated that there would be some more marksmanship at that target, with the Minister as marksman, it must have been a great relief to the shareholders of that company when something so unexpected as the terms of the memorandum of October, 1943, and later, the present Bill, came their way: something which enabled them to save something from the wreck. It was not surprising that, when the Minister began talking about the question of legislative interference in the early part of 1943, the shareholders of that company should have felt very much like sheep in the wilderness when they hear the baying of a wolf. How were they to know that the Minister, on this occasion at any rate, was only a sheep in wolf's clothing, and that he was much more kindly disposed to the shareholders of that concern than they had reason to anticipate?

I do not want to travel over the ground that has been covered by the tribunal report. I want to say that I accept unreservedly the decisions arrived at by that body. I do think, however, that those shareholders who were frightened into selling their holdings at the time they did, in the course of the year 1943, as a result partly of Ministerial utterances and partly from what they already knew from their own experience of Government policy in the treatment of railway shareholding interests, have an equitable claim to some further compensation, in fact to a degree of compensation which is not contemplated in the terms of this Bill. On the Committee Stage of the Bill, I hope to be able to make suggestions which would, in some sense, compensate those people who were frightened into selling in the circumstances I have mentioned. In my view, the responsibility of the Government in that matter is this: They should have absolutely forbidden all stock exchange transactions when once they made up their minds to adopt the lines of the policy embodied in this Bill. If they had forbidden all such transactions, then there could have been no question of speculators coming in and buying at dirt cheap prices in the spring of 1943 and afterwards profiting by the enormous increase in the stock exchange value of those holdings which took place after October of 1943. To that extent, the Government must accept certain responsibility for having allowed to exist conditions in which speculators were able to make enormous profits and, therefore, I think the case for compensation on equitable grounds for those who were frightened into selling when there was no real reason to do so, is a very strong one.

On the general aspect of the matter, this Bill is a legislative mechanism to enable a new transport company to acquire the assets of two existing transport companies, and when the matter is complete and when the reorganisation of capital and the expenditure of new capital is complete, as contemplated in the Bill, the new company will have acquired for some £20,000,000 odd of substitute and new capital an undertaking which we all hope will be absolutely first class in the way of modern transport facilities. There has been a good deal of complaint elsewhere about the heavy burden on transport users and on taxpayers resulting from the fact that the shareholding interests in this new concern were not written down to an even more negligible figure than they appear in the present Bill.

In my view the right way to look at the matter is this: What would it cost the nation in one form or another to acquire at modern costs of labour and materials the kind of railway and transport system which we hope to have when this £20,000,000 is fully expended in one way and another in creating our new transport system? Bearing in mind the cost of railway engineering now as compared with 100 years ago and the fact that I think in any future we may contemplate we must have a substantial skeleton of main line railway, even though road services play a greater part than hitherto, I think it probable that any expert in these matters will tell you that to acquire the capital framework of such transport facilities would, if you were starting from scratch, involve expenditure of at least £30,000,000 or £40,000,000. Actually, this new company, which will act on behalf of itself as well as of the nation, is going to acquire all these capital facilities for a matter of some £20,000,000. To my mind, the difference between those two sums belongs in equity to the shareholders of the two companies which are being taken over. From that point of view, I think the public are making an extremely good bargain and I have no sympathy whatever with the people who talk about the heavy burden involved in paying for the service of so much capital. The nation ought to be thankful and somewhat conscience stricken for the fact that instead of paying interest on the service of £40,000,000 to £50,000,000 worth of capital, it is able to get its transport facilities by paying interest on only £20,000,000 worth of capital.

These are the principal points that I wish to bring before the House and I hope, in the course of the Committee Stage, to be in better form for elaborating in some greater detail.

Mr. Counihan

I intend to support this Bill on behalf of the cattle trade. The cattle trade realise that the country cannot do without railways. Our main concern with the Bill is the effect it will have on the transport of, and freight charges on, live stock and agricultural produce. I am sure most people realise that cheap and efficient transport is essential not only for the success of the cattle trade and the agricultural industry, but for the success of every branch of our economic, industrial and social activity. Many people do not agree with the entire provisions of the Bill, but I am sure everybody realises that the railways must be preserved; and I am sure they will also agree that the railways will be the principal means of transport in this country for many years to come.

Since the amalgamation of the railways, things have gone from bad to worse. I do not want to comment on the old management. I have not very much to say in its favour. I do not want to praise the new management at present because we have very little experience of it, but I should like to say that the new management has worked under very adverse conditions and, under the circumstances, they have discharged their job as well as could be expected. Freights on live stock have been raised many times since the amalgamation and in some cases they have been raised by well over 100 per cent. With those high freights we have very much worse service. I can assure the Minister and the House that bad service is more detrimental to the livestock trade than high freights. Four-fifths of the cattle we produce in this country are for export and have to be sold in the British market against world competition. It must be plain to everybody that if we are to hold our own in those markets, we must have reasonable freights and quick and efficient transport for our live stock and agricultural produce.

Most people might be of opinion that reduction in rates is solely to the benefit of the cattle exporters. That is a fallacy. The cattle exporter at all times must, and will, buy his cattle to meet freight charges and all other expenses, but there is one thing he cannot guard against and that is bad service; and bad service causes deterioration to his stock and loss of markets. I am more concerned about the farmer or producer than I am about the dealer. I think most people will agree that every penny of freights which is paid comes directly out of the pocket of the producer or farmer.

Freights on live stock are the most paying source of revenue the railways have, but the railways ignore that fact. They give more attention to a passenger who pays 10/- for a first-class ticket than to the transport of 30 wagons of cattle, the freight on which might be £200. In the first instance they supply a couple of men to look after the luggage of a passenger who pays 10/- for a first-class ticket, to label it and place it in the van, and then when it arrives at its destination, a couple of porters take it to a waiting car. All that the railways do for a man who has 30 wagons of cattle is to leave one porter to count the cattle, and another porter at the destination to count them out. Things like that are not taken into consideration by railway companies. I am not exaggerating when I say that while the livestock trade is the most paying business that railways have they give it no consideration. I should like to know from the Minister the position regarding the Great Northern Railways Company's train, bus and lorry services? For very many years we have been getting very good service from the Great Northern Railways Company. It gives facilities——

Leas-Chathaoirleach

This Bill does not deal with the great Northern Railways Company.

Mr. Counihan

I only want to explain how the cattle trade suffers. The Great Northern Railways give more transport facilities, along with the shipping companies, to exporters of cattle via Belfast. Freights are cheaper and the service much better. That is detrimental to Dublin and to other Eire ports. During the recent emergency, when it was difficult to get cattle boats, the shipping companies ran one for six days weekly from Belfast to Scotland, while Dublin only got one boat from the same company on Sundays. I suppose Dublin would not get that boat but for the fact that the northern people, being great sabbatarians, would not work on Sunday. That happened for many weeks. All our transport problems will not be solved by this Bill. The Minister will find that he will still have to think about the shipping problem as well as the railway problem. We tried on a couple of occasions to start shipping companies here. These ventures did a certain amount of service, and kept down freights, but as no return cargoes could be got, the service did not pay and the boats had to be sold. I am glad to say that they were sold without loss, because the combines bought them in order to cut out competition. If the Government is thinking of setting up a mercantile marine, I hope it will be on different lines from those tried previously.

Leas-Chathaoirleach

I suggest, Senator, that matter is scarcely relevant. There is nothing in this Bill about marine services.

Mr. Counihan

I have to bow to the ruling of the Chair. Has the Minister considered the question of approaching the British Government, or English shipping companies, to inquire into the possibility of establishing a train ferry service from Dublin to Holyhead, Dublin to Fishguard or Rosslare? Does that come under the heading of "transport"? I do not know if it is possible to refer to a train ferry service here?

Leas-Chathaoirleach

I do not think that is relevant either.

Mr. Counihan

I am dealing generally with the transport question and with a ferry train service.

Mr. Duffy

Is not the Senator entitled to say what he thinks should be in the Bill?

Leas-Chathaoirleach

Within the ambit of the Bill, yes.

Mr. Counihan

I am referring to the transport of perishable goods from Ireland to Great Britain. I intend to submit an amendment dealing with that matter. Those interested in the cattle trade want to have the double-track replaced on the railway between Athlone and Dublin. I think the present railway management agree that that line should never have been singled. The Bill contains a provision empowering the company to sell lands, to abandon lines and to knock down bridges. I think the Minister stated that there was a possibility of the railways being superseded by road traffic. If we go in for motor traffic, the present roads will not be able to deal with the traffic, and for that reason it would be a wise provision to look to the future and to keep the tracks in the possession of the railway company, because they are useless for agricultural purposes when sold to farmers. A solid foundation is available for the motor traffic, so that it would be better to keep the roads and bridges intact. We do not know what changes may arise in a short time. I intend to submit an amendment also with a view to impressing on the Minister the desirability of having one member of his advisory committee selected by the national executive of the cattle trade. I do not want to create a job for any member of the cattle trade, as I believe that members of the advisory committee should get only out-of-pocket expenses. If the Minister agrees with my suggestion I believe he will have a better advisory committee than he would have by making membership a permanent job with a salary attached.

The financial clauses of this Bill were vigorously debated in the Dáil and I do not wish to deal with them now. I intend to put down an amendment suggesting that registered owners of shares, or people who owned £100 of ordinary stock in the old company, before the amalgamation, should be allotted a £10 share in the common stock of the present company. That is only asking for justice. The Minister stated that these people, particularly ordinary shareholders, did not agree with the directors in the allocation of stock. They did not, and they never would agree to have stock value for £100 reduced to £10 in value. At present, when the railway company is going to get money, and is to get a monopoly, it is only fair that those who were the registered owners of common stock in the old company should get an allotment of £10 of the common stock in the new company.

Mr. Kennedy

I am opposed to this measure in the main because of its financial provisions. Regarding the other portions of the Bill, I do not consider that the time of the House would be well taken up in discussing them because of the unlikelihood of any alteration being accepted by the Minister. A good deal of criticism could be put forward against the Bill, and particularly against the Minister's statement on the failure of his Government to accept national ownership of the railways, but if we are to get anywhere, it will have to be along the line of constructive criticism. I take the view that the shareholders of the Great Southern Railways have been treated very generously in this Bill. I make that statement in the light of the result of the inquiry set up by the Government and the statement made by the Minister to-day, that, in 1938, the position was that the Great Southern Railways required a very large sum of money if anything was to be done towards getting efficient working and that there was no hope of the public providing that money. In other words, the concern was in such a state that the people who invest money were not prepared to invest in that private concern.

That is a very effective answer to those who are dissatisfied now with this measure and who plead that there should be a greater element not alone of private ownership but private control in the management of the new company. I cannot understand how a person can argue that, when the State, is required to guarantee the interest on the capital of this company, the State, on behalf of the citizens, ought not to have a very large measure of control, if not entire control, of the company. I have no personal knowledge of the management of the existing company or any of the old companies other than what was disclosed at public inquiries, all of which went to show that the private owners could manage the concern neither in their own interests nor in the interests of the citizens.

My main objection to the Bill, as I have said, is its financial provisions. I object to the generous treatment meted out to the shareholders, but I do not think that is the most important flaw in the financial arrangements, from the citizen's standpoint. We have a system of finance under which the State guarantees interest on £16,000,000 of capital. So far as the redemption of stock is concerned, this is to take place within 15½ years, and there is no doubt that, the State having given that guarantee, provision will be made in earnings to see that the stock is redeemed.

I have one suggestion to offer to the Minister, and if he accepted it, it would bring me round to almost 100 per cent. support of the Bill. I object to the State guaranteeing interest to private investors, repaying them their investments after 15½. years, and then handing over the entire property to stockholders who hold £4,000,000 of common stock. I do not think there is any business man who would favour such an arrangement, and I am very surprised that some of the members of the House who represent commercial interests have not tackled that aspect of the finances of the new company. When the redemption stock goes—and so far as the greater portion is concerned, it is guaranteed to be repaid by 1960—this concern, valued for at least £16,000,000, even assuming that no new stock is issued, becomes the property of the ordinary shareholders.

What struck me as being very peculiar is that the common stock of the Great Southern Railways was of very little value so far as the market was concerned. On the other hand, the Dublin United Transport Company was financially very successful. No matter what the reason was, that was the fact. It was paying good dividends and its stock was fetching a good price from the stock market, and, curiously enough, the people who held ordinary stock in that company are not to get any ordinary stock in the new company. My suggestion to the Minister —it is the only constructive proposal I will make; I do not propose to take up the time making other suggestions —is that the Minister ought to make the entire stock of the company redeemable. It would at least provide this satisfaction, that the citizens who are to provide the backing for the new transport concern can look forward to a time, in 1960 or at some later date, when that property, built up and paid for by them, will become their property.

Mr. Crosbie

At this stage of the debate, I rise with a certain amount of diffidence. We have heard from various sides of the House criticism of the railways and the present transport system, and, what is more, criticism of the future transport system of the country. To my mind, this Bill opens up a new aspect of transport, and for that reason it ought to be considered on an entirely new line. This Bill, in actual fact, takes over on behalf of what we used to know as the Great Southern Railways the entire transport of the country by land, by sea and by air. We are serving very little purpose in arguing about the merits or demerits of the A and B preference shares, and so on, of the Great Southern Railways in relation to the Bill because the Bill is much more far-reaching than that. So far as I am personally concerned, I must say that I have no very fixed opinions on the Bill, except in one particular direction.

So far as this Bill gives a complete monopoly or a complete dictatorship in regard to transport by land, by sea or by air, to one man, I am at loggerheads with the Minister. I thoroughly disagree with the Minister on that point, and on that point alone. That is the point upon which I wish to challenge the Minister to-night. I have every sympathy with the Minister when he is drafting a new Transport Bill. I wish here and now to pay a tribute to the man that the Minister has in mind to take up the chairmanship of this new company with these vast powers. I have seen the extremely efficient results which that man has achieved in connection with transport in our capital city. Nevertheless, I must still disagree with the Minister in making him a complete transport dictator.

In this Bill, the chairman is given absolutely dictatorial powers. He is given a board of directors who are to operate with him, but under the Bill it is laid down that no meeting is of any consequence if the chairman is not present. It is also laid down that the chairman by himself constitutes a quorum of the board, and that he can function as the board, and so on. In other words, the chairman of this company is visualised as a complete transport dictator. That is the plain fact, and we must realise it. I have no great objection to the gentleman who is being pinpointed as the dictator. He has proved himself, and proved himself extremely well, in the manner in which he has co-ordinated and organised the transport of our capital city. He has done that in a fashion for which our capital city need not apologise to any capital city in the world. But I do object to his being put in complete control of the entire transport of the country for several reasons. First of all, he has been nurtured on and brought up in control of a transport system in a city. Secondly, he has no experience of a transport system radiating through rural districts. Thirdly— and a very important aspect of the matter—he may be here to-day and he may be gone to-morrow.

Mr. Sweetman

That applies to us all.

Mr. Crosbie

That applies to each and every one of us. While the Minister makes provision in this Bill to appoint the one gentleman in this country who is outstanding in his ability and in his success in the handling of transport problems, if anything should happen to that gentleman to-morrow; where are we to get a successor? Before we could find out that the successor was a complete dud, he would have our entire transport system in a state of complete chaos. I am not personally very much opposed on principle to this Bill, because we might as well face the fact that our transport system up to now has been completely and utterly below all normal standards. I make no apology either to my friends or my opponents when I say that I welcome this Bill in certain respects as a bold and courageous experiment, but I do draw the line at certain points. In this Bill, the Minister has made provision whereby the chairman of this new company is to be a complete and utter dictator of all transport in this country. He is to be supported by a body of directors who, in the terms of the stock exchange, are to be complete guinea pigs. I deprecate that absolutely. I am sorry that the Minister had not sufficient courage to go a bit further. I think he is picking the right chairman. Of course, we are all choking the dog with butter. We all know well the chairman he is picking. Why not say so?

I am in entire agreement with the Minister. I think he is picking an excellent chairman. But why put all the responsibility on that chairman? Why not push a certain amount of that responsibility on to the directors? In this Bill, the directors are so many guinea pigs, and "guinea pig" is the stock exchange term for a person who counts for nothing. I think that the Minister in this Bill is dealing unfairly with that expert chairman who, as we know from experience, has proved himself to be a master of passenger transport. My suggestion would be that the Minister, instead of providing this chairman with a board of guinea pig directors, should provide him with a board of live, honest-to-God business men, and give them powers of advice, and so on, so that they would be of assistance to him, instead of being a mere kind of Celtic background. I believe there is a term that they use which is known as the Celtic Twilight.

The other thing that struck me when reading through this Bill was that, apart from the lack of powers that the directors of this new company will have, they are to be selected by the votes of the shareholders. I must protest against that. Quite frankly, if the Minister had taken his courage in his hands—and I am surprised he did not because, in my experience in this House, this particular Minister is a man who is never lacking in courage— he would have nationalised the railways. He did not, and more is the pity. If he had, I would have suggested to him that his board of directors should have been picked on a territorial basis. People may wonder why I suggest they should be picked on that basis, so I will tell you why.

Mr. Douglas

There might be somebody from Cork.

Mr. Crosbie

Senator Douglas says that somebody might be from Cork. Somebody undoubtedly will have to be from Cork: there will be the two ends and the middle of a row if somebody is not from Cork. Senator Douglas may put that in his pipe and smoke it.

I will give you my experience of the Great Southern Railways over a number of years. When I started to travel on the Great Southern Railways there was a train leaving Kingsbridge at 7.15 that delivered people in Cork at 10.30, roughly. There was a train leaving Cork at 4 o'clock and it arrived at Kingsbridge at 6.50. In other words, a commercial traveller could leave Dublin at 7.15, arrive in Cork at 10.45, stay in Cork until 4 o'clock and return to Dublin all in the one day. There was a train leaving Cork at 7.45 which arrived in Dublin at 1.30., the time at which all the business men in Dublin were at lunch—nobody was back in his office in Dublin until 3 o'clock. The train returning to Cork left at 5 o'clock. That gave the man who came up from Cork to do business in Dublin a period of two hours. We all know the jokes about Corkmen coming to Dublin.

That was the state of affairs until 1939 and then, perhaps by a bit of good luck or something like that, we happened to get a Corkman on the board of directors. Despite what a fellow-townsman of mine has called the directors of the Great Southern Railways, in December, 1939, one of our most distinguished and reputable citizens was elected to the board, and from that out the services were changed. The train that used to leave Cork at 8 o'clock in the morning and that arrived in Dublin at 1.30 was speeded up until it arrived at 11.45. The train that left Dublin at 5 o'clock was put back until 6 o'clock. In other words, things were equalised and the Cork businessman was given a fair chance against the Dublin businessman.

I make no apology for proposing this to the Minister, that in the directorship of the company that he is visualising—I am sorry that he has not had the courage to make it a national company—he should not allow the selection of the directors of this vital transport company to rest with the shareholders, who can be swayed one way or another by any corrupt or cute body —and there are many of these bodies. There are umpteen organisations trading around under different names, calling themselves shareholders' protection associations, and so on.

I object strongly to the powers the Minister gives under this Bill to the chairman. I think the Minister is banking unduly on the longevity of a very brilliant man. If anything should happen that very brilliant man we might quite easily find ourselves in very difficult circumstances. I put it to him that there should be a director from Dublin, from Cork, from Limerick, from Waterford and from Galway; not only that, but that these directors from the provinces should be selected not by the number of shares they hold in the railway company, but because they are either manufacturers, distributors or producers in their various areas. In other words, that they should be responsible for the production and the distribution of goods from Cork, Galway, Limerick, Waterford, and so on. In that manner you would get away from this burden which has always been on top of our railway system, that Dublin was the one and only centre from which goods and passengers could be distributed throughout this country. I know that in one way the suggestions I have made are outside this Bill, but I would ask the House to consider that in this Bill there are provisions whereby, when it becomes law, this company will not only control the entire railway system of this country; they will control the entire road system of this country, and they will control the sea and air traffic as well. I ask Senators to remember——

Mr. Seán O'Donovan

Is there any use in appealing that repetition be avoided? I know it is hardly a point of order, but I think our patience is pretty well exhausted.

Mr. Crosbie

Is the Senator's patience exhausted?

Acting-Chairman (Mr. McGee)

He has said so.

Mr. Crosbie

As the Senator happens to be a fellow-countyman I should hate to exhaust his patience, so I will conclude by saying that this Bill contains provisions whereby the chairman can control the ordinary facilities for air, land and sea transport, and I think this House should be very slow in voting him those powers if they can possibly persuade the Minister to make amendments.

Mr. Foran

I do not want to let this occasion pass without saying a few words in this matter. There seems to be a great difference between some of the Minister's earlier statements on nationalisation and his attitude towards nationalisation to-day. I am reminded of a quotation by a famous statesman of another country, who, when somebody had performed a similar volte face, said: “On that occasion he was a man with much greater freedom and less responsibility.” I suppose that is the Minister's point of view with regard to his former attitude towards nationalisation. He said that, if we nationalise the railways, Party politics and Party and sectional influence will be brought in to the detriment of the efficient control of the railways. He was asked in the other House why he did not consider the plan of the Electricity Supply Board in relation to the railways. There, in my opinion, you have a perfect model. Nobody attempts to interfere unduly with the Electricity Supply Board. They carry on their business efficiently. But a somewhat similar mistake was made in the finances of the Electricity Supply Board as is being made under the new railway amalgamation. The capital repayment was to be made too rapidly, and consequently the extension and development of the Electricity Supply Board that we all hoped for could not take place. That is an example of what might easily happen in regard to our new efforts at railway reorganisation. To get back to my original point, the Electricity Supply Board carries on its business very well, and is not subject to any extent to influence from any political clique or Party. It is absolutely immune from and above all that. I should like to hear the Minister's explanation as to why the Electricity Supply Board plan was not approved—I am sure it was considered—in relation to this new effort at transport reorganisation.

There is a great analogy between the Electricity Supply Board and the railway system in more ways than one. In connection with the new railway system, the Dublin Transport Company is being thrown into the pool in order to bolster up the railway system. The source of revenue is great there, and its distribution will be very helpful to the railway company in the future. There is a similarity there. It means, to the Dublin citizens at any rate, that the hope of cheaper city transport is gone for all time. If the Dublin Transport Company had been municipalised; or if it had remained a private company, then the people of the city could look for extension and development, and might reasonably hope to get cheaper fares. The possibilities now are that, in order to repay the capital interest in the new company, we may have to pay greater fares still, just as we had to pay a higher tariff for our lighting system in this city when the Dublin Corporation threw into the general pool their lighting system, which was very efficient at the time and very cheap. There was a great prospect of cheap electricity generally for industry and for home use, but when it went into the common pool the citizens did not benefit to the extent that they might have. I hope that the Minister, in replying, will give some explanation as to why the Electricity Supply Board plan was not adopted in connection with the railways.

In conclusion, I want to say—I think Senator Douglas has already referred to it—that we are very fortunate at the moment in having a man of great ability to put in as Chairman, with those enormous powers. I am absolutely confident that he will not abuse them. I am certain that those powers will be used by him in the general interest of the community at large. I am speaking as one who has known him for over 30 years, and who is aware that at one period when the workmen of this city were fighting for the right to organise, the right to belong to a trade union, he came along with Countess Markievicz and threw in his weight on the side of the workers. The man who did that over 30 years ago is not very likely to have become the tyrant that he has been represented to be in other places. Consequently, I am perfectly satisfied that the workers of the railway will get a fair deal from him. I am also satisfied that industry will get a fair deal, but I am not satisfied that the power should be given to one man because the Minister has already objected to politics being introduced into those national schemes. The present Government will be in office for a certain number of years; it is pretty well assured of that unless some calamity happens. But assuming that a Labour or Fine Gael, or some other Government were elected, who would they put into the job? Are we satisfied that their nominee would have all the qualities necessary, or might this become a political appointment? There is grave danger of that kind of thing. The particular Government in office has the right to hand out those positions, and there might be abuses. That is, to my mind, a certain weakness in the Bill. The Minister has the right to select this man and the right to employ him.

The financial aspect has been referred to by Senators Douglas and Kennedy, and more or less by Senator Keane. I am glad to have Senator Keane as a nationaliser in the end of his days. The Minister was a nationaliser, but he is not now; while Senator Keane was an anti-nationaliser, but is a nationaliser now. However, I have been a nationaliser all my time, but I am not in office and will not change. Certainly, I believe the Minister would have done much better and would have given greater prosperity to the country in general, if he had gone the whole hog and nationalised both the Great Southern Railways and the Dublin United Transport Company.

Mr. Lemass

Senator Douglas opened the debate by giving expression to his misgivings as to the successful working of the system which the Bill provides. He would, of course, be a bold man who would confidently assert that any untried system was bound to succeed, and I am not going to make that assertion. However, I think that we have devised a system capable of working, assuming that the general conditions are not too unfavourable. I think we have devised the best system possible, having regard to the conditions we anticipate. It may be that circumstances at home and abroad will so develop that this scheme and other schemes will have to be reconsidered in the light of them, but assuming that, in the post-war years, the task of transport organisation has to be undertaken in conditions such as we now can foresee, I think the system which the Bill provides is the best in our circumstances.

Senator Sweetman said that this system is the product of the recent history of the Dublin United Transport Company, that the claims which we are making for it are based upon the success of the Dublin United Transport Company in recent years. That remark is nearly true. I think it can be said that the evidence which has been given of the success which followed the application of new systems of financial control and efficient management to the Dublin United Transport Company has convinced us that results equally striking, if not more so, can be secured in the case of the Great Southern Railways. I think there were some striking results possible there, as the management of the Great Southern Railways offered far more scope for improvement and the application of efficient financial methods would, in the case of that company, produce even more substantial results, from the point of view of the actual hard cash in the till, than were secured in the case of the Dublin United Transport Company.

Let me say, however, that we are taking from the Dublin United Transport Company, not a man but a system. It is quite true that the managing-director of the Dublin United Transport Company is no more assured of eternal life than anyone else and, for one reason or another, his services may not always be available; but he has demonstrated a system of management in the case of that company which can be applied by others than himself. Although we hope his services will be available in the application of that system to the affairs of the Great Southern Railways, if they should not be available it is, nevertheless possible to contemplate the reorganisation of the affairs of that company in a similar manner and with similarly satisfactory result by some other person.

I think it is wrong to assume, as Senator Sweetman assumed, that the success of the Dublin United Transport Company—and I refer particularly to its financial success—was due entirely to the monopoly conditions made possible for it under legislation, rather than to efficient management. The monopoly conditions were created for that company long before efficient management was applied to it and no more resulted in the improved financial position of the company than they did in the case of the Great Southern Railways. In fact, I can say that it was years after the monopoly had been completed, by the utilisation of the powers of the 1933 Act to buy out all the competitors of that company, that it reached the worst or almost the worst period in its history. It was only the realisation that, despite the monopoly, the affairs of that company had got into bad shape, that induced its proprietors to decide that new management was necessary. The application of the new management was responsible for the improved position of the company, the monopoly position had been created long previously.

In that connection, I must draw attention to another misunderstanding, which arose out of the Report of the Tribunal of Inquiry on Public Transport. The members of that tribunal were obviously not sufficiently familiar with the methods of financial administration which the management of the Dublin United Transport Company proposed to apply, and their observations upon the proposals of that company—to redeem out of revenue £800,000 of new debenture stock to be issued in 1939 for the purpose of redeeming certain obligations which fell due in that year—were based upon their misunderstanding of the precise terms of the company's proposals. I would remind the House that the tribunal expressed the opinion that the company should not be empowered to charge such fares as would be necessary to earn a net revenue sufficiently large to enable that proposal to be carried out. The report goes on:—

"In our opinion it is unreasonable to expect that for the next ten years the community residing in the areas served by the company should be obliged to pay, not only for the current cost of provision of the services placed at its disposal by the company...but also to provide out of current revenue in such a short period so substantial a sum as £1,100,000."

The company did not have to provide the £1,100,000 because of the liabilities outstanding in that year, a liability of £300,000, representing debentures redeemable in 1947, still exists and is being transferred as a liability to the new company. The whole of the other outstanding liabilities redeemed in 1939 by the issue of £600,000 new debenture stock have been wiped out and that new debenture stock has been entirely redeemed, without any increase in the cost of the services and solely by more efficient management and the application of sounder financial methods. There was no increase in the cost of the services, yet that redemption has been effected already in even a shorter time than the company contemplated in the proposal which they made to the tribunal in 1939.

I will deal later with the financial provisions of this Bill, but would like it to be understood that there were in the case of the Dublin United Transport Company, and there are in the case of the Great Southern Railways, opportunities for applying intelligent management, with considerable results upon the finances of the undertaking, which have not previously been availed of. The main purpose of the Bill is to ensure that the individuals will be there and that the opportunity will be given to them to apply that management.

Senator Duffy commented upon my observation that this Bill is intended to be a permanent solution of our transport problem. I think I could say, however, that every Bill I produced was intended to be a permanent solution of our transport problem. I do not want to suggest, however, that we must not contemplate the possibility of some technical changes or other developments making it necessary for us to examine the position anew and, perhaps, to legislate anew at some future time, but I do think we can create this organisation and set it at work with reasonable confidence that we have now removed all the restrictions that may impede its progress, given it all the facilities it may require to complete the job we have given it.

What is the system? Senator Douglas described it as half private ownership and half public control. That is not quite correct, because I think the element of private ownership in the undertaking is substantially less than some Senators estimate. Senator Baxter asked: "Who will own the railways?" Those were the words he used, and the answer to his precise question would be "Córas Iompair Eireann". But I take it that what he intended to ask was: "Who will own Córas Iompair Eireann?" That is a question which may be debated some time, and I should not like to offer a very firm opinion on it. No doubt, in strict theory, the owners of the common stock will be the owners of the concern, but we are inserting provisions in this Bill to ensure that they will not be able to exercise the functions of ownership, save to a limited degree. I think that it is true to say that the only function of ownership they will be able to exercise will be that of electing the directors. The common stockholders will constitute a sort of electoral college for the election of the directors.

Mr. Douglas

They can refuse to agree to the passing of a dividend for themselves.

Mr. Lemass

That is true. Apart from that, they will have no power to exercise the normal functions of ownership. They will not be in a position to decide that they will dispose of the whole concern or that they will stop operating, or exercise those other attributes of ownership which pertain to the private individual in relation to his property. That aspect of the proposal in the Bill is being lost sight of. Senator Kennedy put his finger upon an important point when he said that if the company succeeds in redeeming all its substituted debenture stock by 1960 and has no other debenture stock at that time, the whole property in the concern will devolve on the common stockholders. That is possible. While Senator Kennedy objects to that arrangement, I do not see any strong reason to be displeased with it so long as we proceed upon the basis that their functions in relation to the undertaking will be limited, as proposed in the Bill. I would, in fact, contemplate, at some future stage—after 1960—if there were in existence liabilities of the company in new debenture stock, replacing those debenture stocks by a new issue of common stock, in agreement with the debenture stockholders, and creating a situation in which there would be only common stockholders and no interest obligation resting on the company, dividends being distributed only when the profits justified that course.

Mr. Douglas

In the event of the State having to redeem in 1960 both interest and capital, what would it get in exchange, because the debentures would have ceased? That is not quite clear to me. Obviously, in those circumstances, the State would want to get such assets as there might be. Is there provision in the Bill to cover that? I think that that was what Senator Kennedy was getting at.

Mr. Lemass

I do not think so. Senator Kennedy suggested that we should make the whole of the stock redeemable. He contemplated a situation in which there would be no stockholders of any kind. We should have to make provision for directors other than the chairman in that event, but we would have an organisation not altogether dissimilar from the Electricity Supply Board, with obligations to the State but to nobody else If the State has to make good its guarantee in respect of the interest or principal of the debenture stock, then whatever sum it advances becomes a first charge on the revenue of the company in subsequent years.

Mr. Douglas

Is that in the Bill?

Mr. Lemass

That is provided for in the Bill. While I say that, if a situation developed in 1960 in which the company could not redeem its substituted debenture stock, the Government then in office would have to consider whether it should not introduce new legislative provisions in respect to the company, nevertheless, the strict provisions of the Bill would enable the company to carry on in that situation —that they owed a tremendous amount of money to the State and would have to repay that money before paying any dividends to the shareholders or incurring other expenditure of that kind. It is, I think, wrong to say, as Senator Douglas said, that, in this Bill, we have not avoided the disadvantages of nationalisation; that, in fact, we have devised a system which carries with it the disadvantages of nationalisation and private ownership. I think that the reverse is the case. I do not know what Senators would regard as the disadvantages of a system of nationalisation. I dislike the administration of a commercial organisation of this kind by a Government Department.

Mr. Douglas

So do I.

Mr. Lemass

I dislike the details of management of such an organisation becoming matters of political controversy. I dislike a system under which promises in relation to the undertaking —the improvement of its services or the reduction of its charges—would be sought from public representatives rather than from the company's management.

Sir John Keane

What about the Post Office?

Mr. Lemass

I dislike a system in which the very substantial number of workers which public transport services must employ would regard their political adherence to any one Party as a factor for bargaining in relation to their terms of employment. It is not quite accurate to compare this transport undertaking with the sugar company or the Electricity Supply Board. The numbers of persons concerned in the undertaking, both as workers and members of the public who will have to use it, are so great, in relation to our total population, that they could exercise a very striking political influence. We know that that has happened in other countries. We can, if we like, ignore the fact, but anybody who is familiar with the recent history of France knows that nationalisation of the railways there had very important political results—that the railway workers organised themselves for political purposes, used their powers as railway workers for political purposes, and used their powers as citizens for railway purposes. The experience of other countries has not been altogether dissimilar. I do not say that that is necessarily a vital objection, but it is an important objection. If we can devise a system under which this enterprise can be carried on in accordance with public policy, as determined by public representatives, while free from those undesirable influences, we should do it. I think that we have devised that system. I think we have ensured that the interest of the public will predominate in the case of the new undertaking, and that, at the same time, we shall have ordinary, commercial management, free from political interference, and able to act in the best interest of the undertaking, just as the management of any private, commercial concern can do. That is what we aimed at doing, and I think that we have succeeded in doing it. While I have considerable sympathy with Senator Sweetman's suggestion, that public representatives should have less to do with the administration of public departments, and that their election or rejection by the public should be because of their political views and not their ability to write letters or exercise influence in the administration of Government Departments or semi-governmental organisations, we cannot hope to avoid that completely in this country, and it is precisely because it is almost unavoidable in our methods of administration that we must not ignore it in devising a system of control for public transport.

Senator Baxter suggested an organisation in control of this undertaking consisting of representatives of consumers, producers and workers. Frankly, I do not see how you could have representatives of consumers. I presume that we as public representatives represent consumers. Certainly the people who elect us are consumers even though some of them may be producers or workers as well. Neither do I know how you could get proper representatives of producers, particularly if you take agricultural producers. I think it is almost impossible to devise any system of election or selection which will give you a very limited number of people who could be described as amply representative of producing and consumer interests. In the case of railways you would have considerable difficulty in getting a proper representation of workers' interests. I doubt very much if that system of control would prove efficient.

Senator Duffy said that inquiries into the problems of Irish transport prior to 1924 all resulted in recommendations in favour of nationalisation. That is an historical fact, but I think, however, he misinterprets the fact. In these inquiries the Irish interests represented were as much concerned with the possibility of getting control of the railways out of the hands in which it was then—not altogether for economic reasons but sometimes for political reasons as well—as they were with the conviction that nationalisation was the most efficient system of carrying on the railways. In any event the situation which has arisen since 1924 is entirely different from that which existed prior to that time. As Senator Foran has stated, I spoke in 1931 in favour of municipal control of the transport services in the City of Dublin and of national control of the services outside Dublin. Since that year, however, there has developed a new factor —the omnibus. Each of the concerns providing transport in Dublin and outside Dublin have now become omnibus undertakings. In fact, they are becoming almost predominantly omnibus undertakings. The omnibus is common to both, and I can see no reason why I should attempt to segregate the services in Dublin from the rest of the country. They are both carried on with similar equipment and they both have the same problems of administration and direction.

I know that Senator Sir John Keane questions the advisability of effecting amalgamation between the Great Southern Railways Company and the Dublin United Transport Company, but I think this amalgamation is going to make a very useful contribution to the efficiency and operating stability of our transport organisation. Mind you, I disagree entirely with the contention that it is wrong to deprive the citizens of Dublin of whatever advantages can be secured from an independent transport service. The mere fact that they have an independent bus service at the moment is not an argument in favour of leaving it so. No doubt, the people of Cork could argue equally well that if Dublin were left out of the general pooling system, they should be left out also, and that whatever advantages or reduced fares could be derived from the concentration of services in densely populated districts should be equally available for Cork. One could proceed with that argument still further and contend that the railway and road services of the eastern part of the country should not have to carry the burden of the less remunerative services in the west. We can proceed either on the basis of letting each district look after its own transport service and get whatever advantage it should have from an independent organisation, or proceed on the basis of a national undertaking. We are in favour of the national undertaking.

Mind you, I think it is going to operate eventually in the interests of the citizens of the City of Dublin. One can easily contemplate a reorganisation of the services which will ensure that there will be not merely inter-changeability of vehicles, and uniformity of control and of organisation, but that the reserve pool of vehicles, which must in normal times be retained by transport organisation, will be common to both concerns. Everybody knows that transport has not only to be provided on a uniform basis every day but that there has also to be a reserve pool of vehicles available to deal with abnormal demands on certain special occasions. Occasions such as G.A.A. matches or a Rugby international at Lansdowne Road call for the provision of utterly abnormal facilities. There must be available a pool of equipment which will enable these facilities to be provided. Amalgamation facilitates that just as it facilitates the reorganisation and management of the new undertaking, by making available to it the best brains and the best technical experience and efficiency which are at present at the service of either company.

I do not agree that the Dublin Corporation should have been consulted as Senator Sir John Keane suggested before these proposals were put through. The corporation have certain rights, but let us be clear as to what their rights are. They have the right to acquire in 1966 the tramway services operated by the Dublin United Transport Company if tramway services are being operated at that time. If there are not, and the tramway services have disappeared, the right of acquisition no doubt dies with them. At the present time the corporation has a certain right to receive wayleaves from the company but there is a proposal in the Bill to abolish the payment of wayleaves in consideration of the transfer of a capital sum to be determined by an arbitrator. The right of acquisition by the Dublin Corporation under the 1925 agreement is, in fact, of very little value. It has no value because the Dublin Corporation has no power under its own statutes or under the transport legislation to carry on a transport service. Perhaps if there are trams still running in 1966, the transport organisation will be quite ready to sell them to the Dublin Corporation if the corporation want to buy them.

Many Senators have referred to the proposal in the Bill that the substituted debenture stock should be redeemed by 1960. It was suggested that the time was too short and that the placing of that obligation on the company would entail higher charges for transport than otherwise would be necessary. As I have mentioned already, in the case of the Dublin United Transport Company, a capital reorganisation of a somewhat similar kind has been carried out without any increase in fares. It is true that the circumstances of the emergency improved the revenue-earning capacity of the Dublin company but they also increased its operational charges considerably. In fact, there has been no increase in fares in Dublin during the emergency.

Mr. Sweetman

They were so high already. They had been increased prior to the emergency.

Mr. Lemass

That is not right either. Senator Sweetman said that the rates were increased under the new management. In fact, the rates were reduced.

Mr. Sweetman

I do not think so.

Mr. Lemass

Certain rates were in operation prior to the emergency. A strike which took place in 1936 resulted in the company having to increase the wages of their workers. There was some loss of revenue and in consequence the company increased its rates. These increased rates were reduced in the following year under the new management to the rates which had been in existence prior to the strike. They have not been increased since. May I say, in reference to the case which Senator Duffy mentioned about the girl travelling from Dún Laoghaire, that either she was ignorant of the practice of the company or the Senator's information is incorrect? There are weekly tickets issued to people who have to travel every day in the manner indicated by the Senator. When the tram cars were withdrawn because of the emergency and were replaced by buses, the price of the weekly tickets was not increased.

Mr. Duffy

A weekly ticket costs 4/-.

Mr. Lemass

The price was not increased and the tickets were available for use on the buses. However, the trams are back again now and the tickets are still being issued at the old rates. So far as I have been able to find out, most of the municipal organisations throughout Great Britain have been compelled by the emergency conditions to increase their rates. There has been no such increase here. There has been, in fact, a substantial improvement in the revenue of the company, and although the Minister for Finance might not like it because of the taxation which the company has been paying to the Government, the company contemplate a reduction in rates as soon as conditions permit. Remember, however, that we had a transport problem here and that that transport problem would not have been alleviated by a reduction in rates. We do, however, contemplate that there will be a substantial reduction in the rates charged in Dublin when normal conditions are restored. Such devices as workmen's tickets and, particularly, low rates to the outlying housing areas, as well as special rates for persons travelling to the seaside on Sundays, and, in general, other improvements of that kind, are in contemplation and will all be possible.

Mr. Crosbie

Is the Minister offering a reduction in transport rates in Dublin after the emergency?

Mr. Lemass

Certainly. I contemplate that that should be possible. I have already indicated that the amalgamation of the two companies brings to the new organisation a substantial new revenue which represents not merely the surplus revenue of the Transport Company, but also is represented by the modification of the tax charge which will result from the amalgamation.

Mr. Crosbie

Is the Minister aware that the transport rates in Cork are about double what they are in Dublin?

Mr. Lemass

Well, I hope that we shall be able to effect a reduction in transport rates in Cork also, but I am not aware at the moment of what the Senator says. Now, Senator Sir John Keane asked if the redemption of the substituted debenture stocks would be a charge on the company's revenue in priority to depreciation. It would not. Depreciation I would regard as a working cost, which would necessarily have to be provided out of revenue before any provision could be made for the payment of dividends, or for allocations to reserve. Whatever appropriation from its surplus revenue the company may make to its fund for the redemption of surplus stock will be made entirely at the discretion of the company. We are not imposing an obligation on the company that a fixed amount should be allocated to the redemption fund. That will be at their own discretion. They can appropriate to the fund whatever amount of revenue, in one year, seems best to the company to be allocated to that fund, and also any special revenues which may accrue, from time to time, through the sale of properties and so on. It is, however, wrong to assume that any definite procedure will be followed, and Senator Duffy's calculations as to the increase in revenue which the company would have to make, in order to meet the charges we are putting upon it, are based upon certain wrong assumptions. The Senator assumed, first of all—as the Deputy who asked the question in the Dáil evidently assumed— that there will be a regular half-yearly appropriation to be made to the redemption fund, and that that fund would be retained intact until 1960: in other words, that the stock would not be redeemed until that time, and that the fund would earn a net revenue of 2 per cent. I think that the company would be foolish to operate in that way. We give them power to operate at any time they think fit, and, in so far as the market quotations allow them to do so, they are free to buy in their debenture stock, and, presumably, would do so.

The Senator also presumed that the company would issue the whole of the £6,500,000 for which the Bill provides, and that the issue of those debentures, and the employment of the capital accruing from them, would not increase the revenue of the company. I think that the issuing of new debentures would not be approved by the Government unless the company could show that the revenue of the company could be increased to an extent that would meet the charges imposed on the company and improve its financial position.

Mr. Duffy

May I say, Sir, that my view was that the Minister contemplated, early on, that there was an immediate need for expenditure on replacements and renewals of that kind?

Mr. Lemass

That is true, but I want to say this also: that there is not quite the comparison between the financing of this concern and the financing of the Electricity Supply Board, to which Senator Foran referred. The Electricity Supply Board was required, by statute, to fix its charges in such a way as to yield a revenue, not merely sufficient to cover its working costs, but also to cover a pre-determined amount for sinking fund to amortise the capital advances that had been made to it, and also to provide for the creation of a depreciation fund sufficient to replace the assets created by the capital expenditure at the end of their useful life. In the case of this company, however, there is nothing to prevent it using its depreciation fund or other reserves for the purpose of paying off these debenture stocks, and reimbursing these funds when necessary by the issue of Government guaranteed debentures. In fact, in the course of the present year, the company has redeemed for cash £1,000,000 worth of subsidiary stock, such as the North Wall Extension Loans, the City of Dublin Junction Railways stock, and the New Ross and Waterford Extension Railways guaranteed stock—all of which have been already redeemed for cash this year. The company used for that purpose the cash in bank and the investments which appeared on their balance sheet opposite the depreciation fund and certain reserve funds. Now, the company can, to the extent necessary, reimburse those funds by the issue of new debentures, if necessary, but it was obviously good business for them to use money which was earning interest at the rate of 3 per cent. to get rid of capital liabilities on which 4 per cent. and over had to be paid.

Similarly, in the future, if it appears to be good business to do the same thing, the company will be free to do so, but we are not requiring it, as in the case of the Electricity Supply Board, to make special provision for a sinking fund. Not merely will they be able to manage their revenue and arrange for it to be applied to the best purposes as they themselves think fit, but we empower them to redeem these debentures, and even compulsorily to redeem them, from 1955 onwards.

Some Senators placed upon a remark of mine, concerning the future of the railways, a significance which I did not intend it to have. I mentioned in the Dáil that we had to have regard to the possibility of developments which might mean that railways would no longer be regarded as an efficient method of transport. I made that remark in connection with certain proposals relating to the transfer of railway employees of the company to road services, in such an eventuality, but I did not intend it to be understood that I, myself, contemplated an early cessation of railway services. I do not think that that would be practicable, apart from any other objection that there might be to substituting road services for railway services in the period after the war. We do think, however, that a considerable reorganisation of railway services is possible. There are many different ways of carrying on railways. If, by railways, Senators mean the conveyance of goods traffic or passenger traffic over rails fixed on a permanent way, then, I think that the bulk of our traffic will travel on rails for many years to come, but the question of how to transport them is another matter. Not merely is it obvious that a great deal of the rolling-stock of the Great Southern Railways Company is antiquated and unsuited to modern methods of transport, but there are many other methods of traction which the company may prefer, in various circumstances, to traction by means of the steam engine. Even in the case of traction by steam engine, there are various methods of producing steam. At the moment, of course, coal is the recognised method of producing steam, but it is possible to contemplate that, in the future, a steam engine may be run by the use of fuel oil, by the use of turf, or it may be decided to use the Diesel engine, or electrically-driven locomotives. I do not want it to be taken that I am suggesting that any one of these methods has been decided on, but the company will have to consider every possible method in order to ensure that it will have the equipment that will enable it to provide the most efficient and cheapest transport service for the country. The wagons which are being used for the transportation of live stock are, I think, most unsuitable. In fact, there are wagons in use at the present time which were amongst the first ever used by a railway in this country. They have merely been repaired since when repair was necessary.

I know that the management of the company agree with me that there is a great deal of experimental work to be done before the equipment for the transportation of goods, suitable to modern conditions, has been devised. The intention is that the efficiency of the railways will be increased, and the costs of operation reduced, by the substitution of better equipment than that which is now available, and that the cost of maintenance will be substantially lowered by the standardisation of that equipment. I think it is true to say that at the present time the Great Southern Railways Company has 60 different types of railway engines. Quite obviously, the cost of maintaining these engines in repair is much higher than it need be, because of that lack of standardisation. All that expenditure on the construction of new equipment, which will involve, I hope, a great deal of employment at the railway company's works for many years to come, will have to be financed out of capital, and because that new equipment will represent the replacement of equipment against which existing capital liabilities stand, we think that these existing capital liabilities should disappear with this antiquated equipment. That is why the proposal is that the company should redeem its debenture stock by 1960. If the new management incur new capital liabilities represented by new equipment, well and good; but, in so far as the existing assets of the company may have to be displaced, or may no longer be capable of earning revenue by 1960, we think that the capital liabilities representing these assets should disappear with them.

I think Senator Baxter was quite right in saying that the public support for this Bill is on the assumption that it will save the railways. We think that it will save the railways as an essential part of a general transport organisation. The aim of the company is not merely to save the railways. The aim of the company is to provide the country with an efficient and a cheap transport service of whatever kind is best suited to our needs. It will have the operation of the railways as the main part of its responsibility, but we think that, by incorporating the railways in a general transport system, properly managed, they will be made serve the economic requirements of the country much more satisfactorily in the future than it was possible for them to do in the past.

Some Senators seem to have misunderstood the provision in the Bill in regard to the abandonment of railway lines. In previous Acts there was power to authorise the company to close, and, in fact, it did close a number of branch railway lines, but it was not given the power to abandon the branch lines which it closed. The provision in this Bill relating to the abandonment of railway lines will facilitate the company in being able to dispose of branch lines which have already been closed, and over which trains have not been operated for a long time past. We are enabling the company not merely to sell the permanent way to adjoining landowners or others willing to buy it, but to get rid of its obligation in regard to the maintenance of bridges, and we are doing that under conditions which we regard as fair and reasonable to the local authorities of the areas concerned. That is why there are proposals in the Bill relating to the abandonment of railway lines. Senators must keep the abandonment of railway lines as a separate matter in their minds from the closing of railway lines. There is ample power under the 1933 Act to authorise the company to close a railway line and to cease to operate a service on that line, but in certain circumstances, where a railway line has been closed, it is desired to facilitate the company in abandoning it: that is, to get rid of it, and get rid of all responsibility in relation to it.

Objection has been taken to the form of the advisory committee. The proposal has been made that the members of the advisory committee should be nominated by organised interests or chosen from panels prepared by organised interests. I would disagree with that proposal entirely. This advisory committee is intended to be of assistance and advice to the Minister for Industry and Commerce. He must choose the committee for the purpose of advising him and endeavour, in doing so, to avoid a situation in which there would be a conflict between the committee and himself. It is not intended that the committee should be an independent authority, having functions of inquiry or investigation independently of the Minister. I think that would be a bad system. I think that, in so far as the committee is intended to be an advisory committee to the Minister, he must have the choosing of it himself.

As I explained in my introductory speech, the Minister's actions are taken on his own responsibility When he gets advice from the committee he can act upon that advice or reject it. It is assumed that in 99 cases out of 100 he will act upon its advice, but, even if he acts on its advice, the responsibility is still his, and he is answerable to the Dáil for what he does. He cannot defend himself in the Dáil or Seanad by saying: "Well, that is what the committee advised; if you do not like it, criticise the committee, but do not criticise me." In so far as the Minister takes action, he has got to bear the brunt of defending it in such circumstances. It is clear, therefore, that the committee should be one that has not been foisted on the Minister by vested interests, a committee the members of which may not have sympathy with his policy and may wish to obstruct him. Rather it should be one in which the Minister will have confidence. It will be chosen by him because he will believe that it will give him the right advice. I would not think it desirable, either, to put on the Minister any special obligation to refer to the committee matters which may be raised by vested interests. In the ordinary course of events matters which would involve a public investigation will be referred to the committee, but there will be a very large number of trivial matters arising and, perhaps, some frivolous matters. Our experience has shown that, in a very high percentage of these cases, the matters can be adjusted by a verbal conversation with the officers of the railway company or by the writing of a letter. We are establishing this advisory committee in lieu of the Transport Tribunal which was set up under the 1924 Act because experience has shown that the public prefer to get their grievances, where they have grievances, redressed through administrative action by the Department rather than by a formal appeal to an independent authority. The Transport Tribunal was very largely nonoperative in these matters, and it is only where there is need for an investigation, such as would arise where a claim was put forward on behalf of a local authority that the services provided in its area were inadequate to meet the reasonable requirements of the public, that the matter would go to the committee. Comparatively trivial matters arising from day to day would be dealt with in the ordinary course of events. It would be difficult, I think, to frame a provision for insertion in the Bill which would require the Minister to consult the committee upon specific matters without destroying entirely the scheme upon which the Bill is founded.

Mr. Sweetman

As the Minister is on that particular point, would he mind explaining in more detail the exact types of applications that will go to the High Court, which is being substituted for the tribunal, for hearing?

Mr. Lemass

There are certain matters of law which will now be referred to the High Court.

Mr. Sweetman

Affecting such things, as, for example?

Mr. Lemass

An allegation of undue preference. Suppose, for example, a trader alleges that the company is giving some of his competitors preferential rates or preferential treatment, he can get his redress in the High Court.

Mr. Sweetman

The reason I ask the question is this: under Part V of the Bill, I cannot see that a private person is entitled to go to the High Court. There is a special provision in regard to the Minister for Agriculture. He certainly can go, but does not that imply that nobody else can go?

Mr. Lemass

I will deal with that.

Pádraic O Máille

Perhaps we could be told now if it is the intention of the House to sit later than 9 o'clock.

Acting Chairman (Mr. McGee)

The intention, I understand, is to sit for some little time longer to enable the Minister to conclude.

Pádraic O Máille

Because some of us want to get away to catch our buses.

Mr. Douglas

There is a general understanding that there is not going to be a division on the Second Reading of the Bill.

Mr. Lemass

There are just a few more matters that I would like to deal with before concluding. Senator Douglas referred to the possibility of a conflict arising between the Government and the shareholders' directors in circumstances in which there had been a change of Government or some other calamity as Senator Foran described it. I think that we must visualise the possibility of such a conflict and many of the provisions of the Bill which have been the subject of debate were devised because that possibility was there. We do not think it is likely. I think any intelligent body of directors selected by the shareholders of this company will seek to co-operate with the Government in office, no matter what its policy, rather than to get into conflict with it.

But, in order to ensure that in such a conflict the Government's will is to be predominant, these provisions are in the Bill. We are not trying to disguise that. We are not trying to represent them as other than they are. The intention is to ensure that if there is conflict between the public interest, as represented by Government policy, and the special interests of the shareholders, as represented by the shareholders' directors, it is the public interest which is to come out on top. That is what these provisions of the Bill are meant to ensure.

Senator Sir John Keane asked what are the public interests. Senator Kennedy, I think, answered him in one regard. He said that if the taxpayers are to guarantee the principal and interest of several million pounds of stock issued in the name of this company, that is a very special interest. The public interest goes further than that. I think we must not forget the position which this company will hold in relation to the provision of transport facilities. The powers which it will enjoy are given to it by legislation, just as in the past we gave the Great Southern Railways Company in its area and the Dublin United Transport Company in its area powers which enabled them to establish a monopoly and because we gave them those powers we had surely a right to see that they carried on that monopoly in accordance with the public interest.

One cannot say that the Government has no interest other than a mere contingent liability unless the Government can be released of its obligations in relation to general national economic development. The railways and the public transport services generally must play a very critical part in the economic development of the country, and, on that account, there is obviously a public interest in the manner in which these services are managed and that general public interest is, as I have said, backed up by the particular interest that the powers and privileges which the company will possess have been given to it by the citizens through the Legislature and that, in addition, the citizens, as taxpayers, have accepted a contingent liability in relation to the interest upon their stocks.

I was interested by Senator Sir John Keane's suggestion that there should be a review of administration periodically. I think it is a reasonable assumption that the management of the company will take steps to have such a check-up upon the company's administration as the Senator contemplates. The Electricity Supply Board have done it, and they are under no statutory obligation to do it. From time to time, as it appeared desirable to the board, the particular sections of its administration were subjected to searching test by outside auditors or technical experts brought in for that purpose. I should imagine the management of this new company will be equally concerned to do the same thing, but it is an affair of management, I suggest, and not an obligation to be placed upon the company by legislation.

Sir John Keane

I am suggesting it as a protection to the public, not merely a matter for the company's own conscience.

Mr. Lemass

The company is obliged to take every possible step to ensure that adequate, efficient and cheap services are available to the public. The particular steps it takes to produce these results are its concern. The public are, undoubtedly, concerned with the results, and, if the public are dissatisfied with the results, they can make that dissatisfaction obvious to the Government, which has powers to ensure that the company's administration is made more efficient—powers which go to the extent of a removal of the chairman if it is clearly obvious that he is not doing his work properly or in accordance with the Government's idea of what is possible.

Senator Baxter appears to object to the powers given to the Minister to determine by Order the classification of merchandise or the maximum rates of charge for merchandise. I regard that as an essential feature of the Bill. It is the fact that the Minister has these powers which enables him to exercise the supervision over the administration of the concern which the public authority should be able to do. Under the old type of railway legislation, there were all sorts of detailed requirements as to the number of trains that would travel over every branch line every day, the number of carriages to be attached to the train, and a whole lot of regulations which were designed to protect the public against the machinations of railway managements.

We are sweeping these away but we must put something in their stead, and what we are putting in their stead is a power given to the Minister for Industry and Commerce to prescribe certain conditions, the rates of charge —and because he has the power to prescribe rates of charge, in order to give that meaning and significance, he must have the power to prescribe the classifications of merchandise—the facilities which are to be provided—he could require the company to provide a new facility, such as a bus service between one town or another, or a train upon a particular branch line on market day, or something of that kind if the company is not doing it willingly.

These powers to control minimum charges, to ensure that adequate facilities are given, together with the power given to the individual citizen to protect himself against discrimination, represent the limits of what we consider necessary in the public interest but, clearly, if you take that power away from the Minister you must give it to some independent authority. You could not let the company exercise these powers itself without supervision because that might lead to abuse. Under the 1924 Act, the independent authority was in the form of the Transport Tribunal, which in fact exercised these powers and is exercising them now. Because we are proposing to get rid of the Transport Tribunal we think these powers should be given to the Minister, and we think the Minister is a better organisation to work these powers than the Transport Tribunal.

Mr. Duffy

May I ask the Minister whether he will consider any method by which he would report to the Dáil or to both Houses decisions taken in regard to matters such as he has now enumerated so that they can be questioned by public representatives?

Mr. Lemass

Certainly. The Minister exercises these powers by Order. He will make Orders and, no doubt, there will have to be Orders made shortly after the establishment of the company in relation to its charges and classification. The Bill says the existing maximum charges are carried over and form the maximum charges of the new company, and the existing classifications of merchandise are carried over and form the classifications of the new company, until amended, but at some stage after the establishment of the new company there will have to be formal Orders prescribing maximum charges for various classes of merchandise under various conditions of carriage, Orders relating to conditions of carriage and to classifications, and in the ordinary course dissatisfaction with any of these Orders will come to the attention of public representatives through the special interests that they affect and these special interests will soon make themselves heard.

Mr. Duffy

The point I was anxious about was whether any method can be afforded by the tabling of these Orders, or any similar procedure, to enable public representatives to discuss the matter in the House.

Mr. Lemass

I resisted a proposal for the tabling of these Orders. I think that is the wrong system because it involves the automatic submission of these Orders to the House, and I do not approve of that. I think this matter of administration should proceed without the intervention of the Oireachtas until it is clearly obvious that some person has been adversely affected by the Orders, just as the orders of the Railway Tribunal could not be questioned in this House. We are merely proposing now to substitute in this one field the Minister for Industry and Commerce for the Railway Tribunal. We think his Orders should have the same effect as the orders of the Railway Tribunal until some representative, having been approached by people adversely affected, feels the matter is of such importance as to raise it in discussion.

Mr. Duffy

Personally, I am agreeable to the suggestion the Minister made elsewhere that these Orders should not be capable of being annulled.

Mr. Lemass

Quite.

Mr. Duffy

But I think there ought to be some avenue by which expression can be given to dissatisfaction if it exists.

Mr. Lemass

The Senator can, I think, assume that these major Orders relating to maximum charges and conditions of carriage and classifications will be made available in the Library of the House, just as a great many Orders that have not got to be tabled under statutory obligation are made available, but there will, of course, be a multitude of directions and Orders made by the Minister from time to time which will be of very trivial importance and might only relate to the goods of an individual firm, because many industries in this country are necessarily carried on by individual firms.

Mr. Baxter

As the Minister has referred to that point, the fear I have had about the power which he is taking is that it seems unsatisfactory, if I represent any particular interest in agriculture, that I must come to the House to raise the matter.

Mr. Lemass

No.

Mr. Baxter

What redress is there, suppose that I am not satisfied with shipping or other charges on cattle?

Mr. Lemass

The normal procedure would be that representations to that effect would be made to the Department of Industry and Commerce. If the Minister thought that the matter should be inquired into he would, normally, refer it to the advisory committee, which would consider it, hold an inquiry if necessary and report to the Minister. It is obvious that public representatives might feel that the advice of the committee was wrong if an Order was made and that it should be investigated. It is natural in that case that a debate in the Oireachtas would arise.

Mr. Baxter

That is my point. I consider that to be an injustice.

Acting-Chairman (Mr. McGee)

Is not that a point which could be debated in Committee?

Mr. Baxter

But it is a question as to the type of amendment that will be moved as to the determination by the Minister. I want to be clear about this matter.

Mr. Lemass

There must be some finality. The finality we propose is an Order, after consideration of the application and consultation with the advisory committee and a public inquiry into the matter. If at that stage an Order is made no doubt it can be questioned in the Oireachtas. That is the procedure. The Minister having made an Order must defend it. If he cannot defend it successfully he ceases to be Minister. Senator Baxter referred to agreements with the Great Northern Railway Company for the pooling of receipts and other matters of particular interest to the people of Cavan. All existing agreements are carried over and become obligations to which the new company is liable. Statutory provision is made in the Bill for the transfer to the new company of agreements and arrangements of that character which are at present in force. We go further and provide that no such agreements may be altered without the sanction of the Minister, and it is intended to ensure that the Minister for Industry and Commerce will be familiar with all such agreements that are in existence. He will be able to ensure that these agreements are not amended or altered in a manner which he would regard as contrary to his policy. The most important agreement is that relating to the routing of traffic to the various ports to which Senator Counihan referred. These are specifically mentioned in the Bill. On one point to which Senator Baxter referred, I can assure him that existing agreements with the Great Northern Railway Company are continued and will be obligations of the new company.

Senator Sweetman referred to redundancy, and contrasted my statement, that little redundancy was anticipated, with the statement made by Mr. Reynolds, Chairman of the Great Southern Railways Company in 1942, as to the number of persons engaged in transport in 1942. There was, in fact, no relationship between the two statements. I referred to redundancy arising out of the amalgamation of the Dublin United Transport Company with the Great Southern Railways Company. Mr. Reynolds was referring to the number of people employed in transport by the Great Southern Railways Company. It might be that the number of people employed in transport in 1942 was excessive in relation to the traffic arising in that year. I think we can not merely maintain the existing traffic of the company, but substantially improve that traffic. The quantity of traffic that arises for a transport organisation is determined very largely by the facilities which a transport organisation provides. As everyone knows, the number of people who have been travelling in this country has increased enormously during the past ten or twelve years. It is not that there are more people in the country. It is that the people in the country have travelled more frequently, because new services were provided, particularly road omnibus services. Many classes of goods do not move, because it does not pay to move them in existing conditions, but the improvement of transport facilities, or the cheapening of transport facilities, increases the amount of traffic, both of passengers and goods. The aim of the new organisation will be to provide cheap and efficient facilities, and by that means to increase the amount of traffic it would have to deal with, and the number of passengers it will have to carry. The actual number of persons employed by an organisation will depend on the business it has to do, and the aim of the company will be to bring the number of persons employed by it into better relationship with the business offering, mainly by increasing the amount of business which it will be able to attract to itself.

Senator Johnston referred to shareholders who were induced to sell in 1943. I do not know if there were, in fact, any shareholders who were induced to sell in 1943. I would have to assume with him the contention that the statements as to the Government's intentions in that year were of such a character as to induce people to sell their shares. We know from evidence given to the Tribunal of Inquiry that these statements in other cases induced people to buy shares. I certainly would not agree that the announcement made on behalf of the Government in that year should be made the basis of a claim for compensation. I think that would create an impossible situation. In 1938, when we established the Transport Tribunal, the Great Southern Railways shares were quoted at £40 on the stock exchange. The establishment of that tribunal was due to the fact that the Great Southern Railways Company had reached a precarious financial position, and made no secret of the fact, because it came to the Government looking for assistance, and the Government decided to establish a tribunal. That tribunal was set up. If we had to have regard to the possible reactions of the statements made at a tribunal of that character, on the stock market value of the shares, and compensate those who were induced to sell because of our action, we would be creating an entirely ridiculous situation.

Anyone who sold shares sold because he thought it good business to sell. That applies to those who sold not merely at £9, but also to those who sold at £100. May I point out that the present values of the guaranteed preference and ordinary stock of the Great Southern Railways, despite the publication of this Bill, are, in many cases, substantially below the values reached at various stages during the past ten years? People who sold Great Southern Railways shares in 1938 at £35 and £40 per £100, nominal value, thought they were doing good business when they sold at these prices. They were sure of it when they saw the value fall to £9 or £10. Now, they may regret having sold, when they see the value gone up to £50. We cannot prevent people making decisions of that kind. I see no reason why we should compensate them for making wrong decisions. Senator Johnston said that we should have stopped transactions in Great Southern Railways shares as soon as we arrived at a decision as to the form this Bill was to take. What the Government decided to do was to make its decision known publicly as soon as possible, and Senators are aware, from the report of the Tribunal of Inquiry into stock market transactions in Great Southern Railways shares, that the Government arrived at its decision on the Bill at a meeting held on October 19th.

The board of directors of the Great Southern Railways met on October 21st and a circular to the shareholders was published in the Press on October 24th. The aim of the Government was to ensure that there would be the least possible delay between the determination of policy on the Bill, and publication to the shareholders of the Great Southern Railways of the proposals so far as it affected them. There was, in fact, less than a week's delay.

We think the Government was following the better course of action in ensuring the immediate publication of its decision, rather than the course suggested by Senator Johnston, in a stoppage of stock exchange transactions. If we had held the proposals of the Government unpublished until the Bill was issued and appeared in March, 1944, there would be some basis for that criticism. But Senators are disposed to forget that the provisions of this Bill, in so far as they affect shareholders of the Great Southern Railways Company and the Dublin United Transport Company, were published long previous to the terms of the Bill, and published deliberately to ensure that every shareholder would have information as early as possible.

Senator Counihan raised a matter with which I do not wish to deal now. Some points arise on this Bill. I expressed in the Dáil the opinion, that the singling of the Galway line was an administrative mistake, a measure adopted as an economy which did not prove to be such, and it may, in fact, be necessary for the new company to consider doubling that line again. All economies are not necessarily wise and the board of the Great Southern Railways, under the influence of the director who came from England, adopted many economies prior to 1930 which were of very doubtful wisdom, and that was one of them. The other matters to which Senator Counihan referred, such as the establishment of ferry train services, do not require legislation. They require the provision of facilities which are not available now. I agree with him, however, that, from the point of view of the cattle trade, the provision of fast services and suitable equipment is urgently necessary. No doubt, from the point of view of the cattle trader, the provision of these services is much more important than rates because rates are ultimately paid by the producer.

Mr. Baxter

The traders are not concerned.

Mr. Lemass

We hope it will be possible for the company to benefit both producers and traders by a modification of the rates and by a speeding up and improvement of the services given.

Senator Kennedy objected to the Bill on the ground that we are providing unduly generous treatment for the shareholders. That contention leaves out of account the provisions of the 1933 Act. I have repeatedly urged that this Bill should be considered in relation to that Act, which certainly was not generous to the shareholders of the company and was criticised by many as being unduly harsh to them. I think we must not leave out of account the fact that the original investment of a person who gets £100 common stock in the new company in consideration of the surrender of £100 ordinary shares of the Great Southern Railways is represented by an amount of £1,000. That original investment was reduced in nominal value to £100 by the 1933 Act and it is on the basis of the reduced value that the substitution is proposed to be made here.

Similarly, the guaranteed preference and preference shareholders had the nominal value of their stocks substantially reduced in the earlier legislation, and I do not think we are unduly generous to them in giving them to the extent proposed here either Government-guaranteed debentures or common stock of the new company. I hope that it will, in fact, be possible for this new company to pay dividends upon its common stock, and, as the House is aware, it will be, apart from this year, the first time the ordinary shareholders of the Great Southern Railways have received a dividend for a very long period; but if they do receive a dividend, it will be not merely a benefit to the shareholders but to the country, because the depressed financial condition of our transport organisations, and their inability to pay dividends with any regularity, must have affected the national credit before the war and would have affected it after the war.

From the point of view of both the country as a whole, the users of transport, and the railway workers, the sooner we get this company on a paying basis the better. No worker can feel his employment secure unless the company employing him is earning profits, and I would say that the workers employed in transport should be as much concerned as we are to ensure that the company gets out of the doldrums, gets into a position in which it is able not merely to meet its financial obligations in full but to provide a profit for its shareholders as well, because the fact that it is paying a profit is an indication that their employment is more secure than it would otherwise be.

One of the obligations we are placing on this company which will have priority over the payment of debenture interest is the provision of an additional £175,000 per year in order to finance the pension scheme now coming into operation, and that new obligation must be added to those which Senator Duffy enumerated in determining the extent to which the revenue of the company must be expanded. However, I am sure that he will not object to an expansion of the revenue of the company for that purpose.

Mr. Duffy

I do not object to an expansion of revenue in any circumstances.

Mr. Lemass

The provision in the Bill is such that that new charge on the revenue will rank in priority over all other charges, including debenture interest, so that in effect it is also guaranteed by the Government, in so far as the Government is guaranteeing the payment of debenture interest.

Some other matters were referred to with which I could not deal now, except at considerable length, and I think they had better be left over until the appropriate sections arise for discussion in Committee. We had a long Committee Stage in the Dáil. The Bill was very fully debated and I think I convinced the House that I was anxious to give Deputies, just as I am now anxious to give Senators, all information upon any points that may arise on the Bill and to consider fairly any amendments that may be proposed.

Question put and agreed to.

Committee Stage ordered for Wednesday, November 8th.

The Seanad adjourned at 9.25 p.m. until 3 p.m. on Wednesday, 8th November, 1944.