ORDUITHE AN LAE—ORDERS OF THE DAY. - AGRICULTURAL CREDIT BILL, 1927—THIRD STAGE.

Sections 1 to 3, inclusive, agreed to.
SECTION 4.

There is an amendment on the Paper to Section 4 in the name of Deputy C. Byrne, as follows:—

After sub-section (2) to add a new section as follows:—

"(3) The dividends on the Share Capital referred to in the preceding sub-section shall be free of income tax."

If the amendment is intended to exempt all dividends from assessment to income tax, it cannot be moved to this particular Bill.

The amendment is ruled out on this Bill?

Question proposed: "That Section 4 stand part of the Bill."

With your permission, A Chinn Comhairle, I will explain the amendment I had down. The idea I had in mind was to encourage the general public, and especially the agricultural community, to take shares in this Corporation. I am afraid that there is considerable danger that, in the event of the public failing to take up the proportion of the capital offered to them, the banks and the banking interests will obtain a preponderating representation on the board of directors. It was with the object of guarding against that I put down the amendment. I want, if possible, to guard against such a thing happening. I am very anxious that something should be done to encourage the people to invest in these shares. If I am in order, I will put down an amendment to the Finance Bill with the same object.

The Finance Bill is the proper Bill for this kind of amendment.

I hope the Deputy will not confine his generosity to this particular company, but that he will extend it to all industrial corporations.

The Deputy can look after the interest of the other companies.

I think what the Deputy has in mind is that the small investors should not be charged income tax. That is really a matter for the management of the Corporation. The Corporation will be subject to income tax in the ordinary way, same as any other trading company. The directors of the Corporation can pay dividend free of income tax, and the shareholders will then be assessed in the ordinary way by the Inland Revenue Commissioners.

If the Deputy has a certain object in mind he should endeavour, directly, to achieve that object. It seems to me that he is going a roundabout way towards achieving it.

Section 4 agreed to.
SECTION 5.
(1) Two hundred thousand shares of the Corporation shall be offered at the one time for subscription only by banks carrying on business either wholly or partly in Saorstát Eireann and as soon as may be after the expiration of the time limited with the approval of the Minister for such subscription the remaining three hundred thousand shares of the Corporation and such if any of the said two hundred thousand shares as shall not have been subscribed for by such banks shall be offered at the one time for subscription by members of the general public.
(2) All shares of the Corporation offered for subscription by the general public and not so subscribed for shall at the expiration of the time limited with the approval of the Minister for such subscription be subscribed for by the Minister.

I move amendment 2:—

At the end of sub-section (1) add the words "nothing contained in the forgoing portion of this sub-section shall be construed as permitting banks to subscribe for shares other than those offered for sale to the banks. In the event of the two hundred thousand shares offered to the banks being subscribed for by them, persons holding positions as directors or paid servants of banks shall not be permitted to hold shares in the Agricultural Credit Corporation."

On the Second Reading of this Bill Deputy Johnson called attention to the fact that it was in the power of the banks to obtain control of the capital of this Corporation. Shares to the amount of £200,000 are to be offered to the banks, and if the banks buy up this amount, shares to the value of £300,000 are to be offered to the public. There is nothing to prevent a bank, either as a corporate body or through individuals or officials, going into the market and buying up such a number of shares as would give them the greater part of the total share capital. While it is not intended that this Corporation should be in direct competition with the banks, matters may so develop that there will be a certain amount of competition between them. At this stage, it is impossible to foresee what the developments will be, but we should take precautions that the banks shall not be in a position to acquire the greater number of shares in the Corporation. This, of course, may be a mere bogey. There may be no real danger, but I see no harm in endeavouring to guard against it. This amendment was rather hastily drafted, and I am not sure that it will fulfil the purpose intended. If the Minister accepts the principle of the amendment, he could have it re-drafted so as to meet the case.

I am not prepared to accept the amendment. I would say, again, with reference to this amendment, what I said with reference to Deputy Byrne's amendment—that if the Deputy has a certain object in view he ought to go along a straight road towards that object. If he wants to arrange that there should never be a majority of directors elected by the banks, he ought to put down an amendment providing for something like that on Report Stage. It seems to me that this is not the right way to accomplish that object, even assuming that the object were a desirable one. If we want people to invest money in the shares of this Corporation, we must not prevent them having a free market in the shares. There would be no use in preventing the banks subscribing for the shares when first issued if we are going to allow them to acquire them afterwards. If we are not going to allow them to acquire the shares later, then we are limiting the market for those shares.

We would be limiting their use in the case of individuals who own them, and who perhaps wanted to borrow on them, and I think the result of an amendment such as this would either be that it would have no effect at all, because the banks could afterwards get all the shares they wanted, or if we extended it to prevent the banks later on from getting shares it would discourage the general public from applying. I think, therefore, that even if what Deputy Heffernan desires to do were a right thing to do, this amendment proposes to go about it in the wrong way. I may say that I am not a bit alarmed about the prospects of the banks acquiring a majority of the shares. Supposing the banks applied for a majority of the shares, supposing that they took up all the shares, all that they would have accomplished would be this, that they would have attached a Government guarantee to £500,000 of their own money, which they could apply to certain purposes specified in the Act.

But that would be the limit of what they could do, because if the Corporation were not behaving satisfactorily the Minister would not guarantee any service to the charge, and the matter would simply stop at the investment of £500,000. I do not think that there is any likelihood of that occurring. I do not think that the banks, for the trivial advantage it would be to them to be able to invest a certain sum of their own money with a Government guarantee in a certain way, as laid down in the Bill, would do a thing, perhaps quite legal, but that would be rather crooked. I do not think that we need anticipate anything of the kind. This Corporation will be a great help to the banks. Anything that will enable agriculture to prosper will be of great assistance to the banks. This will enable loans to be given that the banks find difficult to give at present, that are not really ordinary bankers' loans, and I believe that we may anticipate cordial co-operation between the Credit Corporation and the banks, and unless there is cordial co-operation the Credit Corporation to a large extent will fail in its purpose. If the Corporation is to be conducted on economic lines we must be able to avail of the services of bank managers as agents for the purpose of carrying out certain of the duties, and apart from the way in which Deputy Heffernan proposes to do this—I think it is wrong to do something that assumes that we cannot look for co-operation, and that in fact the banks may resort to unscrupulous methods to defeat the purpose of the Bill.

I maintain that I really have taken the most direct method of dealing with this question. The suggestion made by the Minister that we should insert a specific clause forbidding bank directors to be directors of the Corporation would not, in my opinion, be equitable or fair if the banks or their directors are allowed by the Articles of Association to acquire a majority holding of the shares. If such an amendment were accepted it would mean that those who might hold a majority of the shares could not have a majority of the directors, and I suggest that that would be a wrong way to deal with this. I suggest that my way, although perhaps appearing to be indirect, is really the only way in which it could be dealt with. In my opinion there would not be the slightest danger that the small limitation that would be put on the purchasing of these shares would have any real effect in preventing the shares from being taken up by the public. I am quite convinced that the public will take up the shares freely, because as I see them they will be quite as good as the National Loan. The interest will be 5 per cent.; they will be issued at par, I presume, and as the National Loan at present exceeds par, and as these loans will bear the guarantee of the Government, they will be, as far as I can see, on a level with the National Loan, and in addition to having the security of the State they will have the security of the assets of the bank. Therefore, I do not foresee the slightest difficulty in placing the shares. I may be unduly optimistic, but I believe that the shares can be placed with the public. I quite agree with the Minister that if this Bill is to be worked as it ought to be we will require to have co-operation between the joint stock banks and the Corporation. That is the intention, and we hope that it will happen in practice. But still there are possibilities that we cannot foresee; they may be dimly foreshadowed in our minds, but we cannot see what they will be, and it seems to me that it might be possible for the banks to obtain control of this institution and, by carrying it on in a way that the Minister could not disapprove of and which would not permit of his refusing to support the capital that he is asked to guarantee, might so reduce the competition as to make the Corporation ineffective.

One of the things that occurs to me is the question of deposits. Under the Bill, contrary to the findings of the Banking Commission, the Corporation is allowed to take deposits. In that respect they will, to a certain extent, be in competition with the ordinary banks, and one can foresee methods being used by the bank directors, if they were in control of the Corporation, to minimise the competition that will arise. It may be quite unnecessary, but as far as I can see the amendment would not do any harm. I feel in all these matters, from the Banking Commission Report down to this Bill, that there is at the back of the whole thing some kind of a fear of the banks. That is a situation which ought not to exist. The banks are important institutions, fulfilling their duties fairly well according to their own lights, but still they are institutions whose purpose is to make profits. If there is any idea that those institutions have a controlling power over the actions of the Government it is an idea that we should not allow to go out. The banks are subject to the laws of the State, the same as the individual, and I think it should be made pretty clear to the public that that is so and that no special privileges are being granted to them, and not only that, but on account of the powers which they have because of their enormous control of capital they must be subject to certain restrictions. I respectfully suggest that the amendment is a good one and ought to be accepted.

I think the Deputy is contradictory. He spoke of the premium at which the National Loan stands. There is a free market in the National Loan, and he wants to prevent a free market in these shares. It would really mean a depreciation in the market value of the shares, and why there should be a penal clause in relation to the Agricultural Credit Bank and no penal clause in relation to any other trading institution is something I cannot see. As to the matter of deposits, I do not suppose that the Bank will pay deposits in exactly the same manner as the ordinary commercial banks, which pay deposits practically on demand. I presume that the Agricultural Credit Bank will take deposits for stated periods, in the same manner as they will lend money for stated periods.

Amendment put, and declared lost.
Sections 5, 6, 7, and 8 put, and agreed to.
SECTION 9 (a).
The objects of the Corporation shall be so stated in its Memorandum of Association that the Corporation shall be entitled and authorised to perform and fulfil the following and no other functions, that is to say:—
(a) to receive without limit from individuals, co-operative societies, and other persons (including government departments and bodies exercising functions of government whether general or local) deposits of moneys to be carried on its books on deposit repayable to the depositor (either with or without interest) only on ten days or longer notice and not on less than ten days' notice nor on demand nor against cheques.

I move:—

In paragraph (a), line 24, after the word "interest" to delete all words to end of paragraph.

This amendment deals with the question of deposits. It has been put down for the purpose of getting information rather than with a view to fulfilling any definite object. I believe it is not right that the Credit Corporation should take deposits which would be payable on demand, but on the other hand, I think that a ten days' period is not sufficient. Ten days' notice is almost tantamount to demand, and my idea of the type of deposits which this institution ought to get would be deposits payable on, perhaps, three months' notice. An institution of this kind, lending money on a long term, cannot expect to have that money available on demand, and with a restriction of only ten days there is a possibility that in certain circumstances such a demand might come for the repayment of deposits at ten days' notice, that liquid assets would not be available for the repayment. I want to get information in that regard, and if I am satisfied with the information I will withdraw the amendment. I am not satisfied I think the best thing would also be to withdraw it, and put down an amendment for a later stage with a view to extending the period beyond ten days. My idea is that ten days is not a sufficiently long time.

I would ask the Minister to consider this whole question of taking deposits. Deposits do not seem to me to be necessary for the success of the Corporation. This will give a good deal of trouble. You will require to have a far more skilled expert staff to look after that part, it will add very much to the overhead charges, and it will at once set you in direct rivalry—at least so it seems to me— with the ordinary banks. Again, I do not think you are likely to get deposits. The object of this clause is to get some ready money to be used for the purposes of this Credit Corporation, but I do not think you will be likely to get deposits. From what I know of depositors in this country they are rather secretive. They like to put their deposits away and hide them, and they would not be inclined to put them into a Corporation like this where they would imagine their deposits could be seen by many Government inspectors. I think the chances of getting deposits are not very good, and there are several reasons, to my mind, why we should not receive them. It complicates the work of the Credit Corporation, and means that you will have to establish a full banking staff.

I think this is a general point on the section rather than on the amendment. We ought to get the amendment spoken on first.

I would like to discuss that aspect of the question.

That will arise afterwards.

I thought Deputy Heffernan was putting down this amendment from another point of view altogether. I thought he was anxious that the Corporation might accept deposits without being subject to notice at all. I agree with him, however, that ten days' notice is not sufficient, and I intended to put down an amendment for the Report Stage increasing the period of notice. I do not know whether I might refer to what Deputy Alton said on this point.

We will take that after the Deputy has spoken on the section.

I am satisfied with the Minister's statement.

Amendment, by leave, withdrawn.

Arising on the section and the statement of Deputy Alton, I would urge that the Minister should not do what Deputy Alton advocates. I think this question of people having confidence and requiring secrecy in a banking system can be pressed too far. I, personally, would like if it were possible for us to develop a banking system in this country whereby people who are prepared to make deposits would be prepared, not alone to put them in a bank but to put them in a bank where they might be utilised for the progress and development of industry. If men up and down the country —farmers and others—have sufficient faith in the agricultural industry, and a sufficiently strong desire to see it developed, I do not think now that we are starting out to set up this new Corporation, that we should limit the activities of the Corporation and prevent them taking deposits from people who are prepared to lodge their money with them. At the outset, the number of depositors, undoubtedly, would be few. I would hope that this Corporation would do such good work, and would command such confidence from those who have a little safe money that they would be prepared to put in at least a share of the deposits in the Corporation. We have many people putting in banks money gathered from an industry which at the present time is in sore straits, and in great need, indeed, of ready money to assist it in its development, and I think it is regrettable that our people could not have more faith in their industry, and that even the banks have not had that outlook that would have made it possible for them to put some of the surplus funds which it has been possible to invest elsewhere into this industry here at home, particularly at a time when it requires it so much.

Deputy Alton's case is that people will not utilise the machinery of the Agricultural Credit Corporation; they will not use the Corporation as a place to deposit money and that because of that the Minister should alter the section. If they are not prepared to use it, all right, there is no compulsion, there is no obligation on them. But if they are prepared to use it why not let them put their money into that Corporation particularly when we know that the money that will be available for the Corporation is money to be utilised for the improvement of the agricultural industry? I do not think Deputy Alton should press that point of view, and I would not like that the Minister should accept it.

I am not suggesting that people should not put their money into this Credit Corporation, and support it in every possible way, but I am pointing out that when you establish a receiving agency here you must have the machinery to take the deposits. You must have full banking machinery. On the other hand, I said, I do not think you would be likely to get deposits, because depositors like a certain amount of secrecy. It is a human trait. I think it is common enough. I do foresee that people will invest their money in this Credit Corporation. There are certificates of charge. These certificates of charge, I assume, will take up a lot of money that now goes into deposits.

The deposits given to a bank are really given on the reputation of the management of the bank. I presume the management of this bank will be just as reputable as the management of any other bank. The bank will be in an impregnable position. Its capital will be guaranteed by the Government. It will be in a far better position than any other bank in Ireland. I do not know how many millions of deposits are in the other banks at one per cent. I presume the Agricultural Credit Bank will give an extra quarter or half per cent., as banks established on the same plans usually do. I do not really see what is to prevent the bank getting its fair share of deposits. Otherwise it will not be able to bring all the benefits to the country that it is expected to bring. I hope the Minister will not listen to Deputy Alton's representations. As far as the extension of the notice is concerned, it is all against the depositor. The depositor may want money as quickly as possible. If he goes into one of the banks or agencies of the Agricultural Credit Bank he cannot get his money when he wants it. Certainly the extension of time would not be in favour of the client; it would be in favour of the bank undoubtedly.

I dare say I am making a mistake, but I was fully expecting that there would be an amendment down by the Minister for Lands and Agriculture, limiting the amount of these deposits, at any rate. To my mind, this idea of the Credit Corporation taking deposits is based on a mistake. It is not its business. The deposit business is especially the business of the bank. The issue of long-dated loans will operate seriously against the obviously desirable object of getting the banks and this Credit Corporation to co-operate on different lines. As I said, I think this will tend to prevent co-operation. I believe this giving of power to the Agricultural Credit Corporation to receive deposits is definitely against the Report of the Currency Commission. It was specifically stated in that Report that this Credit Corporation was not to have that power. In fact, I have reason to believe that there would have been much greater difficulty in getting the agreement of the bank representatives to that Report if that provision had not been inserted in the Currency Commission Report. I strongly hope the Minister will reconsider this whole question. I admit that it will be modified to a certain extent if the deposits are only deposits to be withdrawn after considerable notice. Further, it will be modified if the amount of the deposits are limited. But, in its present form, it seems to me to be wholly objectionable, and I hope that we shall have an important modification of the provision made before the Bill reaches the Report Stage.

I confess that I do not understand Deputy Alton's point about secrecy. I cannot see why the Agricultural Credit Corporation cannot take their deposits as the joint stock banks do. I do not think that point is valid at all. I think the control of this Agricultural Credit Corporation will be subject to the ordinary understanding with regard to secrecy, just the same as the joint stock bank. I would hope that that is to be the system by which it is going to be worked with regard to deposits or advances of any kind. I would like to impress on the Minister not to pay any attention to the suggestion that has come from the Independent benches in regard to these deposits. I think there is a great deal in what Deputy Baxter says, that in an agricultural country deposits which are coming from the agricultural population should, in part at least, be used for the betterment of that population. The banks at the present time are not making use of those deposits for the betterment of the larger portion of the community in this country. The deposits are being invested in outside countries. I think we should try to change the outlook in that direction. I realise we cannot change it in a day or by an Act of Parliament, but there ought to be an agency to try and direct money which is deposited here by agriculturists to be used to a certain extent for the benefit of agriculturists. The only competition that I can see that this Corporation would be up against would be the competition of the Post Office Savings Bank, and as regards the Post Office Savings Bank a large portion of the deposits, as far as I know, is being invested in outside securities, when it should be invested for the benefit of the community from which the deposits are drawn. It has been recommended in other places that the Post Office deposits should be used, for instance, for the benefit of Agricultural Credit Societies. I think there is something in that argument. I do not foresee that there is going to be any real danger of a rush on this Corporation, or that it is going to be in serious competition with the ordinary banks. The period of notice will be extended, and I am willing to have it extended to a minimum of three months if necessary.

That will mean that nobody will deposit money unless he is prepared to wait for three months to get it back after giving notice. That would probably prevent any undue rush on the Corporation. The Government guarantee does not apply to safeguarding deposits that might be regarded as involving a certain amount of risk. I think that that element of risk, combined with the extended period of notice, will be a sufficient safeguard to ensure that there will be no very large amount of money turned into this form of deposit. I think it is essential that an institution of this kind should have deposits from people in the country, as such an institution should not be regarded purely as a Government one. It will, I suppose, be a fact that the investments in the capital of the Company and in the share-certificates will not be by agriculturists, but the opportunity which will be given to farmers to place money on deposit will induce them to take an interest in the bank and make them regard it as one of their own institutions. They will not regard it as purely a Government institution for giving relief, but they will look upon it as an agricultural institution established for the benefit of farmers by way of reasonable interest on deposits and the giving of credit on long terms to those worthy of credit.

Since the Second Reading of this Bill I have had several discussions with the Minister for Agriculture in regard to this matter, both in regard to the length of notice that should be prescribed and the limitation of the amount of deposits. As a result of further discussion and examination we are inclined to think that it is wrong to accept deposits from individuals, and that it would be better to bring the Bill back into conformity with the recommendations of the Banking Commission. We believe that the Corporation will enjoy confidence and will do its business as well, and with as much secrecy, as any bank, and would ultimately get a certain amount of deposits, but it will be doing business that should not be financed by money on deposit. Deputy McBride came to the kernel of the matter when he said that the extension of the period of notice was really against the customer and in favour of the bank. I doubt whether the bank could get any substantial sum on deposit if it required absolutely as much as one month's, and, in certain circumstances, three months' notice. As a general rule when people deposit money, subject to three months' notice, they get it back without sacrifice of interest. A Corporation such as this, to get in substantial sums of money, would require to arrange that people could get their money out without sacrifice of interest. That would mean that the Corporation would have to be ready to pay substantial sums at short notice.

If it did not get the concessions in this Bill, and if it stood by the position that the prescribed notice should be given, then the sum which it would obtain would be much less, and no gain would accrue because there would be expense in working the deposit business. The only object in having a deposit business would be simply to give the Corporation money at a cheaper rate than it could get by issuing certificates of charge. If the amount was small, the profit would disappear in the overhead expenses. On the other hand, if the concessions given by other banks were given, and if people were allowed to take out money almost at call without the sacrifice of interest, the position would be that the Corporation would be trying to give long-term loans with money which it had not at its disposal for the same period as that at which it was lent. I had a certain amount of experience in dealing with a business that was not really liquid banking business, and dealing with it by means of deposits. I was a director of the National Land Bank, which was smaller than this institution ultimately will be, and I know it was a cause of constant anxiety to the directors that they had their money in something that was not liquid, and there was a danger that big calls might be made on them for cash at any time. We were not able to use the money on deposit for good business, because we were afraid that some day, if we went further than we had gone in lending it in various ways in which we could not get it back quickly, we would have to close our doors, although the bank was quite solvent.

The general conclusion which the Minister for Agriculture and I came to was that it would be no advantage to the Corporation to have deposits from individuals. We would propose to accept deposits from co-operative societies, but the amount of that money would be comparatively small, and they would be people with whom the Corporation would be dealing every day. Deputy Baxter is right when he says that it is desirable to get the money saved by agriculturists back into agriculture, but the right form in which to get that back is in certificates of charge. We are loosening up the provisions of this Bill in regard to certificates of charge. In the Bill, as originally drafted, they could be only issued on first mortgages of land, but we are going to allow them now to be issued against other approved securities. There will be a much more rapid and more extensive issue of certificates of charge than if we allowed them to be issued only in regard to first mortgages in land. The man who could afford to put money on deposit for a considerable period and who would only require that money back after giving long notice can be induced in many cases to purchase certificates of charge which will bear the Government guarantee, and which will be marketable. They should, in fact, be as marketable as National Loan. They will bear the Government guarantee for the same rate of interest. There will be no doubt that the dividend will be paid and that they will be redeemable.

People, particularly agriculturists, should not deposit money and try to have the Corporation carry on an unsatisfactory business, but big efforts should be made to get them to purchase certificates of charge and make them realise that in this way they could get their money back as easily as if they had to give thirty days or two months' notice. The amendment to which I am referring will be proposed on Report, and the Minister for Agriculture will, I hope, be here then to discuss it. We are not proposing that amendment because we think there would be no deposits or that there would be no reason for confidence in the Corporation, but simply because we fear that it would lead the Corporation into the sort of difficulties which the banks are in. People blame the banks. I do not say whether they are right or wrong for not giving money for long-term loans, money that they might be called on to pay at any time. It would be almost impossible to get any real advantage in the way of cheap money owing to the difficulties which would be involved. A bank could not be expected to lend money on long terms when it has that money only for short terms.

I think the Minister is arguing the case of deposits as though it were an obligation on the Corporation to accept them. That is not the position. The section deals with the Memoranda of Association, which, if this section were allowed to remain, would empower the Corporation to accept deposits, but it does not impose on them an obligation to accept them, and they may well rule out of their ordinary business the receipt of deposits. If the Minister, with his nominees, and the bank, with their nominees, on the Board consider that it will hinder their development or elasticity they will not undertake the receipt of deposits, but are we wise in prohibiting it? That is, in effect, what the Minister proposes. If the Articles of the Association do not allow receipt of deposits, then it is practically prohibited and I think that is unnecessarily stringent. The Minister is arguing in favour of making it absolutely prohibitive to receive deposits. If a public body or a wealthy friend wanted to lend money to tide over a difficulty it might be done by way of deposit and we should not prohibit it.

The Corporation, if looked on as a business institution, might benefit by receipt of deposits. If it took deposits and purchased, say British War Loan, or some such investment, it might be a very good operation, but the receipt of deposits for the purposes of this Corporation seem to us not to be likely to confer any benefit at all and, if that be so, it seems to us to be better to draw the line. There is an arrangement in the Bill by which it can get money for temporary needs by the issue of debentures. If, for some temporary reason, the Corporation needs money it can get it in the way in which joint stock banks can ordinarily get it, but deposits are another matter and they are not a means by which temporary difficulties can be covered. I do not know whether we should argue the matter at great length as, in my view, it could be argued more satisfactorily on Report when the proposed amendment will be before the Dáil.

I am in the same position as the Minister in regard to this matter. I think we could argue it better on Report when the amendment will be before us.

I think we should see the amendment. We are arguing about the deletion of paragraph (a), but that may not be the actual amendment. It may only be to delete part of it, or to alter it in some way. We would be in a more satisfactory position on the Report Stage when we would see the amendment. The argument would then be more satisfactory.

Am I to understand from the Minister that on the next Stage a proposition will be brought forward by which deposits will be refused by these institutions?

Yes, from individuals.

I think that would be a mistake. I am afraid it is the result of political pressure.

Mr. HOGAN

From Wicklow?

Or banking pressure.

If the Deputy is suggesting that I have been briefed by a bank, he is completely mistaken.

I acquit Deputy Alton.

What is forgotten with regard to deposits is this: When a farmer has money to spare he places it in the bank; he would not buy these charge notes that are to be issued because he would consider them too inconstant, and he would lose his money. He would put his money in the bank for a definite object, and perhaps he would need to withdraw it in six months' time. He would not buy charge certificates because of the likelihood of diminution in value. He is not a gambler in that respect. The Minister should take cognisance of that. I have met people in the country who would not take money out of the bank to put it into the National Loan, although they are only getting 2½ per cent. on the bank deposits. They will consider charge certificates a fluctuating item, and they will not take the money out to buy them.

Section 9 agreed to.
SECTION 10.
(1) The Articles of Association of the Corporation shall be in such form consistent with the provisions of this Act as shall be approved by the Minister and the Minister for Lands and Agriculture.
(2) Notwithstanding anything contained in the Companies Acts, 1908 to 1924, no alteration in or addition to the Articles of Association of the Corporation which is made without the previous approval of the Minister and the Minister for Lands and Agriculture or is inconsistent with any provision of this Act shall be valid or effective.

I move amendment 4:

Before sub-section (2) to insert a new section as follows:—

The Articles of Association of the Corporation shall immediately on issue be laid on the Tables of the Oireachtas and if within twenty-one days on which each House has sat a resolution is passed by either House disagreeing with the Articles of Association said Articles shall accordingly be annulled.

This amendment is simply a precautionary amendment. The idea is that the members of the Dáil should have an opportunity of examining the Articles of Association and satisfy themselves that they are in accordance with the Act. I do not want to press the amendment. There is really no great benefit to be gained by it. If the Minister will show it is unnecessary in practice, I am prepared to withdraw it.

Mr. HOGAN

If the Articles of Association are not in accordance with the Act, the courts are there and it is their function to see that the proceedings of the Corporation are strictly within the law. I do not see any necessity for laying the Articles of Association on the Tables of the Oireachtas.

There is a special point in connection with it. The amendment provides that the Articles of Association shall be laid on the Tables of the Oireachtas and if, within twenty-one days on which each House has sat a resolution is passed by either House disagreeing with the Articles of Association, said Articles shall accordingly be annulled. Let us assume the Dáil reassembles in July and rises in September, or at the end of August. As regards preparing the Articles of Association and doing the initial work, I doubt if it could be done in a month or even six weeks. It is more than likely you will not have twenty-one sitting days before the Dáil rises again. The Dáil, in the ordinary course, may not sit again until November or December, and it will be, perhaps, two months before you have twenty-one sitting days of the Seanad. It could very easily happen that the Articles of Association would not be released, with the best will in the world, until February or March. After that the Corporation would have to be organised, shares issued and capital obtained. That would take a few months more. This is not an argument directed directly to the merits of the amendment, but this amendment might mean that you could very easily delay the establishment of the Corporation for nearly a year, and I do not think anybody wants that. I do not see any likelihood of danger. The courts are there to ensure that the law shall be kept. I ask the Dáil not to pass the amendment and I ask the Deputy not to insist on it.

I quite agree that in the present circumstances of the Oireachtas the operation of the amendment might be likely to protract the period within which the Corporation could be established. That is what I do not want to do. I would like to see the Corporation established as soon as possible. If necessary, I would be willing to change the number of days in the amendment to seven. On the whole, I am satisfied with the Minister's statement, and I desire to withdraw the amendment.

Amendment, by leave, withdrawn.
Section 10 agreed to.
SECTION 11.
The Articles of Association of the Corporation shall provide that the number of directors (including the chairman) shall be ten, of whom four (not including the chairman) shall be nominated by the Minister from time to time as occasion requires and that if and so long as the Minister holds more than two hundred thousand shares of the Corporation the chairman of the Corporation shall be nominated (in addition to the said four directors) by the Minister from time to time, as occasion offers.

I desire to move amendment 5:—

In line 59, after the word "Minister" to insert the words "with the sanction of the Dáil."

This amendment is on all fours with amendments which were before the House in connection with the Electricity (Supply) Bill with regard to the directors of the Board of Control. The principle in that case was pretty well argued. My intention is to guard, if we can guard, against anything in the nature of political control of these institutions. Since I put down the amendment I have been reading the discussions which took place in reference to the directors of the Board of Control connected with the Electricity (Supply) Bill. The arguments there set out show me there are great difficulties in the way of the idea that underlies my amendment. The difficulties are almost insuperable.

I do not know if the contingency I want to guard against can be guarded against. If the Minister will make a suggestion which will meet my point, I am willing to consider it. It is possible under the Bill that the Government, through the Minister for Finance, can have a majority representation on the Board of Directors. In such a case this institution would become a Government institution; its directors would be nominated by the Minister and there seems to be a possibility that you may have men appointed on this Board because of political reasons, and for political purposes. We want to ensure that this Corporation shall not, in any way, be run as a political institution. We want to see that members of the Farmers' Union will get loans just as well as members of the Cumann na nGaedheal. Perhaps that is an extreme way of putting it, but the amendment is mainly directed to guard against any possibility of political influence, and to ensure that we shall have the names of the directors placed before us for examination before their appointments are sanctioned. I know it is an extremely difficult matter to carry out. It is almost impossible for the Dáil to examine the qualifications and credentials of particular individuals. If there is any kind of safeguard which the Minister can suggest, I would be glad to hear it.

I would like to suggest the safeguard in this matter is that we choose Ministers who are honourable men.

Mr. HOGAN

That is, of course, the only safeguard, in fact.

We do not choose them.

Mr. HOGAN

The Board of Directors must be appointed by somebody. It is obviously an executive act. I suggest to the Dáil the proper Minister to appoint for the purpose of this Bill is the Minister for Finance. If the Minister for Finance is not capable of performing efficiently and properly that executive act he is not fit to be Minister for Finance. There is no way out of that, I am afraid. The arguments used by the Deputy could be used in respect of every other executive act performed by every other Minister. In fact, you have no security against arbitrary acts of a Minister except the power the Dáil has, such as it is, of nominating and approving and appointing Ministers.

When the Board of Control connected with the electricity scheme was under discussion we raised the point that some of the members of that Board should have some connection with agriculture or should understand it. I wonder what is the point of view of the Minister with regard to the directors of this Corporation?

If my memory serves me aright, I think Deputy Johnson argued somewhat on these lines when dealing with the Fifth Stage of the Electricity (Supply) Bill: if the Board of Directors on this Corporation are not acting as we think they ought to act, our only remedy is to try to put out the Government. That is, we have to take some action here which, if approved, will have the effect of being a vote of censure on a particular Minister, and thereby we shall put the Government out of power. That would be a very big thing to do for the purpose of achieving one comparatively small end. In practical politics it is not possible; it is all very well in theory. Unless there was some actual corrupt practice I do not see how it would be possible. Ministers do a lot of other things besides looking after the appointment of directors. Although a Minister might be to blame in connection with the appointment of a director, it would be a very difficult thing to undertake putting a Government out of power simply because of—I will not say a misdeameanour—a Minister being guilty of something. The safeguard that I am looking for is a safeguard in practice and not one in theory.

I do not want to go into this question as, perhaps, one might be tempted to, but I want to assure Deputy Heffernan and the House that my position regarding the powers and functions of the House has been pretty consistent since I came here—that this is not an administrative assembly. The task of administration is left to the Ministry, and it is the business of the Dáil to criticise the Ministry for their administrative acts, and dispense with them, were we in a position to do so, out of dissatisfaction, but that we ought not to take on ourselves the duty of making appointments of an administrative kind.

Amendment put and declared lost.
Question put: "That section 11 stand part of the Bill."

I want to get an assurance from the Minister that if there are to be ten directors they are not going to be merely ten bankers, ten men qualified in the theory and practice of banking and in that alone. This Corporation will undoubtedly have to deal with farmers and with the business of farming, and, therefore, there is a very practical side to this question of the appointment of the directors. I am not going to attempt to define the qualifications necessary for some of the men who may be appointed as directors on this Corporation, but I feel that it is absolutely essential, if the business of the Corporation is to be well done and if the Corporation is to be helpful to the farmers, as we hope it will be, to have on it men who have other qualifications than those of being very good bankers in theory and in practice. I think that the men appointed must have an understanding of agriculture, and I am afraid you are not going to get men of that type out of our banking institutions at the moment.

I agree with Deputy Baxter that the gentlemen nominated by the Government should have at least a working knowledge of agriculture and of its requirements, as well as being qualified in other ways.

Mr. HOGAN

I am inclined to think that ten directors are too many. It may be that on the Report Stage I will suggest that there should be a lesser number. The Minister for Finance will have the appointment, and if he were to ask me what he should do I should certainly suggest that he should appoint directors who would have a special knowledge of agriculture and of agriculture credit. That presumes a certain amount of special knowledge of agriculture generally. The men appointed should, I think, have a certain amount of special knowledge of banking, and above all a special knowledge of agricultural credit.

Question—"That Section 11 stand part of the Bill"—put and agreed to.
SECTION 12.
(1) The Memorandum and Articles of Association of the Corporation shall be so framed and expressed that the Corporation shall be entitled and authorised to lend or advance money only to the persons and for the purposes hereinafter stated, that is to say:—
(a) to any person for the purpose of purchasing land;
(b) to any farmer for the purpose of constructing buildings on his farm, or making on his farm improvements of a permanent character calculated to increase or facilitate or conduce to the increase of the productivity thereof or for the purpose of purchasing live stock, agricultural machinery or implements, manures, feeding stuffs, seeds, or other requisites of agricultural production or marketing;
(c) to any co-operative society (subject to the limitations hereinafter contained) for the purpose of establishing, carrying on, or extending its business;
(d) to any person engaged in or proposing to engage in an enterprise designed for the service of farmers or of farming communities for the purpose of establishing, carrying on, or extending such enterprise;
(e) to any person (other than a co-operative society) for the purpose of paying off a loan which was originally made to him (whether before or after the passing of this Act) wholly or mainly for a purpose for which a loan could under this section be made to him under this section by the Corporation;
(f) to any co-operative society (being a co-operative society to which a loan could be made under this section by the Corporation) for the purpose of paying off a loan made to such society (whether before or after the passing of this Act) wholly or mainly for a purpose for which a loan could under this section be made to such society by the Corporation.
(2) The Memorandum and Articles of Association of the Corporation shall also be so framed and expressed that the persons to whom and the purposes for which the Corporation shall be entitled and authorised to lend or advance money as stated in such Memorandum and Articles in pursuance of this section may be varied (whether by extension, restriction, or otherwise) from time to time by the Minister and the Minister for Lands and Agriculture at their joint discretion by orders made by them jointly, but so that such persons and purposes shall not by any such order be extended so as to include—
(a) any person who is not engaged or about to engage in agriculture or in a business or enterprise of an agricultural character or calculated directly or indirectly to benefit primarily persons engaged in agriculture, or
(b) any person to whom the Corporation is expressly forbidden by this section to make a loan or advance, or
(c) any purpose which is not directly or indirectly related to or concerned with agriculture.
(3) The Corporation shall not make any loan or advance any money to—
(a) any co-operative society the objects of which do not include at least one of the following objects, that is to say, the giving of agricultural credit, or the production or the marketing of agricultural produce, or the sale of agricultural machinery or implements or manures, feeding stuffs, seeds, or other requisites of agricultural production or marketing, or the production and distribution or the distribution only of power and light mainly to farmers, or
(b) any co-operative society which at the time of the making of the loan or advance carries on the business of selling by retail any goods which are neither agricultural produce nor requisites of agricultural production or marketing, or
(c) the chairman or any director of the Corporation.
(4) So long as any portion of a loan or advance made by the Corporation to a co-operative society remains owing to the Corporation, such society shall not give or continue financial assistance to any person engaged in or carrying on the business of selling by retail any goods which are neither agricultural produce nor requisites of agricultural production or marketing and shall not itself engage in or carry on any such business, and if any such society contravenes the provisions of this sub-section the whole of the loan or advance so made to it by the Corporation shall (notwithstanding any agreement to the contrary) forthwith become due and payable by it to the Corporation.
(5) The Corporation shall not discount or purchase any promissory note, bill of exchange, or other negotiable instrument which was made by a person to whom the Corporation is expressly forbidden by this section to lend or advance money or which was made otherwise than for the purpose of obtaining for the maker thereof or for any other person money for expenditure on a purpose for which a loan or advance could lawfully be made by the Corporation to such maker or person.

Mr. HOGAN

I move amendment 6, which stands in the name of the Minister for Finance:—

In sub-section (1), (b), line 6, to insert immediately after the word "land" the words "for agricultural purposes."

The purpose of the amendment is to make it clear that a loan is not to be made for the purchase of land for building in a city.

Amendment put and agreed to.
AN LEAS-CHEANN COMHAIRLE took the Chair.

I move amendment 7:—

In sub-section (1) (b), to add after the word "marketing," line 14, the following words: "or for the purpose of holding over live stock or farm produce for a better market."

I am not quite sure whether the amendment is properly drafted, but the object of it is to give the Corporation power to grant loans for the objects stated, namely, to enable people who want to keep over their live stock until better market conditions obtain. Every one conversant with agriculture knows that this provision, if inserted in the Bill, would confer a great boon on people in certain circumstances. Perhaps the Minister would consider the matter and bring in an amendment on the Report Stage to meet the object I have in view.

Mr. HOGAN

This bank will exist to give loans for agricultural purposes. A farmer has stock on his land, but he wants to hold them over. He would prefer to do so, but must sell them because he wants the money. The whole question is what he wants the money for. Does he want it for an agricultural purpose? If he does he can get a loan and hold over the cattle. If he does not he cannot get the loan, and that is the intention of the Act. I suggest that the Deputy's point is already covered by the Bill.

Amendment, by leave, withdrawn.

I move amendment 8:—

To add at end of sub-section (2) the words "Any variation (whether by extension, restriction or otherwise) shall immediately on being made be laid on the Tables of both Houses of the Oireachtas and if within twenty-one days on which either House sits a resolution be passed by either annulling such variation said variation shall be inoperative."

This amendment is put down for the purpose of dealing with the Memorandum and Articles of Association.

Mr. HOGAN

Surely this amendment goes with amendment 4?

It is not the same question at all. The Minister has power under the Bill to vary the class of persons who can obtain loans or the purpose for which money may be lent. He has power to do that either by extension or restriction. That is a rather extraordinary power to give the Minister—power to go outside the Act altogether.

Mr. HOGAN

Not at all. There is no question about that. If the Deputy wants an assurance from me I can make it clear to him, so far as legal advice can be got, that the Minister for Finance may not extend the Articles of Association outside the Act.

Or restrict them.

It is in regard to the restriction that there is a real danger. The Minister can restrict as to the persons to whom advances are to be made, and can restrict in regard to the purpose for which advances are to be made. I do not think we should give this power to the Minister. If the Minister wants to apply restrictions in the matter of advancing money under the Bill, I suggest the proper course to pursue would be to come to the House and get the powers to restrict.

Mr. HOGAN

My view is that this amendment is in the same position as amendment 4, which provides for the Articles of Association. The Articles of Association will set out in detail the objects for which money may be lent, the persons who may get a loan and so on. Under the Act the Minister responsible is free to go to the extreme limits allowed him by the Act, and on the other hand he can refuse to avail of the powers conferred on him by the Act. In other words, he gets a discretion. I think it is only right that he should have that discretion, because this is experimental. Certain powers are conferred on the Minister and on the Corporation. At the beginning they may decide that it is safer, in the drafting of the Articles of Association, not to include all the powers which they might have within the Act. They will see how that will work, and then, if they think well of it, can extend the Articles of Association gradually to the full limits allowed under the Act. I think that course merely indicates common sense and ordinary caution. I see no objection to the Articles of Association, as originally drafted, restricting the Corporation to lesser functions than the maximum functions they may exercise. In fact, without doing it deliberately—I do not suppose it would be done deliberately—it would be impossible for the Articles of Association to cover every power that the Corporation may have under the Act, because in fact new opportunities for exercising powers will only show themselves gradually.

As agriculture develops, as other services come in, and as new forms of organisation come in, there will be new opportunities which the Corporation may, and can, avail of well within the Act, so that even if the Corporation wished, if the person who prepares the Articles of Association wished, it would be quite impossible at the beginning to draft Articles of Association that would cover every contingency and every case in respect of which the Corporation would be entitled to deal under the Act, so that there is bound to be an extension. It is almost certain that there will be a certain number of restrictions in the first Articles of Association, but there is likely to be an extension of that afterwards as new opportunities for making loans and making credits evidence themselves. The Dáil has agreed that the original Articles of Association should not be laid before the House. Therefore, I suggest it would be an extraordinary and an illogical thing to say that whenever there is an extension within the Act that it should be laid before the Dáil.

The Minister's statement opens up an aspect of this question that has not been revealed in anything said previously on the Bill. May I call attention to sub-section (1) of Section 10, which states: "The Articles of Association of the Corporation shall be in such form consistent with the provisions of this Act as shall be approved by the Minister and the Minister for Lands and Agriculture." I would now ask Deputies to turn to sub-section (2) of Section 12, with which we are dealing. The sub-section reads:—

"The Memorandum and Articles of Association of the Corporation shall also be so framed and expressed that the persons to whom and the purposes for which the Corporation shall be entitled and authorised to lend or advance money as stated in such Memorandum and Articles in pursuance of this section may be varied (whether by extension, restriction, or otherwise) from time to time by the Minister and the Minister for Lands and Agriculture at their joint discretion by orders made by them jointly, but so that such persons and purposes shall not by any such order be extended so as to include—"

and so on. Section 10 lays it down clearly and explicitly that the Articles of Association shall be consistent with the provisions of the Act. We are accepting the Bill as it is, and for what we hope it will bring. The Articles which may be drafted may be of such a restrictive character that it will not be possible for the Corporation to do what we are giving them power to do in the Bill. We are not going to agree to that. If the Minister tries to make the case that sub-section (2) of Section 12 is on all-fours with the amendment, I submit he is not correct. If it is necessary that the Articles should be drawn in such a way that it would not be possible for the Corporation to do what we feel they are entitled to do under the Bill, it is not extraordinary to ask that the Articles should be laid on the Table of the House for 21 days so as to let the Dáil know that this Corporation is not going to do everything that the Dáil thought it was going to do. If it is a question of extending the list of things that the Corporation may do—that is a different thing. We think that a great deal of good can be done if the Bill is administered as it is, even without further extension. We recognise that the operations of the Corporation may indicate the necessity for an extension of powers in certain directions. We are prepared to concede that much. But if we pass this Bill and the Minister is going to draft Articles of Association which will not make it possible for the Corporation to do all the things that we thought they were going to do when passing the Bill a good deal of the merits of the Bill will be taken away. If it is felt by people who are optimistic about what this Bill will do for them that the Minister is going to draft Articles of Association, so that it is going to be an entirely different thing, a great part of the value of the Bill will be taken away. The least we can ask is that the Minister will accept the amendment and agree if there is to be restriction in the Articles of Association——

Mr. HOGAN

The Deputy does not object to extension?

Restriction covers extension.

Mr. HOGAN

How can you have extension? Does not extension imply restriction?

My answer to that is that at present we are not asking more, and I would be loath to press for more than is contained in the Bill. What we are asking is that we should get what is contained in the Bill and that the Minister should not take power to take away what is written in the Bill. There is no point in the remark that extension is the same as restriction—it is nothing of the kind. What we fear is too much restriction. I have no delusions about the fact that hundreds of people will be disappointed as to the credit facilities they expect to secure under the Bill. I am satisfied that hundreds of people will not get the credit facilities they expect under the administration of the Act. Therefore, if the Minister is asking us to give him power to restrict the operations of the Corporation, we are not prepared to agree.

It is only what he asked from the beginning—this is not the Minister's amendment.

Mr. HOGAN

I do not understand the Deputy—it is not my amendment. I am not an expert in company law, but I presume that the person who has the duty of preparing the Memorandum and Articles of Association will have to take Section 9 and Section 12. He will have to amplify (a), (b), (c), (d) and (e) of Section 9. Then he will come on to Section 12 and will take, say, sub-section (1) (b)—just to take one sub-section. I presume he will insert that word for word in the Articles of Association. On the other hand, it may be that there will be more detail in the Articles. They may attempt to define the requisites of agricultural production.

Will he be at liberty to restrict and put in less than that?

It might be necessary. Supposing the Deputy wanted to buy land, would you not require some restriction?

Mr. HOGAN

Supposing, as it may well have to be, that the Articles of Association attempted to schedule the requisites of agricultural production. If each member of the Farmers' Party here at present attempted to make a list of the requisites of agricultural production they would produce nine different lists, and there might be still other requisites. There might, for instance, be further developments in agriculture that would require new and unforeseen requisites—raw materials—and consequently the Articles of Association would have to be extended to meet that. Equally the Articles of Association ought to deal. as I said, with Section 9, paragraph (e) of which states:—

To do all such things as may be incidental or ancillary to the due performance of all or any of the functions hereinbefore mentioned.

I presume they will have to invest money temporarily, and that there will have to be some discussion as to what sort of investments money should be placed in, what powers of investment they may have, and that some decision will have to be come to on that matter. It may be as a result of the working of the Corporation, that they will find that different powers should be given to them in regard to the investment of money. I am just taking that one sub-section so as not to go through all the rest. There is no possibility that any Articles of Association would foresee every possible contingency. It is absolutely certain, and was always contemplated, that the Articles would be extended according as the needs for extension showed themselves. The first Articles of Association will ultimately, as agriculture develops, require extension on the banking side—small extension perhaps. There may be financial arrangements that I do not understand —purely banking matters—that are not exactly as they should be. Powers to invest money, provisions in regard to securities against certificates, all of which will be in the Articles of Association, may have to be extended or changed or adapted.

Or restricted—will the Minister deal with that?

Mr. HOGAN

Or perhaps restricted. If they have to be extended, obviously the first Memorandum and Articles of Association will be restricted as compared with the extended Articles.

The Minister does not see the point. The section says: may be extended, restricted or otherwise from time to time. It is not dealing with the first Articles of Association at all.

Mr. HOGAN

I agree. It seemed to me that Deputy Baxter was under the impression that the Articles of Association as originally drawn would contain all the powers that the Corporation would require for all time. That was the whole trend of his argument.

I was not under any such impression. I pointed not that the development of the work of the Corporation would indicate the necessity for extension, but the Minister did make a statement which left me under the impression that there would be restrictions.

Mr. HOGAN

That is the whole point. If there is not to be restriction in the beginning, then the original Memorandum and Articles of Association must contain all the provisions that the Corporation will want for all time.

Mr. HOGAN

Surely, if the English language means anything, if there is not to be restriction in the beginning, then the Articles of Association must contain all the provisions that the Corporation will require for all time.

I should like to correct the Minister. My interpretation of this is, that what may appear to be full and complete in the Articles of Association in the beginning will, as development takes place be shown not to be full and complete. But one need not conclude then that the first Articles of Association will not be complete. I hope they will be complete, so far as we can see it is necessary to have them complete, to deal with the conditions existing at present. I recognise that there must be extensions later, owing to possible developments. What I fear is restriction even on the work that the Corporation can do immediately.

Mr. HOGAN

The person who drafts the Articles will have to make them adequate to the needs of the moment. The whole point is, whether they will require extension afterwards—extension not only as to the objects for which money will be lent, but extension and adaptation so far as financial provisions under Section 9 are concerned. Deputy Johnson raised the point that there may be restrictions afterwards—that the powers may be taken under the Articles of Association and surrendered later on by additional Articles of Association. That might very well be. For instance, I would say that it ought to be the point of view of the Dáil that the Minister for Finance, who will be guaranteeing all the certificates, and who stands to lose every thing in the long run, should have the power at least to say, in a situation that we cannot foresee now, and that may arise five or ten years hence, that for the present there will be no more loans of a special kind made. I cannot see anything wrong in that. If he does, it is known at once. First of all, the Articles of Association can be obtained by anybody. Secondly, it will immediately affect some section of the public. It will get to be known immediately, and can be debated in the Dáil in all its moods and tenses. There is no question of secrecy, about it. If it is of any importance, it will affect the interests of somebody. If that somebody, or that class to which that person belongs, thinks that they have a real grievance, or that the Minister is acting unjustly, it will get to the Dáil very quickly. The Memorandum and Articles of Association as restricted or extended, can be got, and the whole thing can be debated here. But this is a restriction in regard to the objects for which a loan may be made. I cannot at the moment outline the actual details with regard to loans that might be restricted later, and I cannot draw a picture of the conditions which would make it necessary to restrict some form of loan. But it might very well be that it would become necessary in the future. But there will be restrictions possibly in the administrative and the financial side of the Corporation. It may be that some provisions with regard to the investment of money or the management of securities, the management of the pool, and so on, would have to be set out, and if the Articles of Association were too wide, the Minister might very well feel that he should restrict these powers and confine investment.

I want to point out that this does not apply to restrictions in regard to investments.

Mr. HOGAN

I am answering Deputy Johnson's question.

It only applies to restrictions in regard to lending.

Mr. HOGAN

The Articles of Association will deal with restrictions of all kinds, restrictions on lending, and so on, and one affects the other. If you have restrictions on investments they may react on lending, and you cannot draw a distinction between them. On these two points it is clear that there must be power to extend the Articles of Association. Equally it is clear, in my opinion, that there must be power to restrict them, and there is no argument that I can see for laying on the Table of the House extended or restricted Articles of Association that would not apply with more force to laying on the Table the original Memorandum and Articles of Association. Deputy Baxter made a long speech which really meant this: "The cat is out of the bag."

Oh, now!

Mr. HOGAN

That is what it seemed to come to. He did not put it that way, but we have now discovered that it is the intention to restrict the powers which we are giving the Minister and really to starve the Corporation. That is not the intention, and a provision enabling the Minister either to restrict or extend the Articles of Association is no evidence of such an intention. The Deputy ought not to assume that because an ordinary business precaution is taken it is an indication that it is to some extent camouflage and that some of the most important functions of the Corporation are to be cut away immediately by limiting the Articles of Association. There is no such intention. This right to restrict and to extend the Articles of Association is a right which is dictated by commonsense, and, undoubtedly, the Minister for Finance should have such a right. It is in details that he will exercise it, and I am sure that there will be ample opportunity for exercising it. It is to a certain extent tentative. But there is no argument I can see for placing extended Articles of Association on the Table of the House that would not apply with greater force to the original Memorandum and Articles of Association.

I do not think that the position has been made quite clear; certainly it has not been made quite satisfactory. Any Articles of Association that may be made must be consistent with the provisions of this Act, but the Articles of Association which are first made may be as wide as the provisions of Sections 9, 10, 11 and 12. Let us assume that as a possibility. Then it is provided that the two Ministers may from time to time restrict those Articles by order. I think that there are provisions in the Companies Acts that require certain procedure—public notice—before Articles of Association can be altered. I do not know what the provisions are, but I am pretty confident that something of that kind is in existence. The proposition of Deputy Heffernan seems to me equivalent to that public notice of the alteration of the Articles of Association. If no such provision is inserted it means that the powers which are restricted in respect of the Companies Acts regarding Articles of Association are abrogated and that all the powers for altering these Articles are left to the two Ministers. The remedy, if any remedy is required, lies with criticism in this House of the action of the Ministers after the thing is done. I do not think that that is quite sufficient. I think that before the change is made there ought to be some public notice, that the change should not take place suddenly under an arbitrary act of this Corporation any more than in respect of a public company, which has to give notice before its Articles of Association are changed. Whether the particular method here is satisfactory or not I am not caring, but it does seem to me that some publicity is required before the Articles of Association are changed, and that the mere fiat of the two Ministers is not sufficient, because in effect that gives them power to modify the law.

I am not quite satisfied as to the variations between the Minister and ourselves. This is a question of policy in the management of the affairs of the bank. For example, if in the course of the operations of the bank too much money has been lent for land speculation and that this would eventually raise the price of land unjustly, it would perhaps be the function of the Minister to say to the directors: "Do not give so much on land. Try to divert money into some other channel."

Mr. HOGAN

That would not require a change in the Articles of Association.

Therefore I do not know what the Minister really wants. Section 10 gives the Minister power to draw Articles so long as these are inside the Act. If the Minister and the Minister for Finance agree, then those will be the Articles of Association in the beginning. It says definitely "shall be in such form as shall be approved by the Minister and the Minister for Lands and Agriculture," so long as they are consistent with the Act. That means that the initial Articles of Association may be very much restricted compared with what the Bill would give them. In that case it might be necessary to give them the power to extend, and I think that there might be a case for restrictions if, in the course of time, it was found that things were not going right with the Corporation. That is the meaning I take out of the position.

If I gathered correctly what Deputy Baxter said it was that he would have no objection to sub-section (2) of Section 12 if the word "restriction" were out.

That would represent my view. "Restriction" is the main thing.

I submit that it is scarcely fair to admit "extension" and to refuse "restriction," and the fact that an order shall be laid on the Table is not so much of a safeguard as it looks. After all, the Minister for Lands and Agriculture and the Minister for Finance must make this order. It is something that will come about, not from a particular conception of the needs of one department only but of two. It could reasonably happen that a restriction was made necessary in the interests of the community itself, if a certain abuse were to creep in, and it is only when the Minister for Lands and Agriculture would agree with the Minister for Finance that a restriction of the sort would lie. Picture for a moment how this might be taken if there was no power to restrict and only power to extend. Obviously there is a limitation there. It would be an extraordinary limitation if no power whatever was given to restrict, no matter what abuse might exist, or what bad investment were made, or anything of that sort that might happen. It is obviously a necessity to have a restriction if power be taken for an extension, and as far as laying on the Table of the House is concerned it appears to me that that is an elaborate ornamentation in our procedure.

Will the President tell that to the Minister for Industry and Commerce?

A particular case might require a particular answer. I am dealing only with this particular case. Deputies who are in the agricultural industry would be in a position to make representations against such a proposal and have it varied if it were necessary, but the sub-section appears to me to be the ordinary sub-section that should be put in, and it certainly looks to me to be very remarkable if "restriction" were not included in this when "extension" is put in.

Is it not a fact that Articles of Association have to be issued? The Articles of Association evidently must be in accordance with the Companies Acts, and notwithstanding any agreement between the Ministers for Finance and for Lands and Agriculture, the ordinary procedure must be gone through, but either restriction or extension has to be recommended by both Ministers.

Deputy Johnson used the argument that this might have the effect of abrogating the procedure under the Companies Acts, and I think that is possible, in connection with publicity with regard to a change in the Articles of Association. But I am rather suspicious of this section because of the very strong case that the Minister, backed up by the President, has made for the retention of the section in its present form. I am simply asking that any change, whether by way of extension or restriction, shall be laid on the Table for twenty-one days.

That is not asking for unreasonable publicity. Restrictions or extensions can be made, but they must be laid on the Table of the House. That is all we are asking. The Minister has endeavoured to throw a smoke screen over the thing, because this is only endeavouring to give power to restrict or extend the purposes for which money will be lent; it does not deal with investments or matters of that kind. I think it is an elementary precaution. I would accept the section if "restriction" were eliminated and the section were drafted to allow "extension" to exist, because I say there is a big difference between "extension" and "restriction." They are opposite in meaning. "Extension" means that they can be extended within the Act, but they cannot go one inch beyond the Act, but "restriction" means that in practice the Minister, if he so desires, can restrict and restrict until there is practically no Act left, and still it will be within the Act. He can restrict the Corporation so as only to lend money for one purpose. We will take good care that that will not happen, but, nevertheless, I maintain that there is no necessity for the retention of this word "restriction" at all. In practice, the directors will have power to lend money for any purpose within the Act. They cannot be forced by anybody to lend to anybody if he is considered unsuitable or if the loan be considered bad from the credit point of view. In actual practice they will have power to restrict credit as much as they like. But we do not want to give the Minister power to whittle down the Act, so as to govern the directors in respect of the powers they have.

Mr. HOGAN

As I understand the Deputy's objection now, it is to the word "restriction." My objection to the Deputy's point is this: I like some sort of uniformity. The Articles of Association are not to be laid on the Table of the House. Now if there is to be any restriction, as set out in sub-section (2), that is to be laid on the Table of the House. Why? In order to give the House an opportunity of debating it. That is simply a debating reason. If there was any serious restriction at all, that fact would become known in the country. The Deputy knows very well that the question would be raised in the Dáil at once and. the whole question would be thrashed out as effectively as if the Articles were on the Table. Yet, that is the reason put forward for laying the extended Articles of Association—or the restricted Articles of Association, if you like —on the Table, when, apparently, there is no good reason for laying the original Articles of Association, which are much more important, on the Table. I do like a little uniformity, and I think it is illogical to place the amended Articles of Association on the Table if you do not make the same provision for the original Articles.

I particularly object to the Deputy's proposal when arguments are used in its favour which are unsound. One argument used was that the functions of the Corporation might be so seriously restricted that in the end it would practically disappear. The Deputy knows that the first sign of serious restriction would be seen at once by the people of the country and particularly by the interested section, that the question would be raised here and that the whole matter would be debated. If the Deputy's real objection is to the word "restriction," he can allow the matter to stand over until Report, and we can then go into it further, but I cannot give any undertaking in regard to it.

When this matter was first raised. I did not think it had the significance it seems to have. It was only after the Minister's statement that I realised its significance. The Minister stated that, in the beginning, there would be some restriction.

Mr. HOGAN

Surely the Deputy, at this stage, has got the point that in the beginning there will be some restriction.

My interpretation of the Minister's statement was that in the beginning we were going to have less than this measure gives——

Mr. HOGAN

Why not take what a person says and no more?

The Minister sometimes shows extraordinary impatience in regard to another person's point of view. We have reason to fear that the administration of this Act may not bring such satisfaction as is pretended. We have to try and take all the precautions possible. If we did not do that, the Minister could say, later, that we gave him power to restrict, in passing the Bill, and that he had a right to exercise that power—that he was standing on that right. If the matter was raised later in the Dáil, that would probably be the answer the Dáil would get. We want to see that the position is safeguarded, as far as possible, for our people.

I am willing to withdraw the amendment. I will have the same amendment put down for Report Stage. In passing, I wish to say that it is not fair to the Dáil to talk about the intentions of the Minister. We are dealing with what is in the Bill and not with the Minister's intentions. We do not know that, when the Bill comes into operation, we will have the same Minister for Agriculture.

Mr. HOGAN

I have not spoken of my intentions. I make the point that I should be taken to mean just what I say.

Might I suggest to Deputy Baxter that he read carefully the first four lines of sub-section (1), Section 12. There it is stated definitely that the Articles of Association shall be so drawn as to give certain powers.

Amendment, by leave, withdrawn.

I move amendment 9:—

In sub-section (3) (a), lines 60-61. to delete the words "or other requisites of agricultural production or marketing."

I believe these words should be deleted, as they are open to very wide interpretation. They might, in fact, be taken to include practically everything used in agriculture. They might be taken to include such things as cans, pots, kettles and dishes, and other things being sold at present by some of these societies. If these words are not deleted, these societies may continue, in my opinion, to sell these articles hereafter. The Dáil, in coming to the relief of a large and important section of the community, should take care that it does not jeopardise the interests of a section of the community just as large and just as important. I think the main purpose of the Bill is sufficiently safeguarded in the remaining portion of the sub-section, and that we should take these words out. The words used are too loose and are open to too wide an interpretation. The Minister and Deputies know perfectly well that the traders in our important towns who deal in these agricultural goods and commodities have a certain fear in regard to this provision. I think their fear is perfectly legitimate. Societies which will get money on exceptionally favourable terms under this Bill will be in a better position to compete than the trader who has to stand on his own feet. The competition would not be equal, and I think the Minister should amend this section so as to remove any legitimate fear which the traders have at the moment.

Mr. HOGAN

The "requisites of agricultural production" are really the raw materials of agriculture. When interpreted along with sub-section (2), there is no difficulty, in my opinion, as to the meaning of the provision.

Amendment put and negatived.

I move amendment 10:

In sub-section (3) to delete paragraph (b).

The intention of this amendment is to safeguard certain co-operative supply associations which are engaged in supplying the requisites of agricultural production—agricultural machines and other articles. These articles may not be defined as necessary for agricultural production. Deputy Hennessy, in dealing with his amendment, mentioned some articles which are sold by these associations.

I would not stand against restriction on credit societies which are not engaged in the supply of the requisites of agricultural production if these societies stood alone. But we find that the accounts of societies attached to creameries are not kept separate. The creamery accounts and the supply accounts go into a common till. The effect of the Bill, as it stands, would be that where a loan was made to such a co-operative society it would have to conduct its two forms of activity separately and have a separate system of accounting. In practice, this provision would restrict to a great extent the credit which can be given under the Bill, and it would not enable the purpose intended by the Bill to be fulfilled.

I support Deputy Heffernan in his amendment, because the effect of the sub-section would be that creameries having co-operative stores attached would gain no benefit under the Bill.

Mr. HOGAN

Co-operative stores dealing with the necessaries of life.

There is no co-operative store which deals solely with agricultural requisites. They always take in household effects. In the case of creameries having co-operative stores, the manufacturing side is the losing side, and the distributing side is the prop of the creamery. That is owing to the fact that the supply of milk to the creamery is not economic, and that the overhead charges are heavy. Under the Bill at present, a creamery having a co-operative store and selling flour, tea or sugar would be debarred from any benefit. There has been a good deal of talk about unfair competition with traders. I think that there is a good deal of illusion in that regard. In the country, the co-operative stores have to employ paid hands, whereas private traders have the benefit of the service of their own families. I do not see that the competition of these societies is unfair, because, by using the labour of their own families, private traders should be able to sell more cheaply than the stores. I support the amendment.

Would the Deputy describe the establishment he referred to as a trading stores or a co-operative creamery?

It would be a co-operative creamery.

I think it would be a co-operative creamery under false pretences.

In County Limerick, I know a creamery where the milk supply would only reach 45 per cent. of the total turnover. The balance would come from the co-operative store. Yet if the creamery went down, it would be a serious financial loss to the farmers of that district.

Fifty-five per cent. of their revenue comes from trade?

That does not bear out what the Deputy said a moment ago.

I may not have made myself clear. I can name a good many creameries that are depending upon the co-operative store to compete with other creameries.

Mr. HOGAN

Such a creamery is in a very shaky condition indeed.

Not by any means. You can see the balance sheets in their offices.

Mr. HENNESSY

The position, I submit, will be entirely different under the new system. I agree with Deputy McBride that we ought not to subsidise shopkeeping. That is what Deputy Hogan wants.

Mr. HENNESSY

The Deputy stated that creameries could not subsist if they are not allowed to sell tea, sugar, and other necessaries of life, and he asked the Dáil to agree to a provision to allow this bank subsidise such an institution against the ordinary traders. I hold that that is not fair and it should not be accepted by the Dáil.

I do not know exactly what is the way out in this. There is a difficulty here, undoubtedly. I, to some extent, question the possibility of doing everything we would like to do in this Bill. At the same time you have a number of co-operative societies—as Deputy Hogan says, distribution societies—attached to co-operative creameries and doing business in agricultural requisites. The Bill is going to act unfairly if the whole concern cannot get a loan, because a certain type of business is being done in the same institution, business perhaps that would be a very small proportion of its total business. Nevertheless, because a trifling business is being done, they are not entitled under this Bill to obtain a loan. There are difficulties on both sides. I wonder whether the Minister can do anything to find a way out of the difficulty, because it is going to create a considerable amount of dissatisfaction. We have up and down the country many societies. Perhaps the percentage of their business, outside dealing with requisites of agricultural production or manufacturing agricultural products, would not be more than ten or fifteen. In a case like that, what is to be done under this Bill? I think the Minister will require to meet that case somehow.

I am not very much enamoured of Deputy Hefferman's amendment. I had the privilege of belonging to a co-operative society some time ago. I had the further privilege of paying well over £200——

You were a great man to have it.

It would be very useful, I agree, sir, now, owing to the fact that I was a guarantor for their overdraft which reached very large dimensions. I think that a co-operative society which merely goes in for retailing business, without helping the farmer in any way in the matter of marketing his produce, is not worthy of very much consideration. I know that in my county there have been three or four co-operative societies which were forced to put up their shutters. There are two or three working yet. Probably they are under better management, or it may be due to the fact that they turned their attention to other matters than selling tea and sugar and that sort of thing.

I think there is some change required in this section, even to meet the case made by those who object to the subsidisation of or the assistance to retail trading societies.

Sub-section (b) states: "Any co-operative society which at the time of the making of the loan or advance carries on the business of selling by retail any goods which are neither agricultural produce nor requisites of agricultural production or marketing." I visualise a society which accepts, amongst its other work, eggs for marketing. Amongst the people who deal with that society for other things are some who do not raise eggs, or may require eggs for home use and, as a matter of ordinary convenience, eggs are supplied to them on a retail basis. If a society did such a thing as that they would be precluded from getting any benefit. I think the objects of the Minister would be covered if it spoke of the main business of the society being retail.

Eggs are agricultural produce.

To retail them. Take the other side. They may sell eggs, flour, bacon, tea——

The Deputy is right. I intended to make that point.

Everything but clothing and furniture, and do very little else. I think the Minister, on the last occasion, pointed out, or somebody pointed out, that the purpose of this was to prevent retail trading. If it is intended that this should be a prohibition of any retail trading in foodstuffs I think it is an undue restriction and should not be allowed to remain in the Bill. I think there should be some way whereby a society whose main business is not selling by retail, but which incidentally does retail business, should be still free to get these loans or advances. I would point out, too, that there is a distinct economy for the farmer if he is able to get in the one place the goods for his home use. If the farmer has to go to the society, the creamery or the agricultural store with certain goods for the purpose of his business, but has to go to the town, perhaps ten miles further, to buy the household commodities there is a distinct loss in the agricultural economy. There is a waste of time. I have an idea that the Minister is convinced that one of the defects of the economy of agriculture is that there is too much time wasted in the town. This is going to force the farmer to go to the town oftener than he otherwise would need to.

Would the Minister make it clear, when he is replying, that there is no such thing as subsidising these creameries.

Mr. HOGAN

There is.

It is a loan, to be paid back.

Mr. HOGAN

The present position. as far as I know, is that there are four or five hundred co-operative creameries in the country. Only a small proportion of them do any business other than creamery business, and of that small proportion only a proportion do business other than in raw materials of agriculture. So the position with regard to the creameries is this. Only a very small proportion of the total have stores attached to them which deal in the necessaries of life. I think we would not be far wrong if we put it that 75 per cent. of the creameries have no stores of any kind attached to them. Deputies of the South will probably make a better case, but I think I am not far wrong. Of the remaining twenty-five per cent. a big proportion deal in the requisites of agriculture. and the remainder deal in the raw materials of agriculture plus the necessaries of life. So that the Bill covers a very big number of the creameries of the country, whether they be creameries simpliciter or creameries with stores attached.

With regard to these retail stores, they are the most unsatisfactory end of co-operation, and always have been, and the really bad creamery is a creamery that is mainly depending on its retail store. A creamery that is dependent to any great extent on its retail store is in a very bad position indeed. You will always find that it is the most slovenly creamery in every sense of the word. The accounts are not kept separately. There are all sorts of mixing up between the accounts of the store and the accounts of the creamery. The manager has specialised in everything, and, consequently, has specialised in nothing. He is hopping from one place to another, and there is considerable confusion. That has been the normal condition of a very big proportion of the creameries that run retail stores.

With regard to retail stores which are not attached to creameries at all, they have not been an outstanding success either. There have been some of them successful, but only a small proportion. The balance always have been the biggest proportion. They have always been in a very bad and very shaky condition. What people forget, dealing with this question, is that it requires a very big degree of special knowledge to run a retail store. Anybody who believes that a retail store can be started and run successfully, in a big way, without a considerable amount of technical skill and special knowledge, is making a big mistake, and that is the mistake that has resulted in the present situation where you have such a very large proportion of the existing retail stores in a very shaky financial condition. When you think back to the development of cooperation in this country, you had first the co-operative creamery and then the co-operative store. You have two or three small co-operative creameries in an area that should be served by one. I developed this subject at some length on the vote for the purchase of the premises of the Condensed Milk Company, but I would like to remind Deputies that I showed there that the farmers of the country were to blame. They had certain advantages in other countries which they had not here, but whether these advantages are there or not, let us look at what did happen. You had small co-operative creameries —two or three organised in an area that should be served by one—competing against each other, doing things in a small way, improperly financed, improperly organised, no real efficiency in a great number of them, no real efficiency in the carrying on of the ordinary work of the creamery—buttermaking—and no proper supervision of accounts, no real system from beginning to end. Then the suppliers split up and other creameries were formed. All this cost money. They diffused themselves all over the place. Generally they manage to carry on with the greatest difficulty, and they are never in anything like a strong position.

If there were any sort of proper development during that time, the creameries would have been properly organised, and there would be a sufficient supply of milk. Large, instead of small, creameries would have been established. Proper machinery could have been installed. The places could have been better kept. The accounts could have been better kept. All that would have resulted in a much more prosperous trade. The question of marketing clamoured for solution for years. Every creamery was competing against every other, and no attempt was made to organise a Marketing Board, such as exists in other countries. No attempt was made to market in a rational way. While these important essentials were neglected, the societies were diffusing themselves in other activities, and were neglecting their proper business. There is no use in pretending that the Irish co-operative movement is simply panting to conquer fresh fields. Before the movement begins to worry too much about the lack of opportunity for going into the distributive business and conquering it, it has a big job to put its own house in order.

A lot has to be done before the bacon societies are efficient, before the actual producing work is as efficient as it should be, before the creameries are properly organised, before the accounts are properly kept, and before there is proper supervision. All that has to be done, and, in addition, there has to be built up a proper marketing organisation. When that has been done—it will take years to do it—we can discuss the problem whether the societies should go into the distributing business as well. In my opinion, in the best interests of the country, we will have to keep the co-operative movement as far as possible out of the retail business. The ordinary retail store has not been a success. It has only served one purpose. It has diffused the energies of the farmers of the district. It has taken them away from what they should be doing, and it has concentrated them on something else. Generally, it has confused the whole position.

I regard these two sections as being in the best interest of the farmers themselves, and of the co-operative movement in particular. There is another side of the question. This is a bank to provide agricultural credits of a special kind, credits which are not provided in the ordinary commercial way. To that extent, undoubtedly, the farmers, individuals and organisations, who are getting these credits are in a very special position. Equally, it must be admitted that the creamery which has a store attached is in a very special position to get the custom of the farmers. The farmers come there regularly, and it is easy for them to get their goods there. They are paid a cheque for their milk, and it is a simple matter to stop for the supply of goods out of the cheque. That is first done, and in that way the creamery that has a store attached is in a very advantageous position as against the trader. The owner of a proprietary creamery is in an equally strong position. He can also have a store, and can get all these advantages which the ownership of a creamery gives him.

The mill-owner, or anybody who has a business which brings people to it as customers, can also start a retail shop and can get all the advantages by having it on the same premises as the other concern. That is quite right, but it is going pretty far in present circumstances to make special credits available to agricultural organisations which already have the advantages. which I have pointed out, for getting customers, while these credits are not available to any other class outside this limited one. Undoubtedly, in equity, we must take into account the point of view of a man who has put money into a trade or business and who is trading. He is entitled to fair play. We have to recognise facts. These people are there, and in a great many cases their business has been built up by the expenditure of much capital. They are entitled to fair play from the State, and, when the State is putting facilities in the way of a certain class of organisation, it must take into account its obligations to other classes.

When you consider these facts on one side you must also consider on the other side that the weakness of the co-operative movement up to the present has been these retail shops, dealing with the necessaries of life and with other articles which are the mainstay of the town. The creameries that are trading in a wholesale way in such articles as fertilizers, feeding stuffs, implements and machinery are doing good business, and are doing it efficiently. The institutions that are doing badly, institutions which are badly conducted, are, as a rule, those that are doing a general trade, a trade in the necessaries of life. Take these circumstances together and you have a line to draw. It is only a question of giving effect to it. I would agree with Deputy Johnson that this does not give effect to the distinction I outlined, and I propose to make slight changes in the Bill before the Report Stage. The first change would be in regard to Section 12, sub-section (3) (b). That reads:—"Any co-operative society which at the time of the making of the loan or advance carries on the business of selling by retail any goods which are neither agricultural produce nor requisites of agricultural production or marketing."

As Deputy Johnson pointed out, the Corporation might make a loan in that state of affairs to a society dealing in a retail way in, say, sugar, bacon or flour. That was never intended, and I propose to alter that in this way. I propose to delete the words "neither agricultural produce nor requisites of agricultural production or marketing," and insert the words "goods actually or usually produced by that society."

What will the effect of that be? A creamery with a store attached may get a loan provided the store is not dealing in the necessaries of life. The reason I insert those words is this: A creamery which does a business in butter often has in store large quantities of Canadian or New Zealand butter for the winter. That is done quite openly. It is a common thing with creameries. I know creameries that are butter exporters and which do business in the winter time in foreign butter with retail shops. I know retail shops in the country which, as a matter of course, deal with certain creameries for foreign butter. A really good creamery would have shops in Cork and other places which it would supply with butter all the year round on the understanding that, when its own butter was run out, they would take its foreign butter. This proposed change is to meet that case. It gives effect to what I desire to achieve. It will enable the Corporation to deal with a creamery which has a store attached and which sells either its own produce or requisites of agricultural production.

That is the position of, at least, 90 per cent. of the creameries. With regard to the rest, even though they do a general business, it is a very small proportion of their business. It represents only a negligible item in turnover. They have an alternative. Those that do not want long term loans can deal with the joint stock banks. I should say that with 70 per cent. of the creameries which have a store doing a general business, the general business is only a small proportion of the retail business, and if they require loans they will have to conform with the terms of this Bill. I would propose to make a slight change also in regard to sub-section (4). I am quite satisfied that the policy of leaving to the exporters, the produce people, the distribution of the raw materials of agriculture is quite sound, and will remain sound for the next twenty or thirty years. I am satisfied that they will have sufficient to do to make themselves as efficient in that field as their rivals. I am satisfied that the best turn which the State can do is to prevent them, indirectly if you like, from going into other fields of activity.

I am afraid that the most of the Minister's argument rather assumes that this is a direction to the Corporation to give credit and make advances to societies whenever they ask for them. It assumes that the Corporation is not going to have any discretion as to the character of the society, the credit behind it, and its management. I thought that, according to the Bill, the Corporation would have discretion and, if it found a society which was slovenly or careless, it would be thereby damaged in its endeavour to get an advance from the Corporation. But the proposition of the Minister is to prohibit the Corporation from granting credit to a society whose main business is purely agricultural, no matter how strong and well-conducted that society is, if they sell an ounce of tobacco over the counter. I think the Minister is going entirely too far, and is putting a prohibition upon the Corporation which is quite unnecessary.

It seems also that the Minister is forgetting that there will be further development in co-operative organisation, apart from creameries. After all, creameries are not going to be the only direction in which agricultural cooperation will spend itself. It seems to me the prohibition upon this Corporation in this respect is going to militate against the development of the idea of co-operation amongst farmers, and unnecessarily so. I see, too, in this prohibition temptation to societies simply to try to get round the prohibition and, unless the Minister is going to make very radical changes in the law regarding co-operative societies, it will be a very simple matter, indeed for any number of members over seven to form such a society for trading purposes, and rent for one shilling a year the premises of the trading or creamery society and do exactly the very thing you are pretending to prohibit.

I think this is unnecessary. I think the objects might be well safeguarded if the section were framed in such a way as to prohibit credit being given to a society in connection with which any considerable part of the business was retail distribution of general commodities. I can understand that case, but I cannot understand the case the Minister is making for an absolute prohibition upon the Corporation against making an advance or giving credit to a society which, in a minor way, deals in retail commodities. I think the Minister is badly advised, and he is merely forcing societies to get around the Act by forming new co-operative societies, which they can do very easily indeed.

The traders in the towns who are paying rent, rates and taxes, and who have to pay a portion of that subsidy or loan, are in this position; it would be very unfair to deprive these men in the towns from exercising what ought to be their lawful business, purchasing and selling the necessaries of life. A co-operative society that would be supplying these necessaries of life would be getting, if you like, sheltered assistance from the State. It would be very unjust to give them sheltered assistance, and so help to deprive traders of their means of livelihood. In a great many cases traders have to seek from the members of the co-operative societies some of the necessaries of life, in order to exist. They have to get butter, eggs, potatoes, and several other necessities. It would not be fair or just to the traders to deprive them of the right to carry on their business and to give a subsidy or loan, or a grant, if you like, to the co-operative societies and so put them in a position in which they should not be.

I think the cat is pretty well out of the bag now. If the Minister argued on the grounds that there should not be competition between traders and co-operative societies in the selling of ordinary non-agricultural necessaries of life, that is a matter that could be taken on its merits. The Minister has resorted to a good deal of special pleading to make a case, and I think his arguments are not altogether justified. If the Minister argued that practically all co-operative societies carrying on the business of retail selling of ordinary commodities have not been a success, that is a debatable point. I know of one creamery society which has a store attached to it for retailing ordinary agricultural necessities and the ordinary necessaries of life, such as flour, bacon, boots, etc. That society is one of the best in my county. It produces the best butter, and it continually gets prizes at surprise competitions. Great benefit has accrued from that society to the people in the vicinity, because of the retail store and the reduced prices. It is not at all impossible to have a creamery with a store attached well managed. In that particular store there is a separate manager for the creamery and a separate manager for the retail department. If the business is sufficiently large, that is how to run it. The Minister has drafted the Bill so that credit will be restricted in future.

Perhaps the Deputy will tell us about some of the other stores in Tipperary that have gone bankrupt because they are delving in too many matters?

If the Minister mentions societies which would not enter into competition with the traders, I am prepared to argue with him. There are no such societies. The fact is that these societies are not going to get credit simply because they are selling articles other than actual requisites for agricultural production. It might reasonably be argued that practically everything a farmer buys is necessary for agricultural production. The farmer has to live in order to produce, and in order to encourage efficient farming we ought to encourage the farmer to get the articles he requires at the lowest possible price.

Mr. HOGAN

What particular cat is out of the bag?

I do not want to particularise the cat too much. The interests of agriculturists in this country come first and we ought to meet them.

Amendment 10 put.
The Committee divided: Tá, 15; Níl, 32.

  • Pádraig Baxter.
  • Connor Hogan.
  • Tomás Mac Eoin.
  • Risteárd Mac Fheorais.
  • Risteárd Mac Liam.
  • William Norton.
  • Tomás O Conaill.
  • Liam O Daimhín.
  • Tadhg O Donnabháin.
  • Mícheál O Dubhghaill.
  • Seán O Duinnín.
  • Donnchadh O Guaire.
  • Mícheál O hIfearnáin.
  • Domhnall O Muirgheasa.
  • Pádraig O hOgáin (Luimneach).

Níl

  • Earnán de Blaghd.
  • Séamus Breathnach.
  • Seoirse de Bhulbh.
  • Próinsias Bulfin.
  • Máighréad Ní Choileáin Bean Uí Dhrisceóil.
  • James Dwyer.
  • Desmond Fitzgerald.
  • John Hennigan.
  • Seosamh Mac a' Bhrighde.
  • Donnchadh Mac Con Uladh.
  • Liam Mac Cosgair.
  • Pádraig Mac Fadáin.
  • Seoirse Mac Niocaill.
  • Pádraig Mag Ualghairg.
  • Martin M. Nally.
  • Michael K. Noonan.
  • Peádar O hAodha.
  • Mícheál O hAonghusa.
  • Seán O Bruadair.
  • Parthalán O Conchubhair.
  • Máirtín O Conalláin. Eoghan O Dochartaigh.
  • Séamus O Dóláin.
  • Peadar O Dubhghaill.
  • Pádraig O Dubhthaigh.
  • Eamon O Dúgáin.
  • Séamus O Murchadha.
  • Pádraig O hOgáin (Gaillimh).
  • Máirtín O Rodaigh.
  • Seán O Súilleabháin.
  • Mícheál O Tighearnaigh.
  • Liam Thrift.
Tellers:—Tá: Deputies Heffernan and Baxter. Níl: Deputies Dolan and P.S. Doyle.
Amendment declared lost.

Mr. HOGAN

I move to report progress.

Agreed.

The Dáil went out of Committee.
Progress reported; the Committee to sit again to-morrow.