Wednesday, 17 May 1961
Seanad Eireann Debate
An Cathaoirleach: Before we take up consideration of the Committee Stage of this Bill, I should like to indicate that I have ruled that amendments Nos. 1 and 2, standing in the names of Senators O'Quigley and Burke, are out of order, on the ground that they involve a potential charge on State funds. The Senators have been notified accordingly.
Mr. O'Quigley: While not wishing to question your ruling, sir, the Minister for Finance indicated on Second Reading, at Column 207, Volume 54, of the Official Report, that if an amendment to this effect were put down, he would accept it. I wonder if there is any procedure by which effect can be given to the desire of the Minister and the views of those on this side of the House?
Mr. Burke: I am one of those who was involved in this and if it cannot be dealt with in this House, perhaps the Minister can tell us if he can deal with it in the other House? It is a matter of very important public concern.
Dr. O'Donovan: It seems to me from the way this section is drafted that, in line 19, the words “from time to time” should be inserted. The memorandum and articles of association will vary from time to time in accordance with other provisions in this Bill. Without the words “from time to time” in line 19, this section does not read correctly.
Dr. O'Donovan: Before we go on with this, let me tell the Minister I am not going to play this game with him throughout the debate on the Bill; the game we had, of necessity, to play with him on another Bill. This is a genuine comment and relates only to the section. I am going to ask him questions about other sections.
The capital shall be in “stock units or shares of ten shillings each or such other denomination or denominations as shall be in accordance with the memorandum and articles of association of the Corporation.” Naturally they have to be in accordance with the memorandum and articles of association as the memorandum and articles exist from time to time. To be quite frank, I do not know how this business  of the 10/- shares crept into the 1947 Act—or perhaps I do; it was an historical matter. The previous shares of £1 had only 10/- paid up and when the capital was being re-issued, they were left at 10/- and 600,000 of them were issued to the Minister in exchange for a small payment at that stage, he already having paid in some £287,000. He did pay in some £13,000 to pay for the other odd 25,000 10/- shares.
Might I put it this way? Would he consider whether this phrase is necessary or not? The Minister is quite correct. It is a legal matter. Having regard to the way the rest of the Bill is drafted, there are some sections which would convey the impression that the words “from time to time” should be put into this section because—the Corporation will have to alter their memorandum and articles of association to conform with this Bill when it becomes law—they might well say: “Very good; we will have two million £1 shares” instead of saying: “We will have four million shares of ten shillings each.”
Like the Minister, I am not a lawyer. I do not profess to be laying down the law in this matter. It occurred to me, when reading the section, that this might well be required. Draftsmen cannot think of everything. They are human like anybody else and it is no reflection upon the draftsmen to say that this might possibly be required. If, in fact, this section is to mean anything much, I think my suggestion is required. If the phrase “such other denomination or denominations” had been left out and the law just left at “ten shillings each,” I would not have made this point at all.
Dr. Ryan: I am just wondering if the phrase “from time to time” would be an addition because at the end of the section, you will see that the Corporation can make “such alterations as may be requisite in the memorandum and articles of association”, which would certainly go to show that the section, as drafted, deals with the situation as it may arise from time to time, as the Senator says. Otherwise, that clause in regard to the memorandum and articles of association would not be put in at the end. It appears  to me to be all right as it is, but, of course, I may be wrong.
Dr. O'Donovan: Might I be permitted to ask one of the many questions I have to ask the Minister? Why one-fifth? In another part of the Bill, it is, in fact, one-half. Why does the consent of the Minister have to be got if he holds one-fifth? I do not get it. I do not know why it is a fifth. Why not—I do not want to be smart—one-fourth or why not a half?
This is unusual because it is really the reverse of what normally occurs. Normally, if a person is a debenture holder, his consent would be required, say, to raise extra capital or borrow extra money, but it is not usual, as far as I know, in company law to require that the consent of an ordinary shareholder, which is really the position of the Minister primarily under these Acts, should be got for the borrowing of moneys or that kind of thing. It looks as if the Minister in parts of this Bill is kind of hiving off or showing an intention of liberalisation. When you examine it, you come across this other kind of thing in Section 3, which is obviously the reverse of liberalisation. It is, in fact, a tying-up section in the Bill.
Mr. Donegan: This Bill is, in fact, permissive legislation. It does nothing of itself for the farmers but it permits certain things to be done. I hope those things will be done. It is up to the Government to do or not to do. As a piece of legislation, this is not ipso facto something which increases agricultural credit.
Dr. Ryan: It is obviously largely a permissive Bill but if the Government decided to draft a Bill to permit the Corporation to expand credit and to a great extent at the expense of the  Exchequer, the permission is going fairly far. It is going a good bit in favour of agriculture in this country. That is a point that Senators might keep in mind.
Dr. Ryan: That is quite right, so that at the present time the only liberty the Corporation has in borrowing is £300,000 as a debenture—that is the limit—and £250,000 from the bank. That makes a total of £550,000. From voted moneys, there is another £250,000. As far as the Corporation are concerned, they can only borrow £550,000.
Looking at the position in that way, I think we are not making the position any worse for them at least by saying that they should have the Minister's consent for borrowing so long as he holds one-fifth of the capital of the company. I could not give the Senator any rule under which one-fifth was decided upon. It was an arbitrary figure, if you like. It was thought that perhaps a half was not going low enough and we thought one-fifth was a fair compromise. One-fifth, after all, is a different thing now because the Minister will hold £2 million capital in the company as against the £10,000 at the present time. Accordingly, the Minister will have a very much bigger holding in the company than before.
I do not think, however, that there is any danger that any Minister for Finance will curb the activities of the Corporation. As I mentioned the last evening this Bill was under discussion here, I have already told the Board they should take more risks and lend more money. If the risk involves a loss, it will be made up in some way by the Exchequer. The same will apply now, and the loss will be covered by their ability to pay interest on the £2 million capital. If there is a loss, or if through bad debts, whatever they may be, they are not able to meet the interest  on the capital, the money will go to pay the loss instead.
Dr. O'Donovan: Open confession is good for the soul and the Minister has certainly been open-minded about this matter. He has not really disposed of the major issue which I raised—the Minister being in the special position in which he still holds only one-fifth of the share capital. That is restriction. It is not quite correct for the Minister to say that a fifth of £2 million, which is £400,000, is substantially more than the present position which is £300,000. At present £300,000 is invested in ordinary shares by the Minister for Finance, and £400,000 is not very much bigger. At the same time, I do not want to cavil for the reason that I do not think it matters very much. I would be surprised, though the climate might change, if a position were to arise where, say, farmers would have subscribed half of £2 million.
I might perhaps add that the Minister seems to have a considerable ability for getting money without making any charge for it. There was a great deal of cross-chat when I suggested that the rate of interest might be three per cent. for permanent improvement loans, and the Minister now says that he can, in certain circumstances, give as much as 2 million without any interest at all. However, in view of the Minister's statement that he has instructed this body to take risks—and it is about time someone gave that instruction— I will say no more about the matter.
Mr. O'Quigley: On this question of the power to borrow up to a maximum of £10 million, as I understand it, the position created under this Bill will be that the Agricultural Credit Corporation will continue to make loans for the purposes for which they have been making them up to the present time. They will also be able to go into the hire purchase business—and that, I expect, will absorb a considerable amount of money—and they will be entitled to alter their memorandum of association so as to undertake certain new kinds of projects such as those laid down in Section 8 of the Bill. To my mind, that envisages the taking over  of creameries and other things and that they will go into business themselves.
I wonder has the Minister, at this stage, any indication of what the requirements of the Corporation will be, say, in the next five or ten years under each of these three heads? Is there any indication, or has any estimate been formed, of the amount of money which will be devoted to hire purchase? If there were a great deal of pressure from those interested in hire purchase facilities from the Corporation, it might well be that the Corporation would be less disposed to lend money for the permanent improvement of land, because they are confined to that figure of £10 million. It does seem that if they are going into the hire purchase business, since any piece of machinery costs so much at the present time, the amount of money available to them under this Bill will be quickly absorbed in hire purchase credit.
Can the Minister give any indication as to what the rate of interest for hire purchase purposes will be, and whether it will draw off a lot of the business from the hire purchase companies into the Agricultural Credit Corporation, for the purpose of buying agricultural machinery and such matters as the Corporation will supply credit for? Again, if that is so, and if the rate of interest will be lower than the rate available in an ordinary hire purchase firm, that will mean greater pressure on the money available under this Bill. On the other hand, if there is not much difference, it would appear that all the talk about hire purchase facilities under this Bill is meaningless, and that the Bill, in effect and in fact, will make very little difference to the farmers, so far as hire purchase credit is concerned.
Mr. Donegan: My worry as I go through the details of the Bill is that I feel that, in fact, it will make very little difference to the farmers. I should like to ask the Minister if there have been any discussions as yet about the staff of the Corporation and if, in fact, any move is being made to increase that staff? I am quite certain that at the moment they are over-worked, and that the amount of loans they can  get through is absolutely and completely physically limited, first of all, by the amount of money the Government are prepared to give them and the money they can get from other sources, and secondly, by the staff which they now have. I meet them pretty often and they are an excellent body of men, but they are over-worked. I want to know from the Minister if there is any move to increase not only the money that will be available to them, but the number of the staff. Can the Minister give any guarantee that some increase will be afforded to the Agricultural Credit Corporation? This is permissive legislation to give them what the Minister and the Exchequer are prepared to give.
Dr. Ryan: I do not want to put any limit on it. I do not know what the rate of interest on hire purchase may be. I am not sure whether a hire purchase business requires a high rate of interest or not. I think it would require as high a rate of interest as people are paying in certain cases at the moment. It is a short term loan and for that reason in itself, the rate of interest would probably be higher than for a long term loan. I do not know what Senator Donegan has in mind when he says the Government are limiting the amount of finance——
Mr. Donegan: I did not say that. I said that this is permissive legislation and that the Minister has not indicated at any time how much more money he has. He is limited by the amount of money provided and by the staff.
Dr. Ryan: I made a calculation the other night about the £20 million proposal by Fine Gael, but if Fine Gael did not make any better progress, that would last for 231 years. It does, of course, appear a bit ridiculous that this Seanad should provide for 231 years to come. I hope, however, that business will increase in the future.
Suppose we take a figure of £2 million—I may be optimistic—and let us say £500,000 is for hire purchase, on a short term loan. On that basis, the finance provided in the Bill —£10 million by way of loan and  £2 million by way of capital—would leave us between five and six years. If the money were going as quickly as that, it would be well to review the position to see what way things were going. I cannot understand how any Senator would even contemplate that a Minister for Finance would refuse money to the Agricultural Credit Corporation. I am sure Senators believe I am a good politician.
Mr. Donegan: We must assume that the Minister for Finance sees the figures in the papers and will see about the increase in lending by the commercial banks. The Bill we are discussing means nothing greater, and certainly probably something considerably smaller, than the activities of an institution much smaller than any commercial bank here. That is the magnitude of the matter we are discussing now as related to the figures supplied by the Minister.
Dr. O'Donovan: On this section and on this matter, I am going to become a politician for a few minutes and to say that it is simply window-dressing for the next general election. Now the Minister is looking thoughtful because the existing moneys of the Agricultural Credit Corporation are £7½ million, plus £300,000 in capital, plus £550,000 making a total of £8,350,000. In fact, what is being done here is that the £7½ million is being increased to £10,000,000. This is just to bring this  into line with the legislation we have had. We had one about fisheries where there was a big sum put in and there was no hope of that amount of money being lent, but it looked well. The House will remember that I put down an amendment to the Electricity Bill last year to cut the amount from £20,000,000 to £10,000,000 and I was laughed out of court by the Minister for Transport and Power.
Really there is no question about this, that this is a piece of good window-dressing, and I say that in all sincerity. The Minister knows as well as I do that the Agricultural Credit Corporation are doing much better in the last year than they ever did except for their first few years, when they did extremely well until their activities were hit by the world economic depression in agriculture and the economic dispute with Britain, and that it is only in the last year under the new chairman that they have done as well as, or nearly as well as, in those early days. They are just beginning to come to life. This dormant body which was in Limbo for a generation is coming back to life.
Do not forget that as the Minister in his statement says the Corporation lends money for seven years and accordingly a calculation similar to the Minister's 231 years, made on the sum of £7½ million, would probably, if I were a quick arithmetician, show that the existing moneys they have would last for 51 years or some such period. I do not have to go home at night to do that calculation; I can do it here in the House without being too accurate about it and it is a fair enough point to make in this discussion. Let me say that I fundamentally believe in all earnestness that this is a bit of window-dressing. There is a good deal of comment throughout the country that the farmers are doing badly so the Government said: “Let us bring in this Bill to pretend to do various things.”
Dr. O'Donovan: Let me make a forecast. There are other things in the Bill which are desirable to have, but so far as the money is concerned, and it is primarily contained in this section, it will see Fianna Fáil out of office once and for all, even if they were to remain in office after the next three general elections to come.
Mr. O'Quigley: The Minister has somewhat disappointed me and I am sure he will disappoint a great number of the farming community, which, as a fine politician, he would be the first to think of if he could. We can only conclude from all he said that the hire purchase facilities which will be available out of the moneys provided under this section will be no better than those available from hire purchase companies at present. The Minister has said that he is a politician. He has an eye to the election. This Bill just does not come in a haphazard way. All these moves are thought out in advance. I should be anxious to know what the rate of interest is to be for hire purchase credit facilities to be given by the Agricultural Credit Corporation. I can only assume from the Minister's strange silence in the matter that it is not going to be any better than is available at the present time.
Dr. Ryan: I do not fix the rate of interest. I cannot tell the Senator what it is going to be and because I hazarded a guess, trying to help the Senators, Senators say that I am window-dressing. Would it not be better for me not to say anything, if that kind of thing is to go on? Senator O'Donovan tells us that when we brought in the Electricity Bill providing for £20,000,000, he proposed  £10,000,000. Now when we bring in a Bill for £10,000,000, they propose £20,000,000. The sort of Opposition we have here is becoming ridiculous.
Dr. Ryan: I was accused of bringing this in for election purposes. There was a Government here which the people will never forget—I will not say anything more about it—before us. They asked Mr. Gilmore to examine the position of agricultural credit and he gave a very good report. The previous Government did a good job in asking him to come along, and although they did that, we followed it up by drafting the Bill. This is now called an election stunt. I will say no more.
Mr. Burke: The Minister spoke about politics. I do not mind who plays politics. The Government are very good politicians. I think it is first-class politics to give money for agriculture. It is becoming the fashion to refuse to help agriculture in nearly every country in the world. It is always the Cinderella, and particularly so in recent times, but if finance has been used to help industry, it should be used even more so to help agriculture, particularly in this country. If agriculture goes wrong in Britain or in America, it is not their major line, but the major line here is agriculture. We will never have Ireland without it, I hope, and I do not think we are going to make a success of it with an addition of £1.7 million. The Minister ought to make good the promise he made to us the other night and introduce legislation in the other House to make these credit facilities available. They can be used and will be used, if he does so.
Mr. Donegan: On the question of rates of hire purchase interest, the Minister says: “I am not the man.  The Agricultural Credit Corporation do that themselves.” Then he instances the whole framework of what happened here. We had the view being expressed by all agricultural organisations and by all well-meaning organisations in the State that agriculture was not being adequately catered for. Then we had the Gilmore report. Then the Government brought in a Bill and we criticised it. The Agricultural Credit Corporation is a different sort of institution from the ordinary commercial bank. Their lending facilities are for one particular set of people in the community. These are the type of people who, we are told, do not get enough credit facilities. Is the Minister telling us it is not within the ambit of his powers and duties and it is not within the ambit of the powers and duties of the Minister for Agriculture to talk to the officers of the Corporation and decide with them whether certain schemes could be introduced giving low hire purchase rates to, for instance, those small farmers who had been through the credit war?
Professor Stanford: Following upon what Senator Burke has just said, I should like to protest once again against the misuse of the term “politician” in this House. We are all politicians here and anybody who is not a politician should resign his seat. I appeal to Senators O'Donovan and O'Quigley and everyone else on this matter. If they mean a political manipulator, if they mean a partisan politician, if they mean a sectional politician, they should say so and not misuse and abuse this honourable word.
Dr. O'Donovan: This section provides for the guarantee for hire purchase transactions. The Corporation under Part IV of the 1947 Act has ample facilities to engage in hire purchase transactions. Let there be no misunderstanding. I am fully aware that the reason the Minister and his Department—I take it, with the concurrence of the Minister for Agriculture and his Department—have put this section into the Bill is that the loans. guaranteed by the Minister for Agriculture already have been such a success and that when they pressed the Corporation to do this job, they raised a song and dance about the difficulties of chattel mortgages, and so on. It was only a song and dance. Quite frankly, there were no difficulties at all in the matter—none whatever.
The Minister has now taken the short cut. When has he taken it? He has taken it, as usual, when the commercial banks have had time—staid and ancient as are their practices—to set up their own organisations to get into the business. That is something they have done in the past two or three years.
As regards the rate of interest for these hire purchase transactions, I presume it will be 6¼ per cent. or whatever the current rate of the Corporation is. It might well be 6¼ per cent. without the paid up instalments being credited, which would work out at a rate of about 10 per cent. That is normal in hire purchase transactions. I do not suppose anybody would object to that rate if it were, say, for machinery or that kind of transaction.
It seems to me that considerable blame attaches to the fact that the  provisions of the 1947 Act were not worked. I am not to be taken as criticising these provisions because there is a full guarantee to the Corporation, but I want to make one statement in the matter. In my opinion, this is all mumbo-jumbo. A discussion took place the last day about the interest-free money and might I point out that loans to the tune of £237,000 were made to the sheep farmers of Wicklow, following the snows of 1947, free of interest? The applications for these loans were vetted by the officers of the Department of Agriculture who certified them to the Agricultural Credit Corporation. The Corporation raised their hands in horror— desperate, no sureties, no nothing and there would be terrible losses! I made inquiries afterwards. Not one penny of these interest-free loans was lost. It would be an appropriate answer for the Minister to say to me that the price of sheep went up substantially in the succeeding years and they entered a good period for agriculture. That is a good enough answer. Were it not that the Minister for Agriculture and the Minister for Finance at the time made this arrangement, the Agricultural Credit Corporation would not have lent these sums of money at any percentage, let alone money freely available.
This kind of thing looks all right on paper. I do not want to criticise it in any way. If you have a mulish crowd of people, you must induce them with all the carrots you can produce. This certainly is a juicy one: “You get all the carrots and we take all the losses if they occur.” I do not think there will be any losses, unless some unexpected catastrophe occurs to the agricultural community. But it is right on this section to say there were full facilities for this kind of business by the Corporation since the year 1947. While I appreciate that they are being brought in again, a juicy carrot is being held in front of them to entice them into the business belatedly, long after the archaic commercial banks had gone into it.
Mr. Carter: They have no other function at the moment except to keep themselves propelled by politics, seeing they have no programme, no policy, nothing to offer the farmers, no inducement if returned to power as a Government. Therefore, it is natural to expect that the Fine Gael Party will concentrate on the Government and the Minister for Finance for the success that has attended the Programme for Economic Expansion.
Mr. Carter: The Senator will have plenty of time to discuss that later and we hope we will be well able to cover the points. The fact is this Bill follows on the Programme for Economic Expansion and strange to say, the meanest farmer in the community is far better informed about the scope of the Bill than the leading Senators in  the Fine Gael Party. I have not heard any farmer suggesting that you could get money at three per cent. interest. This is a free economy; we believe in the profit motive and we subscribe to private enterprise, and, unless Senator O'Donovan wants to bring in Mr. Khrushchev——
Mr. Carter: That is a success, too. Our drive to secure Continental industries has been very successful and we have over 30 of them coming in in a very short period. There is no need for the Senators opposite to get excited over that; that is just the success of the Fianna Fáil policy which has been applied diligently since the Government were returned to power in 1957. The farming community knew very well that if banks, even the most conservative banks, entered into the field of hire purchase, it was only a matter of time before the Minister for Finance, who is a forward thinker, would bring in legislation to enable the Agricultural Credit Corporation to engage in hire purchase.
We must also bear in mind that the Agricultural Credit Corporation supply only a very small fraction of the credit which is available to the farming community. Having regard to the growth and stability present in the economy we will have, for the future, keen competition, I assume, between the banks and other lending agencies which lend money to the farmers. One can visualise that and therefore the fact that Section 4 provides for the extension and promotion of hire purchase is not to be wondered at.
Mr. O'Quigley: One wonders indeed who is right, the Minister for Finance or Senator Carter. Senator Carter tells us that this Bill follows on the Programme for Economic Expansion and the Minister chides us on this side of the House by saying that this Bill is the follow-on of the Gilmore Report.
Mr. O'Quigley: I am not. The Senator said that this Bill was part of the Programme for Economic Expansion and I am telling him it follows from the report of Mr. Gilmore. That is what the Minister has said and there is no use denying it. The Minister said he has nothing whatever to do with the fixing of the rate for hire purchase facilities. It seems to me from this section that if the Minister for Agriculture is to guarantee to the Corporation moneys which they will advance by way of loans for hire purchase facilities the Minister for Finance does enter into the question of the rate to be fixed for such hire purchase facilities. The Minister for Agriculture can give a guarantee only with the consent of the Minister for Finance and surely one of the important matters in fixing terms and conditions on which moneys will be guaranteed to the Corporation is the interest rate the Corporation will charge for the moneys which they lend. I never knew of anything yet relating to finance in which the Minister did not find it necessary to have a finger, no matter how independent the body might be. The Minister for Finance even fixes superannuation rates for independent bodies.
Subsection (5) of Section 5 says that the Minister will determine the rates of interest, if any, to be paid by the Agricultural Credit Corporation. Surely if the Minister for Finance is to determine that, he will have to say in advance to them: “You can lower your rates of interest in respect of this or that kind of loan.” The Corporation cannot determine their rate of interest until they know what the attitude of the Minister is going to be.
Again, in Section 9, you find this vague type of control, a form of radio control, used by the draftsman to give the Minister adequate and unseen  powers, that they may provide, lend or guarantee the money, as the case may be, subject to any directions given by the Minister from time to time. I have no doubt that the Minister will give general directions from time to time as to what the rate of interest to be charged is to be. For that reason, I think the Minister must have, in advance of this Bill, some idea as to what he is going to approve in the nature of rates of interest for hire purchase.
Dr. Ryan: I was speaking about the general rate of hire purchase which has nothing to do with guarantees. The Agricultural Credit Corporation will, I presume, be making hire purchase loans to the individual farmer for machinery. There will be no guarantee from the Minister for Finance for that. As I said, I have nothing to do with the interest charged. This section deals with schemes such as the one quoted by Senator O'Donovan, the Wicklow sheep scheme, and schemes of that kind, and there is a control over what interest will be charged, or whether they charge interest or not, but that is quite a different thing from a general rate of hire purchase interest.
Dr. O'Donovan: Could I ask the Minister what is the point of subsection (3)? In other words, why is subsection (3) of Section 5 in the Bill? I can ask the same question about subsection (5) with regard to “within two years”. Quite frankly, in the case of the first of these two subsections, I do not know what is envisaged. In the case of the second, subsection (5), I cannot understand what purpose it is hoped to achieve by it. If they are  both pieces of mumbo-jumbo, all right, let us leave them there.
Dr. Ryan: Outside the Corporation, I, as Minister for Finance, have to give guarantees to certain people lending money. Let us suppose the bank lends that money. I give a guarantee. If this person does not pay it back, I will. We do, of course, in that case certainly go into, first of all, the ability of the person to pay, and secondly, the terms on which the money is lent, the rate of interest, the repayment period. All these things will be taken into account.
Where a guarantee under this section is or has been given, the Corporation shall, if the Minister so requires, give to him such security as may be specified in the requisition for the purpose of securing to the Minister the repayment of any moneys which he may be liable to pay or has paid under the guarantee.
What I suspect has happened here is that this is a “cog” out of an Industrial Credit Act or something of that sort. I do not get the relevance of it at all in this Bill. I do not see that it has any relevance whatever. With regard to the provision that he is to repay within two years, it looks as if it goes back to the old Trade Loans Act of the late 1920s. I just do not understand why these subsections are in the section at all. I cannot see them being of any practical significance, except to allow the Department of Finance to harry the Corporation if we hit anything like a harsh period in agriculture again.
 Let me qualify that. I do not mean that the Department of Finance would necessarily harry the Corporation. Mind you, the organisation is so thin skinned about all this matter of guarantee and paying interest on their money that an ordinary inquiry might cause their lending to dry up. They would say that the Minister is asking us this; that the Minister is an important person who has all the resources of the Department of Finance behind him. Quite frankly, as I say, I cannot visualise the circumstances in which either of these subsections would be of any practical significance. I do not believe in legislation in which there are chunks of unnecessary stuff. This Bill, as a whole, runs into 12 pages. I believe you could put the effective part of it into two pages. This is part of that kind of thing I refer to.
I think the Minister did not appreciate my point. This is a case of the Corporation giving the Minister security when he gives a guarantee. I do not know what security they can give to the Minister. Originally, when the Corporation was established, there was a system of trustees—a most involved system based on old land mortgages, which gave rise to untold trouble, the trustees being representatives of the mortgage bond holder who eventually and rapidly became the Minister for Finance. Then it was dropped, sensibly enough. I do not understand the practical significance of these two subsections.
Mr. O'Quigley: Before the Minister replies, I wonder would he indicate the kind of loan which he will guarantee and which will be repayable as required by subsection (5) in two years? Frankly, I do not know enough about the Agricultural Credit Corporation to know what kind of loan that might be.
Dr. Ryan: I recollect one loan that was guaranteed to a co-operative society doing very useful work for the farmers but it fell on very bad times. In the circumstances, I would not blame any bank for not lending money. It looked very bad. We  asked the Corporation to give them a loan. They said that no finance body would give them a loan. That is the type of case the Senator might have in mind where we had to encourage the Corporation to give a loan although there was no very good financial basis for it
I do not think we should object, however, to providing all these safeguards that may be necessary from time to time. If in the particular case I have just mentioned, they had got a mortgage deal on that particular premises, we would say: “Give us the mortgage deal and we will guarantee it.”
Dr. Ryan: The second point is this. Senator O'Donovan says he cannot visualise the powers being used. I am hopeful that farmers will take over this place eventually. I think it is possible that there will be a movement in that direction but whether it will be speedy or not, I cannot say. We may have no control over the Corporation if that movement should go on. The Minister would not be the principal shareholder.
Dr. O'Donovan: There is one final point which is much the same as the other one. I think that subsection (7) of this section is dreadful. It provides that the Minister shall recover these moneys as a simple contract debt. I see the Minister's point. If the farmers were to get control of this body, I can quite appreciate that in those circumstances the Department of Finance, if the Minister were to guarantee borrowings on behalf of the Minister for Agriculture apparently from the Corporation, might get security in the fashion the Minister very clearly indicated, but since this section is in the Bill, might I say what my fundamental objection is?
If the 1947 Act had been operated on the basis of the extent of it, this body would have got about half the Marshall Aid moneys to lend, about 20 million. Not only that, but the 1947 Act was there at the very right moment to allow them to go into  business in a big way. Instead of doing that, the organisation just left the thing sit without doing any business until a year or so ago. Then they were only following in the footsteps of the commercial banks. Recently, the commercial banks lent £12 million extra while this organisation has lent £1 million extra!
It is all right to pass a lot of verbiage into law providing for all kinds of contingencies but I should much rather see something that looked like being a dynamic organisation to provide in particular working capital for farmers who are not creditworthy in the accepted sense of that term. Really, if we could put into this Bill that any farmer living on 20 acres of land or more would be entitled to get £200 from the Agricultural Credit Corporation by writing for it, we would be doing a better job for agricultural credit in this country and a better job for agriculture than by putting in all this complicated verbiage about the circumstances in which guarantees might have to be implemented.
Question proposed: “That Section 6 stand part of the Bill.”
Dr. O'Donovan: I wonder would the Minister tell me what is the reason for paragraph (b), subsection (1) of this section?
Dr. Ryan: The obvious reason is that so long as the Minister is the principal shareholder, holding half of the shares, he should have some control over the Corporation with regard to future policy, distribution of the shares and so on. He should at least be consulted about the matter.
Dr. O'Donovan: This is a public company, and why would not the ordinary rules in relation to ordinary public companies apply? This is a provision which belongs essentially to private companies. Managers are butting in everywhere and this Bill is full of them. They are creating work for  themselves, extending the number of civil servants, setting up sections, consulting between one Department and another and all that mumbo-jumbo.
My question is a simple one: why is a provision which is common form in relation to private companies, and only in relation to private companies, imported by this section into a public company? It is putting the Minister into the position of a major shareholder in a private company. In a public company, no major shareholder would have any power of this sort. Why does the Minister ask for it? I do not say the Minister has been in any way reticent, but does he fear that some commercial group of people, some finance house or something like that, may attempt to take over the Corporation by buying the shares when offered, getting the majority of the shares, and getting control of the Corporation? If that is the reason, from the point of view of public policy, it would seem all right, but it is capable of another interpretation, the interpretation that certain people, remote from the scene of action, want to butt in on the activities of the Corporation. I should be glad to know from the Minister whether or not my feeling about it is correct.
Eamon Ó Ciosáin: Public money is involved and there must be some control over it.
Dr. Ryan: It is all public money.
Dr. O'Donovan: This body is a company established under the Companies Act, 1908, which is still, unfortunately, the main law in relation to companies in this country, owing to another Government Department which should have looked after it being so busy sticking their noses in other people's business, that is, the Department of Industry and Commerce.
There is not the slightest doubt this paragraph is contrary to the ordinary law relating to public companies. Before we pass it, surely we are entitled to know why it is put in the Bill? The Minister did say there should be some control over the persons to whom the shares were transferred, but  I still do not understand it. The Minister is not afraid that a body of Germans, or something of that kind, will take it over, is he, as there seems to be a great surplus of money in the Republic of Western Germany?
Mr. Brady: What is the sneer about the Germans?
Mr. Carter: The Senator has them on the brain.
Mr. Brady: I suppose he is disappointed because they are coming in here.
Dr. O'Donovan: They are not bringing in much money with them.
Mr. Carter: They are not asking the people to tighten their belts.
Dr. O'Donovan: Some of them are getting plenty of our money. I could understand the objection if there were some likelihood of an organisation or a body from outside the country getting control of the Corporation, but the fact is that no one except the Minister's Department—and I want to give credit to the Minister and the Department for it—has shown any interest in it. In regard to this effort by the State in relation to agricultural credit, the only part of the organisation that has shown any interest in the subject is the Minister for Finance and his Department, from time to time. This is not a debating point; I am putting it as a perfectly genuine point. Why stick in a subsection providing for something that is contrary to the ordinary law relating to public companies?
Dr. Ryan: That is the very reason it is put in. I presume we did not want to follow the ordinary law relating to public companies because a very big amount of State money is involved, and so long as the Minister for Finance holds more than half the shares, that amount will be big. As the Senator said, this is a provision that applies to private companies but this is very like a private company because one person owns the whole company. Therefore, I think it is justified.
Dr. O'Donovan: In other words,  there is an inherent contradiction in it.
Question put and agreed to.
Section 7 agreed to.
Question proposed: “That Section 8 stand part of the Bill.”
Dr. O'Donovan: I noticed that in his brief the Minister claimed that afforestation and fisheries were being put into this organisation for the first time, unless I heard him wrongly. I hope he will forgive me if I say that that is gilding the lily because afforestation and fisheries were in it already. Did I misunderstand the Minister? I have a distinct recollection that while listening to his brief on Second Reading I got the impression that he was claiming he was looking after afforestation and fisheries for the first time. Does the Minister recollect making that claim?
Dr. Ryan: As a matter of fact, I do not, because this is a new section giving the Corporation power to go into business with other people. That power was not there before. This is parallel to the Industrial Credit Corporation legislation in many ways. The Industrial Credit Corporation may take shares in new ventures, take debentures or give loans. There are various things they can do. The Agricultural Credit Corporation may now take shares in new ventures and make loans.
As I mentioned already, we hope to see fairly big and widespread development in the processing of vegetables and fruit. I am told on making inquiries about these things that the initial capital will be a fairly substantial sum for a group of farmers to meet and if these farmers in a particular area should form a co-operative society and approach the Corporation, they could make a loan, but they could also take shares in the society and have some voice in running it. We mention here the various types of agriculture covered by the section, and to that extent this is the first time they are brought in, and this is the first time this type of section was brought into such legislation.
Mr. Donegan: I wish to see the Corporation increasing farm production, exports and everything else, but this is parallel legislation to certain sections which I did not feel were properly inserted in the Agriculture (Amendment) Act, 1959, which is commonly referred to as the An Bord Gráin Act. I refer to the section under which the Corporation can engage in the processing and marketing of farm products. I agree that lending money to people doing that would be a good thing, if they did it in the ordinary commercial way to a firm or an agricultural co-operative society, but I have a feeling also that it would be right to advert to the fact that this is a private enterprise economy, and as I drew attention to it on the Act I referred to, it is necessary to draw attention to it now, and to ask the Minister if his opinion is that it would be unwise for the Corporation to go into competition with co-operative societies or businesses where the sphere of operation of those businesses or societies was restricted and the business was being well done already.
I might also mention the insertion of the term “fish culture.” This fish culture has already been proved a most abject failure, and it would be quite unwise of the Corporation to indulge in any loan for the purpose of the creation of fish ponds or anything like that. This was a pipe dream of the Minister for Transport and Power. How it ever came to pass, I do not know, but I am certain that it is an abject and complete failure, and any money the Corporation put into fish culture, it will lose, unless the man to whom they lend it has other resources from which he can make repayment.
Mr. Cole: Paragraph (a) of Section 8 provides that the Corporation may undertake, promote, engage or participate in any scheme or project which in its opinion will be likely to increase the productivity or be otherwise of benefit to agriculture. Will the Minister pay fees for farmers' sons in agricultural colleges, or will the Corporation undertake a scheme on those lines? We have other sections of the  community, such as teachers, who can get assistance from other sources to pay their student fees, and it would be a great help. I know a case where a farmer would have liked to send his son to an agricultural college but had not the wherewithal to pay his fees. It would be a very good thing if the Corporation would undertake some scheme to pay the fees of a student at an agricultural college. They would have security to some extent. Does the Minister think this paragraph will not cover that, or will he indicate that he will accept the suggestion and put down an amendment for the next stage?
Mr. Carter: I do not know what grounds Senator Donegan has for saying that fish culture is an abject failure. To my mind, it has not properly begun yet, and there is no use in throwing cold water on a scheme which has just started until we see it finalised. We are very good at shouting down schemes, but from the other side of the House, we do not hear any ideas of how we shall start schemes.
Mr. O'Quigley: Read the reports.
Mr. Carter: I submit that, in fairness, the scheme should be given a chance. Despite Senator Donegan's assertion that he believes in the profit motive, the Senator will agree that public financing has done a good deal for the economy of this country and that if schemes visualised under this section were left to the profit motive, we should never see them started.
Dr. O'Donovan: I wish to confirm that my recollection was correct. I did not have the report when I spoke about the claim the Minister made about extending the powers of the Corporation. It is in column 165 of the Seanad debates of Wednesday last. The Minister then said:
The definition of the expression “agriculture” is being widened to cover such activities as tree-planting and fish-farming as well as all the usual farm operations and the marketing, processing or completion for sale of any farm produce.
 These were all in the Acts already, and these very words “the marketing, processing or completion for sale of any farm produce” were in the 1947 Act. It may be that that was a verbal slip, but it does seem that to claim this as an extension of the activities of the Corporation is not warranted at all by the provisions of the Bill.
Mr. Donegan: Senator Carter has asked about the information I had about fish culture. I went to investigate for myself where the Government had indulged in this fish culture and I know that it is an abject failure. One reason is that I tried it out here in the Dáil restaurant, and the rainbow trout provided there tasted no more like brown or white trout than something that comes out of a tin.
Mr. Carter: The Senator is missing the whole point again.
Mr. Donegan: I would place the fish ponds, a pipe dream of the present holder of the office of Minister for Transport and Power, in the same category as the Egyptian queen bees a certain gentleman recommended the farmers to use, the growing of tobacco, and the killing of the calves. They were all in the same category of pipe dreams.
Mr. Carter: The dreams are succeeding and materialising.
Mr. Donegan: The Egyptian bees, the killing of the calves, the tobacco and the fish ponds are now succeeding! God bless the mark!
Mr. Brady: It is time you were back with John Bull.
Mr. Donegan: Why not? Did the Taoiseach not say yesterday that we could not leave him, that 75 per cent of our export trade is with him? Now we have a convert.
An Leas-Chathaoirleach: The Senator will come back to the section.
Mr. Donegan: Senator Carter made a remark about the fact that I did not mention the danger if such a body indulged in any activities that might be  in competition with ordinary business men and co-operative societies in, for instance, the marketing or processing of agricultural produce. I think that would be a bad thing. At the moment we are all lauding the effort of the Sugar Company in the production of dehydrated vegetables. That is an excellent project, but I have the gravest doubts as to whether the modus operandi is good. My reason is that if there is a loss on that project in the first or second year, that loss can quite freely and simply be written in as a farthing on the pound of sugar. That could happen, and that is why I believe that the giving of the development to a body such as the Sugar Company or the Agricultural Credit Corporation is bad.
In fact, the unfortunate co-operative society that might be providing a service might well find itself in competition with a stronger body such as the Agricultural Credit Corporation or a company floated by the Corporation with their employees as the executives of the company. That co-operative society, or businessmen, might find themselves in competition with such a body and, with the reserves they could deploy, their position would be quite untenable. That is my reason for making that contribution. I hope Senator Carter will not take too badly my remarks about Egyptian bees, killing of calves, and so on.
Mr. Carter: Worn-out slogans. This is 1961.
An Leas-Chathaoirleach: Senator Ó Cíosáin.
Mr. O'Quigley: We will have some honey now.
Éamon Ó Cíosáin: I cannot understand why the Senators opposite are opposed to Section 8, which I regard as one of the most important sections. The objects set out in it are very important from the point of view of the economy of this country. I think it is only right and proper that the Corporation would have adequate powers to give credit for the advancement of these things set out here—the breeding, rearing or keeping of animals of any kind (including birds and insects); fish  culture; dairying; the pasturing of animals; afforestation; the processing, manufacture, preparation or completion for sale of any farm produce, and the marketing of any farm produce. All these things are very important.
When I heard the discussion to-day, my mind went back to certain remarks that were made here by members of the Fine Gael Party, over there, about credit. Their attitude seems to me to be one of opposition to giving any more powers to the Agricultural Credit Corporation to advance money for the development of the economy of this country.
Mr. Donegan: We do not agree with fish ponds, anyway.
Éamon Ó Cíosáin: We had a discussion on this before. I gathered from the speeches I heard that the Fine Gael members here were not in favour of an extension of credit on the part of the Corporation for the development of agriculture.
Mr. Burke: Who said that?
Éamon Ó Cíosáin: I heard it said before, and it would appear to me that the speeches made on this section today are in keeping with what was said here before.
Mr. Burke: Was it some mirage, or something?
Éamon Ó Cíosáin: Not at all. I am recalling to this House what I have heard members opposite saying here in this connection. We have heard in the past from the very same people, the people sitting on those benches opposite, that agriculture in this country was starved of credit. Now that the Minister for Finance is giving the Agricultural Credit Corporation additional power to give credit for these worthwhile objects, we have a storm of abuse from the Opposition.
Mr. Burke: We want more money.
Mr. O'Quigley: When it comes to misrepresenting something——
Mr. Carter: This now is an expert on finance.
Mr. O'Quigley: ——there is nobody who can do it more successfully than Senator Ó Cíosáin or else the Senator has been asleep on the front bench. I have not observed his eyes closing.
Éamon Ó Cíosáin: I was very wide-awake.
Mr. Carter: Senator O'Quigley is offensive. He can make his contribution without being offensive.
Mr. Burke: Any time Senator O'Donovan or Senator O'Quigley speaks, there is a barrage of interruptions.
Mr. Carter: He is not making a contribution but a personal attack.
Mr. O'Quigley: Senator Ó Cíosáin looks most placid when he is asleep, I am sure. He referred to the Fine Gael Party and said they are opposed to giving more credit to the farmers. Nothing could be more untrue, and the Senator must know that. Our complaint is that not sufficient is being given in this Bill to the farmers. Not alone are we not cavilling at the powers being given to the Corporation but we want to see credit given to the farmers on easier terms.
When Senator O'Donovan said loans should be made available and that it is possible to make them available for as low as two or three per cent., Senator Brady raised his hands in horror and asked where one could get money of that kind. The Minister for Finance says: “I have power in the Bill to do exactly that.” So, when it comes to confusion and inconsistency, it is all on that side of the House. We had Senator Carter flatly contradicting the Minister for Finance and staling that this Bill is part of their project while the Minister for Finance tries to say it is a direct result of the Gilmore report inaugurated by the inter-Party Government.
Mr. Carter: That is the second time the Senator has misrepresented that point.
Mr. O'Quigley: Senator O'Donovan said that the Corporation ought to go into business in competition with perhaps  some of its own creditors. He said there is no use in the Corporation taking over a business that is not thriving and putting it on its feet, the result of that activity being that some other firm in the same kind of business will find itself, in due course, on the rocks. That is Senator O'Donovan's warning, and it is a reasonable warning on this section.
I want to raise just one point. I had not intended to speak and probably would not have done so but for the outrageous charges of Senator Ó Cíosáin. Subparagraph (b) reads:
appoint and remunerate clerical, technical and managerial staff for schemes and projects referred to in paragraph (a) of this section and assist and advise in relation to the appointment of such staff,
It is purely a small matter. If the Corporation go in on some of these projects and schemes or inaugurates them, I want to know if provision is being made to provide for the superannuation of the clerical, technical and managerial staff that may be appointed in accordance with the powers in subparagraph (b). In all cases where superannuation schemes are to be established by a semi-State body or company over which the Legislature exercises any form of control or in the establishment of which it participates, you always find a provision enabling the company or semi-State body to make a scheme of superannuation and to amend it. If the Agricultural Credit Corporation go in on projects of any kind, it seems to me that this ought to be done. I expect they probably will do so in relation to schemes that will lapse.
Mr. Carter: There is nothing about superannuation in the section. The Senator has it on the brain.
Mr. O'Quigley: That is precisely what I am talking about. I want to know if it ought to be in the section.
Mr. Carter: It is what is in the section that counts.
Mr. O'Quigley: It is not. If there is not power in the Corporation to provide  a superannuation scheme, then we can consider it and put it down on Report Stage, if the Minister is well disposed towards it. It is not in the section; I am asking if it ought to be in the section. I am saying that the schemes and projects which the Corporation are likely to undertake will probably be permanent ones and if they are to be permanent, we should, in addition to remunerating them, provide power to give these people superannuation.
Mr. Carter: The Senator twice repeated a misrepresentation of what I said. I said that the Programme for Economic Expansion as issued by the Government visualises an expansion of credit and therefore the methods by which that credit would be brought about were the methods of the Government. The method the Government adopted was that they brought in Mr. Gilmore. It is not the first time in this House that an attack was made on Mr. Gilmore, or rather, not on Mr. Gilmore, but on the Government for bringing in Mr. Gilmore——
Mr. Burke: Question. Who attacked Mr. Gilmore?
Mr. Carter: ——and motives were imputed to the Government——
Mr. O'Quigley: Who attacked him?
Mr. Burke: Poor Mr. Gilmore——
An Leas-Chathaoirleach: I do not think the Senator is correct.
Mr. Burke: ——he cannot defend himself here.
Mr. Carter: I said attacked the Government and not Mr. Gilmore.
Mr. Burke: Everybody heard the Senator.
Mr. Carter: I amended that.
An Leas-Chathaoirleach: It is quite all right. The Senator did not mean that there was an attack on Mr. Gilmore.
Mr. Carter: There is no use getting hot and bothered. If the Senators opposite put their heads together, although it might cause a clash of timber, they  will soon see that there is a great necessity for this section. The section is a piece of forward-looking legislation. Senator Donegan talks about bees and what happened 40 years ago. We are thinking about 40 years hence. Fine Gael gropes in the shadows of the past, as was said elsewhere last week.
Dr. Ryan: Because they have no future.
Mr. Carter: The Leader of the Fine Gael Party in the Dáil had to go back 40 years to dig up slogans. We are about to enter a bigger era.
Mr. O'Quigley: With 100,000 new jobs.
Mr. Carter: We are going to make that promise good, too. That is what is rankling with the Senator. Give us a little bit of time. We have been barely three and a half years at work and we started with a great handicap. The Senator knows that very well. When the old cry was “Tighten your belt another hole”, we had to loosen it. Since that, our slogan could be said to be “Open your belt another hole”. Therefore, there is no need to take exception to this section which provides for development of a character that can be called expansionist. If the Agricultural Credit Corporation visualise a scheme which will not clash with private enterprise, they are entitled, under the terms of the Bill, to help to promote that scheme and to grant those formulating the scheme the necessary facilities and to take part in it, if necessary. That is economic development; that is development in the agricultural sector.
Dr. Ryan: Senator Cole asked whether under this section the Corporation would be empowered to help in the education of a farmer's son. That would be covered by subparagraph (a) all right. Now to clear up another point. Senator O'Donovan, who is now in the Chair, said that fish culture and forestry were already covered in agricultural credit legislation and that I had said in my opening address that we were covering it for the  first time. I am mentioning that because he quoted me. It is not covered and if anybody will compare Section 3 of the Agricultural Credit Act, 1947, with subparagraph (b) (ii) of this Section 8, he will see it is exactly the same, except that fish culture and afforestation are put in. They were not in the original Act. They are put in now for the first time, so far as this legislation is concerned.
I do not think it is right that we should take Senator Donegan's word that fish culture in this country is an absolute failure. There will be snags and it may be necessary to improve as times goes on, but, after all, it was tried only about 18 months ago and we should give it a chance to succeed. I do not see why there should be such contempt, as it were, for the Minister who brought this into being for the first time. It may be a failure—I do not know—but if it is, we cannot entirely condemn a Minister for trying it out, seeing that it has succeeded in some of the northern European countries. If that sort of attitude were to be adopted, no Government could try anything about which there was doubt. I do not think it is a failure; I think it will succeed and certainly there are very reputable businessmen connected with some of the fish culture which is going on and I shall be very surprised if it is not a success.
Senator Donegan seemed to be very indignant about something or other. I do not know what it was, but he even went back to the killing of calves. When this matter is raised, I can never let it pass without protesting and without giving my side of the case. That was one of the measures which was found necessary at that time to beat the British Government and their allies, the Blueshirts. We had to do it for that reason. I do not think it is bringing any credit on the representatives of the Blueshirts to draw attention to that incident. I do not think they will go down in a favourable light in history. They should forget about it completely. We did not raise it——
Mr. Burke: No one mentioned Blueshirts.
Dr. Ryan: I hope they will drop it and not say anything more about it.  This section, as the marginal note says, deals with “Participation by the Corporation in certain schemes and projects relating to agriculture.” It is a very limited section of this Bill but our discussion appears to have ranged very widely. I do not know if any other point in particular was raised except the question asked by Senator Cole.
Question put and agreed to.
Question proposed: “That Section 9 stand part of the Bill.”
Mr. J.L. O'Sullivan: I was glad to hear the Minister saying that he had instructed the Agricultural Credit Corporation that in future they should take risks, but I see nothing in the Bill to indicate they will take any greater risk now than they took in the past. When we examined the risk they took in the past, we can see clearly the reason there was no expansion in the amount of money the Corporation gave to applicants. If we look over it, we can see exactly what happened. The Corporation require two sureties to guarantee the loan given to an applicant. If the applicant failed to pay back his interest and principal, those two sureties were called upon to pay the money. I can see that in this Bill we have the same duty. It meant that the Corporation did not take a risk and will not take a risk in future. If the applicant fails to pay up the principal and interest, the two sureties will be called upon to pay the amounts. I should like to know how much money has been paid in by sureties on behalf of applicants who failed to pay their principal and interest. I should say it is a fairly goodly sum.
I would ask the Minister whether he would accept an amendment on Report Stage providing that the Corporation should not in future require sureties. We are all aware that any farmer who is any way creditworthy can go into any bank and get, with two sureties, an amount of money to tide him over a difficult period, to buy new machines or increase his stock. The Corporation were formed to help the  agricultural community. Yet we find it is even harder to get a loan from them than it is to get it from the commercial banks.
I urge the Minister to consider this very carefully. As a farmer myself and as one who is aware of the difficulties of the small farmer at the moment, I can say it is almost impossible for him to get money from the Corporation. As I said, if he called upon two of his neighbours and went to a bank, he could get the money a little easier than by doing it through the machinery of the Corporation. If the Corporation are in earnest about helping the farming community, they should take out this section dealing with sureties and take the risks the Minister asked them to take when introducing this Bill.
Dr. Ryan: The practice of the Corporation is to make a loan on the security of the land. My own experience—I do not know what the Senator's experience may have been—is that I approached the Corporation several times on behalf of borrowers. I have got more letters now, I think, than I got in the past because farmers, knowing that the Minister for Finance is connected with this, write to me to tell me their case. Wherever the Corporation could get a mortgage in the past, they took a mortgage and no surety was asked for.
In future, the position will be easier because they will charge the land, instead of taking a mortgage, which will be an easier way of doing the business and will be just as secure for the Corporation and more convenient for the borrowers. Sureties will not be necessary where the land can be charged but there are cases such as the case I dealt with very recently. A man came to me looking for a loan from the Corporation. The Corporation had lent him as much as they possibly could on the value of his land. He was going into a specialised business, which I need not mention and the loan he was looking for was substantial. Certainly the land would not be value for the loan, if anything should go wrong. They asked for sureties in that case. They were quite entitled to ask for sureties because the land was not sufficient guarantee and  he was very glad to get the sureties in order to procure the money. I put it to the Senator, therefore, that to write into the Bill that they must not take sureties would not be in the interest of the borrower because the borrower very often would like to have an opportunity of producing sureties. It is better to leave things as they are.
I have figures for the year ending April, 1960 which show that 95 per cent. of the money was advanced by way of mortgage and 4¼ per cent. on personal securities.
Professor Hayes: 4¼ per cent.?
Dr. Ryan: Only in respect of 4¼ per cent. were sureties asked for.
Mr. J.L. O'Sullivan: Has the Minister figures for previous years?
Dr. Ryan: I have got the figures for last year only but I doubt if there is any reason to believe there is any difference. I do not think it would be advisable from the point of view of the farmers to have these personal sureties taken out. I do not think the Board of the Corporation would object very much because it would get rid of these very troublesome cases. The effect of taking it out would be that the Corporation would not lend at all. It is better that we should not remove that method of getting money to the borrowers.
Mr. O'Quigley: This section is an improvement on the present position in that loans can now be made to a person who is not the registered owner of land. Senator O'Donovan, when speaking on the Second Stage, said that quite a number of farmers are not the registered owners of their land and, indeed, cannot be oftentimes until the statutory period of 12 years has been completed, which would give them an opportunity of becoming registered as full owners. The situation might arise where a man might in the eighth year require a loan urgently. This section will enable him to get that loan purely in his capacity as occupier. Whatever we may have  to say about other sections of the Bill, we must recognise that this will be an amelioration of the position of people in that kind of situation. The Minister is to be congratulated—to borrow a phrase from the other side of the House—on this section.
It struck me, however, as an extraordinary thing that when it comes to ensuring that you press down on borrowers, you can go to great lengths to do so. It is remarkable that there are three pages of the 10½ pages of type in this Bill concerned with guarantees to ensure that moneys borrowed by the small farmer will be repaid to the Agricultural Credit Corporation of Ireland. The provisions are quite elaborate. I think that, as far as the question of repayment is concerned, the Corporation can sleep quietly in their beds, in the certain knowledge that there will be some one or other of the subsections of Section 9 available to them to ensure that the small farmers to whom they lend money will not be able to get away with a halfpenny. That is a tribute to the diligence of the draftsman and no doubt to the desire of the Corporation and the Minister's Department that public moneys will not be wilfully wasted.
There is one other matter I want to refer to. It is a matter which perhaps could not have been thought about in the drafting of this Bill, since it does not concern the interests of the Department of Finance or the Agricultural Credit Corporation. It concerns the interest of the individual in possession of registered lands of which he is not the registered owner. It happens in this country—I do not say frequently— that the registered owner may be the father of a family who goes to work in England, leaving behind him a wife and children. After a time, the letters become fewer and the money orders become fewer, and in time all contact is lost with the father in England. The mother struggles on and rears the family and perhaps they all go away in time. It can then happen, and has happened to my certain knowledge, that the father — a kind of prodigal father, not a prodigal son—returns to his home. Unlike the prodigal son, he  is not welcome home—it is the inverse of the prodigal son being wanted by the father. In this case, the son does not welcome back the prodigal father, and does not want him back at all. The father comes back, and the next thing that happens is that ejectment proceedings are started and the father ejects the son.
Under subsection (5) of this section, provision is made whereby the registered owner can obtain from the previous registered owner repayment or recoupment of the moneys which the first registered owner owed to the Agricultural Credit Corporation. The same provision applies in relation to the “person in occupation”. He can recover from the person previously in occupation a debt paid by the present occupier. If the person in occupation is not the registered owner, he also can obtain payment of the moneys which were the personal liability of the previous registered owner or previous occupier, as the case may be.
If the registered owner succeeds in ejecting the person in occupation who has effected permanent improvements, such as the building of outhouses, or perhaps drainage, or perhaps the stocking of the land, but particularly improvements on the property—on the farm itself—if the person in occupation has spent money in that way I should like to see a provision in this Bill whereby he, or the returned prodigal father, would not be entitled to the full benefits of the improvements which had been brought about by the efforts of the occupier, or the son, but that he would under this Bill be liable to repay to the son so much as had been expended by the son on the property. That would be giving the same kind of justice in that type of case as is being given under the provisions in this Bill whereby the registered owner in regard to the previous registered owner, or the person in occupation in regard to the registered owner or the person previously in occupation are entitled to be recouped for moneys paid to the Agricultural Credit Corporation.
I think the case I am making is a very strong case in justice. We should face the fact that such cases have happened  and when they occur, there is a grievous loss to the son. The same thing could apply to brothers of the registered owner. It could happen that the person entitled in law to possession of the land could return and oust the person in occupation who had repaid the loan to the Agricultural Credit Corporation and effected permanent improvements. I believe a strong case can be made to ensure that situation is not allowed to arise under this Bill.
Quite clearly, I do not expect that the Minister will be able to indicate his attitude on this matter straight away, but from what I have said, he may be able to indicate that he has a certain sympathy with it. I regret to say that, despite an earlier study of the Bill in some detail, this matter did not occur to me. If the Minister is prepared to indicate that he will give sympathetic consideration to a relevant amendment on Report Stage, I should be happy to put one down in a form which will meet the Minister's wishes.
Mr. Brady: I have some experience of the Agricultural Credit Corporation. In introducing this measure, the Minister told us there would not be personal sureties where the land would be charged. He had to repeat himself on the same subject today in reply to some queries which were raised.
The attitude of the banks to agriculture has changed very considerably over the past three years, and they have gone a long way in the matter of giving credit to farmers for the purchase of various stock and machinery. I am very pleased that the banks have taken that attitude and I know quite well that for that reason the attitude of the Agricultural Credit Corporation will not be anything like what it was.
The Minister instanced a case of a man who already has a mortgage or a first charge on his holding and who wants a further loan. He is placed in a very awkward position. I believe it is only in exceptional cases they will ask for sureties, where they regard the value of the holding as not being sufficient security. The Minister definitely said that where the land can be mortgaged,  there would be no personal sureties.
We hear a lot about the banks. After all, whose money have they but the money of the industrious depositors of the country. I suppose they have to see that the money is properly and judiciously handled. If a man goes in with a deposit, they will not tell him that the money has been lent to so-and-so and that there is a doubt about getting it back. People talk very lightly about commercial banks but it has been proved that their policy is not as bad as some people pretend it is. I think that any honest farmer who goes to a bank will get a loan if the bank manager knows him. That goes a long way to meet the demand. I believe the banks should not be held up to odium in the light of experiences I know of.
Mr. Burke: I said the other day that I know the big people get more but most of the depositors are small. Many of them are members of the farming community who have to be very prudent. They may want to put money on deposit for only six months, because they may then need it for crops, or stock, or to give a dowry to a daughter, perhaps. We are all close enough to rural Ireland to know that the small depositor gets small interest, and the big depositor gets big interest. I cannot understand why the farmer has to pay big interest on the money he is borrowing and should get small interest on the money he lends. That is the rub.
As I said the other night, if someone wants to buy a pub in a village in which there are three banks, they will be prepared to give the money, but they will not be so anxious to give money to help the farmers when they should be twice as anxious. This is not Fianna Fáil politics or Fine Gael politics.
Mr. Brady: It is the fantastic price being paid for land at the present time.
Mr. Burke: When I was very young, I used to hear some people saying that bank managers were out in force all over the country asking people to take money because they had the wind-up and thought it would be safer in land.  I do not want to prolong this debate, but I think there is a point in lending money at a low rate for projects that are desirable and beneficial to the progress of the country rather than for things that are bad for it. That is the point I tried to make the other day, and no one commented on it except myself.
Dr. Ryan: There is no comment at all because I do not know what the Senator has in mind in talking of things that are bad for the country. Somebody must be giving the farmers money because land was never so dear. They must be getting it somewhere.
Mr. Burke: That is so, but when somebody wants money and he tries to borrow it, he has to pay dear for it and that is bad.
Dr. Ryan: That is right. Senator O'Quigley asked a question about what he termed the prodigal father. The question he asked was whether the son, having worked hard on the farm on credit from the Agricultural Credit Corporation, made big improvements and paid back the Corporation, should be compensated by the father. Perhaps he should, but that is not a matter for this legislation. Take the parallel of a house that is let. The rent restrictions legislation would apply. I think the only parallel here would be that the Land Commission should deal with it. It is a case the Senator would have to put to the Land Commission. Certainly it should not be brought into a Bill of this kind. Without examining the merits of it, I would say that it should not be put in. I do not know if the merits are very strong or not.
Question put and agreed to.
Sections 10 and 11 agreed to.
Question proposed: “That Section 12 stand part of the Bill”.
Mr. O'Quigley: I want to point out that the first part of this section reads:
Subsection (1) of Section 21 of the Act of 1947 is hereby amended by—
 (a) the deletion in paragraph (a) of the definition of “the mortgagor” of “who is a farmer”.
That is anything but elegant draftsmanship, and I wonder would the Minister, in the interests of clarity, give some direction to whoever is responsible for that kind of thing not to use that form of amendment of a section. In my opinion, it would be much better if the whole section sought to be amended were completely deleted and a new subsection inserted. It took me quite an amount of time to make out what it meant, but having read it, I suppose all those “ofs” of something else are probably in order and would be capable of true construction by the Supreme Court after a four or five days hearing.
Question put and agreed to.
Sections 14 to 17, inclusive, agreed to.
Schedule agreed to.
Title agreed to.
Bill reported without amendment.
Report Stage ordered for Wednesday, 24th May, 1961.
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