Dáil Éireann debate -
Thursday, 17 Jun 1926

Vol. 16 No. 12

PUBLIC BUSINESS. - TRADE LOANS (GUARANTEE) (AMENDMENT) BILL, 1926—SECOND STAGE.

MINISTER for INDUSTRY and COMMERCE (Mr. McGilligan)

I move the Second Reading of the Trade Loans (Guarantee) (Amendment) Bill. The provisions of this amending Bill have to be looked at in relation to the principal Act, when it will be seen that in reality there are only two changes proposed and those are with regard to the amounts that may be guaranteed. Originally £1,000,000 was set aside as a possible fund to be called on for the giving of guarantees. That was divided as between the two main sections of the Act. Three-quarters of a million might be guaranteed under one section and one-quarter of a million under the other. The second provision has not been called on, to any extent, and it is accordingly proposed to have the principal Act amended so as to re-allocate that original million, making, now, provision for £900,000 under Section 1 and £100,000 under Section 2. The only reason for that is what I have remarked, that applications to no great extent have come in under Section 2. It is proposed, therefore, to have the main amount of money allocated to the first section of the 1924 Act. Outside that the Bill merely carries the existing Act on for a further year. It is only recently that a decision was come to with regard to the continuance of the Act.

About last Christmas this matter arose, in a peculiar way, for decision. At that time I felt that while the results of the Act had been disappointing, the number of applications received had shown, definitely, a necessity for some provision of this sort; but it appeared to me that whatever facilities were required were likely to be met in another way. Considering the slacking off in the applications which had just occurred about that time, I had pretty well come to the conclusion not to ask the Dáil to extend this Act any further. It may seem that I was coming to that conclusion very much earlier than was required by the point of time at which the present Act would expire, but the matter came for decision in this way. There was a company being started —the Industrial Trust Company. Two of the members of the Advisory Committee, under the Trade Loans Act, were to be associated with that, and I was faced with the difficulty, there and then, of finding a new Advisory Committee, even for the running out period of the 1925 Trade Loans (Guarantee) Act. The point had been raised even before that when one of the members of the Committee, Mr. Dowdall, in May, 1925, decided that his own business commitments were so large and the drain upon his time required by attention to the Committee's work was so great, that he would have to resign from the Advisory Committee. When he proffered his resignation in May, 1925, I pressed him very strongly to continue as a member of the Committee, until such time as I could discover somebody who was willing to take his place, and to that he agreed. In December last year Mr. Dowdall, for some different reasons, raised the question of his resignation again and did, in fact, send in his resignation. The other two members of the Committee, Mr. Smith-Gordon and Mr. Telford, the Chairman, were also very anxious at that period to retire. They put the point to me in this way: that if they continued to act as members of the Advisory Committee under the Trade Loans Act and were, also, associated, as they were going to be, in the new year, with the new company, it might put me in an invidious position afterwards if there was any criticism made of their continuing to act in this dual capacity. That led, at any rate, to a consideration of the continuance of this or any similar Act.

I reviewed the circumstances at that time and made up my mind, as I say, that there was no necessity to have the Act continued for another year. Having my mind fairly clear on that point I approached Mr. Telford and Mr. Smith-Gordon, and put it to them that inasmuch as fresh applications did not seem to be coming in, in any great number, and seeing that already they were seized of the facts of the applications which had come before them and that the setting up of the new Committee would necessitate delay and would mean the holding up of applications in process of being considered, and seeing that it had been determined not to continue the Act beyond July this year— on these grounds I asked them to reconsider the decision they had pressed upon me on several occasions with regard to their resignation. It was with a certain amount of reluctance that the two gentlemen agreed to act on the Committee. The position at the moment is that I am without an Advisory Committee. The Advisory Committee has broken up. Both Mr. Telford and Mr. Smith-Gordon have resigned, and the fact that they did not resign or were not allowed to resign last December, when they pressed they should be allowed to do so, was entirely due to me. My action is explainable for the reason I have given.

I insist at some length on this, because a discussion in the Seanad yesterday, and in the Dáil on an earlier occasion, if nothing else, must have revealed to Deputies that these two gentlemen have been criticised for continuing to act on the Advisory Committee while being associated with the Industrial Development Company. If there is blame attached to anybody for that it must attach to me alone. I insisted that they should stay on, and was barely able to convince them by the reasons that I put forward that they should remain on. No matter what discussions we may have afterwards with regard to this Bill or to certain incidents, or one transaction that has been unfairly criticised arising out of the operations of the Act, I would ask the Dáil to be quite clear about the position that these two gentlemen occupied. These positions have been very onerous and the work has been very responsible. They have given a tremendous amount of their time to the investigation of the applications that came before them. They have neglected their own business in order to give their attention and experience to the working of this Act. I feel that I should here make that statement with regard to them and I ask the Dáil to agree with me that some recogtion is due to the members of that Committee for the very onerous and responsible work which they undertook without fee or reward in helping a Department of State to carry out an Act which was brought forward in the best interests of the State and with the object of getting the conditions of unemployment bettered.

I am at the moment without an Advisory Committee, and as a result of the abuse that has been poured around certain people recently, I even hesitate to approach anybody with regard to acting on this Advisory Committee for the future until I see what action the Dáil may take this day with regard to the Bill or, apart from the Bill altogether, until I discover if this House is sufficiently aware of the services rendered by these two gentlemen and is willing to award them some recognition of their services. If that is done, then I can, with a certain amount of hope, approach other men of capacity and experience and ask them to act in the same position, if this Bill, renewing the expiring Act, be passed. There has been one transaction under this Bill very definitely criticised, and so far as I know there has been no word of criticism of the Advisory Committee nor, as I had to point out yesterday, so far as I know, has there been any criticism of the National Land Bank as a bank, for any part it may have had in the particular transaction to which I refer. But there has been criticism of the transaction; and on that particular transaction, inasmuch as it is relevant to the continuance of this Act. I wish to make certain references. The first criticism is contained in the Appropriation Accounts for the year 1924-25, in paragraph 91, where the Auditor-General refers, under the head of Vote 65—National Land Bank, Limited—to a certain transaction. It was in connection with the loan granted to Alesbury's, of Edenderry, and certain remarks were made with regard to that transaction, finishing with this: "In view of the limitations for guarantees of loans imposed by Section 1 of the Act, I did not consider that the guarantee in this case came within its terms, and I have deemed it necessary to call attention to it in my report." The Public Accounts Committee have discussed the same transaction and they have issued an interim report dealing with it. Unfortunately I do not think that the interim report can properly be discussed in the absence of the evidence. There has not been produced the evidence on which this interim report is based, and I have hopes that at some time before the Dáil rises we shall have an opportunity of seeing the evidence on which this interim report is based so that we may come to a conclusion as to whether and in fact to what extent the recommendations of the Public Accounts Committee should be accepted. There are, as far as I am concerned at the moment, three recommendations which have touched on this Bill or the continuance of the expiring Act, and they are given in paragraphs 14, 18 and 19 in the interim report. Paragraph 19 refers to the difficulty about defining what is "a capital undertaking," and the last three lines of the report state that "the Committee has been led to the conclusion that the expression ‘a capital undertaking' used in the section ought to be more clearly defined than it is in Section 8 of the Act." As I say, I have not the evidence upon which that report of that Committee was based. But an official of my Department attended for the purpose of giving evidence, and I did inquire from him as to what facts had been put before the Committee.

I gathered that a representative of the Auditor-General's Department, in giving evidence before the Committee, asserted that pretty well nearly every economist had a different interpretation of what "a capital undertaking" meant. And apparently the Auditor-General's Department has some interpretation of its own upon which this conclusion set out in paragraph 91 of the Appropriation Accounts is based. Now we have that statement that pretty nearly every economist has an interpretation of his own, and we are asked for the purpose of this Act to define better what a capital undertaking means. I have no dislike for a better definition, but I hope that the Committee's report does not mean that I am to bring forward a better definition. If there is any definition brought forward at the Committee Stage, or if there is a variety of definitions, we can have them considered and have the best one chosen and put into the Bill. With that I leave paragraph 19.

Paragraph 18 of the Public Accounts Committee's interim report states:—

"The Committee considers that the creation of a liability in front of a State guarantee is not desirable and should not be repeated."

I am not quite clear as to what is the effect of the recommendations of the Public Accounts Committee presented in this report, laid on the Table of this House and afterwards discussed. Is it that next year if some guarantee when given is seen to have involved the creation of a State guarantee which is postponed for some prior liability, I am to be held up to criticism and told: "Well, the Public Accounts Committee called your attention to that last year and it should not have been done."

If that is to be the effect of the recommendation I think we should have it more clearly before us. If there is anybody here who thinks the recommendation should be adopted, then further amendment of the Bill should be moved so as to make it quite rigid that where a guarantee is requested in circumstances where there is a liability in front of a State guarantee, that loan should not be guaranteed. I would like to warn the House that if that is put in the effects of the Act are going to be very seriously limited.

I may say that is the practice of the Advisory Committee. That is what they aim at. I do not know, as regards cases in which guarantees have been given, that there has been more than one other in addition to the Alesbury case in which there was a liability which was prior to the State guarantee. I believe there is one other case which is under consideration in which that might turn out to be so. That is definitely the aim, object and practice of the Advisory Committee, and the two Departments are in accord with that. I ask the House to hesitate before they put that into the Bill as a rigid rule. I should say the case other than the Alesbury case in which that rule was not adhered to is one of the best guarantees that has been given, and the State's secondary liability by way of guarantee is quite well protected even though there be this other liability in front of it.

In so far as this report of the Public Accounts Committee is to be taken as being a recommendation, a very definite recommendation, that something is not desirable and should not be repeated, I agree it is not desirable, and I agree it is not the practice. In every case in which it has been found possible we have always tried to get the State as the first charge; but it is not always possible, and, if other applications are to be ruled out because that is not possible, then the effect of that paragraph on the working of the Act is going to be rather serious.

Mr. WILSON

Does that mean that you have never got a first charge up to the present?

Mr. McGILLIGAN

No.

Mr. WILSON

Then what does it mean?

Mr. McGILLIGAN

I have stated the number of cases in which actual guarantees were given to date. There are only two cases in which it could be found that that rule had not been adhered to, Alesbury's being one and there being one other case. But if I take the number of applications which come in and in which we are faced definitely with this proposal that we are asked to guarantee money to a concern where there is already some liability, and if we are asked to refuse applications simply for that reason——

Mr. JOHNSON

Perhaps the Minister will read the recommendation? It might save trouble. The creation of a liability in front of a State guarantee means the creation of a new liability.

Mr. McGILLIGAN

If it is brought down to that, then the Alesbury case is the only one that would come in. The other case is outside that. On the other hand, I want to put it to the House in this fashion: even now, with the creation of a liability in front of a State guarantee, is there to be any advertence to the amount of the new liability that is created prior to the State guarantee? Is it to be that if there are any brought in, then the application should not be granted, or are we going to have a sum fixed beyond which one may not proceed with the application? Those are points that will arise again on Committee Stage, but unless there be an amendment brought in of a certain type and inserted in the Bill I would like to give notice that I do not consider myself bound merely by this recommendation of the Public Accounts Committee in the carrying out of the Act next year.

The third point is in paragraph 14 of the Report:

"The Committee considers that as this question directly affected the Exchequer, the submission of the case to the Attorney-General ought to have been made through the Department of Finance in order that that Department, as the central financial authority, might be fully informed on the matter and given an opportunity of making any observations thereon."

What that means in relation to the Alesbury case I do not know, unless it be this: that the Minister for Industry and Commerce put to the Attorney-General for his opinion a statement of a case and secured the Attorney-General's ruling in his favour; but if the Minister for Finance had put a statement of the case to the Attorney-General, the Attorney-General's opinion would have been adverse. If that is what it means, it indicates that I put a statement of the case to the Attorney-General which was not fair. I would like some member of the Public Accounts Committee to state later whether that is the meaning to be taken from that paragraph.

I must get back to the Auditor-General's report, and certain other remarks that have been made following on it. The Auditor-General simply states: "I did not consider that the guarantee in this case came within its terms and I have deemed it necessary to call attention to it in my report." The Auditor-General can report in any way he pleases; there can be no quarrelling with that. But coming here later after the Auditor-General's report I feel I have a right to add in certain other facts which were not adverted to in the Auditor-General's report, and to which public attention was not called in a similar way or with the same publicity as was given by this particular paragraph in the Appropriation Accounts for the year 1924-25.

There is no reference in the Auditor-General's report that the Attorney-General's opinion was obtained on the only matter that it was thought fit to refer to the Attorney-General, and the only matter which the Auditor-General thought fit to criticise—that was on the legal point. Personally, I feel there would be a full presentation of the facts if the Auditor-General's report had stated: "Although the Department concerned fortified itself with the opinion of the Attorney-General, I still do not consider that the guarantee came within its terms and I have deemed it necessary to call attention to it in my report." I think the public has not got a fair presentation of the case until that addition is made to what the Auditor-General has reported.

I am informed again that an official of the Auditor-General's Department, in giving evidence before the Public Accounts Committee, made two statements: one was that the only files which the Auditor-General had a right to call for were the files of the Accounting Officer, that the Accounting Officer was the Secretary to the Department of Finance, and then I am told—I can be corrected in this—that this statement was made, that "on the files submitted to me I did not see the reference of the case to the Attorney-General or a copy of the Attorney-General's opinion." If that was not on the files submitted to the Auditor-General there is a serious lapse from the files of the Department of Finance and I cannot believe that that was not on the file, because on a particular date, having received the Attorney-General's opinion, I forwarded to the Department of Finance a letter which covered the statement of the case as made to the Attorney-General, having below it a copy of the Attorney-General's opinion. That was dispatched to the Department of Finance on 22nd January, 1925, and that covering letter of mine, plus the attachment—the statement of the case to the Attorney-General and the Attorney-General's opinion—must necessarily have been on the Department of Finance's files. Whether it was or not can be determined later. However, as I say, the Comptroller and Auditor-General's Department was responsible, I believe, in the evidence before the Public Accounts Committee, for the statement that the files submitted from the Department of Finance did not contain the reference of the case to the Attorney-General or the Attorney-General's opinion.

I may say in passing that notwithstanding the Auditor-General's comment as given in paragraph 91 of this report, the present Attorney-General is still of the opinion that the case did clearly come within the terms of the Act, and he agreed with his predecessor, who signed to that effect in 1925. The official of the Auditor-General's Department is reported to me as having said further that for the Auditor-General to have made any remark with regard to the Attorney-General's opinion would, in fact, have meant this, that the Comptroller and Auditor-General was sheltering behind the Attorney-General. That seems to me to be quite a misunderstanding of the point that was expressed by my own departmental officials in giving evidence before the Public Accounts Committee. There the point was made that a full presentation of the case required simply a statement that the Attorney-General's opinion had been sought and agreed that the case came within the Act. There was no question of sheltering behind the Attorney-General in the sense of saying "That ends it as far as we are concerned." The Auditor-General could have gone on to remark: "notwithstanding this, I am still of opinion," and I repeat again that the public have not got a fair presentation of the facts as long as the fact of the reference to the Attorney-General and his opinion as a favourable one is not given.

However, on that we get paragraph 14, which states that the Committee is of opinion that the submission of the case should have been made through the Department of Finance. First of all, the question, I do not think, directly concerned the Exchequer —indirectly it did. If anything that concerns the Exchequer is to be put up through the Department of Finance, then it means the scrapping of Government departments, leaving one super-department and only one single department in the State. If matters that are directly connected with the Exchequer are in every case, no matter what the special point be—legal point or otherwise—to be put up through the Department of Finance, and they are to be the Department to deal with it, then the Departments of State can be definitely coalesced into one.

What was the question referred to the Attorney-General? It was not a question as to the amount of money that should be given—the amount of money that the assets of the firm seemed to guarantee—nothing of that sort. That was a matter that arose later and was considered in the departments, and all the views of the departments were in agreement about it. The single point that arose was a legal opinion: did something come within the terms of the Act, and it arose on Section 1 of the Act of 1924. Section 1 states:—

"If the Minister for Industry and Commerce, after consultation with an advisory committee nominated by him in conjunction with the Minister for Finance for the purpose of this section, is satisfied that the proceeds of any loan proposed to be raised ... are to be applied towards or in connection with the carrying out of any capital undertaking...."

That is the point that is questioned. It is: "If the Minister for Industry and Commerce ... is satisfied." Yet I am told by the Public Accounts Committee that the reference of that legal point for my satisfaction to the Attorney-General should have been made by the Department of Finance. I wonder had the Public Accounts Committee the terms of the Act before them?

Major COOPER

Will the Minister read what follows and he will find that he may, if he is satisfied, "subject to the limitations hereinafter imposed, and subject to the sanction of the Minister for Finance."

Mr. McGILLIGAN

Yes, I will read the full section. The Deputy does not think that has any reference to the legal point?

Major COOPER

I am not contesting a legal point with the Minister.

Mr. McGILLIGAN

It reads:—

"If the Minister for Industry and Commerce, after consultation with an Advisory Committee ... is satisfied that the proceeds of any loan proposed to be raised ... are to be applied towards, or in connection with the carrying out of any capital undertaking ... the Minister for Industry and Commerce may guarantee in such manner and form and on such terms and conditions as he shall think proper subject to the limitations hereinafter imposed and subject to the sanction of the Minister for Finance, the repayment of the principal of such loan...."

When it comes to the guaranteeing it is subject to the sanction of the Minister for Finance, but as to the question are the proceeds of any loan going to be applied towards the carrying out of any capital undertaking, I am the only person to be satisfied, according to the Act, and not being satisfied myself I consult the only legal opinion open to me and I get a statement that this is within the terms of the Act, and the present Attorney-General agrees with that view. It was Deputy Cooper, I think, who, in the Public Accounts Committee, raised the point, had the Auditor-General's department any legal officer attached to it, and I think the answer was "No."

Major COOPER

No answer was given. Deputy Johnson ruled that it was not a matter for the Public Accounts Committee to discuss.

Mr. McGILLIGAN

I rather understood that Deputy Johnson, in reply, said that if he had not legal opinion he could always get it, and I took the implication to be that there was agreement in the Public Accounts Committee on what, I think, is a well-known fact, that there is no legal officer attached to the Auditor-General's department. It is a loan made under Section 1 of that Act that is in question. The only point that is questioned is: was it within the terms of the Act or not? I, as the person to be satisfied, took the opinion of the Attorney-General, and the Attorney-General said he had no doubt about it. The Public Accounts Committee now recommend that:—

"As this question directly affected the Exchequer the submission of the case to the Attorney-General ought to have been made through the Department of Finance in order that that Department, as the central financial authority, might be fully informed on the matter and given an opportunity of making any observations thereon."

As a matter of fact the Department of Finance afterwards got the reference of the case to the Attorney-General and his opinion, and they had then their chance of making any observations. If they considered that the presentation of the case to the Attorney-General was not fair there was plenty of time. The guarantee had not been given. There had been no expression of my willingness to give a guarantee at that period, because we then had to discuss and get our minds clear on the further responsibilities that were on us beyond the legal point. That is to say, as a business proposition. The Public Accounts Committee have a certain reference to that also. Again I say, they will have to make up their minds is this Act going to be carried on with the present machinery or is some other machinery going to be suggested. The machinery, so far as a business proposition is concerned, is that it is first investigated by the Advisory Committee. If they pass it it comes to me. I make certain investigations and inform myself in various ways and pass judgment upon it, and if it passes the Advisory Committee and passes me it goes on to the Minister for Finance.

He looks at it. He may turn it down completely, or he may say that the loan may be guaranteed subject to certain conditions and with certain limitations and all the rest put upon it. This, as a business proposition, passed the Advisory Committee, passed my Department and the Department of Finance. If it was not a business proposition which should have passed, then some other machinery has to be got for avoiding that type of proposition passing in future.

There are two things at issue in this. There is a legal question, and on that I make no complaint about anyone passing any judgment he likes as long as he makes a full presentation of the case and states the Attorney-General's opinion was taken. As far as the legal opinion is concerned the Department took every step they could have taken to clear up the position. Anyone can come after that and say: "I do not care what steps were taken. I do not care anything about the Attorney-General's opinion. I am still of opinion it is not within the terms of the Act." that can be said and there can be no complaint. But when this report, as it does by implication, refers to the whole matter as a business proposition, that is then the issue: was it a sound business proposition to have guaranteed? The machinery for getting that is very cumbersome. I suppose there is hardly a Deputy who has not some time complained to me of the delay that occurs through the complete investigation of these cases. The machinery is there, and the Advisory Committee appointed in a certain way, making the preliminary investigation generally, if you take the run of the cases, have to send the application back three or four times to get the case put up and full information supplied on which the Committee can form its judgment. That is presented to me and afterwards to the Minister for Finance. Only after it has got over all these obstacles does intimation with regard to guarantee issue.

The report of the Public Accounts Committee therefore raises three very serious points with regard to this. As to the minor point of definition of "capital undertaking," if that can be given and put up in a way to satisfy the House, and I might be allowed to say of any definition proposed how I think it is going to affect the working of the Act, I do not mind then what definition we get, and there may be an agreed definition if we can get one. The second point is, what is referred to in Section 18. I would ask, if that is considered to be a sound recommendation, that it should be brought in as an amendment in some section of the Bill, so that we can know where we are with regard to it. There is a third point with which I entirely disagree, and I again announce publicly that I will not, unless it be accepted by a vote of this House, accept what is stated in paragraph 14 as a guidance to me in the future, with regard to this case or with regard to Government business generally. If it is put forward here relevant to this Bill in a particular form and accepted as an amendment, then I am bound to accept it, but simply because it appears in this report I do not intend to accept it. If the Public Accounts Committee consider and can get this House to agree that propositions are being passed which are not good business propositions, then the whole machinery of the Act is called into question and it is for the Committee again to decide what better machinery they can evolve and how the object of this Act can be achieved; that is, the guaranteeing of money to industries likely to create employment, and combine that with the safeguarding of the public purse. That is the object of the Act: that money should be given in a certain way and, at the same time, certain precautions taken to see that the money is not wasted.

I have discussed this report of the Public Accounts Committee and I have very definitely stated the basis on which I am discussing it. Information is conveyed to me; it may be incorrectly reported, as I cannot say that an official's memory is so good as to bring back in every detail what has been suggested at the Committee. If some of my references are wrong they can be corrected. I have to discuss this on the evidence before me, on what came to me from my Departmental sources. That information may be accurate or inaccurate in detail, but it can be corrected. But I hope an opportunity will be given to discuss the report of the Public Accounts Committee with the evidence on which it was based apart from this Bill.

Mr. JOHNSON

I find myself in very great difficulty because the Minister's statement raises quite a number of questions of the utmost importance. We are asked to give a Second Reading to a proposal to extend the Trade Loans (Guarantee) Act of 1924 and the amending Act, and we are asked, inferentially, to discuss a paragraph in the Comptroller and Auditor-General's report in the Appropriation Accounts of 1924-25. We are also to discuss the functions of the Comptroller and Auditor-General, his relations to the House, the Minister's relations to the House as against the Comptroller and Auditor-General, and the part played by the Public Accounts Committee in legislative and financial procedure. That constitutes rather a big order to be taken with little preparation.

AN CEANN COMHAIRLE

Were the functions of the Comptroller and Auditor-General called into question at all by the Minister? I do not think they were.

Mr. JOHNSON

I think so, but not in so many words. I think the Minister criticised the action of the Comptroller and Auditor-General here, and yesterday in the Seanad, to some extent. I think he has done that without a clear understanding of the constitutional position that that officer holds. Let me say, first, with regard to the position of the Comptroller and Auditor-General, that while not technically, as you ruled some days ago, a civil servant, he is a public servant, and in that way he is not in a position to answer for himself in this House or in public. Consequently I think it may be said to devolve on the Chairman of the Public Accounts Committee to speak for him in a matter that affects his duties.

Having given some thought to this question for a year or two, and having taken account of the position of that officer as created and as it has developed in England, and in view of the fact—this is very important—that we deliberately took over the procedure and practice of the Comptroller and Auditor-General and his Department from the British procedure and practice, I say that the position of the Comptroller and Auditor-General ought to be very carefully safeguarded by the House, and his judgments, if they are to be called judgments, or his reports, and the method of arriving at these reports, while capable of discussion and capable of being answered and argued about by the appropriate Departments, ought to be considered very much in the way that a judgment of a court is considered. That is to say, that the form of a judgment of a judge would not be discussable in this House, and the form in which the Comptroller and Auditor-General presents his report to the Dáil, as he is required to do by law and by the character of his office, should not be subjected to criticism in this House. I am now speaking of the form. The practice in the matter is easily ascertained. The Comptroller and Auditor-General is required to examine the Appropriation Accounts. His position is that of a check on behalf of the Dáil, over the Ministry and the Departments in respect of State finances, and I think it is very important that we should leave that officer the freest possible discretion in regard to the manner in which he makes his report upon these finances. Particularly I think that the Comptroller and Auditor-General should not be subject to criticism by a Minister (especially if, as in this case, he is the Minister of a Department who is being criticised) in the Seanad, when it was suggested that the Comptroller and Auditor-General had failed to fulfil his duty—that is to say, that he had made a report which is not a full statement of the facts. The Minister's statement, as quoted, is: "He might be disposed to quarrel with the report of the Auditor-General, but would simply make the comments that it would be better if the Auditor-General, in making reports, would state the full facts. There was nothing to prevent the Auditor-General from writing in that the Attorney-General had ruled in a certain way."

I think the suggestion that the full facts had not been stated is very like a statement that a judgment of a Judge of the Supreme Court was couched in faulty language or that the judge had not summed up correctly and accurately. It may be said that that is placing the Auditor-General in a position which is above criticism, but I do not hesitate to place the Auditor-General in a position equivalent to that of a judge in regard to criticism in this House. The Auditor-General reports to the House, and, following practice, the House, for the better carrying out of its functions as the supreme financial authority over State funds, refers that report for examination and elucidation to a committee of the House, the Committee of Public Accounts. The Committee of Public Accounts would not, I think, presume to criticise the Auditor-General as to the language that he uses, or even the sins of omission or of commission which it might think the Auditor-General was responsible for. The Committee would recognise that the terms under which that officer was appointed are such as to place him in a peculiarly independent position, and it is very necessary that he should be recognised as being in that position.

The procedure in regard to the Auditor-General's report is, as it is known by those who have followed the subject, that the Committee of Public Accounts makes a report to the House, but so far as to its being authoritative in the sense of having the effect of law, that is, of course, out of the question. It is taken as a guide, if it is accepted by the Departments. The recommendations of the Committee of Public Accounts are subject to comment by the Department of Finance. If the Department of Finance dissents from any recommendations, it states the grounds of its dissent, and finally, if there can be no agreement, the matter is left for the decision of the House. In practice, between the discussions of the Committee of Public Accounts and the comments of the Department of Finance, a general understanding of procedure in regard to expenditure is arrived at. But if the Minister, notwithstanding anything that has been said by the Committee of Public Accounts, is going to follow a certain course, the report of this Committee can have no authoritative effect upon the Minister's action, which would be done in view of the House and in face of the fact that the Committee has reported to the House in a certain direction. So far as that goes, the Minister can still consider himself merely responsible to the House for his transactions as a member of the Executive Council. I think, too, that there is some error in the view that the Minister seems to have adopted in regard to the position of the Attorney-General. The Minister is quoted as having said in the Seanad yesterday: "There was nothing to prevent the Auditor-General from writing in that the Attorney-General had ruled in a certain way."

I will assume that the Minister did not really mean that an opinion of the Attorney-General was in any sense a ruling. Certainly the view of the Committee of Public Accounts, if I understand it, would be that an opinion of the Attorney-General, or any other opinion on a legal matter, would not and should not bind the Comptroller and Auditor-General in making a report upon any matter affecting finance, because the position is that if the Minister in this case or, in the case of the ordinary accounts, the accounting officer of the Department, could spend money in a particular direction, even with the sanction of the Department of Finance on the authority of the Attorney-General's opinion, we might as well dismiss any thought of having an auditor, and the control of the House over finance might be very largely nullified. The Act setting up this Audit Department sets it forth that "the Comptroller and Auditor-General shall certify and report upon the same"— that is, the Appropriation Accounts—"with reference to the Acts of Parliament under the authority of which such issues may have been directed." Further: "Every Appropriation Account shall be examined by the Comptroller and Auditor-General on behalf of the Dáil, and in the examination of such accounts the Comptroller and Auditor-General shall ascertain whether the money expended has been applied to the purpose or purposes for which such grant was intended to provide."

Further: "In all reports as aforesaid, he shall call attention to every case in which it may appear to him"— there is no question of legal opinion in the matter having to be sought, or not even any suggestion that it might be desirable in certain cases that he should seek legal opinion—"that a grant was for any other reason"—that is after mentioning certain reasons—"not properly chargeable against the grant."

Lest there might be any misunderstanding, I want to make it clear that there is no suggestion in the Auditor-General's report that any sum was not properly chargeable against the grant. Touching this aspect of the case—the position of the Auditor-General and the legality of any kind of expenditure and his position in regard to legal advice, outside his own office or outside such advice as he himself may seek—there is a reference in the records of the proceedings of the Public Accounts Committee in Great Britain to the action of the Comptroller and Auditor-General. It states:—

"The Public Accounts Committee of 1909 had before them a case where the legal interpretation placed by the Law Officers of the Crown upon the Old Age Pensions Act, 1908, that the allowance of a pension by the Pension Authority, made the payment in respect thereof a proper charge against the Vote so long as the allowance remained operative, appeared to them to set aside the statutory duty of the Comptroller and Auditor-General of investigating, on behalf of Parliament, the confirmity of a payment with the intentions of Parliament in making the grant. The course adopted by the Treasury"— equivalent to our Department of Finance—"and the amendments embodied in the Old Age Pensions Act, 1911, under which questions may be raised at any time as to the qualifications of pensioners, admit of points raised by the Comptroller and Auditor-General being referred back by pension officers to the Pension Committee, and if, necessary, to the Central Pension Authority. Most of the objections noticed by the Committee have thus been removed."

The point there is that the Treasury took the view that the Comptroller and Auditor-General and the Public Accounts Committee had no standing, in fact one might say no right, to complain or to draw attention to expenditure in connection with the Old Age Pensions Act, when the authority had been granted by statute to the Old Age Pensions Committee to do certain things, and the law officers of the Crown confirmed that view. The Treasury took that view for a time, but after discussion, they came to an understanding, which was that the Comptroller and Auditor-General had, in fact, the authority which he claimed, that no subsequent Act did override or could override in the circumstances the Act appointing the Comptroller and Auditor-General—that is, the Exchequer and Audits Acts. So that I am saying that, notwithstanding any legal opinion, the Auditor-General is bound to follow his audit irrespective, if he wishes, of that legal opinion, even though that legal opinion is communicated to him. As a matter of practice I understand both in England and here the Comptroller and Auditor-General may at any time seek the advice of the Attorney-General or any other law officer. But I would maintain that it is not by any means incumbent upon the Auditor-General to make mention of that fact in his report; and while he may do so as frequently as he wishes, my own view is that it is better for him to stand upon his own judgment in the matter and to make no reference to the opinion of any legal advisers.

We are dealing with a matter of finance. We are dealing with State finances and the effect of any action of a Department upon the State finances. The Minister has made a great point of the fact that he sought and obtained the opinion of the Attorney-General upon the question of whether the proposed guarantee came within the scope of the Act. He sought the advice before he came to a decision whether this guarantee should be given. Section 1 of the Act is the section which has any importance in this matter. The reference to the Attorney-General —I think the Minister has stated here—had regard to the question of whether the proposed loan was to be applied towards or in connection with the carrying out of a capital undertaking calculated to promote employment and was not to be used as working capital.

I think that is a fair summary of the submission to the Attorney-General. The opinion of the Attorney-General was that the proposed loan came within the scope of the Act. The view of the Public Accounts Committee, which confirms the view of the Comptroller and Auditor-General, is that whatever may be the law— whether or not the proposed loan came within the letter of the section—the financial implications of the section were not before the Attorney-General, and that to implement the section it was necessary for the Minister to have regard to the financial implications. Whether or not that was so is a matter for the Minister. It was certainly a matter for the Comptroller and Auditor-General to take account of, and it also was certainly a matter for the Minister for Finance. The Public Accounts Committee has the view that in connection with a purely financial question—the Trade Loans (Guarantee) Act, it will be remembered, was certified as a Money Bill—primarily affecting finances and having necessarily an influence upon the national finances, the Minister for Finance ought to be placed in a position to put any aspects affecting finance before the Attorney-General when a submission is being made for a legal opinion. The Act is an enabling Act, and on the face of Section 1 it is clear, if not to the lawyer, to the Deputy, that there is intended to be checks upon financial obligations that the State enters into. It is not merely a question of whether you can bring into the letter of the section a certain proposal, whether it will by any means conform to the section from the purely legal point of view, but whether the terms of the section, speaking broadly, including financial surroundings, implications and obligations, are also being recognised and acknowledged in taking action under the section. I think it is appropriate at this time to refer to that financial intention of the section which, as I say, ought to be taken into account in giving advice to the Minister as to whether a case comes within the scope of the Act as well as within the purely legal literal meaning of it.

Mr. McGILLIGAN

I wonder does the Deputy understand the matter correctly. Does he think that the Attorney-General had submitted to him merely references and not all the papers that were with the Advisory Committee? If he does, he is wrong.

Mr. JOHNSON

No, I do not know what papers were with the Advisory Committee. That is not the point. In fact it is not by any means suggested that the Advisory Committee would require to have regard to all the financial implications of a loan upon the State. I take it that the Advisory Committee's function is to advise the Minister as to the business possibilities, the integrity of the firm and the reliability of the business prospects. But we have involved in this question the larger question of the national economy.

Mr. McGILLIGAN

Of £20,000.

Mr. JOHNSON

The Minister is now speaking in terms of pounds. I thought he was speaking of principles. If the Minister is taking that line, that the amount is small, then I have very little more to say.

Mr. McGILLIGAN

No. I am taking the particular case reported on.

Mr. JOHNSON

The Minister speaks of £20,000. I will assume it is 20,000 pence, and I say that the implications of this section are that the State liabilities are to be protected from the financial point of view, first by the limitation of a condition that the loan shall be applied in connection with the carrying out of a capital undertaking and that it shall be calculated to promote employment. A capital undertaking is defined as an undertaking involving capital expenditure. I think the Minister has more or less made it clear that there is no general understanding of what that phrase means. He has suggested, curiously enough, that it is for the Committee of Public Accounts to formulate a definition. I may say for his information that the Committee of Public Accounts was only dealing with the facts of an event which occurred in the year 1924-25 in relation to the law which had been enacted prior to that date. It was not dealing with the formulation of a new statute except to suggest that the existing statute had obviously raised questions of interpretation, and that before any other financial obligation was entered upon there should be a clearer understanding of what was meant by the section. The carrying out of a capital undertaking is one of the conditions, but there was also another condition, which was that the proceeds of a loan were not intended to be used as working capital. Obviously, or shall I say presumably, these conditions were intended to have financial value to the State. They were intended to ensure that there would be security, that the general financial interests would be safeguarded, and that the risks of the guarantee being called upon would be brought to a minimum. Surely the implications of the section would require that in any case submitted to the Attorney-General on a matter of interpretation the Finance Department's view of the case should be presented at the same time as merely a trade department's view so as to get a considered view from the Attorney-General, having all the facts before him.

There is a good deal of criticism here and there as to whether we have followed an example wisely when we decided that the Minister for Finance should have a centralised control over departmental expenditure and obligations entered upon by a department. I know that for a considerable time there has been criticism in this respect, but, rightly or wrongly, it is the system that we have adopted, and the more I see of the working of affairs the less eager I would be to depart from that centralised control. It may be that in time, with longer experience and a clearer view of the requirements, it might be possible to depart from this rigid centralised control. I do not think the time has come by any means yet, but having adopted that system I believe, and the Committee agrees, that in matters which affect the Exchequer, and which are obviously of financial import, where a case is being submitted to the Attorney-General for his opinion opportunity at least should be given for that centralised Finance Department to present its aspect of the case at the same time.

Mr. McGILLIGAN

Is the Deputy certain that the opportunity was refused in this case?

Mr. JOHNSON

So far as my information goes, the case was presented to the Attorney-General not through the Department of Finance—not having asked the Minister for Finance to add any considerations he might wish to put forward—but directly by the Minister's own Department.

Mr. McGILLIGAN

He still had the opportunity of putting it up himself.

Mr. JOHNSON

By all means; there was nothing to prevent him. I think I am right in saying that the case was presented without the observations of the Minister for Finance, or without submitting the case to the Minister for Finance for any additional observations before going to the Attorney-General. That is a matter of departmental practice. The Committee merely makes this recommendation, that in such a case where finances are involved, it would be well and desirable, if not necessary, that the Department of Finance should add any observations they required to make on the case as presented before the Attorney-General is asked to give his opinion.

The Minister invited the House, at least I interpreted his reference to be an invitation to the House, to express a view, if it had a view to express, in regard to the services rendered by the gentlemen who sat on the Advisory Committee. I do not know to what extent Deputies are familiar with the work of the Advisory Committee, and my knowledge is not extensive, but so far as I have been able to see, and possibly my opportunities have been greater than those of many Deputies, the activities of this Committee have been great and the services rendered by the members of the Committee have been valuable. I agree with the Minister that the Dáil has a right to be thankful, and the Minister is to be congratulated on having had at his service men of the character, quality and integrity of those who have served on that Committee, and when he informs the House that their service has been given purely out of regard for public interests and without reward, I think it is more highly commendable than though it had been highly paid. I am quite certain that the Minister is right in his view regarding the Committee of Public Accounts, and I think I am justified in saying with regard to the statement of the Comptroller and Auditor-General that it is not the action of the Advisory Committee, or the action of the bank, which is criticised. Responsibility in the matter is that of the Minister. It is a curious misreading of the situation, whether of the Auditor-General's report or of the report of the Committee of Public Accounts, which suggests there is any criticism of the action of the bank. I think the bank has been particularly careful in this matter. Certainly it is by no means correct to suggest that there is any adverse criticism of the bank or of the Advisory Committee in either of the reports.

Now I think I had better come to the Bill, unless a further opportunity is to be provided. The Bill has the intention of prolonging the activities under the Trade Loans (Guarantee) Act of 1924, the section in question being the section authorising guarantees in respect of loans for the carrying out of capital undertakings, the other section, regarding the grants and loans with a view to reducing prices of commodities in common consumption, being more or less out of the question. Section 1 lays it down that "the loans are to be applied towards or in connection with the carrying out of any capital undertaking or in connection with the purchase of articles manufactured or produced in Saorstát Eireann required for the purposes of any such undertaking, and that the application of the loan in the manner proposed is calculated to promote employment in Saorstát Éireann. The Minister for Industry and Commerce may guarantee in such manner and form and on such terms and conditions as he shall think proper subject to the limitations hereinafter imposed and subject to the sanction of the Minister for Finance the repayment of the principal of such loan and the payment of the interest thereon or the repayment of such principal or the payment of such interest."

There is a further sub-section which I have quoted already:

"No guarantee should be given under this section in respect of a loan the proceeds or any part of the proceeds of which are intended to be used as working capital."

In the course of the discussion on this Bill it was pointed out that sub-section (4) was introduced as something peculiar to our conditions. That is to say, while the first part of the section was taken bodily from the British Act, no such provision regarding working capital was contained in that Act although we were asked to insert it. There was an amendment brought forward by Deputy Heffernan that sub-section (4) should be deleted and in the course of the discussion on that sub-section it was made clear that not even the Minister had a clear view of what was to be deemed to be working capital notwithstanding that he insisted that the provision should be inserted in the Bill. I take the view that the intention of the section, including sub-section (4), is to ensure that the purposes of the loans which would be fully guaranteed are to create wealth in one form or another, to create productive undertakings or to create materials which are to be used for productive undertakings, and that the money raised by loan under this section shall not be used for working capital.

I think it is necessary that we should understand, in view of the development of the case under discussion, what is intended by this condition as to a capital undertaking. The Minister says, quoting the evidence given before the Public Accounts Committee, that it appears from reference to economists that there are 20 or 30 varying interpretations. If that is so, who is to interpret what is meant by a capital undertaking? Is it satisfactory to come to the Dáil with a Bill which has so many definitions capable of being applied according to the person who is interpreting it, or is it desired that nothing should be done under this section until somebody has gone to the Supreme Court for a decision? That is obviously undesirable, and I take the view, reading Section 1, supported as it is by sub-section (4), that obviously the intention of the section is to apply the proceeds of any such loan to creative operations. Up to now I have been dealing with the matter from the point of view of the Act as it stands. I am very doubtful as to whether it is desirable to continue these limitations or whether the purposes would not be served better if those limitations were removed to some degree. I am aware of the very strongly-held opinion that to remove these limitations even from the strict interpretation that has been placed upon them may lead to less security, a greater charge upon the Exchequer and greater risks that the guarantees will be called up. Never-the less if the Minister, with the knowledge which Departmental officials can bring to his aid, with the experience of the needs of the case, comes forward on his responsibility and says it is desirable that money should be granted for works or for the lending of money for working capital, I should be slow to oppose, notwithstanding that I realise they are added risks in such a course. I believe it may be necessary for the State to come along and say: "Here are undertakings which in the conditions we see looming have a chance of succeeding if they are supplied with capital, but the capital cannot be raised except at exorbitant rates by the ordinary procedure. Nevertheless to promote employment it is necessary to keep these in being." I am prepared to support the Minister if he comes forward on his responsibility with some proposal of that kind.

The conditions the Minister obviously desires to be in a position to create are not clearly allowable under Section 1 of the Act which it is now sought to extend. I think the Act at present limits the Minister beyond his desires, beyond what he thinks is necessary, and that he realises there ought to be opportunities given to promote employment by the safeguarding of industries which cannot, without that, hold good. I think he limited himself by that Act in a way which he found too tight and that he ought, if he is prepared to come to the House and say it is necessary, he ought to come to the House and say, "Remove these limitations." If he does so within the amounts mentioned in the Bill, I am prepared to support that view. I nevertheless feel that merely to carry on the Bill in its present form, if you are asked to guarantee loans which are not for productive undertakings but which are entered on for the purpose of raising working capital, you are stretching this section beyond what is a reasonable interpretation of the section in all its connotations. It is because I felt that that I asked the Minister a few days ago not to press for the Second Reading of the Bill until the recommendations of the Committee of Public Accounts had been before him. One of those recommendations is, that if that Act is to be carried on in its present form then the limitations ought to be made clear, also the intentions of the Minister and his desires with regard to operations under the Act ought to be made clear; but if, on the other hand, he comes and says that those limitations with that interpretation are too tight, then let him say, "Remove some of the limitations and give us greater liberty." If he does that, knowing all the circumstances surrounding the industrial conditions, the requirements of the case, the effects of the tariffs, and so on if he comes and says, "I should have greater liberty in the matter," I shall not oppose that liberty.

AN LEAS-CHEANN COMHAIRLE

took the Chair.

Major COOPER

I need not cover all the ground of the speech of the Minister for Industry and Commerce, because on the general question Deputy Johnson, as Chairman of the Public Accounts Committee, has dealt with the position of the Comptroller and Auditor-General and the functions of that Committee, but, as an individual member of the Committee, I would like to add a few words to supplement what Deputy Johnson has said. The Minister complained that he was at a disadvantage because he and other Deputies had not got before them the evidence on which this report was based. It is quite true that it was open to the Committee not to make any report on the matter until their final report, and to have the final report and the minutes of evidence issued simultaneously, as is usually done. The Committee thought, however, and I think they were right, that this was a case in which an interim report should be issued, for more than one reason. I will give one. The issue of the interim report has made clear, at the earliest possible date, the fact that the opinion of the Attorney-General had been sought in the matter.

If the Committee had not issued such a report there would have been no way open to them to bring that fact forward. I think that the omission by the Auditor-General of that fact was accidental. The Minister knows with regard to this particular trade loan that there have been all sorts of rumours and all sorts of statements in the Press, culminating in yesterday's debate in the Seanad. I think that the publication of the interim report tended to clear the air, and tended to exempt from blame certain institutions and organisations which did not deserve blame. The Minister, in the Seanad yesterday, used paragraph 15 of the Committee's report with great effect, and that justified us in issuing the interim report without the minutes of evidence. I think it has helped to make the true nature of these transactions clear. Nobody on the Committee, I think, took the view that it was a corrupt or dishonest transaction, or a transaction of which anybody had any reason to be ashamed. The bank had no reason to be ashamed, the firm concerned had no reason to be ashamed, the Advisory Committee had no reason to be ashamed, and the Ministry have no reason to be ashamed of anything more than mistaken methods of procedure. That is the utmost. This report says that the procedure of the Ministers was not completely consistent with the Act.

Mr. McGILLIGAN

That is paragraph 14?

Major COOPER

Yes, amongst others. I am dealing with the three paragraphs mentioned by the Minister. The Minister told us that he was dealing with this matter as the result of the recollection of an officer of his Department who appeared before the Committee, and that it might be accurate or inaccurate. I have not the report here at the moment, but so far as my memory serves, it is substantially accurate. I think there are one or two points of detail on which my recollection differs, but it is, perhaps, likely that I am wrong. It is not inaccurate, but it is very incomplete. The Committee took evidence on this matter on two separate occasions. They discussed the matter on two other occasions, and went through a large number of documents, and only on one of those occasions was any representative of the Department present, so that the Minister does not know all that took place.

I am not sure how far it is right for me to refer to the evidence given, as, for the moment, it is regarded as confidential, but I think I am at liberty to describe the effect made on my mind. I went to the Committee, when the matter first arose, rather disposed to think that the Comptroller and Auditor-General was making a mountain out of a mole-hill. I was, however, converted from that opinion and made to realise that this was a proper matter for the Committee to take up and report upon by the evidence of the Accounting Officer of the Department of Finance. That was the factor that influenced me most strongly in inducing me to deal with this report. I will deal now with the paragraph to which the Minister took exception—paragraph 14. I do not think that there is any dispute over paragraphs 1 to 13. Paragraph 14 deals with the submission of the matter to the Attorney-General. I do not suggest that anything the Minister for Industry and Commerce did was wrong, but I am suggesting that the words, "with the sanction of the Minister for Finance," unless they are merely formal, impose serious responsibility on that Minister, and that that Minister should, in exercise of his duty, before giving sanction, have done more to ascertain the legal aspect than he did. He knew that the previous application for a loan to a similar firm had been rejected on the ground that it was not legal.

He had, on the other hand, before him a doubt expressed by some of his subordinates as to the legality of this particular loan and, in view of these facts, I think he ought to have put the question up to the Attorney-General again. Without suggesting any impropriety, people in different departments approach questions from different points of view. There is the Industry and Commerce point of view, mainly concerned with giving employment and carrying on business, and there is the Finance point of view, mainly concerned with the security of the State's finances. I think the financial point of view in this case got too little consideration and that the Industry and Commerce point of view got possibly too much consideration. That is the reason why I personally assent to paragraph 14.

Now, we come to paragraph 18, and the Minister says that he cannot accept that paragraph unless the Dáil compels him to do so. The Dáil has, at the moment, no means of compelling him. I hope when the report of the Committee of Public Accounts comes to be discussed that, if the question as to whether it is to be approved or disapproved is put, it will be voted on with the Whips off because the reports of the Committee of Public Accounts are never voted on on Party lines. Members of the Minister's own Party were anxious to have this section inserted.

Mr. BLYTHE

I think it is not the rule for votes to be taken on reports of the Committee of Public Accounts. If that were done, the value of the Committee of Public Accounts would be destroyed, because it would not be possible to take divisions other than on Party lines.

Mr. JOHNSON

In view of the many things said, I think it is necessary to make it clear that the report of the Committee of Public Accounts is not a thing that is taken holus bolus and accepted or rejected or that is taken paragraph by paragraph and voted upon.

Major COOPER

I am not suggesting that, but I am suggesting that if a motion be made that the report be approved——

Mr. BLYTHE

It would be a fatal thing if a motion were made that the report be approved. Immediately that were done, it would destroy the value of the Committee of Public Accounts.

Major COOPER

I agree with the Minister for Finance, but it is very unfortunate that he did not hear the Minister for Industry and Commerce. The Minister for Industry and Commerce said that unless the Dáil definitely compelled him he was not going to regard paragraph 18 of this report as binding on him.

Mr. McGILLIGAN

That was not exactly my statement. I said that if this recommendation were considered by the Dáil to be one which should be embodied in the Bill, then an amendment should be brought forward and I should have to be coerced into accepting it. In using the word "coerced," I am quite prepared to leave any amendment on that point to an open vote of the House.

Major COOPER

I am sorry I misunderstood the Minister. He expressed his point of view twice and on the last occasion he was rather terse. I think it is not unreasonable that if two claims have been created in respect of a single business the State's claim should be the first claim. We should be more scrupulous in dealing with the State's money than with our own private money. If, as I believe to be the case here, the assets are sufficient to meet both claims, then you are doing no injustice to the private individual by asking him to take the second claim. That, I think, was the view of the members of the Committee without exception. It is certainly my view. If two liens or mortgages are being created simultaneously, the claim of the State should come before the claim of the private individual or the bank or whatever other institution is concerned.

The only other matter is with regard to paragraph 19. Deputy Johnson has dealt with the fact that the Committee of Public Accounts is not the body to give these definitions. That is clearly a matter for the Dáil or for the Minister. Let the Minister collect his 19 or 90 or whatever number of economic definitions there are.

Mr. McGILLIGAN

I have not said anything about these definitions. I quoted an official of the Department of the Comptroller and Auditor-General.

Major COOPER

I shall say then that "it is assumed" that there are 19 or 90 definitions.

Mr. McGILLIGAN

It is alleged.

Major COOPER

I accept that, and I urge that it is for the Minister, after some research on the part of his staff, to find a satisfactory definition. All the Committee say is that there should be a clearer definition than there is at present. That is obviously a matter which is no more within the functions of the Committee than the other suggestion of the Minister that the Committee should suggest machinery for dealing with the Trade Loans Guarantees. That is not the function of the Committee of Public Accounts.

Mr. McGILLIGAN

My suggestion was as regards the individual members of the Committee.

Major COOPER

I thought the Minister referred to the Committee. I should like to point out that the claims on the time of the members of the Committee of Public Accounts are so heavy that members have hardly time to think in their individual capacity.

Mr. McGILLIGAN

Does that observation apply to this report?

Major COOPER

No. The Committee devoted so much of their time to that report that they had no time in which to offer suggestions as to the machinery for Trades Loans. The conscientiousness of the Committee is great. Any document that comes before them is very carefully studied and restudied in order to achieve the happiest wording. I have only to regret that the Minister has withdrawn the approval —perhaps I should say the qualified approval—with which he regarded this matter in the Seanad yesterday. It is, I suppose, like the historic egg—parts of it are excellent.

If I am not out of order in referring to the Bill, I should like to support Deputy Johnson's remarks regarding the limitation upon working capital. Up to the present these two Acts have not fulfilled the purpose we had in view when they were passed. They have not led to any widespread revival of industry in the Saorstát. They have kept two old-established concerns from going out of business. They have enabled a number of creameries to make useful extension of their work, and a considerable capital sum has been devoted to other useful purposes. But the result of the passage of these two Acts has not been the revival of manufacturing industry which would give steady and regular employment. I cannot help thinking that the limitation on borrowing for the purpose of working capital is one of the reasons why this desirable effect has not been achieved. At any rate, I think the experiment might be made. If the Minister can get another Advisory Committee as satisfactory as the last, it will, I think, be fairly well qualified to decide on what is sound and what is unsound.

I would like to repeat what Deputy Johnson said regarding our gratitude to the members of the Advisory Committee who filled an onerous and unpleasant office in a manner that entitles them to the thanks of the whole country. I sometimes regret that it is not the custom of the Government to bring into the Dáil a motion that so-and-so, by his services on an Advisory Committee or on some other body, merits the thanks of the Dáil. We have no Honours List and no means of recognising merit on the part of citizens, and I have a feeling that something of that kind might well be desirable. Amongst those who would have first claim if that custom were introduced, would be the members of this Advisory Committee.

Mr. McCULLOUGH

I regret I was not in the House when Deputy Johnson was speaking on this matter. Looking at this report as a whole, there were only three points in which I was definitely interested. The first is the paragraph suggesting that the case submitted to the Attorney-General for his opinion or a case of a similar kind to be submitted for his opinion, in future, should be submitted through Finance. On first examination of the draft of this report I took some exception to that, because I felt that the Dáil, having put the burden of carrying out the terms of this Act upon the Minister for Industry and Commerce that Minister was, in that sense, acting for the Department of Finance in any action he might take, such as submitting a case to the Attorney-General for the expression of his opinion upon the legal points arising out of it. I feared, as a matter of fact, that considerable delay might occur if, instead of having the case submitted directly by the Minister for Industry and Commerce, it had been referred to the Department of Finance first, and then through them to the Attorney-General.

In these matters I think urgency is a big item and that any unnecessary delays that might arise between the time when the application is made and the time when the certificate is issued are not good for a going industry, and might be injurious to the concern applying for the guarantee. But, in course of further discussion, and in view of certain matters brought before the attention of the Public Accounts Committee in connection with this case under review, I felt that, without causing any undue delay, and perhaps to the advantage of a proper finding on the matter, this paragraph could be inserted. I only gave it provisional assent on the understanding that such a transmission of a case to the Department of Finance for final submission to the Attorney-General would not be a cause of delay in dealing with a case that might come before the Minister for Industry and Commerce.

Now in regard to the nature of this transaction, there were certain views expressed with which I did not find myself in agreement. I can see no possible objection whatever to the nature of this transaction. Where this Act can be most helpful to industry is where a well-established industry, finding itself coming to a dead end—where owing to circumstances prevailing in this country during the past years, an industry that was thriving in the past finds itself in difficulties—is enabled by a re-formation or any other method that might be approved and that might be legally proper, to take advantage of this Trade Loans Act and get the guarantee necessary to enable it to get business going strongly again. I took the view that this was a perfectly proper transaction, divorcing one's mind from the fact that the transaction was one where a certain set of individuals, finding that the application they made might be untenable, found a way out by going into voluntary liquidation and forming a new company. It was, in fact, an entirely new company quite apart from the personnel of the directorate. Consequently, no exception, to my mind, could be taken to the transaction on that basis. As far as I am personally concerned, and as far as my voice carried at the Committee, it met with my approval so long as the transaction was properly carried out and was legally acceptable by the Department of Industry and Commerce.

With regard to the question of security, I feel strongly with other Deputies who have spoken. I am not concerned with the particular nature of this transaction, but I am concerned that public moneys supplied by the taxpayer should not have any other claim created to take precedence of them by way of guarantee. The Trade Loans Act was devised specifically for the purpose of aiding industry, and advantage should not be taken of that Act by any concern to raise money from other quarters, and give to those other quarters precedence in the amount of security offered. I think that is a fair proposition. I do not know that any objection could be taken to it. I know certain objections to it were made, and a certain class of prior charges were suggested that could not be properly set aside to enable State moneys to have precedence. But I must confess, and I gave some consideration to this matter, that I saw no particular kind of security submitted or suggested that, to my mind, at all events, would have a sufficiently strong claim to justify its taking precedence of State moneys. I hope that the Minister will look upon the view expressed in this memorandum or interim report as a wise safeguard for public money, and as an expression of opinion from a body acting for this House on the examination of public expenditure.

In the particular case under review I had this consideration: that an advance obtained from a financial institution was only made possible by a guarantee of the State and that, consequently, it did not seem to be quite proper or right that such an advance should take precedence of the thing that made it possible; that is in the particular case. But in general, although I am prepared to admit that there may be cases where you could not, perhaps, properly ask for first claim to be given to the State guarantee, I would say that—I express this opinion very strongly—no other classes of claims existing—certainly no claims to be created—should be permitted to take precedence of the State moneys in the guarantees given for the advances made.

Mr. DAVIN

I feel, as one with some knowledge of the history of the firm concerned with this application, that if I were called upon to give a vote in connection with the Second Reading of this Bill moved by the Minister I could not, in any circumstances, give a vote which would mean casting a reflection upon the action of the Minister in guaranteeing a loan to this particular firm. Since I became a member of this House, and a representative of the constituency where this particular firm has its headquarters, I have been fairly closely associated with the work of the firm. Perhaps the Minister knows that I actually, on the first occasion, introduced the directors of this firm to one of his officials before formal application for the loan. On that occasion the directors were accompanied by two of the largest ratepayers in the district of Edenderry. I had access, with one other labour representative, to practically all the books and documents of this particular firm, and one thing I want to say definitely here is this: that I am perfectly satisfied that, starting with the official of the Department of Industry and Commerce, up to the President himself, all the inquiries it was possible to make covering a period of four months were made into the merits of this application. It is difficult, I know, for any member of this House, other than a member of the Committee of Public Accounts, to discuss this matter in an intelligent way, because, as the Minister rightly pointed out, we have before us the report of the Public Accounts Committee but not the evidence upon which it is based. I am sorry that Deputy P.J. Egan is not here in the House, because he had a good deal to do with the whole matter of this application, especially in the remaining stages of the inquiry.

Mr. JOHNSON

May I make an explanation here? The Minister has referred to the absence of evidence. Of course, the oral evidence will be printed in the ordinary course, but it is one of the powers given to the Committee of Public Accounts to send for persons, papers and records. The report of the Committee is based not only on what is oral evidence, but also upon papers and records, which, of course, cannot be printed. I want to remove a misapprehension on that score, and explain that it is within the power, if they exercise it, of the Public Accounts Committee to send for papers. These papers will not be printed in the records of evidence.

Mr. DAVIN

I am not aware at what stage of the inquiries the Minister for Industry and Commerce submitted his recommendation and report to the Attorney-General. If I am wrong, let me be corrected before this debate closes—but I am aware that the Minister for Finance went into this matter and eventually it went to the President, and the President, in consultation with the other Ministers and principal advisers, with the consent of the Committee, agreed to guarantee this loan. I am sorry, however, that the Minister for Industry and Commerce in moving his motion made it a sort of condition that we should accept everything he said as a condition of the passing of the Second Reading motion. As far as I can gather, the Minister laid down certain conditions before he would agree that the Act should continue to operate. I am in agreement with the Committee's recommendation in regard to paragraph 18, and while what has happened could not have been prevented, I think it would have been only quite right to amend the Act if it is necessary to do so in order to conform to the conditions laid down in paragraph 18 of the report of the Committee of Public Accounts. I believe, however, though I am not a financier by any means, that the loan that has been guaranteed by the Government, as well as the prior liability for the other party involved, are both properly secured, and I am very glad to be able to say here that the nominee of the Minister for Industry and Commerce, Senator Douglas, who has been attacked in connection with this and other matters, has a very big share of responsibility, be it said to his credit, for having laid and made secure the foundations for the working of this firm in the future. I am satisfied that this firm is going on and is progressive now, and that there is no doubt whatever of the possibility of the firm making good the amount guaranteed by the Government. I am glad, moreover, that an opportunity was afforded to Senator Douglas in the Senate yesterday to make the convincing statement he made. I think this will add to the prestige of this particular firm with which he is associated as well as to the prestige of the National Land Bank which was indirectly attacked by reason of the attack on himself and other directors.

I am satisfied that the Minister for Industry and Commerce has justified himself. As referred to here in paragraph 15, I am certain, too, that "the Department, after making its own inquiries, was assured that employment would be promoted to a noteworthy degree by the granting of the loan, and were satisfied that the assets of the company were a good security for a second mortgage." Anybody who knows the conditions in Edenderry knows that if this firm ceased to exist —and it was closed down for a considerable period previous to the guaranteeing of the loan—the town of Edenderry would disappear and with it the four hundred or five hundred people who were depending upon this old Irish industry for a living. I personally support the motion for a Second Reading of this measure, and for the extension of the Trade Loans (Guarantee) Act. As I said in the beginning, I would not under any circumstances, knowing the history of the whole application, no matter what the consequences to me were personally, give a vote which would be tantamount to a vote of censure upon the action of the Minister for Industry and Commerce in regard to this matter. The Minister when making his speech stated that no applications had been made under Section 2 of the original Act. Can the Minister say to what extent applications were made and to what extent amounts were guaranteed under that particular section? I fully realise that discussion at this particular stage in the absence of the verbatim report, would be difficult to carry on, and especially by Deputies who have not had the experience of membership of the Public Accounts Committee, and that is a remarkable educational experience. I would like the Minister to answer my question with regard to the amount guaranteed up to the present under Section 2 of the Act, and, if he has the figures to indicate how many applications are outstanding at the present moment under Sections 1 and 2 of the original Act.

Mr. WILSON

This matter has been thrashed out sufficiently long, but I want to apply myself for a moment to paragraph 18 of the recommendations of the Committee. The Minister takes serious objection to this recommendation, or at least says that its effect will seriously injure or retard the operations of the Trade Loans (Guarantee) Act. I think he used these words.

Mr. McGILLIGAN

Yes.

Mr. WILSON

Now I cannot see why, when you are advancing in any case a certain amount of money, you should not become the sole creditor of that particular concern. That is, if you take the case in point, would you not be in a better position as a first mortgage holder of the total debt than a second mortgage holder for a portion of the debt?

Mr. McGILLIGAN

Do you want an answer now?

Mr. WILSON

No. But I want you to consider that position—that where you are a creditor you are now a godmother over an infant industry——

Professor O'SULLIVAN

A fairy godmother.

Mr. WILSON

Yes, a fairy godmother if you like. You are a fairy godmother over an infant, and where you have the sole control of the financial interests of that firm, are you not in that particular role in a better off position always to insist on getting first charge? I cannot conceive any case where you would not get a first charge——

Mr. HEWAT

Nationalise the industry.

Mr. WILSON

Yes, it is a nationalised industry if you like. We passed the law and the Minister has power to advance money to any industry, and I want to make the case why the recommendation of the Public Accounts Committee ought to be followed out by the Minister in charge. He could advance more money, but where he is the sole creditor, the man who holds the concern in his hands, he can keep that particular industry going. Nobody else can press it as long as he keeps it in that position and holds first charge. I hold that in that case the State is in a better position than being in the position of a second mortgage holder with another man pressing. That is a real business proposition, and that is one of the reasons why the recommendation is there. I believe that the Trade Loans (Guarantee) Act should be prolonged. The matter has been well thrashed out, and the Dáil is well educated now on the implications of the whole business. The Deputies will know the situation better in future when they are discussing these loans and their implications.

Mr. LYONS

I just want to ask one question concerning the representative appointed by the Minister to be a director of any firm that succeeds in getting a guarantee under the Trade Loans (Guarantee) Act. Is that representative paid from the profits of that firm? Is that particular director paid a salary or expenses for so acting on behalf of the Government?

Mr. McGILLIGAN

I have rather a feeling, at least I had a feeling, as I listened to Deputy Johnson making points against arguments that I did not use, that I must have misled Deputies with regard to the report of the Auditor-General. Deputy Johnson referred to cases and English precedents where the Auditor-General there thought fit to report contrary to the legal advice given. I think that is a general statement of what he referred to. I have never made any objection, and I certainly disclaim any intention of making any objection to the Auditor-General reporting in any way, having any legal opinion before him. I did not intend to criticise the functions of the Auditor-General or how far he was acting up to what were supposed to be the traditions of that office, or any comment that he thought fit to make as Auditor-General. But I do say this, that if the Auditor-General issues a certain report, and if there are matters left out that I think should be added to it by way of supplement, then I will add them. Deputy Cooper agrees with me in that, and says that if it had not been for the publication of this report that the public would not know that the Attorney-General's opinion had been got and he apparently thinks that it is desirable that it should be known to the public. I think it desirable that should be known, and I am surely at liberty to say that without being more or less accused of having criticised the Auditor-General for anything he did.

There was a report issued and a certain statement made. There is no objection to that statement being there, but I insist that for the public education I should make an addition to it, and that addition is the fact that the Attorney-General's opinion was taken on this matter and, as far as my Departmental responsibility was concerned on the purely legal side, I took the last possible step I could take to get direction and guidance on this point. Neither did I argue. I went into a certain amount of detail to show I was opposed to the point of view that the Auditor-General ought to be bound by the opinion of the Attorney-General. I said that I had heard an official of the Auditor-General's Department had made the remark that if they were to put down the Attorney-General's opinion it might seem as if they were hiding behind him and refusing to do their own work. That was never asked of them, nor do I ask it of them now. I do think, however, that a full presentation of the case might have included a statement that the Department had sought for and obtained the opinion of the Attorney-General.

Deputy Cooper says he thinks the omission was accidental. If I am correctly informed as to the evidence of an official of the Auditor-General's Department, he did not see on the files submitted to him the reference to the Attorney-General or the opinion of the Attorney-General. When the Deputy says the omission was accidental, I take it to mean——

Mr. WILSON

I think that is wrong. I was there. The official in question said that the fact of the matter being referred to the Attorney-General was there.

Mr. McGILLIGAN

It was reported to me that there was a very brief reference to the affair, and the official of the Auditor-General's Department continued to say that the statement of the case as presented to the Attorney-General was not on the file, and a copy of the opinion of the Attorney-General was not on the file either.

AN CEANN COMHAIRLE

resumed the Chair.

Mr. HEWAT

My recollection of the case is that the Auditor-General had not, at the time he was making the Report, the Attorney-General's opinion. That is subject to correction. The Auditor-General admitted subsequently that he had the Attorney-General's opinion.

Mr. McGILLIGAN

Perhaps I could end this. It was reported to me also that at the end of that meeting Deputy Johnson said: "I do not know what files were before the Auditor-General, but I do know they are certainly on the files—the reference to the Attorney-General and his opinion." What was that remark of Deputy Johnson's, if made, relevant to, if it was not to the statement that the Auditor-General's Department had not got the statement of the case submitted to the Attorney-General and the Attorney-General's opinion? Probably we will get it all when the evidence is published.

Mr. JOHNSON

I may clear this matter up. The statement was: "There is no copy of the reference to the Attorney-General on the file which I saw, nor is there any copy of the Attorney-General's opinion." I made it clear that in the files which had been presented to the Committee and which included not only the Department's file, but also the file of the Finance Ministry, the Attorney-General's opinion did appear. I think it is clear also that the files which were available and which were in the hands of the Comptroller and Auditor-General were the Department of Finance files.

Mr. McGILLIGAN

The file that was presented to the Auditor-General, the file which he stated he had a right to ask for and did ask for, was the file of the Department of Finance, and Deputy Johnson's quotation is, I presume, a quotation from the officer of the Auditor-General's Department. He says there was no reference on that file; the reference to the Attorney-General was not there, nor a copy of the Attorney-General's opinion.

Mr. McCULLOUGH

The Attorney-General's opinion was eventually placed before the Public Accounts Committee.

Mr. McGILLIGAN

I am not talking about the Public Accounts Committee; I am talking about the evidence given before it by an official of the Auditor-General's Department, who made the statement Deputy Johnson has read out. There is the file that was before the Auditor-General; there is the statement of the case as presented to the Attorney-General, and there is the Attorney-General's opinion. We will get the evidence in due course, but I am anxious to know how the official of the Auditor-General's Department was able to make such a statement having had that file before him.

I come now to this Report which Deputy Cooper says I used with a certain amount of effect in the Seanad yesterday. I did use it, and I think I used it rightly, and I am prepared to use it again and to quote in extenso paragraph 15 in the same circumstances. I am still in doubt as to the net effect of this Report. Deputy Johnson says of it in a general phrase that the Auditor-General's comments are confirmed by the Report of the Public Accounts Committee, and Deputy Cooper says that the only thing really criticised is wrong procedure— those were the words he used—on the part of Ministers. On that point I asked him did he refer to paragraph 14, and he said "Yes." According to Deputy Cooper, the only point on which there was criticism, as far as the transaction was concerned, was paragraph 14.

Major COOPER

Not necessarily. I said I included paragraph 14.

Mr. McGILLIGAN

The only point, according to the Deputy, on which there was criticism was that there was wrong procedure on the part of Ministers. The only paragraph I find referring to wrong procedure is paragraph 14. Deputy Johnson says the Public Accounts Committee confirmed the remarks of the Auditor-General, and Deputy Cooper says the only thing criticised is wrong procedure on the part of Ministers. The Auditor-General's Report says: "I did not consider that the guarantee in this case came within its terms." Paragraph 16 begins by stating:

"The Committee does not propose to express any views on the question as to whether or not a guarantee can be brought technically within the scope of the Act..."

I rather took it that paragraph 16 avoids any decision on the point raised by the Auditor-General, and paragraph 14 is dealing with a matter about which the Auditor-General made no comment whatever. I do not know if the Auditor-General's officials gave any evidence before the Public Accounts Committee in which they adverted specially to this point, that the opinion should have been asked for through the channel of the Department of Finance instead of through my own Department. If not, I cannot see how this can be taken as confirming the Auditor-General's Report when they refer to different things. Deputy Johnson said the Minister for Finance—and I queried him on this—should be enabled to secure the Attorney-General's opinion on this and on any other point. I asked him was he prevented? Had he not his opportunity when my presentation of the statement of the case to the Attorney-General, with the Attorney-General's opinion on it, came back to me and was referred by me to the Minister for Finance? He surely had then his opportunity, if he thought there was anything wrong, if he thought that the case had been coloured in its presentation, if he thought there was any omission from it which should have been put in. Instead of that, the Minister for Finance accepted that and the guarantee was given.

Deputy Johnson also argued that there is more in this submission to the Attorney-General merely than the legal point—that you have to get the view of the financial authority on the matter under Section 1, because we have to consider the financial implications of it on the general State economy. I ask the Dáil to consider that in its relation to this case. If it was a matter of a two-million loan I could imagine the Minister for Finance certainly having to have his opinion taken on whether the State could afford to raise that money at the moment. But take a loan of something of the sort under discussion here, that is within the amount of money set out in the Act as ordained by the Dáil to be guaranteed in any one year—well within the million mark, well within the three-quarter million set out in Section 1, and on a point where I am, by the Act, made definitely the arbiter as to whether or not the proceeds are going to carry out a capital undertaking. Am I supposed to ask the Minister for Finance to make his observations on that from the point of view of how it affects the financial economy of the State? If that was intended it should have been put into the Act. It is not in the Act. It is an Act that I have to interpret; it is an Act that I have to proceed along the lines of, and I take the only course open to me to find out whether or not my procedure was correct.

From what Deputy Johnson has said in answer to Deputy Davin, I gather the implication is that really the evidence on which this report was based was not going to be very much good, because we must remember the report is based upon evidence that is oral, evidence taken down, plus documents and papers —that the evidence is not going to be very satisfactory. It will have a great deal of satisfaction for me in the light of the remark made by Deputy Cooper that he went into this Committee feeling that the Auditor-General had been making a mountain out of a molehill, but was convinced by the evidence, I think, given by the principal officer of the Department of Finance, that this was a serious case. I should like to see all this evidence and before the Dáil adjourns, any time we may get a discussion, I am going to see if there is not some way in which we can get made available for Deputies, even in the roughest form, the evidence relevant to this whole Alesbury case, so that the Dáil may have that evidence, at any rate, in its hands when it comes to discuss, as it may have to discuss, the interim report of the Public Accounts Committee. I think that can be arranged very easily, and even if we take it with the very definite and clear limitation put by Deputy Johnson, that you do not get a full understanding without examination of the papers and documents, there will be, at any rate, something more to go upon than merely the report.

Mr. JOHNSON

I think that the way the Minister is likely to leave this is more likely to cause misunderstanding than anything else that can happen. If the matter is left as the Minister has put it, following my intervention, it may well appear that I am suggesting that there are all kinds of secret, confidential documents that cannot see the light, and if they do see the light, that extraordinary things would be revealed. That is by no means the case, I venture to say that the summary of the case which appeared in this report is a fair and accurate summary. Although I have avoided saying it, I think the situation now demands me to say that the Department of Finance was averse to granting this loan on grounds which were detailed and which led in the first instance to the refusal of the loan; that further consideration was given to the case, as I suggest, without knowledge of the fact, particularly from the point of view of employment, and as a matter of public policy it was decided that it was right and proper, in view of the decision of the Attorney-General that it was within the scope of the Act, to grant the loan. That statement I do not think would prejudice anyone unfairly. But, having made that statement, I do not think there is anything more in the file beyond what is summarised in this report of the Public Accounts Committee. I thought it necessary to say that for fear the inference that might be drawn from the Minister's last comment would suggest all kinds of secret and unpublishable facts. That is not true at all.

Mr. McGILLIGAN

I am very glad to have that explanation from the Deputy. I disagree with about two words in this as a presentation of the summary of the facts. I object to the use of the word "formal" when they talk of reconstruction. I think it shows a point of view on the part of the Committee when they talk of "brought technically within the scope of the Act." The word "formal" in one part and "technical" in another I certainly would not—

Mr. JOHNSON

I avoided discussing the details of the case. If the Minister thinks it ought to be discussed, then I am very ready to do it and to defend those phrases which the Minister has thrown doubt upon as a true story.

Mr. McGILLIGAN

I object to those two words as used. I am prepared to argue on the Alesbury case when the report of the Public Accounts Committee comes up for discussion, and I hope we will have the evidence.

Mr. GOREY

It is pretty well given to us.

Mr. McGILLIGAN

It has not come up with the evidence. That is the main thing that has to be seen to, particularly the evidence which converted Deputy Cooper into the belief that this was a serious matter. That is the evidence I want to see.

Major COOPER

Perhaps the word "evidence" is too limited. I think I should have used the words "attitude" and "evidence."

Mr. McGILLIGAN

If it is "attitude," I disregard it, because I can understand it. It is the evidence that I want to get after in this case, and I do not think that there is going to be any proper understanding of the whole case from the Public Accounts Committee Report until the evidence is published and we see what certain individuals said.

Mr. GOREY

How many volumes?

Mr. McGILLIGAN

I think it would take not more than about 16 pages.

Mr. BAXTER

Consider the rest of us who have not seen the evidence, so that we are in the dark listening to all this.

Mr. McGILLIGAN

Deputy Davin said that I laid down conditions about the passing of this. I did not. I said that if an amendment be brought forward to give some definition of what is required in paragraph 19, that it should be looked at and considered in the light of the other facts I have put before the Dáil. I said that if there is an amendment brought forward to bring in paragraph 18 and to make it some way operative in the Bill that I am prepared not merely to have it looked at, but to let the Dáil have a free vote on it.

Mr. DAVIN

The Minister will agree that that is not what he said in the first instance.

Mr. McGILLIGAN

Decidedly I did not go so far as to say a free vote. I said definitely I would not accept this recommendation simply because it appeared in the Interim Report of the Public Accounts Committee unless it were made a term of the Bill. If paragraph 14 is going to be insisted upon, and if there is going to be evidence that the majority of this House thinks that paragraph 14 ought to be a guiding rule for Government Departments for the future, either under this or any other Bill, as to how work will be done, I simply hold that it will make Government work impossible, and I am not prepared to work with that condition. I want to be quite distinct about that.

Mr. DAVIN

That is what I was referring to when I said it was a pity these statements and conditions were laid down for the Second Reading of the Bill.

Mr. McGILLIGAN

It goes beyond the Bill. It means that I am not prepared to work any Act or to carry out any administrative business if paragraph 14 be insisted upon as a condition. As to this question of working capital, to which Deputy Johnson has referred, and to a possible amendment on these lines, I do not think I will be able to get the Minister for Finance to agree to taking out sub-section (4), and I think there would be very great danger in it. The Deputy has referred to risk. It means that one would have no fixed assets on which to charge the moneys put up if sub-section (4) was removed. We have put it to the Banking Commission that they should consider the question of long-term credits for industrial purposes, and we hope we will get certain suggestions and recommendations from them which will meet the need that would otherwise be met by the abolition of sub-section (4) of this Principal Act. I do not think it would be wise to move towards the summary abolition of that at the moment.

With regard to the cases, the latest returns show that under Section 2, the section that Deputy Davin queried, there have been 13 applications considered by the Advisory Committee and three have been recommended. The sums of money involved in these three total about £3,500. Under Section 1, 81 cases have been considered by the Advisory Committee and 27 have been recommended. Coming to the applications received under Section 2, the section to which Deputy Davin referred, 35 applications have been received, and under Section 1, 38. The pending cases at the moment are only three under Section 1. I have not the tots of the sums of money involved, but when I last quoted these about three weeks ago I said that if all the cases in the various stages of getting towards guarantee were all looked upon as guaranteed there would be a sum of over £600,000 involved.

Mr. DAVIN

Are the cases pending awaiting consideration by the Committee that must be set up following the resignation of the old Committee?

Mr. McGILLIGAN

No. On the Estimates I divided the trade loans into about four sections: (1) those in which the guarantee was given; (2) those in which the guarantee was not given but approval or recommendation sent up by the Advisory Committee and approval given by the two Government Departments concerned; (3) where recommendations came from the Advisory Committee and were passed by my Department but not assented to by the Department of Finance; (4) cases recommended by the Advisory Committee but withdrawn by the applicants. If you take the first three lots the total amount involved would be over £600,000. That is to say where recommendations have been sent up and passed by my Department.

Mr. HEWAT

How much is guaranteed under No. 1?

Mr. McGILLIGAN

£111,000. With regard to Deputy Lyons's question there is no general rule. It would depend on the circumstances of the case. Those put on to represent me in a particular business might have some nominal fee paid them and would. I think, pretty well always have their expenses paid by the firm concerned. No general rule can be stated with regard to that.

Mr. LYONS

Can the Minister say what would the amount be?

Mr. McGILLIGAN

Expenses generally. Anything else would be nominal.

Mr. BLYTHE

I would like to say in reference to this that I think the discussion indicates that on the whole the issue of Interim Reports by the Public Accounts Committee will probably not be advantageous.

Question put and agreed to.

Mr. McGILLIGAN

The date for the Committee Stage would depend on whether there is a considerable number of amendments to be brought forward on the lines of the Public Accounts Committee's Report. If it is stated to me that there are likely to be amendments say, on the question of defining "capital undertakings" and introducing some term corresponding to paragraph 18 of the Report we might have to give a longer time than would otherwise be the case. I have no indication at all as to what amendments are likely to be brought forward.

Committee Stage ordered for Tuesday, 22nd June.

Sitting suspended at 6.25, and resumed at 7.10 p.m.,

AN LEAS-CHEANN COMHAIRLE

in the Chair.