There is, moreover, a special reason why such a stock, from its
inception, would tend to depreciate in value; namely, that from the
moment the Irish Government or their nominees became the owners, there
would be almost irresistible pressure put upon them to reduce the
railway rates, and generally (as indeed the Majority Report recommends)
to work the railways on other than commercial lines.[99] A reduction of
rates has been held out as the great resulting boon of nationalisation
ever since the Irish Parliamentary Party specifically raised the
question in Parliament in 1899. A 25 per cent. reduction in rates and
fares (suggested by Nationalist witnesses) would involve an annual
diminution of net receipts to the Government of over £1,000,000 per
annum, and if the reduction were in goods rates alone, the loss would be
£568,000 per annum. It would be years, if ever, before such a loss could
be recouped, however the traffic was increased. Experience has shown
that in recent years running expenses tend to increase nearly parallel
with the gross receipts, and a large increase in gross traffic would
involve enormous capital outlay for rolling stock, engines, sidings,
etc. It is unnecessary to comment upon the suggestion that the railways
should not be run on "commercial principles." The Irish ratepayers and
taxpayers, who would have to bear the loss, would loudly call out for
business management when it was too late.
It is hardly necessary to add that another result of such an operation
would be to prevent the Irish Government raising the very large sum
necessary for improving and standardising the light railways and for
extensions, except at an unremunerative rate of interest. Even if
shareholders be put off with State paper, contractors will have to be
paid with cash. Moreover the creation of such a large amount of debt at
the beginning of the new regime would render it difficult, if not
impossible, for the Irish Government to raise sums necessary for other
public works and services of a pressing character, arterial drainage,
canals, education, and other objects, not to speak of migration,
congestion, and land purchase. The conclusion, in fact, is inevitable,
that without the security of the United Kingdom, and the market of
British investors willing to lend, it is idle to think that either State
purchase of railways, or any other of the boons mentioned, are
reasonably possible. Mr. Erskine Childers, though a Home Ruler, does not
fail to perceive, to use his own words, "that financial independence
will now mean a financial sacrifice to Ireland."[100]