Dáil Éireann debate -
Wednesday, 18 Jul 1928

Vol. 25 No. 6

TRADE LOANS (GUARANTEE) (AMENDMENT) BILL, 1928. - MONEY RESOLUTION.

Mr. BLYTHE

I move:—

Chun go gcuirfar in éifeacht forálacha aon Achta a rithfar sa tSiosón so chun leathnú do dhéanamh ar an teora ama a forchuirtar tríd an Acht Iasachtaí Trádála (Urraíocht) (Leasú), 1927, le tabhairt urraíochtaí agus iasachtaí fén Acht Iasachtaí Trádála (Urraíocht), 1924, agus chun a chur ar chumas an Aire Tionnscail agus Tráchtála teora do chur leis an am gur laistigh de a féadfar iarrataisí ar na hurraíochtaí sin agus ar na hiasachtaí sin do dhéanamh go bhfuil sé oiriúnach a údarú (a) go gcuirfí mar mhuirear ar an bPrímh-Chiste no ar a thora fáis pé suimeanna is gá o am go ham chun aon urraíocht do chólíona no chun aon iasacht do dheona do húdaruíodh fé sna hAchtanna Iasachtaí Trádála (Urraíocht), 1924, 1925, 1926 agus 1927 agus fén Acht san a rithfar sa tSiosón so agus (b) go gcuirfí mar mhuirear ar an bPrímh-Chiste no ar a thora fáis colann agus ús aon urrúis do tugadh amach chun iasacht d'fháil fé sna hAchtanna Iasachtaí Trádála (Urraíocht), 1924, 1925, 1926 agus 1927 agus fén Acht san a rithfar sa tSiosón so.

That for carrying out the provisions of any Act of the present Session to extend the limit of time imposed by the Trade Loans (Guarantee) (Amendment) Act, 1927, on the giving of guarantees and the making of loans under the Trade Loans (Guarantee) Act, 1924, and to enable the Minister for Industry and Commerce to limit the time within which applications for such guarantees and such loans may be made, it is expedient to authorise (a) the charge upon the Central Fund or the growing produce thereof of such sums as from time to time may be required for fulfilling any guarantee or for granting any loan authorised under the Trade Loans (Guarantee) Acts, 1924, 1925, 1926 and 1927 and such Act of the present Session, and (b) the charge upon the Central Fund or the growing produce thereof of the principal and interest of any security issued for the purpose of borrowing under the Trade Loans (Guarantee) Acts, 1924, 1925, 1926 and 1927 and such Act of the present Session.

This Bill will not impose any fresh charges, as it simply continues the existing Act for a further period.

AN CEANN COMHAIRLE

Notice of an amendment has been given by Deputy Lemass which seeks to extend the scope of the Principal Act. It is not therefore, in order, but in any event, when a Money Resolution such as this on the Order Paper has been passed, an amendment of this kind cannot be moved. I have suggested to Deputy Lemass that he should discuss the matter on this Resolution. No other opportunity appears to offer.

Mr. LEMASS

I think that some opportunity should be afforded to the House of discussing the advisability or otherwise of extending the scope of the Trade Loans Act. For that purpose I tabled an amendment to the Bill in Committee in regard to which, however, in so far as it appears to exceed the scope of the continuing Bill, it can be contended that it is out of order. I am glad, therefore, to take the opportunity of raising this matter on the Money Resolution. It has been discussed here before, though, I think, somewhat inadequately and without any definite suggestion being put before the Dáil. The amendment which I proposed to insert in the Bill on the Committee Stage was to give the Minister power to guarantee loans, not merely for the purpose of acquiring fixed assets, but also towards, or in connection with, the development of any manufacturing concern in the Free State in such manner as to increase the amount of employment given by that concern. Under the Act as it is at present, the Minister, strictly speaking, has power to guarantee loans used for the purpose of securing additional fixed assets and for that purpose only. We have had discussions in the past upon the precise interpretation of the Act, but I do not intend to deal with that now.

Whatever may be the exact interpretation which the Minister or the Public Accounts Committee may put on it, we think that it should be definitely stated in the Act that power would be given for the purpose of enabling the Minister to guarantee a loan that will be used by an existing concern in a manner so as to provide that that concern will be able to increase the volume of employment it provides. It is quite possible that the Minister may say that he has this power already. Every time a debate on this subject takes place in this House we find that the Minister in the interval has discovered that the Act as at present drafted gives him some new powers, until those of us who are not lawyers have long since given up trying to ascertain what the Act really means and what powers it confers on the Minister. The proposal in the amendment raises a serious matter which will have to be considered seriously. In the discussion on the Second Reading of the Bill, Deputy Davin made a statement, of which I would like to remind Deputies. He said: "Deputies, when they come to consider either an amendment or an extension of this Act, will have to say how far they are prepared to go in using the taxpayers' money for the purpose of preserving decaying industries or building up better ones."

I suggest that Deputies will also have to consider whether money should be provided for one or other of these purposes. In that discussion we learned that the Minister has, or thinks he has, power to guarantee loans which will be used for the purpose of extinguishing existing liabilities. I asked him that question and his reply was: "I do not think it is entirely ruled out." Further, he said: "I have done what amounted to that in one case." It would, appear, therefore, that the Act, as at present worded, and as the Minister interpreted it, does confer on him power to preserve decaying industries, but it does not confer on him the power to build up better industries in place of those which exist. That is the purpose behind this amendment. I am not a draftsman and I do not contend that the amendment is fool-proof. It is quite possible that some amendment could be devised that would convey the same idea while, at the same time, be less liable to be torn to pieces by lawyers. It is not the words but the idea behind the amendment which I want to submit to the House. I think that there should be imposed on the Minister power to guarantee loans required for the purpose of developing existing industries with the qualification provided for under the amendment that it would be done in such a manner as to ensure that the industry concerned would, as a result, give an increased amount of employment.

On Second Reading I gave an example of what I meant. It is conceivable that there would be an industry in this country that was not working at full capacity with sufficiently fixed assets and a sufficient amount of machinery to enable it to turn out its products in greater quantity than it does at present. That industry might be protected by a tariff and the firm may be anxious to take advantage of the protection afforded it to spread out and capture trade in this country. It does not require fixed assets, but requires money for the purpose of providing additional staff, for the purchase of additional raw material, for the sending out of additional travellers, and to enable it to provide additional credit to its customers. We think it should be possible for the Minister to guarantee a loan to an industry in that position. There are other examples which I could give, but the one I quote is quite enough to give a general indication as to what I mean. The question of security, of course, arises and the Act gives the Minister power to advance loans on whatever security he regards as adequate in conjunction, I think, with the Minister for Finance, but there is no reason, so far as I can see, why loans given under such circumstances as I have indicated, and in accordance with the amendment I suggest, could not be as securely provided for as loans given for the purpose of fixed assets.

There is no compulsion on the Minister to give a loan unless he is satisfied with the security that is offered. When this matter was suggested before, the Minister gave me the impression that he was thinking of loans given in such a manner to firms which already got loans under the Act and which required additional money. I was not thinking of it in that light, but of firms which have not availed of the Act up to the present because they do not want additional fixed assets or new buildings, but because they want money to develop and give additional employment to Irish workers. I cannot see, therefore, how the question of security can constitute any difficulty in this matter, because security can be obtained just as good as that obtained in cases where the Act has been availed of. The argument of the Minister when he replies will, no doubt, be similar to that which he advanced on Second Reading. He said then that his view is that where originally or on reconstruction a firm finds itself unable to get working capital from shareholders or subscribers then there is a very bad case for that business.

As the Minister himself said, that may be, from the point of view of good banking and the purest of pure finance, very admirable, but we have got to ask ourselves whether that view does fit the circumstances of the country at the moment. The Minister may have changed his attitude recently concerning the facilities which financial concerns are prepared to give to Irish industries. It is very probable that having got into close contact with the directors of these concerns, he is, as Deputy de Valera suggested, so close up to them that he cannot see the wood for the trees. No doubt they are able to put forward very plausible arguments to justify their position, but I think those actually engaged in industry in this country realise, and painfully realise, that banking houses are not prepared to give to industry in Ireland facilities which banking houses in Germany, say, give to German industries. Those engaged in a manufacturing concern and anxious to extend that concern might find very considerable difficulty in getting accommodation from their bankers. We know there have been cases, quite recently, of what appeared to us to be very harsh actions by particular banks which is likely to result, and which in some cases did result, in the closing down of the firms concerned. If it was thought that the banking houses of the country were giving adequate facilities to Irish industries, then there was no need whatever for this Act, and there would be no need now for the Ministry to come forward with a proposal to continue the operations of the Act for another 12 months. It is because the banking houses of the country are not giving the facilities which Irish industry requires that this Bill was introduced. The lack of facilities for which the banks are responsible applies just as strongly in the case of capital required for development purposes as it does in the case of capital for fixed assets.

It is proposed also in the amendment to delete sub-section (4) of Section 1 of the Principal Act. That is the section which relates to working capital. The deletion of that section, of course, does not give the Minister power to guarantee loans for working capital unless he is satisfied as to the actual circumstances under which it will be used, because while that sub-section remains in the Act loans can only be guaranteed under the terms of sub-section (1), which is the principal clause of the Act. So far as Section 1 does limit the powers of the Minister in the giving of guarantees the deletion of sub-section (4), which concerns working capital, has no effect. The belief of Deputies on this side, at any rate, is that by an amendment of the Bill in the manner which I suggest its utility to Irish industrialists would be very considerably increased and it would be possible to realise some part of the hopes which were placed on the Act when it was first introduced in 1924. We know that the Act has not been as successful as was anticipated. We know it has not had any real or substantial effect upon the volume of employment or the amount of industrial activity in this country. In fact, I think I am correct in stating that the provisions of the Bill have not been very widely availed of at all since 1926, in the last year or so. Unless its scope is widened and these additional powers given to the Minister, its utility has practically come to an end. If, however, the Bill is widened in this manner and power to give a loan under these conditions is given to the Minister it will be possible, as I suggested, to get something of real value to the industry of the country from the Bill. Therefore I hope the Minister will consider the matter fairly and will see his way to accept the suggested amendment. It could not be inserted now except by agreement because, strictly speaking, it is out of order. I hope, however, that the Minister, in his reply, will be prepared to accept the suggestion contained in the amendment.

AN LEAS-CHEANN COMHAIRLE

took the Chair.

Mr. J.J. BYRNE

Speaking to this Bill when it was last before the House, I took the liberty of stating that Deputies were entirely at one in hoping for the development of Irish industry, and that the point at issue between us was as to the proper method by which that could be accomplished. In the Bill as it stands three things are aimed at. The first is the creation and the development of Irish industry; the second is the promotion of employment, and the third is the reduction of retail prices for essential commodities. There is no Deputy in the House but will think that it was an exceedingly useful and serviceable Bill as far as the national interests are concerned. By that Bill a sum of something like £720,000 is placed at the disposal of Irish manufacturers for the development of Irish industry. Under existing arrangements the method adopted, if I may use the term, is something like a fifty-fifty basis. At present, under the Bill, capital has to be obtained by Irish industrialists for the purpose of plant and for the development of premises suitable for that plant, but on the other hand, while these advantages are to be got something is expected in return from industrialists who obtain the benefit of the Act. It would be expected that while the State supplies the necessary capital for the purchase of machinery or for the proper erection of necessary premises required for the machinery, that an industrialist coming in to avail of the Act would on his own part put something into the enterprise. If I might put it in a rough form, I would suggest that the State would guarantee a sum of £20,000 for the purchase of plant and machinery or for the erection or improvement of premises, and that on the other hand the industrialist, on his part, would be able to do something in the way of providing the necessary working capital to run that industry. It must be obvious to every Deputy that some kind of security must be forthcoming for the use of this capital by Irish industrialists. Deputy Lemass, in speaking to his amendment, pointed out quite frankly that this Act takes the place of carrying out a transaction which Irish banks are unwilling to carry out. The real reason for that, of course, would be that the security offered by the industrialist would not be of a nature that would appeal to the ordinary Irish banking institutions.

The security that is given under that Bill to the State and to the taxpayer would be security in the shape of the new machinery installed. I am sure Deputy Lemass and others on the Opposition Benches must recognise that that is not security that would appeal to the ordinary banking concern. Anyone who is in business knows that valuable machinery when purchased deteriorates very rapidly in value after it has been installed. I have known instances in this city where machinery which cost originally £20,000 to £25,000 when sold after a short period in use realised only something between £3,000 and £4,000. If, under this Bill, the necessary capital was found for the running of a particular Irish industry and that proved successful, the taxpayers' money would be certainly secured, but if, on the other hand, that particular industry failed, then the balance that would be left, say, in a £20,000 or £25,000 transaction would be something like the small sum of £3,000 or £4,000. It surely must be obvious that some limit must be put to the use of the taxpayer's money in the financing of Irish industry. It surely must be obvious to the House that something in the nature of security for that financing must be forthcoming to the taxpayers of the State. Under this Bill to help Irish industry the taxpayers' money is being used in a way that certainly entails a very fair margin of risk. The difference between Deputy Lemass and myself, as far as this Bill is concerned, is how far are we both prepared to go in risking the spending of the ratepayers' money and on what security are we prepared to risk the investment of that money. Deputy Lemass, when speaking to the amendment, pointed out that working capital is not very easily available under the Bill. That is, no doubt, perfectly true, but Deputy Lemass knows as well as I do that certain industries have been already helped under the existing Bill owing to its elasticity and the powers of discretion which the Minister possesses. That enables him to save a failing industry. That particular instance came before the Committee of Public Accounts, and some adverse criticism was passed by the Committee on that particular transaction. In dealing with that, the last time the Bill was before the House I said if any complaints could be made against the Minister it would be that he erred on the side of leniency and in the interests not alone of the taxpayers but in the national interests of the country. I believe in that particular instance the sum advanced amounted to something like £28,000, but what result accrued to the State in return for that advance of £28,000? I am informed that the wages alone that accrued amounted to something approximating to £100,000. No Deputy in the House will deny that the payment of £100,000 in wages for a loan of £28,000 guaranteed by the State is a transaction in the national interests.

The one point I would like to press on the Opposition really to consider is: has any undue hardship arisen under the present working of the Act? Has any deserving industry been prevented from starting? Can it be shown that hardship arising under these two heads has accrued under the Bill as it is now constituted? I will ask the Minister to say in his reply if I am not correct in stating that an examination of the Bill in actual practice has resulted in showing that there is scarcely a single instance of where a deserving industry has been prevented from starting for the want of finance under this Bill. Perhaps I might qualify that by saying that there might be one industry, but one industry is certainly no proof of undue hardship. The amendment of Deputy Lemass, presupposes a state of affairs under this Act that does not exist. It presupposes that if this money were to be forthcoming in the particular way——

AN LEAS-CHEANN COMHAIRLE

We are not discussing the amendment.

Mr. BYRNE

Am I not allowed to discuss the amendment?

AN LEAS-CHEANN COMHAIRLE

The amendment itself is not before the House, but the Ceann Comhairle ruled that the matter of the amendment could be discussed on this Money Resolution. I want to have the Deputy clear that the amendment itself is not before the House.

Mr. BYRNE

I presume I will be in order in pointing out——

AN LEAS-CHEANN COMHAIRLE

The Deputy will be in order in discussing what is in the amendment, but I want to make it clear that it is not before the House for decision.

Mr. BYRNE

I will be in order in discussing what is in the amendment.

AN LEAS-CHEANN COMHAIRLE

Yes.

Mr. BYRNE

If I turn for a moment to the amendment as now constituted I will ask the House what effect it will have on the Bill. It will certainly have the effect to which Deputy Lemass referred, of providing working capital for industrial enterprise in this country. The points Deputy Lemass touched upon, but did not labour, were the points that security and working capital would be forthcoming. I have endeavoured to point out in dealing with the measure as it now stands that the security which the State receives under existing conditions for the granting of money is not at all what could be called gilt-edged security, but is of a very doubtful value. But if the amendment now before the House were to be incorporated in this Bill I think it is up to the Opposition to tell us upon what security this money would be advanced. I have had a very striking instance of the need for the obtaining of this security. People, as a rule, who come looking to the Government to start industrial enterprises are very full of brainy ideas, but very often are "stony broke" as far as capital is concerned. I do not think it is in the interests of this State that individuals of that type should be encouraged at the taxpayers' expense. I do not think it is in the interests of the State that people who have pledged every asset as far as their particular industry is concerned, and who do not want money for the extension of their premises or the incorporation of plant, should be put in a position to obtain actual working capital to run that business.

Speaking plainly as a business man, and knowing how difficult it is to obtain accommodation from banks upon ordinary commercial transactions, I could not possibly vote for this amendment as it now stands, because, summing it up in a few words, what does it mean? It means we are going to give money on no security whatever to be invested in industrial enterprises that may turn out failures or a success, but upon what terms is the individual who is obtaining money coming in? He is coming in confessedly with practically no capital, and taking no personal risks as far as the industry he is borrowing money for is concerned. In a word, it may be summed up in a very popular phrase we have in Dublin: "Heads I win, tails you lose." He stands to lose nothing whatever. After all, we cannot give the money of the taxpayers of this State upon terms of that kind. I suggest that I am sure the Opposition will agree with me there should be some spur on individual enterprise and in the lending of any money of the taxpayers of this State, some curb upon how that money is invested, to see that it is invested wisely and well. If the amendment is carried, what spur is there on proper banking enterprise carried on here? What curb is there on wasteful expenditure of that money? If the money is handed to an inefficient man —and I am sure Deputy Lemass will admit, like every other country, we have inefficients among our industrialists; very often they are possessed of a wonderful amount of eloquence to the effect that their proposition is a regular Bonanza on paper, but when it is put into actual working practice perhaps the whole sum of money advanced by the State might be practically lost.

I think if Deputy Lemass considers that particular position he will not persist in asking the Government to incorporate such an amendment in this Bill. I would ask him to consider, supposing he was Minister for Industry and Commerce, which perhaps some day we may have the pleasure of seeing, what would his position be if every Tom, Dick and Harry were to come along, and if he were legally authorised to meet their demands for money for industrial expansion, without any practical security? I think the amendment, if you regard it really from a commercial and a national point of view, is practically unworkable. Mind you, I am not going to contend for one instant that the measure which we are now discussing is the alpha and omega as far as industrial expansion in this country is concerned. I am of opinion that something further is necessary for the development of this country. I am as anxious for its development as any member on the opposite benches, but I consider that the amendment proposed by Deputy Lemass is not one that will lead to the industrial expansion that he thinks it will.

Deputy Lemass referred here to the differences between the banking houses that we have at home and those in other countries. The one thing in my mind that retards true industrial expansion in this country is the want of real technical knowledge in the various industries that we propose to start. I presume Deputy Lemass is aware, as I am aware, that the system of banking on the Continent is run on entirely different lines from the system of banking in this country. Speaking upon this measure, which I look upon as only a measure to tide us over a period of transition, I would remind Deputy Lemass that the Banking Commission have already passed recommendations to the effect that this Act should at some future point be abolished and that a new system should be established. Nobody will contend that this Act is a true solution of the industrial difficulties with which this country is confronted. If we are to tackle that question in a real workmanlike way we will have to go a step further. This Act will not carry us the necessary distance. I do suggest that there is required in this country something similar to what they have in Continental countries. That is, the establishment of an industrial system of credits.

One has got to take into consideration, when making recommendations of that kind to the House, the difficulties that exist between the banking institutions on the Continent and the differences and difficulties with which our own banking institutions are confronted here. Let me take, for example, a concrete instance of which I have some particular, knowledge, in the business with which I am concerned. Let us take the manufacture of nails. Suppose we want to start in this country making nails that are necessary for us. Under the present system of banking there is nothing whatever to help us. But supposing that proposition was advanced, say, in Belgium? What would happen in that country? The banking system there comes in to operate in a two-fold way. It comes in, first, to find the necessary capital. If the undertaking is likely to be productive and to have good and true results for the country, the director of that particular bank would be the directors of the particular industrial concern which would be set up for the manufacture of nails.

The directors of that bank would hold at least 51 per cent. of the share capital of the new industrial company. I feel, as one with some little knowledge of banks in this country, that we have not got the requisite technical experts to deal with that problem as it really exists in this country to-day. We do need expert technical knowledge to develop new industries in this country. We have to follow the examples of other countries. The United States at one time was not a great industrial country. What did they do? They came to England and took the finest craftsmen England possessed to start industries in their own country. I think the Germans adopted a similar line of action when dealing with the dyeing industry. We have none of these experts here. We have not a sufficient number of high-class business men to deal with industries in a technical way in which they will have to be dealt with if they are to be successfully established in this country. If it were possible to set up such a system of banking in this country, helped by this body of experts with technical knowledge, the same as operates in Continental countries, and a system of industrial credits, I suggest, with all respect, that that would be a real solution of the industrial problems in the Saorstát to-day.

There can be no doubt about it that an absolute necessity exists for setting up such industries in this country, but I suggest, with the utmost respect to the members on the opposite benches, that under this amendment they are never going to get the expansion of industrial enterprise that they are looking for. We will have, as I have already said, to go a step further than this Bill will take us, and to go a step further than this amendment will take us. If we are prepared to deal with this problem as it has been dealt with in Continental countries a system of banking, of technical experts, and all those other factors will have to be brought into play and given a fair field. In the meantime, in putting this view of a system of industrial credits before the House, I do suggest, most respectfully, that this Act has operated very successfully. As I have shown in one instance, for a loan of £28,000, wages amounting to £100,000 have been paid, and that particular industry is still running, and looks like being able very soon to be put on a proper financial basis. I said, when speaking to this motion, that any amendment that would be suggested from the Benches opposite in the interests of industries expansion in this country, would have my whole-hearted and sympathetic support, but I do say that the amendment of Deputy Lemass carries us nowhere, and I very much regret to state that I shall have to vote against it if it is put before us.

Mr. McGILLIGAN

I understand that this amendment cannot be accepted or brought before the House even by agreement, as it is entirely outside the scope of the legislation. Deputy Lemass has been given an opportunity of ventilating his point of view with regard to the further provision of credits for industry. There may be a case hereafter made for further provision of credit facilities for industry, but I agree with Deputy Byrne that this is not the way to do it. If Deputy Lemass were really concerned with getting extra credits, knowing the history of this legislation and the way the Public Accounts Committee regarded it, he would not seek to join on to it any better provision by way of looser working or by another system for the granting of credits to industrial concerns. The Public Accounts Committee have, unfortunately, I think, got into a groove in regard to the consideration of this legislation. Even if this amendment were accepted and passed by the House, I feel quite certain that the Advisory Committee, on whom the whole thing still depends, would be driven, by what they know of the Public Accounts Committee's mind, and of the Comptroller and Auditor-General's mind on the legislation in years past, to take up a rigid, narrow, conservative attitude on the granting of money for working capital. I asked, on Second Reading, if there was going to be any amendment of this sort brought forward, that we should have some system of regulation, something, at least, suggested as to the conditions under which the Advisory Committee might guarantee. I do say again that if the Advisory Committee got that, they would be disposed always to interpret it very narrowly and would not recommend very many cases to the two Ministers for approval, knowing what they do about the progress that has been made on this in the past. It is only when we get this matter better considered, get some system of regulations made out for ourselves, as to how, when, and where, in the particular type of cases in which it is considered possible to have money given more freely, loosely and without security—until we get that there is no good going on with an amendment of this sort. As to advances without security, there is a fundamental difference between the Trades Loan Guarantee Act as it stands and as it would be if this amendment were passed. Obviously, one can think of exceptional cases where there might be some little security that could be got hold of. Ordinarily speaking, such moneys are being lent when there is some plant or machinery or fixed assets, which one can have to set against the guarantee that is given to set against the possible State loss, the financial sacrifice that the State may have to make in order to keep an industry going, whereas in the case of working capital all one would have to rely upon is what the Committee would think of the business capacity of the people running the particular concern. Any body of men set to investigate an application made under those conditions will always feel, when they are up against individuals, that it is a very invidious task.

I think an outside committee would refuse any such task, and it would be left to the Government Department, and the Government Department would be in a great difficulty over the matter if it were simply thrown at them— whether they would take the fetters of always looking for the security of fixed assets. I think, then, when we do possibly consider hereafter some better provision of credits for industry, that we will have to make up our minds just to what point we are going to go in that matter to help industry. One can help industry, of course, at a completely uneconomic rate. Some people have criticised the expenditure on the Shannon scheme and said: "If the money devoted to that had been spent on industry, look at the position we would be in." I am not sure that we would be in any better position simply by lavishing five millions on industry by giving it by way of a grant. It is not at all clear, even if by an expenditure of five million, whether we would have any better economic position than we have now. There is the pressure of hard times. There is the need to cut out what are extravagances, what are uneconomic sides of business, and to get the whole arrangements scaled down to what the prospects of the business show themselves to be.

This amendment opens up a very big field, and it is not a particular area in which I am disposed to spend much time at the moment, because I think the time has not yet come for it. Even when that matter does come to be discussed it cannot be discussed simply on the lines of providing money, and that industries will naturally follow. Everybody will recognise that there is a limit, and that is why I am talking of the scale, of the arrangement of the schedules, of methods and classes and conditions that we will have to get before we advance on any lines of this sort. The matter has been ventilated. It is a matter to which much attention has been given over a considerable period and which was approached with a view to solution from many angles. At first I thought the financial houses might have helped more than they did. I do not make any claims of that kind now. I may be wrong in that judgment. Secondly, the Investment Corporation was set up, and one looked to getting a certain amount of help from them and from the various other types of holding companies which have been thought of and about which people have been approached, but nothing has materialised. I want to get to the matter of the finance houses. It was said that this Act was introduced because the finance houses would not act as we thought they should act. It was not so much that; it was because when one viewed the banking institutions in the country and the way in which they were organised, the purpose for which they were set up, one saw that this distinctly and clearly was a type of business that was almost entirely outside their scope. It is not so much a complaint against the way in which the banks are being managed at present, and this Act was not introduced as a complaint against the way they are managed, but against banking institutions as they happen to be. It is simply that banking institutions as they exist are not suited, as they are not in a great many countries, for the purpose of giving long-term loans, providing industrial credits over a long period. Banks have certain arrangements of their own; they are built up in a particular way, and one cannot change that overnight.

The matter of insurance has been talked about here on many occasions. In more than two years consideration that has been given to the whole insurance question, one of the points operating with the Department and the Executive Council, as a whole, in trying to get a solution for the insurance problem as it presented itself, was that in most countries moneys at the disposal of insurance companies are generally used for the purpose of financing long-term loans to businesses, and the fact that these moneys were not being used for the purposes of financing business in a long-term way and were going outside the country was, I think, possibly the first, certainly the most important consideration, that came to us when we first started into considering the whole matter. Possibly any change in the region of insurance will have a repercussion upon the provision of credit facilities. The two things are bound up together to a certain extent.

The amendment is not being pressed, and was only put down for the purpose of discussion. I was rather sorry Deputy Lemass did not show a little more of his hand by adding something to it. In fact, this is ex-Deputy Johnson's amendment of a couple of years ago which Deputy Lemass announced he was bringing forward. If he had added to it some outline or given some outline in his speech of the advantages of the arrangements that he thought it would be necessary to make incidental to the passing of this amendment, then I would be able to get a better impression of what was in his mind, or as to whether he has any scheme in his mind by which better provision could be made. Everyone, I think, holds that better provision should be made, and if better provision were made there would be probably a very pronounced, and a very immediate increase in the volume of business. The Deputy has not indicated any arrangement. It may be that the matter has not been thought out fully, but that he wanted to get it discussed in a general way. The matter will come up again—I cannot say exactly how it will come up—but it is bound to arise eventually and quite soon. Again I stress, if there is anything of this sort to be done, it would be better that it should be divorced entirely from the Trades Loans Act, and let that Act run as long as it can. I believe, by reason of keeping strictly, as I assert I have done, within the four corners of the Act, but keeping a wide interpretation of the powers given to me under the Act and establishing these precedents to myself, I have now a scheme which can be worked and which can suit fully most of the purposes for which the Act was introduced, and that we had better leave that as a particular piece of legislation and let anything else come in as a separate matter.

Question put and agreed to.

The Dáil went out of Committee.

Question—"That the Dáil agree with the Committee in the said Resolution"—put and agreed to.