Wednesday, 17 November 1943
Dáil Éireann Debate
Mr. Cole: asked the Minister for Industry and Commerce if he is aware of the extensive Stock Exchange transactions in Great Southern Railway Stocks since 20th August, 1943, and that the Stock Exchange valuation of the total Great Southern Railway Stocks has increased by over £2,500,000 sterling since that date, as a result of inspired speculation, and if he can state the origin of the leakage of information as to the proposed scheme of reorganisation which produced this speculation, and, if not, whether he will have investigations made in his Department and otherwise on the matter.
Mr. Lemass: The information available to me does not indicate that Stock Exchange transactions in the stocks of the Great Southern Railways Company before or subsequent to October 20th were either extensive or abnormal. During the period of two months prior to that date, the approximate weekly average number of such transactions was 88 as compared with a weekly average of 62 transactions during the year 1942. The value of the stocks involved in such transactions averaged 26 of 1 per cent. of the total value of the company's stocks. The average prices quoted during that period for the company's guaranteed preference, preference and ordinary stocks were below the average prices of those stocks during the corresponding period of 1942. The average price of the debenture stock at 66 showed an increase of 10/- on the average price during the same period of 1942.
 The rise in prices which took place after the publication of the company's capital reconstruction scheme was due, probably, to the fact that the number of prospective buyers exceeded considerably the number of sellers. The average weekly number of transactions recorded during the period of three weeks to November 10th was 170, the value of the stocks involved in such transactions averaging .64 of 1 per cent. of the total value of the company's stocks.
I have no reason to believe that any transactions in the stocks of the company since August 20th were, as suggested in the question, due to a leakage of information as to the proposed scheme of reorganisation. The reconstruction proposals were, I am informed, issued to the shareholders as soon as practicable so as to reduce the possibility of speculation and to give existing shareholders the earliest intimation of the proposals which the directors had under consideration. If the Deputy has any evidence to support the statement in his question, I should be glad if he would communicate that evidence to me. I should strongly deprecate the publication of this allegation by the Deputy if he is not in a position to substantiate it.
Mr. Dillon: In view of the fact that it is popularly believed that improper speculations took place in these shares prior to the publication of the proposals for reconstruction by the company, will the Minister cause the entries in the transfer book of the company as from 1st January, 1942, to be laid before Dáil Eireann, and will he require banks that have transactions recorded on that book as trustees for anonymous and unknown purchasers to reveal to Dáil Eireann who these purchasers were?
Mr. Lemass: I think the Deputy has a question to the effect of his supplementary to-day on the Order Paper for to-morrow, and I will answer to-morrow. I think, however, the facts I have given to the House show that there is no foundation whatever for the popular belief to which the Deputy referred.
Mr. Dillon: Does the Minister not think it desirable, in view of the consequences of such incidents in other countries, to allay public malaise in regard to this by the full publication of the facts?
Mr. Lemass: It is obvious from the figures I have given that the percentage of the total stocks of the Great Southern Railways Company that come on the market at all is infinitesimal. In such circumstances, it is clear that a small increase in the desire of the public to buy the stocks or of the holders of the stock to sell them will effect considerable fluctuations in the market value. The facts are, however, that the total transactions during the period to which the Deputy refers were almost insignificant in relation to the total value of the stocks and show in no way whatever that anything abnormal took place.
Mr. Lemass: I am aware that there was in no period of this year any volume of transactions in the shares of the company either in respect of the number of transactions or the value of the shares concerned which was abnormal compared with other years.
Mr. Cole: asked the Minister for Industry and Commerce if he is aware that at the annual general meeting of  the Cork Chamber of Commerce a resolution was adopted calling for a full public inquiry before the proposed scheme of Great Southern Railway reorganisation is approved of by the Government, and whether he proposes to have such public inquiry held.
Mr. Cole: asked the Minister for Industry and Commerce if he is aware that in a recent circular to its stockholders the Great Southern Railway Company has stated that it proposes to liquidate the existing company and to form a new statutory company in which 4/5th of the total capital will be State guaranteed and that it is proposed to ask the Government to guarantee by way of redeemable debentures a total sum of £16,000,000; and whether, in view of the importance of this matter, he will now make a statement to the House on it.
The Great Southern Railways Company has not yet submitted to the Government its proposals for capital reconstruction. I am not therefore in a position to make a statement on it. As to the suggestion that a public inquiry should be held before the Great Southern Railways Company proposals for capital reorganisation are approved by the Government, I would remind the Deputy that a full inquiry was held by the Transport Tribunal which reported in August, 1939. The report of this tribunal is available to Deputies. I do not consider that any useful purpose would be served by another inquiry at this stage. In due course the Government's proposals for new transport legislation will be submitted to the Dáil, and it will be for this House to decide whether or not these proposals are to be carried into effect.
Mr. Lemass: The Deputy's question is a misleading one. The directors of the Great Southern Railways Company  have circulated to their shareholders certain proposals which they intend to submit to the Government. As I have mentioned, they have not yet submitted them to the Government. When they are submitted they will be considered by the Government. The Government's proposals for transport reorganisation will be submitted to the House and will, I expect, be comprehensive, affecting aspects of the transport problem other than the reorganisation of the capital of the Great Southern Railways Company.
Mr. Dillon: Can the Minister at this stage offer any advice to unfortunate persons, bona fide holders of this stock, as to whether they should dispose of their stocks to speculation sharks or hold on to them pending the Government's decision?
Mr. Lemass: As I explained, the intention of the Great Southern Railways Company in publishing that circular to their shareholders was to give the holders of their stocks the earliest possible intimation of what they proposed, so that they could decide for themselves whether to retain or to sell their holdings.
Mr. Norton: Does not the Minister realise that it is of the utmost importance that some statement should be issued at an early date by the Government to steady the speculation in Great Southern Railways shares——
Mr. Norton: ——because many persons believe that if the Government will guarantee this capital the shares may be of a higher value than they are now, and in order that small investors may know exactly where they stand, will the Minister take an early opportunity of making a statement on the matter?
Mr. Lemass: The Great Southern Railways Board has been at pains to make the full facts available to their shareholders. At the earliest possible date they published the details of their proposals. As soon as they received from their shareholders intimation of the assent of the majority of them to the proposals, they announced the fact in the newspapers. The proposals will now be submitted to the Government and as soon after that as possible the Government's decision on these proposals will be made known.
Mr. Lemass: I do not think we can deal with this by way of question and answer. The chairman of the Great Southern Railways Company was appointed by the Government. He was appointed by the Government with a special job to do. The Deputy can assume that in all questions relating to transport the Government consults everybody who is likely to be of assistance to them and an obvious person to consult is the person they appointed to be chairman, during the emergency, of the Great Southern Railways Company. Discussions have also taken place with other transport interests.
Mr. Lemass: I am not going to give that type of reply as it would be misleading. The position of the Great  Southern Railways Company is under constant discussion between myself, the officers of my Department and the officials of that company and other transport organisations. It is quite obvious that the original intention of the Government, which was to leave permanent transport reorganisation until after the emergency, had to be amended. The fact that the Government had amended that decision and was proposing to introduce into this Dáil proposals for permanent transport reorganisation was made known to the public before the general election in a categorical statement of the Government's intention that, if reelected, the undertaking given by the Government to the public before the election would be honoured.
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