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Dáil Éireann - Volume 6 - 11 April, 1924

SEANAD AMENDMENTS TO BILLS. - RAILWAYS BILL, 1924—SECOND STAGE.

The PRESIDENT: I move the Second [3197] Reading of the Bill. The subject of railway re-organisation has been under constant consideration for over a year, and has been tentatively discussed several times in the Dáil. Deputies will, therefore, need no assurances from me that before arriving at the solution of the problem embodied in this Bill every aspect of the matter has been given long and patient examination.

The main elements of the problem can best be explained by reference to the White Paper prepared for the information of Deputies in considering the Bill. The railways dealt with in the main provisions of the Bill are those wholly within the Saorstát, and the White Paper gives such particulars as are necessary to understand the general position of those undertakings to-day. These railways fall into two groups, the baronially guaranteed lines which are shown in italics in the White Paper and what I may call the main line companies.

There will be found in the White Paper particulars of all the railway companies wholly in the Saorstát dealt with in the Bill, of their capital and of their net earned income over a period of years beginning in 1909. This net earned income is not quite the same as the net revenue. To obtain the latter figure there has to be added the payments made on account of baronial guarantees, and, in the years before 1913, other minor adjustments would require also to be made. Railway accounts were placed on a new basis in 1913. But the particulars given in the White Paper will enable Deputies to appreciate with sufficient accuracy the fluctuations over a long period of years in the earnings of railway companies.

It will be seen that from 1909 to 1913 the annual net earned income rose constantly. The 1913 figure is the peak figure, and it has not been reached since. British Government control covered the period from January, 1917, to August, 1921, and since that date the annual net receipts have fallen very considerably below the 1913 figure. The main cause of the fall was, of course, the damage and destruction caused during the times of trouble in this country, and it is the fact that since British Government [3198] control ceased, the railway companies have not had a normal year. For the payment of the usual dividends in 1922 and, to a less extent, in 1923, the sums paid to the companies by the British Government in compensation for control have had, in some cases, to be drawn on, and there is not very much of those sums left.

It is impossible at present to say what the annual net revenue of the companies would be in a normal year. But the results of 1922 and 1923, even when full allowance is made for reductions in traffic and losses due to damage and destruction are such as to raise doubts whether the railway system unless radically re-organised, could with reasonable charges yield its shareholders the returns they received in the past. Working expenses have increased enormously since 1913, and the efforts made to reduce them in recent years have, for one cause or another, not produced great results. It is true, of course, that the rise in working expenses has been accompanied by a very considerable increase in freights, but the possibilities of recoupment in this way have obvious limitations. Diminished traffic must ultimately result from increases in rates, and in any event, it is universally agreed that the present level of railway rates in this country is unbearable. Rates must be substantially reduced, but some doubts have been expressed as to how far this can be done with justice to the interests of railway stock-holders. The view which the Government takes on this point will appear when I come to deal with the detailed provisions of this Bill, but I may say that the Government anticipates that the radical changes for which the Bill provides, if operated with energy and ability, will amply secure the interests of shareholders.

Turning now to the baronially guaranteed railways, Deputies will find in the White Paper a table giving details of the guarantees in respect of dividends in 1913. Briefly, the position of these railways is that the baronies in which they are situated are in law liable for a guarantee of the dividends on the paid-up share capital, and also for any losses on working that the lines may incur. From the Table in the [3199] White Paper the manner in which the guarantees operated in 1913, can be seen. The total amount necessary to pay dividends on the paid-up share capital is £50,648. Of this amount, the Great Southern and Western Company guarantees £1,960 per annum in respect of the Tuam and Claremorris Line. The remainder, viz.: £48,688, is a liability of the baronies subject to their right to recover from the Treasury an amount equal to one-half of what they pay under their guarantee up to a maximum of 2 per cent. on the capital of the railways. Translated into figures this means, as shown in the Table, that the Treasury has a maximum liability of £20,586 and the baronies of £28,102 per annum.

In 1913 neither party had to meet its maximum liability. Some of the lines made a profit and the liability of the baronies in that year amounted only to £21,298. This sum was subsequently reduced by some £6,500 received from the Local Taxation Account under a provision in the Local Government Act, 1898, whereby that account is made available for relief of the railway rate to the extent of one-half of the amount by which that rate exceeds 6d. in the £.

During British control the baronies generally were not called on to pay more than they paid in 1913, and it would not be easy to determine exactly what the results of working the baronial lines were under control. Since control ceased in 1921 the position has been very different. The group of baronial railways mentioned in the Table actually made a working loss of approximately £107,000 in 1922. According to the law, therefore, the baronies were liable in 1922 not only for their maximum contributions to dividends, viz., £28,102, but also for a further £107,000 to meet losses in working. 1922 was, of course, an abnormal year, and in 1923 the loss on working fell to approximately £30,000. But even in that year it will be seen that the liabilities of the baronies were nearly four times as great as their actual net payments in 1913.

Needless to say, the baronies have not met these liabilities, and I do not think they have been asked to. The [3200] lines have kept open by using their share of the amounts received as compensation for control from the British Government, but these amounts are approaching exhaustion, and under the present system, some at any rate, of these baronial lines cannot go on much longer.

The essential features of the problem we have to consider, therefore, are these: The main line system in its present form is doubtfully remunerative, even with rates much higher than the trade of the country can bear, and the smaller lines have no prospect of continuing except by imposing burdens on the baronies which the baronies could not reasonably be asked to sustain. That is the problem briefly stated; it is obviously not a simple one, and it is certainly not one to be disposed of by a phrase.

Fortunately, it is a problem on which much light has been thrown by Commissions, Royal and other, that have examined it at intervals. All of them arrived at one agreed conclusion, that the Irish railway system was the victim of too many independent managements, and that it plainly needed concentration of control. The experts differed as to the best form of control, but that it should be unified as far as practicable they were unanimous. It has often been remarked that the mileage of the whole railway system of Ireland does not amount to that of one of the old trunk line systems in Great Britain before 1921, in which year much larger groups were formed, and the task of managing the whole of the Irish system has, with some exaggeration, been represented as a light and agreeable part-time occupation.

At the beginning of our investigations it was left to the main line companies to submit any proposals they had to make with regard to the first obvious step to be taken, namely, the elimination of redundant managements, the Government expressing a leaning towards unification, but indicating its readiness to consider with an open mind the railway companies' views on the matter. The companies spent some considerable time on discussions between themselves, and the Government showed considerable patience in awaiting [3201] the result so that it could not be charged thereafter, with thrusting any theoretical devices of its own on the practical men engaged in the business.

From the outset the Government indicated that it was not prepared to force on any of the lines operating both in the Saorstát and the Six Counties any arbitrary divisions of their undertakings at the boundary. Had those lines voluntarily made proposals for re-organisation consistent with the public interest of the Saorstát the Government was fully prepared to give them every consideration. But it was and is convinced that any proposal to divide those undertakings into two parts at the present boundary, involving as it would the formation of two new companies, one in the Saorstát and one in Northern Ireland, with all the complications of a revaluation of shares and division of stock and equipment, and another adjustment all over again when the boundary is finally determined—involving, possibly, when Ireland attains to her inevitable unity, the entire reversal of all these adjustments—would neither be good business, good politics, nor good sense. None of these companies have come forward with any proposal to alter their present position, and under the circumstances that exist to-day, the Government does not intend that they should be forced to adopt such a proposal. It is not in any sense necessary to a sound re-organisation scheme for the railways situated wholly within the Saorstát.

After a number of months the discussions between the companies bore some fruit. A provisional agreement was arrived at between the Great Southern and Western Company, the Midland Great Western Company, and the Cork, Bandon and South Coast for amalgamation, and they were joined shortly afterwards by the Cork and Macroom Company and the Cork, Blackrock and Passage. Accepting the view that companies crossing the boundary could not at present be amalgamated with the companies wholly in the Saorstát, this provisional agreement provided for all the larger companies of the Saorstát except the Dublin and South-Eastern Company. As it was all along obvious that the larger companies would have [3202] to be made responsible for the baronially guaranteed lines, the companies' discussion of the position had by this time practically, resulted in the conclusion that all lines wholly within the Saorstát should be amalgamated, the position of the Dublin and South-Eastern Company alone remaining undecided.

I should explain that the Dublin and South Eastern Company had made itself responsible for a wholly different scheme based on wholly different principles. This scheme I will deal with in detail later on. The Government, after close and careful examination, could not approve this scheme and decided that there were many good reasons in favour of and no convincing reason against amalgamating the Dublin and South Eastern with all the other Saorstát companies. Thus, I will not say by general agreement, but at any rate with the Dublin and South Eastern Company alone objecting, a scheme of unification was approved. From the beginning the Government inclined to a scheme of unification, and for these reasons: The primary object of re-organisation is a reduction in railway rates. From the figures I have quoted earlier it will be seen that the best prospect of securing this object, consistently with a fair deal for railway shareholders, was by effecting every possible economy in the management and working of the lines and by eliminating all waste and overlapping. The greater the number of units concentrated under one control the greater the possible economies. Moreover, the main lines had to become responsible for the baronial lines, and whatever burden this might mean would obviously be lightened by placing it on as many shoulders as possible. No Saorstát line could be left out of the unified undertaking if it was to take its fair share of responsibility for the baronial lines, and, at the same time, by sharing in economies, brought to a maximum by having the largest possible area for their operation, to give its users the benefit of the greatest possible reductions in rates. To leave out the Dublin and South Eastern line, for instance, would mean that [3203] the other main lines became responsible for its proper share of the baronial lines, though under the provisions of the Bill that is a small matter; the more serious objection is that the Dublin and South Eastern would then not be one inch advanced towards any possible reductions in its rates below their present level.

I have said that an alternative proposal was put forward through the Dublin and South Eastern Company. It is remarkable that only one alternative to unification has been put forward after the many months given to examining the question, and Deputies will, therefore, have only two schemes between which to decide. The alternative proposal was as follows:—

1. The Dublin and South Eastern and Midland Great Western were to amalgamate and the Great Northern line as far as Dundalk was to be joined with this group.

If the Midland Great Western was committed to the Great Southern (as was the case) the group was then to consist of the Dublin and South Eastern and Great Northern to Dundalk.

2. Running powers were to be arranged (it has never been explained how or with whom) over the Great Northern from Dundalk to Derry or other connection with the Donegal railways.

3. The group was to exercise running powers from Waterford to Limerick and Cork.

4. The other companies in the Saorstát were to be formed into a second group.

5. To round off the scheme the possibility of a railway from Bundoran to Sligo was adumbrated in vague terms.

6. So far as legislation in the Saorstát could bring this scheme about it reduced itself to a group consisting of the Dublin and South Eastern and the Great Northern up to the Boundary, competing with the second group for traffic at Limerick and Cork.

This scheme has not secured the approval or, indeed, the serious consideration [3204] of any of the companies except the Dublin and South Eastern. From the Government's point of view, it involves the splitting of the Great Northern with a ragged edge cut in 14 places at the boundary, whatever voluntary arrangements someone might thereafter make with someone else for running powers over the boundary. The group, so far as we had any control over it, would not be self-contained, and I have already given the reasons for regarding a division of the Great Northern Railway as impracticable. The group is then to compete for traffic at Limerick and Cork by running over the Waterford to Limerick railway. Now, the greater part of the Waterford-Limerick line is a single line, and the Dublin and South Eastern from Bray to Waterford is also a single line, not constructed for fast, heavy traffic. This route, which is very roundabout, could not be made an effective alternative route from Limerick and Cork to Dublin without a very large expenditure. We have not been informed as to who would provide the necessary funds, but it is not likely that the lean end of the Great Northern Company or the Dublin and South Eastern in its present financial condition, could or would do so. The Dublin and South Eastern cannot be taken very seriously in recommending an expensive scheme which it would be totally unable to carry out itself, and in which its intended partner, the Great Northern Railway, has no faith at all.

The main justification given for this scheme is that it would provide competition and so reduce rates. Now there is very little scope for competition to-day. Such competition as exists is practically limited to cross-channel traffic, and it is principally with cross-channel traffic in mind that this grouping scheme has been devised. Competition in any real sense for local traffic could not be provided by the existing railways, and to secure it new lines would have to be constructed at a very large cost.

Suppose the Government were to accept the view that the proper method of re-organising the Irish railways was to adopt this scheme for creating an intensified competition for cross-channel [3205] traffic, what would be the result? Someone would have to spend large sums of money on doubling and strengthening the South Eastern line and the Waterford to Limerick line. Else the competition would not be effective; the Dublin and South Eastern Company to-day has the right to run over the Waterford-Limerick line, but it prefers to the exercise of that right a payment of considerably less than £3,000 a year. How would a return on this great expenditure be obtained? Not, obviously, from cross-channel traffic; that is to be carried at reduced competitive rates. Local traffic, for which there is little or no competition, would have to pay-and pay through greatly increased rates, the present charges being barely sufficient to yield the ordinary dividends and a great deal of fresh capital having by hypothesis been spent on which a return must be obtained. The disparity between through and local rates, which is already a grievance of Irish manufacturers, would be immensely increased.

And what of the other group in the meantime? It is general knowledge that some of the most serious difficulties of the Irish railway companies arise from the fact that the substantial centres of traffic are widely distant, that the companies have long hauls with little opportunity to add to their revenue en route; in short, that there is barely sufficient traffic to go round. If, therefore, one of the two groups proposed in this scheme succeeded in abstracting any substantial quantity of traffic from the other, that other would be left with a business reduced below the existing remunerative minimum, and (if it did not sell itself to its victorious competitor) would have to make large additions to its rates in order to keep its head above water. Such additions, presumably, could not be put on to the competitive cross-channel traffic, and would have to be borne entirely by the rates for local traffic. I should add that the Dublin and South Eastern group does not propose to take any responsibility for the baronial lines —the other group is to take the whole of it.

The only remedy I have heard suggested [3206] for the obvious defects in this scheme is that they should be left vaguely for the beneficence of the big English company to remedy. We are to depend on the spending by the big English companies of large sums of money in competing against each other for cross-channel traffic while internal traffic, like Cinderella, humbly awaits the appearance, some time or another, of a fairy godmother.

Now the big English companies have done a great deal for Irish trade, and they are rich and powerful corporations. Their continued services are of great importance to Irish trade, and I was gratified to notice statements recently made in London indicating that these services would continue and be developed. There is nothing in this Bill to discourage the English companies. Their present position is maintained and protected by it. All the agreements and arrangements on the faith of which they have incurred expenditure on their Irish services remain entirely unaltered, they have ample scope for new agreements in the future. It would, however, be expecting too much of them that they should plunge into a large and unremunerative expenditure on our account, and even if they were inclined to do so the British Railways Act of 1921 contains stringent checks on any such inclination. The British Rates Tribunal will see that British railway companies do not engage in any such orgy of uneconomic expenditure as the Dublin and South Eastern would have us rely on. No Irish Government could seriously propound as a scheme of re-organisation for the Irish railways, their being dangled as a prize before rival English companies, interested in the development of one side only of our railway service. We can ensure the due development of that side, without leaving the future of the other to chance. By making the most, under Irish control, of our existing system in the way provided for in this Bill, we leave ample scope for future competition at the ports in cross-channel traffic, but such competition will be concentrated at the ports and not disorganise or complicate the internal economy of our transport system.

On this subject of competition there [3207] are one or two quotations I would like to give to the Dáil. In a book on the Irish railways, written by a gentleman who has held and still holds a very responsible position in the railway world —and who must have listened on a recent occasion to statements by the chairman of his company with much uneasiness—I find this:—

The advantages of railway competition in Ireland are greatly overrated by the public. From the nature of things it is physically impossible that effective railway competition should exist in Ireland except between a very few favoured pairs of places. Moreover, competition is, in most places, only a temporary expedient, and the keener it is the stronger the inducement to bring it to an end by compromise. Railway managers, if they are wise, will be constantly on the look-out for opportunities for terminating antagonism at competing points by some sort of mutual arrangement.

That does not encourage us to leave everything to competition between the big English companies.

Mr. JOHNSON: Will the President give us the author's name?

The PRESIDENT: I will have to look up the author's name. In the 1910 report of the Scotter Commission, perhaps the most expert of all the Commissions that have considered the Irish railway question, there are conclusions to the following effect:—

1. For internal traffic the Irish railways are essentially non-competitive.

2. Very few places in the country are linked by more than one line of rail communication.

3. The only effect of competition between railways is a tendency to increase the cost of working and thus prevent or delay reductions in railway tariffs.

4. Such competition benefits neither the companies nor the public.

5. The Irish companies appeared to be following the lead of the great English companies in discontinuing [3208] competition and substituting the more economical and profitable system of pooling receipts. The economies in working to be secured by such arrangements would go, normally, to increase dividends while railways remained in the hands of commercial companies, while a public administration would be more likely to avail of them to reduce charges.

6. Through traffic with Great Britain was essentially competitive and would remain so under unification. A unified administration, whether public or private, would direct through traffic as far as practicable by the shortest route, resulting in more economical working and increased net revenue, available for dividend or reduction of rates.

Deputies will, no doubt, ponder these very definite statements by experts on the subject of competition.

To put the case against this grouping proposal shortly, it offers no present remedy at all for what I have stated to be the two chief elements in the railway problem: firstly, the excessive rates on traffic, particularly internal traffic, and, secondly, the difficulties of the smaller lines, unless it is a remedy for the latter problem to tack the whole of them on to your rival's group. The scheme is really one which leaves the future of the Saorstát railways partly to chance and partly to external exploitation, with the constant risk of every benefit it is supposed to confer being swept away in a night by such an agreement between these external interests, as the Scotter Commission thought to be an obvious point of railway policy. The Dublin and South Eastern has recently suggested that if the virtues of the proposal which it has made are not immediately apparent it should be left in its present position to make such arrangements hereafter as it may consider beneficial. I would ask the public dependent on that line what it thinks of having to shoulder the burden of the present rates and fares for an indefinite time; because that company, standing alone, can do little to reduce them, and I would remind the [3209] company that the rôle of an outpost waiting on the turn of events here, is a rôle for which there is now no scope.

The Government has no hesitation in preferring the plan in this Bill, but I have explained in detail the nature of the only other plan submitted to it so that Deputies may judge of its merits themselves.

Now, unification is itself open to definite objections. It creates a monopoly against which the public must be protected. The Bill contains many provisions for this purpose, the principal being those creating a judicial tribunal, which, and not the monopoly, has the sole right to fix its charges. The same judicial tribunal has power to decide complaints as to the services rendered and facilities provided for railway traffic. The Minister for Industry and Commerce has the right of access to this tribunal, on all questions affecting the public interest. He has also the fullest powers of investigation into the whole management and working of the unified undertaking. The basis prescribed for the fixing of rates is such that while the interests of the railway shareholders are reasonably safeguarded, the management of the unified undertaking is given the necessary incentives to economy and efficiency. In every direction in which the public interest might be prejudiced by the unification scheme ample checks have, in our judgment, been provided, but if it is shown that there is anything we have overlooked we will be glad to consider provision for it also.

Special interests have represented that the Bill would prejudice them, and in particular certain members of the Port Board of Dublin have expressed anxiety. Its case, as put to the Government, was that under an agreement between the Great Southern and Western Company and the Great Western Company of England all traffic is to be diverted to Rosslare, that after unification this will apply to the whole unified undertaking, and that to secure the Port of Dublin against these dangers reorganisation should be based on the policy of promoting internal competition in the Saorstát between English companies.

[3210] Now, the agreement with the Great Western Company of England does not provide for the diversion of all traffic via Rosslare, but merely of unconsigned traffic arising on certain defined parts of the Great Southern system, traffic normally amounting to about 10 per cent. of the total cross-channel traffic of that company; the Bill specifically provides for the maintenance of this agreement, but definitely limits its operation to those parts of the undertakings to be unified to which at present it applies; lastly, while the interests of the Port of Dublin are of undoubted importance, that importance is not so overwhelming as to justify us in subordinating to them the whole future of the railways of the Saorstát under a scheme which we regard as essentially unsound. All Saorstát ports are fully protected under the provisions of the Bill, and if any of them are prejudiced in competing for traffic, it will not be by reason of the railway services rendered by the unified undertaking. There are, in fact, provisions included in the Bill of general effect for the protection of the ports, which in a particular case, the Port of Dublin has effectively invoked for its own protection in the past. I may observe again that, as a matter of obvious good faith, the Bill maintains all other agreements between English and Irish companies, such as that between the Dublin and South Eastern and London, Midland and Scottish Companies, similar in its general effect to the one between the Great Southern and Western and the Great Western of England.

It is, perhaps, desirable that I should deal plainly with what is generally known, that the principal fears of those who objected to the scheme in this Bill are based on the obsession that it puts the Great Southern and Western Company in control of the Saorstát railways, that that company having commitments with one of the English companies, will use its influence to the prejudice of the other and of the ports in which that other is interested, and that in effect the Bill gives the Great Southern Company an autocratic monopoly in railway traffic. Now I do not pretend that any railway company is a disinterested body. I have not met any [3211] railway directors who neglected an opportunity to advance their company's interests, nor have I met many to whom the directors of a rival company were not the objects of an almost feverish suspicion and hostility. No doubt these feelings arise out of past experience, but the area of railway competition has progressively diminished, and no Government need base its railway policy on the mutual suspicions of the past. It is everywhere recognised that railway companies must submit to a large increase of public supervision, and I would ask any sane person who studies this Bill dispassionately, whether, in reason and in fairness, it can possibly be described as a Bill to hand over the railways to the will and pleasure of the Great Southern Company, or of any other company. If the Bill has that effect nothing is further from our interition, and we are ready—it is known that we are ready—to make any amendments necessary to give effect to what is our intention, that our domestic railway system should be made as efficient and economical as our resources permit, to serve the trade of the country without favouring any internal interest or discriminating against any external one. We do not intend, nor will we permit, this Bill to be used by any one party to further its own private interests or to prejudice those of others.

Another objection has been urged to the scheme in the Bill. It is said that the competition of the lines crossing the boundary which are not included in unification, will prejudice the Saorstát. The Port of Dublin makes this point, so it is evidently not whole-hearted in its advocacy of competition. Now this competition exists to-day, and I fail to see how the Saorstát or any particular interest is prejudiced by a scheme designed to fortify the Saorstát lines—a scheme that by increasing their efficiency while reducing their rates, must greatly assist those lines to face any competition.

Mr. DAVIN: Can the President say how you can control the rates beyond the border?

The PRESIDENT: I will be able to [3212] explain that when we come to the Committee Stage, to the Deputy's perfect satisfaction. The units in the amalgamated undertaking will, as the result of this Bill, be in a stronger not a weaker, position to cope with competition from the North. It has been said that this is not true of the main lines since they will have to accept the burden of the baronial lines. When we come to the details of the Bill Deputies will see that there is nothing in this point—the baronial lines involve a negligible, if any, burden, and it is many times counterbalanced by the advantages that will accrue to the main line from unification. I do not think traders will see any disadvantage in having for the time being alternative routes across the boundary open to them, nor do I think the closing of those routes in the interest of any particular port could be defended. They will serve as a stimulus both to the railways and the ports in the Saorstát, to provide the services that traders require.

I have now dealt with the main points of policy in the Bill, and will only deal briefly with some of its more important details. They will, of course, be fully considered in Committee.

In providing for the judicial fixing of rates it is necessary to determine the basis on which they should be fixed. For this purpose we have adopted the principles of the British Railways Act of 1921, and have provided that the rates should be such as will yield a certain standard annual net revenue, provided the management is economical and efficient. This standard revenue, which represents approximately the sum divisible as profits, we have fixed at the average of the three years ending in 1913. In England the year 1913 was adopted for this purpose, and the Irish companies naturally pressed us to do the same. But as will be seen from the White Paper, the net revenue in 1913 was the peak figure. It had never been reached before, and notwithstanding greatly increased charges, has not been attained since, though admittedly the companies have not had a normal year since. In our view, it is not wise for the railway proprietors to demand a [3213] standard which they might have difficulty in attaining, and which may be inconsistent with such a level of charges as the trade of the country must have. Though, in our opinion, the scope for economies in the railways to be unified is large, it naturally cannot be so large as among the very much bigger undertakings out of which the new British groups were formed. The British groups, therefore, had much more chance of maintaining a higher revenue out of the same or a lower level of rates. If, notwithstanding the great increase in working expenses, shareholders receive the average of the three best normal years in the history of the railways, and after any year in which the railways earn more, retain 20 per cent. of the increase, they should be well content. We have accordingly provided that the standard revenue should be the average net revenue of the three years ending in 1913. The average earned income in these three years amounts to £1,088,233. To arrive at the net revenue there must be added the contributions in respect of the baronial lines. These amounted to £36,225 in 1913. The precise amounts for 1911 and 1912 have not yet been ascertained, but they may be taken at about the same figure. The total average net revenue thus becomes, approximately, £1,124,458, and this is exclusive of the interest allowance in respect of additional capital expenditure since that date.

The capital ranking for dividend is £27,310,334. £1,124,458 represents 4.12 per cent. on this capital.

Mr. DAVIN —Nominal?

The PRESIDENT: Actual. The figure of 3.48 per cent. quoted in the statement issued by the railway companies, therefore, gravely misrepresents the true effect of the Bill on railway shareholders. I must take this occasion of deploring the too common tendency in business circles and the Press to rush into print with inaccurate comments on Government proposals based on imperfect examination of those proposals. Responsible business men should be slow to make statements from a partisan point of view, [3214] which, as in this case, are not supported by the facts and tend to undermine that public confidence which is essential to the prosperity of business. The statement that scant consideration is shown for shareholders by this Bill is, in the light of the figures I have quoted, absolutely without justification. It might, with greater accuracy, be said that what does receive scant consideration, at least from railway companies, is the fact that rates here are 150 per cent. or more over 1913 rates, while on the British railways the increase is only 50 per cent. I think the railway companies now realise that most of the over-hasty criticisms of the Bill contained in their statement results from misunderstanding the effect of the Bill, and that, on re-consideration, they cannot be substantiated. Experience only will show whether the consideration shareholders are in fact given is consistent with a reasonable level of railway charges.

Some, though not all, of the railway companies profess to regard the economies to be secured by unification as comparatively small. I think this is rather their “brief” than their real anticipation. It would not be a wise attitude for them to adopt, because unless they are able, by their ability and efficiency and with all the opportunities given them by this Bill, to provide adequate services at reasonable rates, I think the country may be forced to adopt some other scheme for running the railways.

Mr. DAVIN: Very soon, too.

The PRESIDENT: I hope not. Personally, I am no expert, but I am quite confident that if they put their minds to it—and a satisfactory service depends as much on their doing that as on the shape given to the railway system by any legislative measure—the companies will make good on the basis of this Bill. By making good I mean, chiefly, providing the services the country requires at rates the country can afford to pay. On any basis more favourable to the shareholders than the Bill provides their future would be more doubtful, while as it is, if they can do better [3215] than it anticipates, they retain a share of the improvement gained in each year so that they can steadily progress.

The next point to touch on is the arrangements relating to the baronial lines. So far as the unified undertaking is concerned, it will be expected to provide for any losses in working the baronial lines, while it will receive from the Government for a period of ten years an amount equivalent to the dividends on the capital of those lines. Now, I have said that the losses on working the baronial lines in 1922 was £107,000. In 1923 this dropped to £30,000, and that was a year in which the effects of the disorders were still being felt and traffic was still dislocated. In a normal year the loss on working should not exceed at the very worst £20,000 and of this at least one-half should be saved by bringing the baronial lines under one management. Since the normal working expenses of the undertakings to be unified amount to about 4½ millions, a sum of £10,000 more or less is really negligible. Having a direct incentive to do so, the unified undertaking will no doubt reduce this figure nearly to vanishing point in a very short time.

The figure of £41,000 quoted in the statement issued by the railway companies is, in our view, a serious overestimate, and that statement makes the wholly false point that the loss, whatever it is, will fall on the shareholders of other companies. On the contrary, it must be met out of railway charges, so that the shareholders may receive their standard net revenue. In any event, even if the loss amounted to what seems to us the fantastic figure of £41,000, this would only mean 1¾d. in the ton on the rates for merchandise traffic. The railway companies' own statement quotes 2½d. in the ton as a negligible figure.

With regard to the payment to be made by the Government, it will be seen from the White Paper that the guarantee of dividends is in part a liability of the baronies and in part of the Government. The Government will, for ten years, find an amount equal to [3216] its maximum liability; we are asking the baronies to find for the same period the amount they found in 1913. Thus, of a total annual sum of £48,688, the Government will provide £20,586 and the baronies £21,298; the remainder will be provided by the Local Taxation Account. Since in 1913 the baronies were subsequently relieved out of this account to the extent of some £6,500 they will, under the provisions of the Bill, be paying £6,500 more than their actual net payment in 1913. But this increase is a very moderate amount, compared with their legal liabilities under present conditions which, in respect of dividends, amount to more than £28,000, and in respect of losses on working, to whatever those losses may be. Moreover, their whole liability, now in most cases perpetual, will terminate in ten years. Since, in certain cases, the Bill would involve some increases in the local rate for railways as compared with the year 1913 powers are taken, on the application of any County Council, to spread the rate over a wider area than at present, over the whole country, if desired, and thereby to lighten its incidence. Particular baronies have borne the whole burden for a great many years, and it is anticipated that some Councils, at any rate, will be prepared to ask the whole of their county to see these payments through for the ten years that remain, it being undeniable that the whole of some counties gains definite benefits, direct or indirect, from the maintenance in it of these baronial railway services.

The limit of ten years after which the unified undertaking will continue without payments from the Government has been fixed, because as a plain matter of business the unified undertaking will, before the expiration of that period, either have realised our expectations to an extent which will make baronial dividends a negligible item, or else will have been replaced by some other system. An arrangement which necessitated the maintenance of guarantees after a period of ten years could not be regarded as a final or satisfactory solution of the Irish railway problem.

The arrangement by which some of the larger companies are to be amalgamated [3217] first and the smaller companies then absorbed is adopted simply as a matter of convenience. If each company has to negotiate with all the others the discussion and settlement of terms, by agreement or by the tribunal, would go on interminably. If the larger companies are first amalgamated as the nucleus of the scheme half the work is done, and decisions as to the terms on which the others are to be absorbed are then much simplified.

There are not many other points to which I need refer now. Though there is a detailed agreement in operation governing the procedure for dealing with questions of wages and conditions of employment on the railways, we have not scheduled it to this Bill, as was done in England, because the creation of the unified undertaking will presumably involve corresponding changes in the wording of the agreement. We have, however, provided for any such agreement being given official recognition so far as it may be desired.

The present charges made by the railway companies result from an Order issued by the British Minister of Transport in 1920. As the fixing by the railway tribunal of the new standard charges must necessarily take a considerable time, we have provided for an interim review by the tribunal within three months from the passing of the Bill, of the rates authorised by that Order, so that if there has been a change of circumstances since it was made the change may be reflected in modifications of the rates.

Certain powers relating to the railways crossing the Boundary are taken by the Bill. Provision is made for the tribunal to hear any applications by traders or the companies for modifications in existing rates for conveyance on the lines within the Saorstát, which the tribunal will determine by reference to the reasonableness or otherwise of those rates. This corresponds to a similar power retained by the British Government in respect of rates on these railways across the Border. The Bill also requires all railway companies operating in the Saorstát to make full disclosure of any agreements relating to the conveyance [3218] of traffic originating in or destined for the Saorstát.

Questions relating to canals and inland waterways have recently been discussed in the Dáil. An inquiry supplemental to that of the Canal Commission and directed primarily to the commercial aspects of inland navigation is now proceeding, but we are not yet in a position, even if the necessary funds were available, to put forward a drastic scheme of re-organisation for the Canals. The old Railways and Canals Commission, however, had power to deal with questions relating to the facilities and accommodation provided for traffic on the canals and this power is transferred to the Tribunal under the Bill. Charges on canals are at present regulated by orders which the Minister for Industry and Commerce has power to revise under the Statutory Undertakings (Continuance of Charges) (No. 2) Act, 1923, after reference to a body called the Rates Advisory Committee. The Bill substitutes for that Committee the Railway Tribunal, so that it is on the advice of the Tribunal the Minister will act in any revision of existing charges. Canal undertakings are empowered by the Bill to complain of exceptional competitive rates instituted by railway companies. So that this Bill, while it does not purport to effect a re-organisation of the inland waterways, does give the users of them definite means of redressing grievances in respect of charges, accommodation and facilities for traffic and against undue rate-cutting by rival railway undertakings.

Mr. DAVIN: Does this Bill include control of the Royal Canal by the new amalgamated company?

The PRESIDENT: Yes. The suggestion was at one time made that the Government should nominate some directors on the unified Railway Board, but, after careful consideration, this suggestion was not adopted. Such directors would be in an anomalous position with a divided responsibility. It is preferable o take powers, as is done in the Bill, for the Ministry for Industry and Commerce to obtain full information about all details affecting [3219] the working of the undertaking; with these powers and the right for the Ministry to appear in proceedings before the Tribunal the public interest should be amply safeguarded.

These are all the points into which, I think, it is necessary to go at this stage. All I have to add is this—the Government puts forward this scheme as the only one which, after close and unprejudiced examination, it believes to be consistent with the public interests of the Saorstát as a whole. It is a scheme which strikes a fair balance between the interests of railway proprietors on the one hand, and traders and public on the other; it provides equally for our internal and our external traffic; for main lines and for baronial lines it preserves undiminished all the present rights and interests of English companies and of Northern companies without surrendering or derogating from our economic independence. And, lastly, it secures, in a reasonable and at the same time effective manner, for the necessary public supervision over an essential service.

Mr. HEWAT: Are we to adjourn now?

AN CEANN COMHAIRLE: The Dáil stands adjourned until 2.30, when Deputy Hewat will resume the debate

The Dáil adjourned at 1.30 p.m. and resumed at 2.45 p.m., An Ceann Comhairle in the Chair.

Mr. HEWAT: We listened with pleasure this morning to the President's explanation of the Bill before us now for Second Reading and called the Railways Bill. The statement of the President was evidently very carefully prepared and indicated, I think, that he was not very sure of the reception the Bill was going to get, and he was at very considerable pains to put forward a strong case for it. This Bill proposes to establish unification of the railways of the Free State. Naturally, one would like to have an explanation as to why it was necessary for the Government to bring in a Bill of this very drastic and far-reaching nature. There [3220] are three bodies of people concerned largely with the railways:—The railway owners covered by the Directors and the management, who are the representatives of the shareholders; there are the business people who want the convenience of having their goods carried over the railways at the best possible terms; there are the public who look to the railways to give them certain accommodation. These three parties have intimate association and connection with the railways, and one would expect that the introduction of a Bill in Parliament would be at the instigation of one of those groups, if not possibly all. I fail to find that among any of the three classes there has been any demand for a Bill such as that now before the House. We must, therefore, look to find out what is the cause or inspiration of the Government's movement in this direction.

The President in his statement has indicated that the baronial railways, a very small section of the railways, are in a bad way. He has instanced the case by pointing out that freights and rates are very high, and that this Bill is intended as a remedy for these two evils. I rather think that the inspiration has come from outside the Saorstát altogether. At the end of the Great War the railway companies in Great Britain and Ireland, following the very deleterious effects of the necessary control which operated over them in connection with the war, found from the experience they had gained, or rather the Government had found in the network of railways covering Great Britain, and owing to the urgency of getting down rates, that there was a lot of unnecessary competition amongst the railways in Great Britain. They proposed to the railway companies that they should handle this matter themselves, and very much on the lines of the quite successful policy that was followed by the banks in amalgamation, and which resulted in the creation of the Big Five, and they considered that something on the same lines applied to the railways would be useful and economical. The railway companies propounded their scheme. In other words, they fell in and co-operated with the Government in their effort to do what was undoubtedly a desirable thing. But [3221] you do not find that the Britisher, and however we may look at the Britisher as being a stupid person as compared with the more brilliant Irish, we do not find that he is in any way unable to mind and to administer his own affairs in a very successful manner.

Now, clearly the policy of the British Railway Amalgamation is to amalgamate, but still to keep the competitive elements alive. The British railways and the British Government did not go to the L.M. & S. and say: “You must amalgamate with the G.W.R.” They did not do any such thing. They said to the G.W.R.: “You form a group, and let the L.M.S. form another group,” and that has been successfully accomplished and carried out. I ask any Deputy in this House who knows anything about railway matters to look at the results of the amalgamation of the railways in Great Britain and to say whether it has had the effect of eliminating competition.

I say to-day there is a growing competition between these people, a sane and wholesome competition, not a cutthroat competition, but a sane and healthy competition amongst these railways in Great Britain, which is of eminent importance and advantage to the trading community. We see the effects of it over here. Now, in our desire not to be behindhand in this railway question, I understand that the Government have said to the railways here: “Go thou and do likewise.” As far as they have done that I am with them. In so far as they propose this Bill I condemn it; I condemn their methods, and I ask the Dáil to condemn them. The basis of this Bill is unification of all the railways. The Free State main railways are the Great Southern and Western, operating from Dublin to the South, and the Midland Great Western, operating from Dublin to the West. These two railways have no more cause to amalgamate than would the G.W.R. of England with the L.M.S. There is no earthly justification for amalgamating them. They practically do not touch one another; the are separate entities, serving separate districts, and what I might almost call separate peoples. The amalgamation of these two railways, in my opinion, [3222] is not in the interests of the Free State in any way. I say that the amalgamation of these two railways is not going to save anything that matters in administration, but, rather, in my opinion, it is going to saddle a monopoly upon the people, which they are going to pay through the nose for, and is going to establish an autocratic control of the railways that will be unapproachable by business men, and is going to establish a stranglehold on the country as a whole.

Take the case of the Great Southern and Western Railway. They were approached and asked to consider the taking in of companies. I understand they did so, and put forward proposals to take in practically all the railways in the South of Ireland. It seems to me that, in doing so, they showed sanity, because that would give continuity to the railways which is very desirable. In connection with that amalgamation, there may be some railways under the title of baronial railways. It is not too much to say that that larger amalgamation would be saddled if necessary with any railways that the Government felt that they had an obligation for in their own district.

The President made some points in connection with the baronial guaranteed railways, and as to their inability to make dividends for their shareholders. They certainly are a charge, in some cases, on the county or the barony. If that charge were spread over the whole county it would not necessarily be much; but, at all events, on the basis of their being originally built—I presume they were built on the claim of the people of a district that a railway should be made—I think the people might be reasonably expected to have had the foresight or the knowledge to form an opinion as to whether the railway would pay or not. At all events, if it was at their instigation that the railway was built, and if they willingly and voluntarily committed themselves to pay a charge, and if the thing was a failure, it does not seem to me that the whole proposition raised by these railways being run at a small loss is any justification for a wide-spread measure of unification such as is involved in this [3223] Bill. I do not think that they present any very great difficulty; certainly not an insuperable difficulty, in connection with the railway problem.

The basis of this plea for unification is that the railway charges are high, higher than they should be, and that must be admitted. We must also recognise that in the year before the war, the year 1913, the railways were not doing anything wonderful in the way of making profit, but still they were in a sound financial condition. During the period of the war they came under control owing to the war. After the war, we had our own little war, our own big war, and we have just emerged from that, and as we all hope have emerged from it for good, but if we have emerged from that state of affairs, is it not fair to ask that the railway companies should be allowed to go on in peace and see how far their difficulties have been overcome? With a better state of trade in the country, and a more peaceful outlook, the railways would materially benefit, and I, for one, am not in the least pessimistic about their position. Why, therefore, this question of unification? If the unification proposition came from the railways themselves, while not agreeing with it and probably resisting it, still it would not have the insidious effect of a Bill proposed by the Government, involving Government control and practically putting the railways in the position that really in my opinion would be almost better covered by the Bill proposed as a Private Bill in this House and discussed and rejected by this House, which was put forward by the Labour Party. What is the difference between these two Bills? In this Bill, in my opinion, the Government can take control. They do not take any responsibility for financing in so far as the financial running of the railways is concerned. They are run as private concerns. This Bill is only a step in the same direction as that which was advocated by Deputy Johnson when putting forward his Bill for the nationalisation of the railways.

Now, if nationalisation is going to be an accepted principle as regards the Free State, it is well we should [3224] know it. You cannot stop at railways. What are the railways? The railways are a highway through the territory.

Mr. DAVIN: A public highway.

Mr. HEWAT: Many of the railways on the Continent were built—certainly they are all controlled by the military situation. In other words, they are largely strategic highways which the Government and the military see will be a useful engine in the event of war. There is no such question arising here. We are an island, but our railways are largely fed by coastwise and foreign shipping. The outlet from Ireland is through the ports. The inlet to Ireland is through the ports. As regards the coastwise and foreign shipping, that is a natural link—if I might put it as the missing link—which links up the two lines of railways on one side of the water and the other. If you have any question of the nationalisation of railways, can you stop there? I think not. I think you have got to take into account the connecting link. That in itself would, I think, in the future some time, lead to the nationalisation of shipping. But at all events, in either case it will, if accepted as a principle, effectually do away with private enterprise. In my judgment private enterprise is the principal incentive by which business should be carried on. Any interference with private enterprise is not, I think, for the good of the country, although other parties may argue the question from the other side. I think the trade largely depends on initiative. Initiative is not the most conspicuous feature in connection with Governmental control. Without initiative I think you are apt to get want of efficiency in management.

Mr. DAVIN: We have it in wars. I mean you have initiative.

Mr. HEWAT: I think that is a very apt interruption. I am obliged to Deputy Davin for the interruption. We have had experience of control and nationalisation during the war.

Mr. JOHNSON: And initiative, too.

Mr. HEWAT: Will any businessman say that he wants a continuation [3225] of the state of affairs that existed during the war? I do not know whether anybody would advocate that state of control, but at all events I have a very strong opinion that the very acceptance of the principle of nationalisation will cut at the roots of private enterprise to an extent that you in the Dáil cannot realise at the present moment. I go so far as to say that our building difficulties to-day largely arose from Government interference, and Government interference right through has created, or, rather, has prevented a settlement of the housing problem and has made it a very expensive proposition for the country. I expect you to call me to order for that as a distinct digression from the subject. I think the President anticipates that in the unification of the railways a large amount will be saved in connection with management that will enable a reduction to be made in the rates and charges of the railways. In that I think he is very sanguine. May I say also at the same time that I think if the railways had not had this question of Government interference before them for the last 12 months they would have made a better and more successful effort to meet the real needs of the traders in the country, and would certainly not have taken the passive attitude that they have taken in connection with the demand for reduced rates. I am not in any way speaking for the directors or for the railway management. I do not profess to consider that they are perfect. I do not profess to say that improvements cannot be made, but we had better get this question out of the way. If we get the question out of the way one way or another, I think that the road will be clearer for individual effort on the part of the business man to get redress from the railway company, and in that way I am glad that at all events the Government have brought this Bill before us. With the following they have at the present time, the reconstructed following, if I might put it that way, I think there is very little doubt but the weight of the Government Party will carry this Bill through. I think possibly, added to [3226] the weight of the combined Government Party, will be the weight of the Labour Party.

Mr. DAVIN: Question.

Mr. HEWAT: We want to hear about that. If that is so, the few of us here who are styled as Independents, will not have much effect. We will be up against a stone wall. But whether we have or not, at all events we have a right to express our opinions, and throughout the whole of this Bill I hope we will give expression to very grave difference of opinion with the Government on this matter. If by chance we can persuade the Government that they are entering on a very dangerous road, even in doing that we will have done good work. This is a new Government and a new administration. We have started on two bad roads. Are we going to pull up in time or are we going on to what is going to be either the millenium or destruction? It may be the millenium. It may be that the country will demand that state control will enter into their lives and interfere with their pleasures.

Of the two cases in point recently, one is in connection with Clause 8 of the Housing Bill, and the other is the whole of this Bill. I do not say in regard to this Bill that there is nothing in it I approve of. I think there are many valuable suggestions which may be dealt with by the railway management as a whole; but I see no reason why this Bill should be put into operation at the present time. I see very grave danger ahead of us in putting it into operation. If the Dáil is willing to pass the Second Reading, we then pass into Committee. I am not going to attempt to go into the different clauses or proposals in it; but on the Committee stage I hope we will concentrate on trying to do away with the worst parts of the Bill. At the present stage I am only concerned in asking the Dáil not to touch this evil thing; not to give it any Second Reading. I ask the Dáil to throw it out straight away on its head; and, if they do not do that, the responsibility is theirs. I protest, and I will call for a division in due [3227] course, and whether I am in a minority of one, or whether I have two or three or six followers, at all events it will be on record that I objected to this Bill.

Captain REDMOND: As far as I am concerned, I shall certainly go into the same lobby with the Deputy who has just sat down, but not, perhaps, from the same motives that he has expressed. I think this Bill as it appears upon the paper should be approached, in the first place, from the national as apart from the particular point of view. I must confess that personally I am of opinion that the whole project is premature. My reason for that opinion is that no case has been made for immediate interference with the existing railway systems in the Free State. The railway systems in Ireland are one of the few, the very few, links which still remain between the Free State and Northern Ireland. I fear that by proposing to deal with a section of that system, namely, the railways in the Free State, we shall be only building up another bulwark against the final unity of our country.

This Bill confines itself, not to all indeed, but to only certain of the railways in the Free State. The Great Northern Railway is, to a large extent, within our territory. To my mind any measure dealing with the railway system of the Free State, and leaving out of consideration the Great Northern Railway, is like producing Hamlet without the Prince of Denmark. Not only is the Great Northern, but also several of the lines bordering upon the North of Ireland, are left out. Why? For the very good reason, as stated, that at the moment we do not know where the boundary is, and most of us hope that there will be no boundary at all in future.

I venture to protest against this tightening up and cementing, as it inevitably will be, of the unfortunate position of temporary partition which we find ourselves in to-day, by cutting off portion of our railway system from the railway system which should be one and unified throughout the whole country. I think it will be also another difficulty in regard to the Boundary question. It could hardly be suggested [3228] that our friends in the North of Ireland would be in favour of giving a monopoly to certain railway companies in the South if ever they (the Northerners), as we hope they shall, see their way to join up with the South.

I noted the President's remarks when he said that he did not consider it good policy to bring in the Northern railways. Of course, it is not good policy to bring in the Northern railways; but I go further and I say it is not good policy to here and now adopt a system which will not be compatible with the future working and desires of the controllers of the Northern railways. I believe this proposal of the partial interference, and what I might style hybrid monopoly, will not bring about the future unification of our railway system. Now, talking about monopoly, the speaker who has just sat down objects to this Bill, because he says it is only a step in the direction of nationalisation. I object to it from a totally contrary point of view, because my view is that if there is to be a monopoly let it be a State monopoly, and not a hybrid production such as this is, controlled as it is to be, not entirely by the State, not entirely by the directors of the various private enterprises, but controlled by a mixture of both.

The argument that is put forward that the group system in England has done away with competition does not stand for a moment. It is said that the rates on the various lines were similar, and are similar to-day. Well, that is true, but there is no doubt about it that though the rates may be the same, if the general public have an option of an alternative route, they certainly also have the option of the choice of alternative facilities and accommodation. The object of this Bill, the main object I take it, is to reduce the rates. I cannot, for the life of me, see upon the face of it how the rates shall be reduced by this measure. We hear use made of fine phrases, such as economy and efficiency. All very nice in general, but in particular, I fail to see how by this proposal—at least it has not been shown to my satisfaction—any greater economy or efficiency is to be brought about. It is true, perhaps, that there [3229] shall be a small saving in Directors' salaries, and in a few officials also, but that will be a very small amount when spread over the working of a great system such as this will be. What I would like to know is: Have the public been in any way consulted in regard to this measure? Who wants it? Do the railway companies themselves desire it, or do the general public desire it? Because, unlike, perhaps, my friend upon my left, I regard the railways, though they may be nominally private property, as the public highway of the people. As far as I can learn, there has been no demand from any class or from any quarter for this particular measure. It is true that there has been, and is, an incessant demand, and a right demand, for a reduction of rates, but I have yet to learn how this measure will bring that about. The President dealt with some specific details, and I would like to take the opportunity to refer to one or two matters with which he dealt. He stated that there was opposition to this proposal from the Dublin Port and Docks Board, and gave a fair account of their attitude in the matter—because they believed that it would be injurious to the trade of Dublin and that, in particular, certain agreements embodied in British Acts of Parliament, which are to be perpetuated by this Bill, will operate injuriously as against Dublin. But Dublin is not alone in this regard. The agreement referred to by the President is contained in clause 19 of the 7th Schedule of the Fishguard and Rosslare Act of 1899, and that was an agreement between the Great Western Railway of England and the Great Southern and Western Railway of Ireland. That agreement provides that these two Companies were to undertake to use every endeavour to send all traffic via Rosslare. Now, that agreement worked in the past most detrimentally to the city of Waterford, and presumably also to the City of Dublin, but it is proposed to perpetuate it in this Bill, and I must certainly, at this stage, protest most vigorously against a proposal to perpetuate that agreement for the benefit of private Companies for the use of a private port, as against the general public for the use [3230] of the public ports of Dublin and Waterford.

The PRESIDENT: Might I ask if the Deputy is urging that it would be in equity for us to move that it should be determined?

Captain REDMOND: Yes, Sir, I am in favour of doing away with all these agreements. If this Bill is persisted in I would be in favour of scrapping all agreements in existence as between the various private companies who previously were permitted to run as private companies, but who are now to be embodied in this proposal, and treated, not as State concerns entirely, but as half-private and half-State bodies. The President also mentioned the agreement between the Dublin and South Eastern Company and the London North-Western Company in regard to Dublin. If this Bill is persisted in I would also be in favour of scrapping that agreement. As far as the trade of Waterford is concerned, it may be of interest to know that previous to the Act of 1899 there were six sailings per week from the Port of Waterford of full ships, and that since then the sailings have been reduced to three, and very often they have not full cargoes. In spite of the Government's protestations, both through the mouth of the President and in the Bill, that they do not intend to give preference to one port over another, I say that the perpetuation of this agreement between these private companies is nothing less than giving a preference to a private port over the ports of Dublin and of Waterford. Certainly, as far as that is concerned, I shall most vigorously oppose it. The Bill in many other respects deals with other agreements, and again I say that I am prepared, if the Bill is to go through, to scrap all these private agreements. The President also stated—I do not know whether it was a quotation or his own statement—that “for internal traffic, Irish railways are essentially non-competitive.”

The PRESIDENT: It was a quotation.

Captain REDMOND: As a general proposition, I might subscribe to that statement, but there are certain outstanding exceptions, and the City of Waterford is one particular instance. That city is served by two systems [3231] —the Great Southern and Western and the Dublin South Eastern—and while the rates may be the same in regard to both, yet at the same time the public in the districts served have always the alternative I have previously mentioned, of service, and facilities, and accommodation. It may be said that one of those systems is not very efficient. That may be so, but if the Bill passes the risk is that both of them may not be efficient. What I especially object to is the proposal to place the whole of the South of Ireland in the hands of one monopoly, not controlled entirely by the Government and not controlled entirely by one company. What is usual in these cases is that everybody's business is nobody's business. I do not think that there is any reason for the introduction of this Bill. I think that it would be far better if this matter were left until the Boundary question was settled, one way or the other. I think that it would be far better if the railway companies were given a chance. They have gone through a serious period, like the rest of the country, for the last two years. They have not yet been able to show what they would be able to do when they would have had time to recover. There is no doubt that the conditions prevailing in regard to wages, etc., have a great deal to do with the rates; all that being so, I fail to see why it is necessary to bring in this measure now to bind us in the Free State to a policy in connection with a portion of the railways, even in the Free State, and for which approval certainly has not, as far as I know, been got, and even as far as I am aware, not been sought, from the people in Northern Ireland. I think that it would be a good thing for the future unification of the country if the railways at least were let alone for the moment and if the railway companies were allowed to endeavour to compete with one another for the benefit of the public at large.

Mr. JOHNSON: Deputy Hewat has told the Dáil that he will oppose this Bill from the beginning to the end, even if he is the only opponent; and he has again informed us of his consistent opposition [3232] to every vestige of State control. He is in favour in railway affairs of private enterprise, and he believes that if only the trading community had been free to approach the companies individually, they could have done better out of the companies than by any other means. It is refreshing to hear the advocacy of a Deputy so consistent in his opposition to any vestige of State control as Deputy Hewat. He has not said, of course, that he is in favour of allowing any group of people to build a railway, as another representative of public organisations advocated; and he has not explained how it happened that there have been three, four or five public Commissions to inquire into the working of the railways in response to the public demand, the demand of traders, merchants and farmers, about the unsatisfactory working of the railways. It has not been made quite clear to us how all this vast volume of opinion for a generation or two should have declared that something had to be done to interfere with the railways, the private control of the railways, and that the free approach of the merchants, traders and manufacturers to the companies was not enough. As a matter of fact, time and time again have there been appeals to Rates Commissions, and demands made that the powers of these rate-fixing Commissions should be enlarged, and these demands have come so continuously from the merchant and trading community that it is, as I say, a surprise to learn from one who speaks authoritatively, I suggest, for the merchant community of Dublin at any rate, that all that is required to bring a perfect railway system into being is to allow the free operation of private enterprise and no Government interference. Deputy Hewat spoke of the absence of a demand for this Bill; no public interest had requested it. He spoke of three elements that might be likely to call for a Bill of this nature, or at least a Bill dealing with railway services, railway owners, the business interests and the public, and I want to call attention to the distinction between the business interests and the public. Deputy Hewat drew attention to the fact that in approaching the consideration of this measure the Government had apparently taken its cue from the [3233] action of the British Government in regard to the British railways, and he said that the Government had approached the railway companies with a message: “Go thou and do likewise.” He regrets that the railways had not been able to do likewise; but I would ask Deputy Hewat to note that the Government has gone and done likewise. They have, as a matter of fact, taken over, word for word, many sections and clauses of the British Bill. They have done exactly with the Irish Bill what the British Government did with their Bill in regard to British railways. I am not very often in agreement with Deputy Hewat in such matters as railway control and railway service, and public questions of economics generally. I suppose I am not in agreement with him on the question of economics on this occasion, but I have arrived at the same conclusion by an entirely different road. I agree with him that this is a bad Bill and ought not to pass.

The PRESIDENT: Adversity makes strange bed-fellows.

Mr. JOHNSON: Deputy Hewat disavowed his ability to speak on behalf of the railway companies, and I am quite sure he spoke honestly when he said that. He was not able to speak on behalf of the railway companies or the directors in this matter, but we have learned a good deal in recent years, and we have learned even something within the past week of autosuggestion. I make the suggestion again that Deputy Hewat in opposing this Bill, for the reasons he has stated honestly here to-day, is really acting at the suggestion of the railway companies, pretending that they are opposing the Bill, pretending to be antagonistic to the passing of the Bill, but in reality hoping against hope that it will surely be passed, because it is a Bill entirely playing into the hands of the railway companies and the railway directors. They are not opposing the Bill in the least. They are merely suggesting to the public that they are opposing the Bill, because they know the public are not going to respond to the call of the railway companies. They see that their interests are conserved right to the letter. As a matter of fact, they are benefiting in every possible [3234] way by this Bill. They have secured the very best return they have ever had in their history for ever and a day by Government guarantee. They pretend, of course, that this is something detrimental to the interests of the railway companies and to those of the shareholders, but they wink the other eye and say: “Don't do anything that will prevent it passing.” The Government seems to have been taken in— seems only to have been taken in. It has not really. There was an unintentional slip, perhaps unintentional, but the truth slips out. There is a phrase in Section 3 in the last line on the first page of the Bill proper which says “the amalgamating companies may, on or before the 1st July, 1924, submit to the Minister an amalgamation scheme framed in accordance with the provisions of this Act which has been agreed to by all these companies.” This Act which has been agreed to by all these companies. Of course it has been agreed to. It is guaranteeing the very best year they ever had perpetually. That is wrong; it is making them so secure for the day, which is foreshadowed in every line of this Bill, when nationalisation will have to take place, and it is improving the position of the companies and of the shareholders in such a way as to make that position immensely better when they come to bargain with the community in five or ten years' time. That is the purpose of the Bill, and that is why the railway companies have agreed to it.

I regret that the President, in his exposition, or, rather, in his opening statement, did not attempt to expound the Bill with any degree of fulness, but he spent most of his time in replying to criticisms made outside and which, I suppose, were intended to forestall criticisms which might be made here. I suppose it is to be taken as a testimony to the assiduity and care with which Deputies read all these measures and understand them that it was not necessary to explain in non-technical language what the Bill meant, but it has been the practice, either on the First or Second Reading of a Bill of this kind, to give the Dáil and the public some indication [3235] of what it contains. When we did not have an explanation on the First Reading, I hoped for and expected a full explanation on the Second Reading which, by the way, might have been avoided had we had a memorandum explaining the Bill, following the good example set in the Transport and Communications Bill. I suppose we have to be content with the testimony to our ability to understand draft Bills of this kind for ourselves. It is one of the prices we have to pay for the honour of being elected. I have suggested that the purport of this Bill is to make secure the financial position of the railway shareholders, pending the time when the Bill's usefulness has come to an end, or, rather, when the public is generally satisfied it is not useful for the public, but that the shareholders' interests will have been so well-established that the State will require to pay a very much higher sum as compensation, or purchase price, than otherwise it would require to do. “Transition period” is written all over this Bill.

The President in his statement has more or less confessed that this is intended to cover a period to give private enterprise another chance, and as a sop to make quite sure that private enterprise, or rather private unenterprise, is going to be paid well for its lack of enterprise. We are to guarantee to the Companies by means of a scheme of rate-fixing the highest net revenue that ever they earned in their existence. Traders and the travelling public are to be required to pay rates which will secure to the Companies that amount of revenue and, in effect, this is to be a State guarantee of the best period of railway history, when the highest profits were made during the period when self-confessedly those people who did the work on the railways were underpaid, a statement which the railway companies themselves agree to. They say that they were under-paid and that they ought never to be brought back to that same condition, quite apart from any change in the relative value of money. But they are to be guaranteed, at the expense of the trading public, of the farming community, and of the travelling [3236] public, the highest revenue they earned even in those days of sweated labour. In a few years time, when the trading public, and when Deputy Hewat, have been convinced of the inefficiency of private enterprise in railway management, and when Deputy Gorey will have come to the conclusion that railway companies as well as salmon fisheries ought to be nationalised, and when the whole travelling public will say that something must be done to remove this incubus from their backs, we shall be expected to go to the railway companies and say: “What will you take?”

They will say: “You entered into a compact with us. You refused to allow us to continue our own way. You imposed on us a certain obligation with regard to rates, and you guaranteed a revenue equal to the highest years of our earning power. You must base your price on that and give us what you are now depriving us of.” Surely the railways will not object to that. Surely the railway shareholders are going to be behind their newspapers, chuckling, by pretending to be very adverse to the scheme of this Bill. Do not believe it for a moment. I wonder what would be said on the Government Benches if a claim were made from these benches that the highest rates of pay, the average of the highest three years in railway history, were to be guaranteed henceforth by the State with a prospect of a sliding scale upward, such as is in the Bill, for any improvement in earning powers. I wonder would the Ministry say: “Yes, we are going to back that proposition.” I am inclined even to make a bargain with the President or the Minister for Industry and Commerce, if he will say: “Support this Bill, and we will give you what you ask; we will give a guarantee to the railway workers, and any other public servants, of the average of the highest earnings for the future.” There is no response, I notice, to that suggestion.

The PRESIDENT: I will address myself to that subject afterwards.

Mr. HEWAT: Will Deputy Johnson explain the enormous increases shareholders [3237] experience in the cost of living during the period of the old control?

Mr. JOHNSON: I am not quite sure that I understand Deputy Hewat's interruption. All I know is that the Government in this Bill is proposing to guarantee to shareholders the best three years of railway history, three years before the war, and I am prepared to ask the Government if they will guarantee to workers in those industries the best three years of their history. They will not, of course.

Mr. HEWAT: Hear, hear.

Mr. JOHNSON: Why? They at least worked for their money. The railway shareholders merely wait for theirs.

Mr. HEFFERNAN: They are still waiting.

Mr. JOHNSON: Do not make a mistake. They are not merely waiting. They are receiving, and waiting for the next. Some of them, at any rate, are constantly receiving. The State is coming along now and saying “we will guarantee it, or in effect guarantee it.” Let me remind Deputies that the position we are asked to re-establish is a position that when a trader pays 20s. for the carriage of certain goods he is going to hand over six shillings and eight pence to railway shareholders. The pre-war position was that round about one-third of the railway revenue went to railway stockholders. You may justify that if you can. You may be pleased or displeased with it, but that is the proposal of the Government to ensure for the future that such a position of affairs would be maintained.

There are a couple of sections in this Bill to which I want to draw special attention. Notwithstanding all that Deputy Hewat speaks about national control, there is, in fact, no national control. He speaks of it as a hybrid. I agree. One half of the hybrid is ineffective, the companies are dominant and the State is recessive. [3238] There is no national control, and there is no assurance that the railway rates are going to be reduced. There is not the slightest likelihood of any advantage coming to the trading, farming, or travelling community through the operation of this Bill. There is to be a tribunal. A railway tribunal is to be set up, and almost at once it is proposed to have in hands an examination of schemes proposed by the company, or failing those, schemes propounded by themselves for the amalgamation of the companies. At the same time it is supposed to be engaged in a revision of rates. All this is to be done before the 1st January, 1925. You may think that is an impossible task. You may think that to ask a railway tribunal as from, say, the end of May, to examine and pronounce upon the merits of amalgamation schemes, the fitness of such schemes to suit the national needs, or failing such schemes being satisfactory, to produce a scheme for themselves, and while doing that to be engaged in a revision of railway rates to satisfy the trading community—you may think that is impossible. Everybody will agree that such a proposition was a futility, but it is not so foolish as it seems, because, as a matter of fact, there are provisions in the Bill which will make the work of this tribunal as an amalgamating body quite a sinecure.

They will not have any duties there at all. It is already done. Section 7 of this Bill contains provisions as to the determination of the terms and conditions of amalgamation, and it says: “That for the purpose of determining such terms and conditions the Railway Tribunal shall take into consideration all the circumstances of the case, and in particular the value of the net revenue-earning basis of each of the Companies,” and so on. But Section 9 provides for what are called preliminary schemes, under which the companies may produce schemes and submit them for the approval of the tribunal. All the companies, except one, perhaps, may have come to agreement, and that is all that is required to submit that scheme to the tribunal and it shall be approved. Any two or more companies may submit such a preliminary scheme, and the Railway [3239] Tribunal shall approve of any such preliminary scheme provided that the procedure preliminary to the submission of the scheme has been complied with, such procedure having reference to the shareholders and stockholders, and so on. Section 7, as put into the Bill, is intended to re-assure the public, but it is only a pretence. It is what is commonly called “eye-wash.” These preliminary schemes are already made. The approval of the shareholders, in some cases, has been already obtained, and I think it will easily be obtained, and the Railway Tribunal has no option but to approve. Consequently, the Railway Tribunal's duty in this respect will be very light, indeed.

These clauses are, as well as many others, taken from the British Act, and the experience in the use made of them by the British companies ought to have been taken as a warning by the Ministry here unless they want to play into the hands of the railway companies. I am not particularly concerned, of course, with the interest of railway shareholders as such, but there is a very good reason why we should be watchful. The Great Western Railway of England, under these clauses, made certain agreements. “The Western group” was formed, and under these preliminary schemes there was a decrease in the nominal capital amounting to over fourteen million pounds, but under this scheme, by the manipulation of the adjustments and the proportions for guaranteed interest and debentures and ordinary shareholding, there was an increase of the annual charges for interest on debentures and dividends amounting to over ninety thousand pounds. That is to say, while there was a nominal decrease in the total capital made by the scheme, there was an increased charge upon the public. I am putting it crudely and bluntly, but it is a charge upon the public of over ninety thousand pounds a year additional to what had been charged upon the public for the previous years before the capital had been reduced. There may be other ways of manipulating the shares of these companies so as to strengthen the position of existing shareholders in the stock markets, of improving their position in the stock markets, [3240] but at the same time imposing a future obligation upon the public, the trading public, or the travelling public. We will find that under these schemes there will be, by one means or another, changes in the capitalisation. Capitalisation may be too high. At any rate, the total guaranteed interest will be increased, the obligations to shareholders will be greater, and the charge upon the public will be enhanced. Then we shall have, in a few years' time, the cry as is so often repeated by companies which have manipulated their shares: “Our earning capacity is not high enough; look at the low rate of dividends we are paying; we must have powers to raise our rates and powers to raise our charges to enable us to pay a fair dividend on the capital invested.” In this way the Railway Tribunal will be obliged to enter into this nice little scheme of putting its finger into the eye of the public under the guise of a scheme for protecting the public.

Now the plea is made by the President, and I have no doubt at all it is a bait that is thrown out to farmers and merchants and the trading public, and to shopkeepers who may be represented on the Government Party. Benches, that they will be able to apply to the Railway Tribunal to ensure that rates will be reduced. The cry will be for lower charges for railway transportation, and they will be told: “We shall be able to go before the Rates Tribunal, and they will fix reasonable rates in the interests of the public.” Well, I do not know whether, when you have railway companies whose reason for existence, as Deputy Hewat says, is to satisfy the demands of shareholders and to respond to the stimulus of private enterprise, that those railway companies and their servants, the railway managers, will not be able to do better for the companies than the tribunal will do for the public.

AN LEAS-CHEANN COMHAIRLE at this stage took the Chair.

Mr. JOHNSON: Remember that this Tribunal is not a Tribunal which is going to adjust the rates fairly as between interest and interest, all being parts of the public. It is going to try and adjust the rates as between the public and the railway companies, the railway companies not [3241] being part of the public as a public institution serving the public for public interest, but the railway company being as a private monopoly seeking to improve its financial position at the expense of the public. The railway tribunal will be bombarded by different interests, none of which interests will know the case for reduction as well as the railway companies will know the case for maintaining the present charges. I propose to quote again the statement of a railway manager, one of the Commission that sat and discussed the Irish railways under the Scotter Commission, Mr. Acworth. Speaking of the utility of appeals to tribunals of this kind, he said: “For every shilling cut by an expeditious tribunal off a rate it is easy for railway companies, if they are agreed to act in harmony with each other, to withdraw two shillings worth of facilities, and the traders may make up their minds that this is what must inevitably happen if the railway companies are confronted with lower rates simultaneously with the rapid rise of working expenses. Assume that your Tribunal can fix a reasonable rate; what is the use of it unless it can schedule to its judgment a minute specification of the quality of service to be given in return for the rate. The railways can bring down troops of expert witnesses. How can the Tribunal refuse to hear them when every student of railway economics knows that the reasonableness of each particular rate depends not merely on its own individual circumstances but on a comparison with all the other rates, and a consideration of the company's entire business. But for a farmer or a shopkeeper, with the assistance possibly of a local attorney to undertake to fight trade railway experts with the lifetime's experience and with every fact and figure at their finger's end is only to court defeat.”

We are asked to rely upon this railway tribunal to fix rates, after hearing the evidence of inexperienced and perhaps inefficient amateurs in opposition to trained railway experts, who have every fact and figure on their finger's end, before a tribunal set up to fix rates. The chances of getting a reduction in railway rates before this tribunal are [3242] very small, indeed, and there again I agree with the dictum of Deputy Hewat. But supposing the House is prepared to give a Second Reading to this Bill, the case has not been made, and no attempt has been made to make a case, for the Bill by the President. All he has done is to reply to criticisms which had been made before the Bill had been explained. But supposing the House is convinced that, at least, a Second Reading should be granted, what are we to say about the omissions? Why, for instance, has the Ministry forgotten that monument to railway efficiency, one or the seven wonders of the whole of Ireland, the Lartigue Railway? Why is Ballybunion left out?

Captain REDMOND: And the Blessington steam tram——

Mr. JOHNSON: The Blessington steam tram is in a different category. The Blessington steam tram requires consideration from a different angle. The Lartigue Railway is a curiosity, and attracts visitors from all parts of the world. The Lartigue Railway is quite a phenomenon, and why not preserve it and keep it in being so that the Tailteann visitors will have an opportunity of learning something about balancing?

But seriously I do not understand why, if we are to consider the unification of Irish railways, any railways that are serving, quite efficiently within their limits, the districts which have asked for them, and which have been served by them for a good many years should be left out. It seems to me that the Bill ought to include both the Blessington Steam Tram and the Lartigue Railway and any others that may have been omitted, but certainly those two are railways. Although the Blessington steam tram is called a tram it is, in fact, a railway, and has been guaranteed in the same way as other baronially guaranteed railways have been, and there is no justification whatever as far as I can see for omitting these railways from the scheme.

That, no doubt, is a matter that will have to be discussed more intimately in Committee, but I am putting in this plea at this stage in the fear that the Bill may get a Second Reading, and in the hope that if it does get a Second Reading that the interests of people concerned [3243] in and round about these railways shall be taken account of just the same as every other railway within the Saorstát. I agree a good deal with what Deputy Redmond has said about the defect of the Bill in respect of the Northern railways. The Northern railways ought to have been included in this Bill; certainly the Northern and such other railways as come into the present jurisdiction of the Saorstát. Whatever we might say about the provisoes or modifications of a temporary kind, there ought not to be exclusion of any railways from the purview of the Bill.

I think that the Bill fails in one other respect, and it signifies a departure from the policy of railway amalgamation, or, shall I say, a departure from the policy which has been so closely copied, of railway amalgamation in England. The intention, at any rate, of the promoters of the Bill in England, was that there should be an active policy of co-ordination of transport services in general. Sir Eric Geddes, when moving the Second Reading of a similar Bill in England, said:

“The Government has come to the conclusion that some measure of unified control of all systems of transportation is necessary; that there must be somebody who can be asked what the transportation policy of the country is, and whose responsibility it is to have a policy. There is none to-day, and it is only the State—the Government—that can centrally take that position. With our transportation agencies in the condition in which they are, it appears almost inevitable that to a greater or lesser extent we must forego private interests and local interests in the interests of the State. In the past private interests made for development; but to-day I think I may say that it makes for colossal waste.”

We made a plea for co-ordination of the transport service in the Transportation Bill which was introduced from these Benches. Apparently our plea has had no effect. The Government is quite prepared to allow private enterprise to control transportation services—there shall be no co-ordination; [3244] roads, canals and railways may compete with one another and waste each other's energies and efforts in senseless competition, wasteful competition; that there shall be no feeding one by the other and no suiting the traffic to the particular means of transportation. The Government has failed to respond to that very necessary need, and one which ought to be taken in hand at this stage of the country's existence. We have had hints from the Government Benches of possible developments arising from electric power production. Let us assume that the Shannon scheme is to be a success. Let us assume that big works will be developed, first in the utilisation of the Shannon for the production of power, and secondly, in the building of factories for the developing of industries on a small scale in the western parts of the country. This is part of the Government project. The railway companies are going to get the benefit of it by this scheme, if it is going to do anything. Thousands of tons of traffic will be handed to those companies without any effort on their part. Thousands and thousands of pounds of revenue will come to them without any effort on their part—unearned increment undoubtedly —by the action of the Government and of the community and not by the action of the companies. But we are asked in this Bill to ensure to the companies all the benefits and to guarantee to the present shareholders, or to the shareholders for the time being, the very highest revenue they were ever able to obtain, when private activities prevailed, before Government control began, and when the day that Deputy Hewat thinks ought to continue for ever did, as a matter of fact, exist. The highest period of prosperity is to be guaranteed by State action to the railway companies.

I say that the hope and expectation running right through the Bill is that within a very few years clamour will come from the public for nationalisation. In the meantime the railway shareholders will be assured of their incomes on a higher scale than they would otherwise have been able to obtain, and the price of nationalisation upon the [3245] community will be very much increased. The future burden will thereby be greater than it otherwise would. I say, having refused to consider nationalisation proper, let the railway companies carry on. Let them prove their capacity under the conditions which they themselves had determined. Let Deputy Hewat and those who act with him do their best to make that service an efficient one, but do not allow the State to be used as a means of fixing for a considerable number of private shareholders of railway companies an income which they are not earning, which they could not obtain by their own activities, and which will in future be an incubus upon the community as a whole.

Major COOPER: I did not think I could be astonished by anything Deputy Johnson said, but I confess that when he said that the railway companies and their directors were praying that this Bill might become law it was something of a surprise to me. I do not frequent the society of railway directors. I have no shares myself in any Irish company. I am entirely disinterested. But it did happen that yesterday I was speaking to a director of a railway company, and he expressed the opinion that the terms offered to the shareholders in the Labour Party's Transport and Communications Bill were very much more favourable than those offered in this Bill, and that the majority of the shareholders were now regretting the fact that Deputy Johnson's Bill had been rejected.

Mr. JOHNSON: I know that they were too good.

Major COOPER: Deputy Johnson quarrelled with the fact that the shareholder's revenue is guaranteed; guaranteed, as he said, on the highest scale. What is that scale? “We needs must love the highest when we see it,” particularly when it is a case of return on capital. But that scale is a little over four per cent. Does Deputy Johnson say that that is an excessive return on capital which has rendered public service, because, after all, whatever our views may be on collective ownership, at the time these railways were built— in the middle of the Victorian era— there was no possibility of their being undertaken as a State proposition. If [3246] they had not been built by private enterprise they would never have been built at all. Four per cent. is surely not an excessive return for capital that has rendered a public service. If you put the money in the National Loan you would get over five per cent. These shareholders—no matter what Deputy Johnson may say—are really philanthropists, who have sacrificed a certain amount of interest in order to render a public service. Is it so monstrous that their revenue should be guaranteed? There is a Schedule in this Bill guaranteeing labour—the employees of the railway companies—certain terms. That is in the third Schedule of this Bill, and I seem to remember that there was a somewhat similar provision in the Transport and Communications Bill of the Labour Party. I do not quarrel with that condition, but if labour is going to stand out and say that it must not get worse terms of employment than they have now, surely the shareholder is entitled to take the same view, particularly when the claim is such a moderate one. I rather dislike the talk of shareholders in the abstract. On the whole, I dislike talk in the abstract. The picture of the shareholder as a vague and monstrous entity—conjured up by Deputy Johnson—oppressing the public and taxpayer is not a true one. Shareholders are of all sorts and kinds. I am not going to say they are widows and orphans, because talk about “widows and orphans” affects me in very much the same way as talk about “the aged poor,” but I am going to say that there is no such thing as a typical shareholder. They are of all ranks of society. Many shareholders of railway companies are institutions, some of them religious institutions, some of them charitable institutions, possibly some of them are even trades unions. Trades unions certainly hold shares in English railway companies. I do not know if they do in the Irish companies. Therefore, we cannot conjure up shareholders as a monstrous vision of capitalists battening on the people of the Saorstát. We must consider this as a problem which affects people in every class of society. My first quarrel with the President is on the grounds on which he elected to compensate the [3247] shareholder. He said that he had taken the average of the three highest normal years. I am not in agreement with the claim that has been put forward on behalf of the railway companies that the highest year should be selected. I agree that it should be an average for three years, but I would like a definition of “normal.”

There is no definition, as far as I know, in the Bill, and I do not know why the President selected 1911, 1912, and 1913 instead of 1913, 1914 and 1915; the war only came into being two-thirds through 1914, and it did not really affect the Irish railways. It affected some people. 1915 was not a normal year with me. But it did not affect Irish railways very much until British Government control came into operation in 1917. If I were simply trying to make a case, I should say, “Why don't you take 1917, 1918 and 1919,” because those were absolutely the three highest years? I do not ask that. I think it would be a fairer basis to take 1913, 1914 and 1915 and average them than to take 1911, 1912 and 1913. They were as much normal years, and they have as great a right to be taken into consideration. The difference in the average is not enormous, but I feel it would be a fairer basis in a Bill of this kind.

Now, I come to the question—the rather thorny question—of baronially-guaranteed lines. I would like to say I agree with Deputy Johnson that if you are dealing with baronially-guaranteed lines you cannot make fish of one and flesh of another. If you have a baronially-guaranteed line, whether tramway or railway, if it has a normal guage and has carriages pulled by steam, I regard that as a railway, and I am fortified in doing that by observing that the Schull and Skibbereen Tram and Light Tramway is included in the Bill. That being so, I cannot see why the Blessington Tramway is not included. That is, assuming they are to be included on the terms suggested in the Bill. I have been told the Amalgamated Company, if it comes into being, ought to be very grateful for getting these lines for not