PUBLIC BUSINESS. - AGRICULTURAL CREDIT BILL, 1928—SECOND STAGE.

This is a very short and very simple Bill. It is a Bill of five clauses and its purpose is as follows. It aims at providing that mortgages in favour of the Agricultural Credit Corporation shall take priority over equities, but shall not take priority over any other charges registered on the folio. That is the whole crux of the Bill. Some Deputies may not grasp quite clearly the significance of that.

When land is bought by the Land Commission and vested in the tenant purchaser, after vesting it is registered under the Local Registration of Title Act, 1891. Of course, there are a very large number of holdings registered every month. Every farm purchased under every Act since 1903 and vested has been registered. The aim of the Registration of Title Act was to simplify land tenures. It was realised that the land of Ireland was passing over from the owners, who held under all sorts of tenures, fee-farm rents, fee simple, long leases and so on, and was being passed to the tenants under a tenure which was fee simple. It was provided under the Act of 1891 that, after vesting, the title should be registered under the Local Registration of Title Act, 1891. The effect is that if any farmer whose land was vested wanted title he got his solicitor to write to the Registration of Title Office and got the folio, which set out that the land was situate in such a place and that it was of a certain acreage, and it also set out any charges which were registered subsequent to the vesting. Take a case where there was no such charge, where the tenant purchased the land and it was vested in him in fee-simple, and where there were no dealings in the land since purchase. The folio in that case would set out the area of the land and the description of it. That document, known as a folio, is evidence in any court. There is attached to it a map, which sets out the exact boundaries, easements, etc. If a tenant had a dispute with his neighbour as to a right of way or as to a portion of a field, all he has got to do is to get a copy of the folio, hand it to the judge in court, and it must be accepted for what it sets out on its face. It is final and conclusive. It was realised that all sorts of rights might possibly attach to lands which were vested. In the case I mention, the simple case of a tenant purchaser who purchased his land under any Act since 1903, and whose land is vested and registered in the Registration of Title Office, it is realised that various persons might have claims on that land.

The tenant purchaser's father might have died five years previously. There might be two of his brothers in America, one in a shop in the town, and another somewhere else in the country. The father might have died without making a will and all the sons are entitled to claims on the land. It was rightly considered at the time that it would be impossible to investigate all possible titles. They got over the difficulty by having the lands registered subject to equity. The idea was that fee simple was a graft on the tenancy, and any claims existing against the tenant should be put against the fee as registered under the Local Registration of Titles Act. The Agricultural Credit Corporation has been in operation for some time and has received a large number of applications for loans. In all the circumstances they can only take one form of security from small farmers. That is a mortgage on the land. The applicants generally are people who hold land in fee simple. The Corporation, when they get applications for such loans, apply to the owner for title. He sends up a copy of his folio and the Corporation then find, for instance, that the applicant is registered subject to equity. The position for them is that they have either to take a mortgage on that land and register it on the folio as security, or they must ask the owner of the land, the tenant purchaser, to discharge equities and to show that there are no prior claims which existed on the land before it was purchased and vested. In the case of a small farmer it takes anything from £5 to £7 to discharge equity and it takes a couple of months to complete it. Searches have to be made, deeds have to be investigated, and so on, and it is found, as a result of that experience, that it is not worth while for a small farmer to go to the trouble and expense of discharging equities to get a loan. That difficulty is holding up the operations of the Credit Corporation. They are in a position to make a large number of loans if they get the security they want, which is a first mortgage on the land against which there are no other claims. While that note as to equities remains on the folio they do not know what claims may be against the land. It is provided by this Bill that a mortgage in favour of the Credit Corporation shall take priority not to other mortgages registered on the land, but to equities. That is the effect of the Bill. It is an important provision. It will mean that if it is passed speedily the Credit Corporation can begin operations almost on a wholesale scale.

I would like to ask the Minister whether he is anxious to pass this Bill through all its stages before the Recess?

Mr. HOGAN

Yes.

It is not my intention, nor the intention of our Party, to oppose this Bill, but there are a few observations which we would like to make upon it. The Minister, in introducing the Bill, said that it is short and simple. It is short, but I do not agree that it is very simple. There is one clause which is somewhat involved.

Mr. HOGAN

Is that Clause 3?

Mr. HOGAN

I should have explained that. I should suggest that Deputies read it afterwards in the light of my explanation. A is the registered owner of land. He was the tenant when the land was purchased. The land was vested in him. He got it from his father who died intestate five or six years before the land was vested and there were two other sons as well as A. These two sons are elsewhere. A is the tenant who fell in for the land and it was vested in him. He gets a loan from the Corporation after this Bill is passed. Under the terms of the Bill there is a mortgage registered by the Corporation. It takes priority over the equitable claims of his two brothers, who have claims against the land, as they are equally entitled as well as he, owing to their father dying intestate. That loan was got, say, for the purchase of stock or for some casual purpose — a purpose entirely to the advantage of the registered owner. It is only right if the land comes to be sold that the interest of A., the registered owner, the man who got the loan, should be made first liable in respect of that loan. It is only right, if the loan has to be paid to the Agricultural Credit Corporation, if the lands are sold, as the result of proceedings taken by the Corporation and the loan paid off out of the purchase money, that the man who got the money, A. and who was living on the land, should be liable to his two brothers, so far as his special interest in the land is concerned. Take, for instance, a farm worth £300. A, B and C have each £100 interest. That is their equitable claim to the land, because their father died, and they are equally entitled to that amount in the event of the land being sold. Suppose that the Credit Corporation has given a loan to A of £70, and that the land is sold and fetches £300. The Corporation gets the £70, but A's interest in the land must first of all pay off his liabilities to his two brothers.

Is that irrespective of the purposes of the loan?

Mr. HOGAN

No, that is in the case of a loan for a casual purpose, but if it is got for permanently improving the land, then it is felt that the loan is made to increase the productivity of land which is made more valuable for selling, and that there should be no distinction as to equities as between either A, B or C.

I am glad that explanation was given because it makes that section very plain. I am not under any misapprehension about this Bill. I believe the Bill as far as it goes is a good one. There might be some small amendments suggested but I am not under any great misapprehension as to what it is going to do for the farming community. I believe the farming community at the present time is scarcely in a position to pay interest on loans — in particular farmers are scarcely in a position to pay 6 per cent. We would have been more gratified if some of the other defects in the original Act were dealt with when this Bill was being introduced. I know there are great difficulties in reducing the interest but there were suggestions made for instance that something could be done about speeding up the deposits that should be made with the Corporation so that they could give out money at a lower interest, or that something should be done about speeding up the creation of credit societies so that deposits could be obtained from these societies eventually. That point of the rate of interest seems to be of more importance to the farmer at the present time than the point of equities because I believe there are very few farmers at present who can make farming pay or get capital at the rate of six per cent. in order to start farming or revive it as the case may be. However, as far as the Bill goes it is all right and I am only finding fault with how far it does not go.

There are just a few points which we might ask the Minister to reply to when concluding. There is one point in reference to the sum of £200. I do not know why £200 is introduced. It is an arbitrary sum and as we all know, giving a loan to a man whose valuation, taking buildings and lands together, is not £10 is quite a different thing to giving a loan to a man whose valuation may be £200. I thought when this Bill was introduced that some sort of sliding scale might be instituted and that a man might be given a loan according to his valuation—perhaps eight or ten times the valuation, instead of £200, because it does appear that a man with a large valuation, and 80 or 100 acres of land, can easily be allowed a loan of more than £200 while a man with a small valuation and a very limited amount of buildings, would not be entitled to £200. Of course, I know there is no difficulty in getting any sum below £200 because the Corporation can exercise a discretion in that matter but it is limiting them to the amount of £200 where they could give more——

Mr. HOGAN

Such a man could be asked to discharge the equities.

That is the answer, that if a man is entitled to ask for a loan of £500 he can afford to discharge the equities, but there may be great difficulty. I have been informed of a few difficulties which seem reasonable. There is delay. There is the cost, which may not be very heavy. It might be £20 in cases of that sort, but there are also some very difficult cases, where it would be nearly impossible to find out definitely about relatives in America and that sort of thing. There is also another point arising out of Section 4, line 56, which I would like to hear explained. It seems that minors and lunatics, as the case may be, are at a disadvantage under this Bill. In all other cases, as far as I can learn, where a person has a claim, he has an unlimited time to make that claim, but in the case of a minor he must make the claim before he reaches twenty-five years of age. I do not know why he should be at a disadvantage in that way. That is all I wish to say on the matter. The Bill is not very difficult and not too long, and if those two small points were cleared up and we were satisfied on them, I think the Bill would be very satisfactory.

As there is a possibility of concluding this stage of the Bill in fifteen or twenty minutes, I wonder if it could be agreed that the debate might run on until, say, 9.30?

As there is no objection, the debate can run on into private members' time.

Ordered accordingly.

I wish to support Deputy Dr. Ryan in welcoming this Bill. We are all aware that there has been considerable difficulty in the operation of the Agricultural Credit Corporation. So far as we on this side of the House are concerned, we are only too anxious to help as far as we can. There are a few points in connection with the Bill to which I would like to call attention. The first is in connection with the defects of the original Act. We are looking forward to the time — and I hope the Minister will be able to give us some indication that he is looking into this matter — when the Act will be adjusted in such a way that it will be possible for small farmers as well as large farmers to take advantage of it. The first matter that requires attention is the question of getting cheap money. I fail to see how the Minister for Agriculture can be hopeful that he will succeed in financing agricultural operations with profit, even if he succeeds in putting the creamery industry on a very sound basis, if he charges interest at the rate of six per cent. In England, they have advanced a certain amount from Government sources, and if deposits are not forthcoming from Credit Societies, perhaps the Government would imitate the example of the British Government in making a certain amount available free of interest for a certain time, at least until such time as the present period of depression has passed. The trouble is that the farmers who are down and out can see very little hope of getting any assistance at present, even if they are able to pay the interest. They are, perhaps, up to their necks in difficulties with banks, and these farmers are not in a position to have their applications considered. I think that some provision should be made to deal with that aspect, and the best method would be to make the money as cheap as possible. Then a barrier is set up between the applicant who is looking for a loan less than £50 and the applicant who is looking for a greater loan. The smaller man has to look for a loan through the local Credit Society. We read in the newspapers a few weeks ago that the Registrar had wiped out fifty of these societies.

It is a most extraordinary thing that at this juncture these very organisations which are so necessary in the poorer parts of the country, if benefit is to be derived from the Act, are being wiped out in this manner. It is four years ago since the Free State Agricultural Commission recommended that there ought to be more power given to the Registrar of Friendly Societies, and that the whole question of the organisation of these societies by the I.A.O.S. ought to be looked into. We would like to have some intimation from the Minister as to whether he proposes to take into consideration this whole matter of co-operative societies and putting them on a definite footing in the near future, as we have been expecting.

Then with regard to the question of priority, I agree with Deputy Ryan that if ten times the poor law valuation were taken, instead of £200, it might perhaps be fairer, seeing that it would mean that every farmer would get a certain proportion of the value of his land, rather than having an arbitrary figure. There is also a point with regard to the claimants. Are we to take it now definitely that there is to be no provision in the Act, or that it is not necessary, in view of the fact that permanent improvements are excluded, to make any provision whereby objections might be made by equitable claimants to the charges being made against their interests on the land?

While I thoroughly appreciate the objects to be served by the Bill, in so far as it facilitates farmers in securing loans, I am not entirely satisfied that it covers the ground fully. I am afraid we will find when this new Bill is in operation that there will be certain inconveniences arising still that will prevent farmers from getting the benefit of the loans in a way which will suit them. This Bill aims at eliminating the necessity for the farmer discharging equities, but it sets up certain difficulties which will be discovered when it comes to be operated. We are told, for instance, that in taking priority over equities it will have the effect of lessening the claims of certain claimants to the property. What I fear is that the Credit Corporation will take that and keep it in mind when they are dealing with applications. The Minister quoted a case of a farm valued for £300, not having equities discharged, and with three members in the family — A, B and C, A being the registered owner living on the farm and the other two living off the farm. Therefore if A gets a loan of £70 that comes to within £30 of the total amount of his portion. If equities are not discharged and the number of the family is, say, ten, instead of three, the value of A's portion of the farm would only be £30. I fear the Credit Corporation will keep such a fact before their minds and that it will react very unfavourably on the person who has not discharged equities. Perhaps it will not, but I am afraid it will.

Again, I do not see any necessity for taking a mortgage, in the first instance on land as a security. If the farmer requires money for stocking his land, it will be quite enough to take a chattel mortgage on the cattle purchased. That would eliminate the necessity for looking into equities or for having a mortgage on the land. It would also get rid of the point that you are cutting across the rightful claims of the other members of the family. The matter must be dealt with in a broad spirit if the Credit Corporation is to have any effect at all for the purpose intended. The Government should realise that the present condition of the farmers is the result of circumstances outside their own control, and that the essential thing for the farmers is credit at such a rate of interest as will enable them to carry on their business. The present rate of interest charged by the Credit Corporation is far beyond the farmer's means of paying, and the conditions surrounding the granting of credit are far too unreasonable to expect farmers to make use of it. If the Government would widen their outlook, realise better the problems they have to face, and which if they do not face some other Government will ultimately have to face, if they will have more confidence in the farmers with whom they are dealing, I am satisfied that the State could work this Credit Corporation on such a basis as would give cheaper money to the farmers, that they could give such terms as would make it possible for the farmers to avail of the loans immediately and in that way make the Corporation of practical use. Even with this new Bill, if the interest remains at the prohibitive rate of 6 per cent., the farmers will never be able to use the money with profit. I am not satisfied that this Bill gives all that is required, and until a wider view is taken of the whole matter it cannot be said that the Government has made any honest attempt to deal with the question of agricultural credit.

I should be very glad if the Minister would do what Deputy Derrig asked and give us some further particulars of the manner in which the Government and the Agricultural Credit Corporation propose to deal with the question of loans to small farmers, particularly to that characteristic product of the congested districts which the Minister himself told us of the other day, the man with a valuation of 30/- or £2. All we know at present is that these people are to be dealt with, if at all, through local co-operative credit societies. I have some little experience of the working of those societies, as I was instrumental in forming two or three many years ago. I know of the very useful work they were able to do in those days. I also know, unfortunately, that for one reason or another very many of them have had to close their doors in recent years. I also noticed the announcement which Deputy Derrig called attention to, and I should like to know what steps are to be taken either by the Department of Agriculture, the I.A.O.S. or any other body, towards the restarting on a sound basis and the spread of those societies. My own feeling is that if this provision is to be really useful, especially in the poorer districts, further consideration will have to be given to the basis upon which these societies are to be formed, particularly the joint and several liabilities of the members.

Personally in the old days I was an advocate of what is known as the Raffeisen type of society which had a joint and several and unlimited liability upon all members. In these days we were dealing as a rule — I speak of the society I know best — with a total liability perhaps of £150, of which, I think, £50 represented a loan from the old Congested Districts Board, and, I think, £100 represented the deposits put up by the members, chiefly the members of the committee. Therefore, the very worst that could happen, in such a case as that, would be if every borrower defaulted and the whole of the money came due, some one individual would be shot at for £150. That of course is bad enough, but still not an impossible proposition. In most of the societies you get people to come on and join and undertake the liability, but now it is rather different and one has to face the possibility and probability of small loans, but still in the aggregate loans amounting to many hundreds of pounds. I am doubtful that you will easily get people, in those circumstances, to join societies and to undertake that liability. While I have no absolutely fixed opinion on the matter I would like to hear what the Minister has to say. I am sure that the matter has been considered, but I would like to know what the view of the Government is. If this thing is to be put in use in the congested districts very definite steps will have to be taken to reorganise these credit societies all over the country. That is all I wish to say. I would like the Minister would deal with that point.

I do not rise to criticise the Credit Corporation or this Bill. I welcome the Bill if it will enable the Credit Corporation to function. So far, I think, its operations are very limited. Up to date I think the Credit Corporation has only lent £1,000. That is the total sum lent.

Is that right?

That is my information.

Is it official?

Yes, and it would appear that the Act which has been already passed is practically a dead letter. I think we will all agree that what is wanted in this country is unlimited credit for agriculture, and when agriculture is on a proper basis, with the credit of the State behind it, because it is agriculture that keeps the State going, we will have a much better chance of rectifying our trade balance and putting the country in a sound financial position. With regard to credit societies some of them have been started, I know there are difficulties. But there is one thing I would like to suggest to the Credit Corporation in the starting of those societies, and that is that they should not get a political brand and that credit societies should not be grafted on to any particular party. I am not going to instance any case, but I have had complaints myself that certain people who are very active, politically, were the people who were canvassing for, and starting the credit societies. If we are going to give credit to agriculture it must be credit given impartially. It must not allow any farmer to say: "I cannot go to this society because it is practically a political organisation." Credit societies must be based on the giving of credit to the whole district and not that of any particular section.

There is another matter that is most important, and that is that all these questions of agricultural credit should be kept within the control of the Dáil. At present if we pass this Bill we pass it to what I may call some irresponsible body. There is a directorate set up. I am not saying anything at all about the personnel, but I am saying that the Dáil is losing control. This question of credit for agriculture is one of such vital importance to the country that it should not be left in the hands of a selected few to deal with. It should be open to criticism in this House on all occasions. If that is not done I see no future for this Credit Corporation or any other. If it is handed over to a few individuals the whole credit of the State is taken out of the hands of the elected representatives of the people. Those who handle this Credit Corporation or the money of the State for the purpose of financing agriculture should be here to be criticised in this House if criticism is necessary, and there should be no stone wall built up between such money and the people administering it. I do not wish to merely criticise. I welcome this Bill if for no other purpose than that it enables the Act already passed to come to life instead of being practically a dead letter as it would appear to be at the present time.

I would like the Minister, when he comes to answer, to say if he is fully informed of the activities of the Credit Corporation and if they have abandoned the idea of giving loans on chattel mortgages. It would appear that that is so. A thousand pounds is a small sum for this society to have given up to date, or, at all events, up to the middle of June. If there is no money being lent on chattel mortgage it may as well be eliminated from the Act altogether. I agree with Deputy Maguire many of these loans could be given on chattel mortgage. That is one of the principal things in the Act, and one of the best features of it. If this is going to be a dead letter then there is no use deluding the people. I have seen forms sent out for chattel mortgages. We are told that if the sum is under £50 you have to go to a credit society. Many small farmers have the idea that to ask for a hundred pounds is out of the question. They want a hundred pounds, but they are afraid to ask for it. If they ask for £50 or anything under that they are referred to credit societies, which are not now in existence and possibly never may come into existence in their particular locality. It is the small farmers that want the money. Under present conditions, I do not think that any bank or State would put up to people who would want to borrow money the conditions put up to farmers on the forms that they are required to fill. Any man who could fill this form qualifying for a loan does not require a loan. The people who require a loan could not possibly satisfy any corporation on the form that is provided. It must be simplified. I am not in a position to state what the actual cost of obtaining a loan is. I fear the expense of obtaining a loan in addition to the high rate of interest will preclude farmers from availing of it. One thing we cannot lose sight of is the importance of credit for agriculture in this State. The State will go to ruination unless agriculture has unlimited credit and unless the farmers have some hope of getting some credit in the very immediate future. I would not like to be in the Minister for Finance's place when he is budgeting next year, because there will be no such thing as getting money for anything. I welcome the Bill, and I hope it will be the means of speeding up the giving of agricultural credit, and that we will find that the Agricultural Credit Corporation will not have the excuse of saying we cannot give loans except under certain conditions; that this will clear the air, and that the people who want money, and are disappointed that they have not got loans, will be given some relief in the near future.

It is quite obvious that there are a great number of Deputies who want to speak on this Bill. It is Private Members' time. The Government are very anxious to rush through their Constitution Bills and so forth, and I think we have given quite enough of Private Members' time to this. If they are anxious about this Bill they can have it to-morrow. No representative of the Labour Party so far has spoken.

If Deputy de Valera desires to have private business taken at any time in Private Members' time, of course, it must be taken.

I am willing to give way now to Deputy Hogan. No member of the Labour Party, as far as I know, has spoken.

Do I understand that Deputy Hogan is to make a speech now, and that then we shall pass on to Private Members' business?

The Deputy need not fear. I am not going to say anything outrageous. He will have plenty of time to quarrel with what I say. I am very anxious that this Bill should go through, because I am anxious that something should be done in the way of getting money circulated through this Act. I do not know where Deputy O'Hanlon got the information he gave us, because several Deputies have been trying to extract similar information from the Ministers with very little success. As a matter of fact, some of the information he gave may be described as inaccurate. In a supplementary question, I asked if there were any intention of introducing amending legislation. The Minister for Finance said: "I do not think it advisable to introduce legislation for this purpose." We did not even get accurate information on that occasion.

What I want to know now is whether there is any chance of making the money cheaper? One per cent. to small farmers is a great deal. Is it due to the difference in administration? Does it mean that the cost of setting up this Agricultural Credit Corporation is to put on an extra one per cent.? Would not a grant-in-aid be more reasonable and cheap on the money by one per cent., which would mean a great deal to the small farmer, who is in need of getting cheap money? There is another matter, that is the term or number of years in which it is to be paid back. We have seen no attempt to make the term longer. Five years is a short term within which to pay it back.

I have seen cases in which the money is to be paid back in five years.

That is the minimum term.

I suggest to the Minister for Agriculture, as a man who knows the country, that ten years ought to be the minimum. There is another matter. Deputy O'Hanlon stressed the point that in the main a great many people were getting money who might be able to carry on without it. I have cases where people were refused money simply because they owed half a year's annuities and only owed them for a month or two. I suppose the Land Commission have a first mortgage on all things on the land, but it is unreasonable to say that a man who owes his land annuities for a couple of months will not get a loan unless he secures a collateral security. I understand that a chattel mortgage is not sufficient unless a collateral security is got. As far as I can see, and I have come in contact with a good many farmers who seek this loan, the Agricultural Credit Corporation lends money only to people who will get it from the State banks—the ordinary joint stock banks. I mentioned State banks, and had in my mind what Deputy O'Hanlon said. I was glad to hear him advocate State banks. That is what he suggests. I was glad to hear him, and hope that he will press that suggestion forward until he gets the Minister to agree with him also. The people who get money from the Agricultural Credit Corporation are people who would get it from the joint stock banks. That is no benefit to the ordinary small farmers. So far as the forms are concerned I agree with Deputy O'Hanlon that one would want to be a qualified barrister or solicitor to fill them in. What the age and sex of a man's children has to do with the granting of a loan is a thing I cannot understand.

There are, apparently, nine thousand solicitors in the country so.

Nine thousand filled them in successfully?

I am glad to hear that. I would be much more pleased however to hear that nine thousand got the loan.

That is another point.

I hope the Minister will give consideration to the points I have raised: the term of years, the rate of interest, and the cost of administration.

Debate adjourned.