No. 50 NAI TSCH/3/S14573/C
Memorandum for Government by the Department of Industry and Commerce
'Great Northern Railway'1
(Secret)
Dublin, 26 September 1951
- The Minister for Industry and Commerce desires to report, for the information of the Government, the stage which has been reached in the discussions concerning the Great Northern Railway. The Minister had meetings with the Minister of Commerce, Belfast, at Dublin on the 17th September, 1951, and the 20th September, 1951. After a full examination of the present position and future prospects of the Great Northern Railway, the two Ministers have agreed to recommend to their respective Governments –
- that the system should be purchased jointly by the two Governments, each Government contributing equally to the purchase price;
- that a joint Board with equal representation should be established to operate railway services over the entire system; that the ownership of the railway rolling stock should, after acquisition, be transferred to this joint authority; that the financial results of rail services which are wholly within the area of jurisdiction of one Government should accrue to or become the responsibility of that Government; and that the financial results of cross-Border rail services should be the subject of agreement between the two Governments;
- that no cross-Border rail services should be discontinued by the joint Board until the two Governments have been consulted and have agreed on the proposals for discontinuance;
- that the extent to which the joint Board would provide local railway services in each area should be a matter for arrangement between the Board and the Government concerned, provided that if the other Government should desire the continuance of any such service which might otherwise be discontinued it would assume any financial responsibility;
- that the Dundalk Workshops should vest in the joint Board and should be maintained as the main workshop for the whole system; and
- that the other fixed assets should vest in each Government or their nominees, and be leased by them to the joint Board.
This agreement is in accordance with the decisions already taken by the Government.
- The Minister for Industry and Commerce and the Minister of Commerce, Belfast met the Board of the Great Northern Railway on the 20th September, 1951, and indicated that it had been agreed to continue the financial aid to the Company necessary to maintain existing services until such time as the transfer of the undertaking to the joint Board could be completed. They also indicated the general lines of the Government’s proposals, and that provision would be made for the transfer of the staff of the Great Northern Railway to the joint Board.
- There was also a discussion between the Ministers and the Board of the Company on the price to be paid by the Governments for the purchase of the undertaking. It was intimated by the Ministers that if agreement could be secured on a relatively small increase in the purchase price of £3.9 millions already offered to the Company and rejected by the stockholders, they would be prepared to recommend such an increase for approval by their respective Governments. The Board of the Company, after consulting privately, pressed that there should be such an increase in the purchase price as would permit a payment to the debenture holders of the par value of the debenture stocks and that there should be, in addition, a further additional payment which would enable a higher offer to be made to the preference and ordinary stockholders than that contemplated when the offer of £3.9 millions was made last January. It was arranged that the Board of the Great Northern Railway would enquire if the debenture holders would agree to accept less than the par value of their stock and would meet the Committee of the stockholders to ascertain what would be the smallest sum the stockholders, other than debenture holders might be prepared to accept in respect of their holdings, and that the two Ministers would again meet the Board of the Company at Belfast on Monday, the 1st October, 1951.
- The additional amount required to pay the debenture holders of the Great Northern Railway the par value of their stock would be £405,000. In discussion between the Minister for Industry and Commerce and the Minister of Commerce, Belfast, it was intimated by Mr. McCleery that he was prepared to recommend to his Government that an over-all increase to £4.5 millions in the purchase price offered should be made if agreement by the Company for purchase at that figure could be secured. The Minister for Industry and Commerce considers that there would be substantial advantage in proceeding by agreement with the Company and recommends, for the approval of the Government, that he should be authorised to join with the Minister of Commerce, Belfast, in accepting any proposal by the Company for sale by agreement at a figure not exceeding £4.5 millions. In the event that no such proposal is made, the Minister for Industry and Commerce proposes that steps should be taken to acquire compulsorily at the figure of £3.9 millions already offered to the Company and rejected by the stockholders.
- The Minister for Finance has agreed to the submission of this Memorandum to the Government.
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