DETAILS OF RAILWAY TRANSIT PROBLEM.
Let us now look at the problem in more detail; and first is the question of the railways. The property to be dealt with consists of 3411 miles of railway, representing a total capital of £45,163,000, of which, at the date of the Report of the Commission, £2,873,000 paid no dividend; the gross annual receipts of the whole system being £4,255,000 and the net receipts £1,690,000, representing a return on the whole capital of 3.77 per cent.[94]
Of these lines, the railways constructed under the Tramways and Light Railways Acts cover 603 miles, of which 322 are narrow gauge, involving a liability on various baronies which have guaranteed interest on capital to the amount of £36,000 per annum. To bring these light railways up to a proper standard and equipment; to widen the gauge in many cases; to provide new sheds, stations, and rolling stock, and redeem the guarantees, a sum of about £5,000,000 would probably be necessary. In addition, projects for no less than eighty-three new railways were brought before the Commission;[95] and it is admitted on all hands, and the Commission find, that practically none of these railway extensions would be undertaken by private enterprise, and that these developments need the credit, help, and direction of the State. Even the necessary improvement of the existing light railways cannot now be undertaken, for under the system of legislation under which they were constructed, there is no means of raising new capital.[96]
Now, what is advocated by the Majority Report is the—
"compulsory purchase by the State of these railway systems great and small, to be then worked and managed by an Irish elected authority as one concern, mainly with a view of developing Irish industries by reduction of rates and otherwise, and not strictly on commercial principles."[97]
This was the scheme supported by the Parliamentary Party, written up unceasingly by the Freeman's Journal, and held out under the term "Nationalisation of Railways," as one of the special boons which Home Rule will bring to Irish traders and farmers.
But mark how the operation is to be carried out. The Commission reported that the sum required should be raised by a railway stock charged primarily on the Consolidated Fund of the United Kingdom, with recourse to Irish rates to make up possible deficiencies, and further, that there should be an annual grant from the Exchequer of not less than £250,000 to the Irish railway authority. Seeing that the Commissioners refer to "the financial terms prescribed by the Act of 1844" (Regulation of Railways Act, 7 & 8 Vict. c. 85, ss. 2-4), and that a cash payment to shareholders was provided for by that Act, it is to be presumed that the Commissioners intended Irish shareholders to be paid in cash. The Act of 1844 provided for payment to the companies of a sum in cash equal to twenty-five years' purchase of the previous three years' annual profits; but this was the minimum only, for it was provided that the companies could, under arbitration, claim additional payment in respect of future "prospects."
Now twenty-five years' purchase of the divisible profits, which at the date of the Commission, were £1,690,000, would amount to over £42,000,000, and if in addition sums had to be raised for "prospects," purchase of lines paying no dividend, special provision for prior stocks standing at a premium, redemption of guarantees, and the large sums required for the extensions and improvements we have mentioned, a sum not less than £50,000,000, and probably nearer £55,000,000, would be required.[98]
From the beginning to the end of the inquiry there was no suggestion that this immense operation could be carried out except by the use of Imperial credit, involving the two conditions: (1) that the Consolidated Fund of the United Kingdom be charged, and (2) that the British public be asked, and should be willing to find the money. Although the Majority Report contemplated an Irish elected authority to work the railways so purchased and amalgamated, it was never suggested that any such Irish authority could raise the necessary purchase capital, or, indeed, any portion of it. The whole scheme from beginning to end pre-supposed the continuance of the Union, with its advantages of credit and capital. Upset that Union, establish an Irish Parliament working out its own salvation, financially and otherwise, and the basis of the whole scheme of railway nationalisation vanishes.
That the British Government should allow its credit to be used to the tune of fifty millions, after full legislative, executive and taxing powers were handed over to an Irish Parliament, is too fantastic to be considered seriously. Whether an Irish or English authority controlled the working of the railways would under such circumstances make little difference, with the Courts of Law, the Executive, and Police in other hands than that of the Government guaranteeing the interest. The security for the advance would be imperilled; and, indeed, it is doubtful whether a tenth of the money required would be advanced, even in London, on those terms. For a similar reason any formal pledge of Irish rates and taxes, to make up deficiencies in working, would be illusory. At any rate, if Irish Land Purchase is to be continued under British credit (and it certainly will be a prior claim and charge), it is idle to expect Parliament to undertake the vast additional obligations involved in Irish railway nationalisation. Parliament would pay the piper but could not call the tune.