T'RA^SACtlONS Ot SECtlON P; 785 



ih another, it would represent a auna of 1,045,000/. on the receipts for tlife year 

 1906 to be made good by profit on purchase, by saving in working expenses, by 

 increased traffic, or in default by the taxpayer. 



Three modes of providing payment for the shareholders and stockholders havd 

 been proposed :— 



First, cash raised on the credit of the State, presumably Imperial credit. 



Second, by Imperial stock, say Consols. 



Third, by guaranteed charge on the taxes of Ireland. 



As regards the first — that is, cash— an Act of 1814 authorises thd pDrchasS df 

 all railways constructed subsequent to that date at twenty-tive years' purchase of 

 three years' average net profits, with pov/er for railways to arbitrate claims for 

 additional payment grouuded on their prospects (which power many railways 

 would be likely to invoke). This in the case of the Irish railways would require 

 about 45,000,000/. cash — a sum which could not be raised without disturbing 

 the money markets to such an extent as to render any accurate calculation on its 

 results impracticable. 



Second, as regards Consols, the transaction would be simple financially, only 

 requiring the issue of sufficient Consols to produce a net income of lfii7,oc>0l. plus 

 some consideration for stocks on which no dividend was paid. This would leave 

 no profit. Both these modes of purchase would involve the railways being con- 

 trolled and managed by the Treasury similarly to the telegraphs and posts. 



The tliird mode of payment would be a railway stock charged primarily on 

 the net receipts of the railways and guaranteed by the rates of the countrj', sufficient 

 to produce the net income of 1,647,550/. p/(fs a percentage for dead stocks. This 

 security would be inferior in capital value to the railway stocks at present on the 

 market ; substantial bonuses should be paid, and dead stocks must be considered, 

 and as a consequence the financial transaction would result in a loss instead of a 

 profit. 



The control of the Treasury and of a JMinister of State would not be popular, 

 and probably would not be acceptable in Ireland. Increased facilities would be 

 expected and would be almost impossible to obtain at the expense of the State, 

 and compensation for injury or loss of goods, or for personal injui-ies, would also 

 be most probably ignored. 



The result would therefore be that unless a cash purchase were carried out 

 ■with extraordinarily good fortune, no part of the 1,015,000/. would be provided; 

 and in the other two modes of financing, the deficit would be increased instead of 

 diminished. 



With regard to the savings, I have made careful estimates, guided by the 

 experience of twenty-five years of railway life. These estimates indicate tliat on 

 purchase by the State on either the first or second basis a saving in working 

 expenses amounting to about 73,000/. per annum could be eflfected, but that if the 

 railways were under popular control in Ireland that saving would be reduced to 

 ftbout 25,000/., unless in both cases large reductions of train service and other 

 facilities were made which would be the reverse of the object for which the 

 purchase is advocated. 



73,000/., or call it 100,000/. in round numbers, would be 2^ per cent, off the 

 rates and fares, a wholly inadequate and ludicrous result to justify such a project, 

 and even were there savings of 400,000/. per annum only 10 per cent, would be 

 taken off" the rates and fares. 



There remains, then, only increase of traffic to recoup the loss : 25 per cent, 

 reduction would mean that for every 100/. at present earned, 75/. would be earned 

 in future. Taking the working expenses at 60 per cent., it would mean that 15/., 

 or one-fifth profit, would arise on every 75/. of receipts, so that to obtain 1,647,550/. 

 of profit the gross receipts should be five times that amount, viz., 8,237,750/., prac- 

 tically double the present receipts, which for the year 1906 were 4,186,422/., or, say, 

 in round numbers 8,000,000/., after deducting the odd figures for light mileage and 

 other .savings. 



To carry the additional traffic would require additional rolling-stock, costing 



1908. 3 E 



