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.
There remains the alternative of the new Irish Parliament financing the operation. This it must do by means of payment in cash to the selling shareholders, for reasons which will be hereafter stated, unless it wishes to start its career by a scheme of spoliation, which would not merely rob the shareholders (who are mostly Irish), but would destroy the credit of the Irish Government. Mr. Redmond has recently acknowledged that a large number of Irish railway shareholders are good Nationalists; and it is certain that a great portion of the ordinary stock is held by Irish farmers and traders; and much of the preference and debenture stocks are also held by Irish charities, convents, diocesan trustees, and monastic institutions. These persons will expect, and justly expect, cash on a compulsory purchase, on basis of market value, or capitalisation of dividend, so as to secure the same return of interest.
Could the Irish Government borrow £50,000,000, and at what rate? To borrow at a higher rate than the present return on Irish railway capital, namely, 3.77 per cent., would be to incur a loss on working the railways, from the outset, which Irish ratepayers or taxpayers would have to make up. The net receipts, at the time of the Commission's Report, were, in round figures, £1,600,000, and thus to borrow £50,000,000, even at 4 per cent., would mean an annual loss of £300,000 a year, even if there were no sinking fund. A 10_s._ per cent sinking fund would increase the total annual loss to £550,000.