Agricultural Credit Bill, 1929—Second Stage.

I move: "That the Bill be now read a Second Time." This Bill is introduced for two main purposes. One of them is to provide additional capital for the Agricultural Credit Corporation and the other is to enable the Corporation more easily to make charges on lands in certain circumstances. It was originally intended that there should be two Bills, one dealing with the financial position and the other dealing with the question of taking charges on lands. However, it was finally decided, in order to save the time of the House, and because both Bills were dealing with the Agricultural Credit Corporation, to incorporate them in one single measure.

The proposal is to increase the capital of the Company from £500,000 to £1,000,000, and it is proposed to divide the shares of the Corporation into two classes. A and B shares. The A shares will be paid a dividend at the rate of 5 per cent., as is the case with respect to the shares at the present moment. So far as the B shares are concerned, a dividend will be paid on them only out of profits. This is regarded as a desirable change. It does not really mean anything to the Exchequer, because the present position is that if the Corporation has not the profits to pay a dividend, the Minister for Finance must, out of the Exchequer, provide the funds to pay a dividend. The money or portion of the money which he pays is then paid back to the Exchequer by the Agricultural Credit Corporation. It gives a misleading appearance to the balance sheet of the Corporation, and the position in future will be that dividends will be paid only out of profits.

Therefore, for a period enough income will be earned to pay the dividend on the A shares. So far as the B shares are concerned, they will be held by the Minister for Finance. For a period no dividend will be paid; but, on the other hand, it would not be necessary for the Minister for Finance to make advances to the Agricultural Credit Corporation for the purpose of paying dividends on any shares. There is a provision later on made for a reserve. If profits admit of it a bonus in excess of 5 per cent. may be paid on the B class of shares. so that ultimately for the whole period the Exchequer will have got its five per cent. on the shares held by the Minister for Finance in the same way as the holders of a shares will have got five per cent. on theirs.

The capital of the Corporation is being increased because certificates of charge cannot be issued to an amount equal to the total loans of the company then outstanding. They can only be issued from time to time. There can only be an issue after the loans have been made and mortgages obtained which will be after all, the primary security for these certificates of charge, though it is now proposed to secure them against all the assets of the company. The Agricultural Credit Corporation will finance itself to a substantial extent from time to time by means of advances which will be obtained from the banks, and it is in order for them to provide a better security for those advances, and more direct security, that the capital is increased. It is proposed that only 10/- per share shall be paid up and that the remaining 10/- per share shall only be paid if and when the Corporation is being wound up.

The new shares will be offered to the existing shareholders, and so far as the banks are concerned, they will take up £200,000 of the new shares. A certain additional proportion of them will be taken up by the general public. The remainder of the A shares will be taken by the Minister for Finance. If all the present shareholders took shares equal to the amount which they already hold, the Minister for Finance would have to take £475,000 of B shares which will be issued. It would take about one hundred or two thousand of the A shares.

The Agricultural Credit Corporation, as Deputies are aware, works on a very narrow margin. The rate of interest that it charges is 6 per cent. It was arranged in consultation with the Minister that not more than 6 per cent. would be charged; if a rate like 6½ per cent. were charged of course the difficulty of carrying on the Corporation in its earlier years would be very much reduced. If the Corporation, for instance, were to lend an additional £500,000 per annum—and I do not think that that is by any means an excessive amount, because there is something in the neighbourhood of £400,000 lent at the present time—and were to continue its operations only on the scale that enables it to lend an additional £500,000 per annum, and if it continued to charge interest at the rate of 6 per cent. and obtained the money at about 5.2 per cent., loans issued at par will be paying 5 per cent. and there will be various charges which will, in effect, increase the interest. If it were to obtain money at 5.2 per cent. it would in 1936 not only be paying a dividend on A. shares and on B. shares, but it would also be able to provide a bonus on the B. shares which would be the beginning of compensation for the period during which no dividend would have been paid on those shares.

The provision for creating a reserve fund is aimed partly at facilitating the Corporation in its borrowing and, of course, as a reserve will represent a certain amount of free money it will, perhaps, at a future time go some way towards enabling the Corporation either to meet its expenses more easily, or in approved cases, to give more favourable terms to borrowers. It is proposed to pay to the Corporation, under Section 11, a sum of £5,000 in respect of flotation expenses. This sum really represents stamp charges and, as I have said, in view of the fact that the Corporation must work on a very narrow margin, it is felt that it ought not to be burdened with this charge.

Part II. of the Bill deals with the question of enabling the Corporation to obtain charges on land in circumstances in which it cannot readily obtain them at the moment, and to relieve borrowers of difficulties and expenses which they would be obliged to face without this Bill in order to give the Corporation the security that it would require. The Minister for Agriculture will deal with this part of the Bill at greater length. It is felt that it is necessary to ask the House to take this Bill before the summer recess because, firstly, the financial provisions are necessary in order to enable the Corporation to get the temporary accommodation it requires in order to make the loans prior to the issue of certificates of charge, and, secondly, because there are many cases in which loans cannot be made owing to the existing difficulties which borrowers have in giving a security which the Corporation can take. There are certain minor provisions in the Bill, but I do not think that I need deal with them at this stage.

This appears to be a Bill to make up for past faulty legislation. In fact, I believe that if we examined the original Agricultural Credit Act very little of it is left after the amending Act of last year and the Bill we are now considering. This is what we might call put and take legislation; they put down any foolishness they can think of in the Bill and then, after a year or two, they take out any part that does not suit. We begin to see now that the Principal Act is really not an Act at all, but a sort of conundrum that nobody can understand, and, as is proved by this Bill, that the Corporation could certainly not work under. There is not a single section of it left except the first, which deals with the short title, and other sections which deal with chattel mortgages. The section which deals with chattel mortgages may remain there, because those mortgages are not workable in any case, and it does not matter what is in the sections, or whether they are wrong or right. If we were to be honest we would also amend the short title of the original Act. We should change it from being an Act to give credit to farmers and put in something else instead. The fact is that it is not an Act at all. We are all familiar with the history of that piece of legislation. It was rushed through the House early in 1927 in preparation for a general election. It was really an Act to return the Government Party and not to give credit to farmers.

As a matter of fact, a certain farmer candidate in June, 1927, had a poster on his car which stated: "Cheap agricultural credit. Vote stability." Whether he has or has not got stability I am not sure, but at any rate the farmers who voted for him and for stability have not got it from the Agricultural Credit Corporation under the Act passed in 1927. We are presented, as usual, with plenty of retrospective provisions. We are told in every section of the Bill not only that things are so, but that things have always been so, although when we refer to the original Act we find that they are not so at all. These retrospective provisions are to make up for past mistakes, with which we are getting very familiar now. When Ministers bring in Bills and have no conception what trouble these Bills may lead them into, they come along with retrospective legislation in order to correct past mistakes. The fact is that the Act was entirely unworkable, the Agricultural Credit Corporation found it practically impossible to give any loans without acting ultra vires in some way, and it is only fair to the Corporation and to its officials to agree to this retrospective legislation in order to make what they have done really legal.

In introducing the Bill I do not think the Minister explained very clearly why these changes were made with regard to the payment of interest. Of course, we can see for ourselves that it was a rather ridiculous thing to set up a company in 1927 and to put on that company the onus of paying a 5 per cent. dividend whether it had made profits or not. If that is removed by the present Bill it is at least a move in the right direction. The Minister also explained that it was necessary to increase the capital of the Company. The original capital was £500,000, and now it will be £1,000,000. It should have been as clear to the Minister in 1927 as it is now that when the Corporation went to raise money by certificates of charge they would not get the full amount of the face value of the mortgages that they would lodge to raise the money.

This is another change in the right direction. The method incorporated in the 1927 Act of raising money on a specified number of these mortgages was absolutely unworkable. I think it is recognised now that if they had at that time consulted even the office boy in the Land Registry he could have told them that it would never have worked, so that the idea of securing certificates of charge on the assets of the company is also moving in the right direction. However, we think that we might at least have been spared having to spend our time here each year passing Acts amending the Agricultural Credit Act of 1927 if the Ministers responsible had been a little more careful and had sought a little more advice before hurriedly bringing in the Act of 1927. If the Minister for Finance had got better financial advice he would then have seen that the capital of the Corporation should have been larger and he would have seen that it would be impossible to make the clauses regarding the certificates of charge workable. Indeed, the Minister for Agriculture might have seen that he could never get the Land Registry to keep up with the work.

There is a provision in this Bill which enables people who have not got their land vested to get loans from the Credit Corporation with much less trouble and at less expense than has been the case up to this. People who have not their land vested must number about 30 per cent. of the farming community, and they were practically outside the sphere of the Agricultural Credit Corporation under the original Act. This Bill will give them at least the same privileges as other farmers have. But again that was a point that the Minister for Agriculture, who is considered by a good many Deputies to be an expert on land law, might have foreseen in 1927 if, as I said, the rush to get the Act passed before the General Election had not been so great. It is possible that the Minister for Agriculture had not time to look at the Act when it was going through.

Under that Act the Corporation was tied up by all sorts of red tape. Not only was the Act itself very narrow in its provisions, but even the articles of association, which had to be sanctioned by the Minister for Finance and the Minister for Agriculture, were narrowed down well within the terms of the Act, so that when an application came before the officials of the Corporation they were put into such a position that they were afraid, without the most minute inquiry and investigation, to make an advance. The result was that many farmers who applied for loans had practically gone beyond recovery, so to speak, before the loans arrived. However, they did succeed in getting loans, as the Minister has said, to the extent of £400,000, and the wonder is that under the original Act and the articles of association the Credit Corporation could give any loans at all.

We have this Bill before us; we had a Bill before us last year, and in all probability we will have other Bills before us, unless the Minister and those responsible for this Bill recognise that the Agricultural Credit Corporation has not yet been given an opportunity to speed up loans. For instance, Section 12, I think, of the original Act prescribes the class of business or the purposes for which loans might be given. But it is very difficult in some cases to know where the line can be drawn, and it is very difficult for the Corporation's officials to find out whether they could grant a loan in a given case or not. For instance, it is very hard to say whether a loan could be given to pay a bill for groceries or not, and I believe that at present it is the practice not to sanction a loan to pay a bill of that sort. Naturally they must be on the safe side within their articles of association and within the Act. But it is rather a foolish thing to pass an Act prohibiting the Corporation from giving a loan to pay a bill of that sort, or to pay a bill, say, for the education of a farmer's son, or anything of that kind, because if a man wants to get £60 or so to pay grocery or education bills, he can, if he wishes, in order to come within the Act, sell £60 worth of cattle, pay his bills and go to the Agricultural Credit Corporation for £60 to buy cattle again. He would be quite within the Act in doing that, everything would be all right, and he would probably get his money if he has good security.

We are legislating to prevent the Agricultural Credit Corporation giving loans to farmers to pay household bills. We believe, I suppose, that we are doing the right thing. We believe that by preventing farmers from paying bills of that sort we are compelling them to apply any money they get from the Corporation to farming purposes. There is always a roundabout way for getting money for bills of that sort. As a matter of fact, it would be hardly necessary for a farmer, if he were not altogether honest, to sell his cattle to pay that bill, and then to go to the Corporation for money to buy more cattle. Possibly he could ask the Corporation to give him £60 to buy cattle and, instead of selling his own cattle to pay the bill and buying other cattle, he could, as it were, sell the cattle to himself and pay the bill with the money.

Mr. Hogan

Where would you draw the line?

I would give the Corporation power to lend money for household purposes, and I would let the directors draw the line.

Mr. Hogan

Education is hardly right.

It can be evaded in the way I mentioned, and I do not see why we should put the farmer to such rounds in order to evade the Act.

Mr. Hogan

That is not answering the question.

The Minister told us that under the original Act the Corporation has lent £400,000, but when we come to consider what has been done we find that the Corporation has been dealing with a certain class in the farming community. The man who has good credit, who can give very good security, and who only wants to borrow a very small percentage of the value of the security he can give, can go into a joint stock bank as usual, and get a loan, so that the Agricultural Credit Corporation was scarcely required for that type of man. On the other hand, the man with no security, the man who is down and out, who has no stock, finds it very hard to get a loan from the Agricultural Credit Corporation. It is the middle class financially, the men who owe money to the banks, who owe debts of all sorts, about whom the banks may be a bit anxious, who are handed over to the Agricultural Credit Corporation, and these are the people that the Corporation has dealt with so far. The Government and, of course, the people behind the Government who lent the money, are in a rather peculiar position, seeing that we have bankers on the Board of the Corporation who would be very willing to sanction loans to certain people in order to have the loans due to the banks paid back. On the other hand, we have only a minority of Government representatives on the Board, and if loans are granted too freely, or if the Corporation had to be wound up, it is the Exchequer and the taxpayers who would have to make up the deficit.

Mr. Hogan

We have a majority on the Board.

Is that so?

Mr. Hogan

Yes. That is so.

That may be so. I was not aware of it. To return to the particular class that I referred to, the class that had not sufficient security to get a loan from the Agricultural Credit Corporation or from any bank, nobody seems to have any solution of their difficulties. I think that, at least, some attempt should be made to do something for them. There are many people with land, some of them good farmers who, through adverse circumstances and through misfortune, are now in very poor circumstances and cannot get credit anywhere. Of course there are others in that position through their own fault. Something should be done to help those who would make good if they got a chance. Their farms are derelict. There is no production from the land, because, owing to certain legislation that was passed here, even if they let it to try to pay the current rates and annuities, cattle belonging to the people who might take the land would be seized, so that the land is really left derelict owing to legislation that was passed here. Not only is there no return from the land, but these people are not paying either rates or annuities. As a result the other people in the county have to make up for their default. The other farmers, who are in the majority at present, at any rate, have to carry these people on their backs, and have not only to pay their own rates and annuities, but also to pay for those whose farms are derelict. Agriculture being in the state it is, it is very hard to see how these people can continue to pay debts due by other people as well as meeting their own liabilities. The danger is that the number of people who are down and out in the agricultural community will increase, and that things will not improve with people who are on the borderline. I do not know if that is the policy of the Government, as it is the case with some industries, such as the flour milling, about which we have been told so often that nothing will be done until the inefficient are wiped out. If it is the policy with farming, that nothing will be done to try to get men whose farms are derelict on their feet until the inefficient are wiped out, possibly they will not have long to wait, but it will be a very difficult job to revive the farming industry if things are left as they are much longer.

I have already referred to Section 23. That section amends Section 12 of the original Act, which deals with the purposes for which money can be lent. I believe that unless more powers are given to the Corporation under Section 23 that we shall have, this year or next year, another amending Bill coming along. Section 28 presents another difficulty. I do not know if the Minister for Agriculture has considered what will be the position under that section. Section 28 raises the question of what will be the position if the Agricultural Credit Corporation lends money to a farmer who gets into arrears with the Land Commission and whose farm is sold out and bought for, perhaps, a nominal sum. Will the Agricultural Credit Corporation lose their mortgage?

It is only for permanent improvement charges as it stands. What will the position be if it is another loan and if it is an ordinary mortgage? The criticisms that people make against the Agricultural Credit Corporation are, first of all, the very slow methods that they have for dealing with loans. That, I think, will be obviated very much under this Bill, and I believe the Corporation will be enabled to deal with applications much more quickly under it than they have been able to do up to the present. But, as I have said, if they were given wider powers they could act more quickly still, because they would not always be afraid of acting ultra vires and of being brought before the court, where, if it were proved that they had acted ultra vires, they would lose their mortgage. At any rate, under this Bill, in the case of people who have land unvested, the Corporation will be in a position to act much more quickly than they have been able to do up to this.

Another complaint which has been made is that farmers cannot afford to pay six per cent. interest. There is no doubt, of course, that even the best farmers in the country cannot afford to do that. Take, for instance, the case of a farmer who has his land well stocked and who does not owe money to anybody, if he were to branch out into some additional line of agriculture, and if that necessitated his going to the bank for a loan of, say, six hundred pounds, on which he had to pay six per cent. interest, I believe that even very few of the best farmers in the country could make six per cent. from any farming operation that they might engage in at the present day. Not only would a farmer have to pay six per cent. on the money, but he would also have to pay an amount for redemption. The result would be that he would have to pay back practically eight per cent. on this money.

It should have been possible for the Government to have devised some scheme of providing money at a cheaper rate. Various ways have been mentioned for doing that. I have not studied them, and I do not know whether they are practical or not. Various ways, however, were mentioned, such as savings certificates, post office savings and so on. It has been suggested that these should have been put at the disposal of the Agricultural Credit Corporation. It was also argued by some that the Corporation should have been allowed to take deposits, that they be given to them at 2? or 3 per cent., and that they should be permitted to give a half per cent. more than the ordinary banks on deposits. If the Government were to guarantee those deposits, as they guarantee certificates of charge, the Corporation would possibly get a big amount of money on deposit, and they would be in a position to lend money at a lower rate of interest than six per cent. If the Corporation is able to work at present on a one per cent. margin, the position would be, if they were allowed to receive deposits and were given a certain amount to cover the expenses for doing so, that by lending out the money again at four and a half per cent they would be better off than they are at present.

The original Act of 1927 was, I believe, framed more or less on certain conclusions reached by the Banking Commission. If we are to judge the Banking Commission by its work on this subject, I think that we ought, as soon as possible, to revise all their other findings to see if they made the same mess of other things that they made of agricultural credit. I certainly am not opposing this Bill. I think it is making up for a lot of the mistakes under the 1927 Act, and that it is going to give the Corporation a chance, to some extent at any rate, to lend money with more dispatch and more freely than they have been able to do so far. But, as I have said already, unless the Minister for Finance or the Minister for Agriculture, or whoever is most concerned gives the Corporation more powers than the Bill before us proposes to give them, then I believe the Corporation will not have the freedom that they should have to give loans without asking all sorts of questions and making all sorts of inquiries which do not in any way help them in the matter of security. Unless the Minister gives them those powers under the Act, then they will be compelled to come back here again within the next year or two with a further amending Bill. When the Committee Stage of the Bill is reached I propose moving an amendment to Section 23.

It was not surprising to me that the Minister for Finance was so embarrassed when introducing this measure. I do not think I ever heard him speak in this House to such disadvantage as he did when moving the Second Reading of this Bill. I have read this Bill, and I am not at all satisfied that this patching is going to make good the defects in the Bills that have gone before it. It seemed to me that that also appeared to be the view of the Minister for Finance when speaking on it.

The Minister gave us practically no information as to what this Bill proposes to do, except to increase the capital of the Corporation from £500,000 to £1,000,000. The Minister for Finance then gracefully retired leaving, what I may call, the terrier of the Front Bench to deal with the question after he had drawn the Opposition. That is exactly the position in which this very important question of agricultural credit is being dealt with. To come to the history of this whole matter, I agree with Deputy Dr. Ryan that the first Bill was an election Bill and that it was designed for election purposes. I am informed, I do not know whether rightly or wrongly, that after the election was over the Government hesitated for a very long time about bringing that Act into operation. The hesitation, I think, was due to the fact that they knew themselves that the Bill was perfectly useless, and they were between the cleftstick of justifying their statements to the electors or launching a Bill that they knew would never be of any use to assist the farmers of the country.

The procedure following the Bill was worse than the method of setting up the Corporation. Whenever they went to the public to get money to finance it they took precautions to see that the investing public of Ireland would not invest one penny in this Agricultural Credit Corporation. Their advertising was badly done. Proper information was not given to the public as regards this gilt-edged security, and what was the result? I asked a question from the Minister for Agriculture as to what return they got from the issue of the first prospectus, and I ascertained that they got £20,000 in the Free State. They did not want any more. If the public had subscribed I think the Government would have felt embarrassed, for some reason or another known to themselves. That flotation was a complete failure not only as regards the financing of the original Act but it did a great deal of damage to the credit of the people for whom it was designed to provide. I know from my own experience that the result of the Credit Corporation Act in its working has been to injure more than to help agricultural credit, owing to the slow methods adopted by the Corporation, which may not be their fault but is possibly due to the very bad instrument which is put into their hands in the way of legislation.

The result of the working out of this Act has been to destroy the credit of farmers in many parts of the country. I am not speaking of the down-and-out farmers but of the men who have met with some losses, and they are legion since the time of the fluke. If a man with six or seven cows loses two or three of them he has not the wherewithal to replace them, and he applies to the Agricultural Credit Corporation say, in August, but his case will certainly not be dealt with by the next spring. That man probably has a bill in the bank. I know several cases of men who have small bills in the banks, and who have sent in applications for loans from the Agricultural Credit Corporation. They have been informed that loans will be granted to them, and they are going into their bank every month and saying, "It is all right. Renew the bill. I am getting money from the Agricultural Credit Corporation." They go in the next month with the same story, and again the next month, and the manager finally says, "Unless you have that money next month I will not renew the bill." The result is that the man is placed in a terrible state and his position is jeopardised. Men have been reduced to dire straits owing to the difficulty of getting seeds for their lands, due to the fact that they were promised loans which have not materialised. The fact is that the Act has not worked out in the way of assisting agricultural operations. The ordinary trader knows that if a man gets a loan from the Agricultural Credit Corporation there is a first charge on his land, and the consequence is that his credit in the shops is stopped. The shopkeeper cuts off supplies to these people because he says "the Corporation has first charge and I will give them no credit."

I do not blame the Act for that. I do not blame the attempt to organise some system of agricultural credit, but I do say that the Act is ill-conceived and used wrongly, and it should have been amended at once by the Government. They should see that the reactions from this Act would not have told against the farming community. As I pointed out before, regarding the second and first Bills, there was a failure to get money from the public, and there was a reason for that into which I do not wish to go. The Minister for Agriculture read the amending Bill here and I have read it since. It is a very complicated piece of legislation, and I do not think there is a man in this House who could understand it. It is supposed to cure all the ills of the first Act, and to simplify it and to make it easy to lend money and to remedy difficulties about equities. I wonder why this Bill is necessary if the second Bill was carefully thought out? Why did they not introduce this Bill as a watertight measure seeing the difficulty under which the farmers were placed as a result of the others? The whole thing has been a chapter of blunders. For that reason, I have grave doubts that the Bill before us now is going to remedy the situation created by the failures in the past.

When the Irish Government were looking for money to finance Irish agriculture they did not care whether or not they got money to do so, but we find in our Irish papers here an advertisement to finance English agriculture. This advertisement was from the Agricultural Mortgage Corporation, Limited, asking the Irish people to put their money into that Corporation. I dare say some will put it into it for the purpose of financing the British farmer, who did not put it into the Irish Corporation. I wonder before this Bill was introduced did the Government make any inquiries in other countries as to the methods adopted to finance agriculture? There is not a country in the world at the moment—some of them have been asleep, and amongst them our own—that has not wakened up to the fact that the most important asset they have is agriculture. No matter whether they are industrial countries or otherwise they are concentrating on the farmer. Are this Government satisfied that they have now produced a Bill that is going to make it possible for the farmers of this country to have some little freedom in the matter of credit, or some security that their stock and every thing belonging to them will not be wiped out?

This Agricultural Mortgage Corporation, Limited, authorises a capital of £650,000. There are a few clauses in this. I do not want to weary the House by reading them, but I dare say the Minister has read them. I do not know if he thinks his method of dealing with agricultural credit is better than the method the English have adopted, and also if he thinks they have gone about the question of getting the investing public in Ireland into backing Irish agriculture as they should. I would also like the Minister for Agriculture, who seems to be in charge of the Bill, to state what has happened to the flotation of the loan for the certificates of charge. It is but a short time ago since the Agricultural Credit Corporation appealed to the investing public of this country to put their money in on the security of certificates of charge. I know that flotation was as badly handled as the first one. If the money was fully subscribed I will not say another word. I would like to know from the Minister how much money has been subscribed to the last flotation. It would surprise me very much if it came up to their expectations. It will surprise me very much if things come up to their expectations with regard to the details of this Bill.

resumed the Chair.

Mr. Hogan

Would it help if they were revealed?

I hope it will show an advance in intelligence on the part of the Government—possibly it does not. However, when the Minister makes the revelation we will see whether they have progressed or not.

Mr. Hogan

That answer is so cryptic that I do not understand it.

A question was raised by Deputy Ryan with regard to the difficulties the Corporation encountered in the matter of lending money for certain purposes. No doubt there are cases where bills for groceries have been held not to be agricultural, and where bills for feeding stuffs for animals have been held to be agricultural. I hold, from an agricultural point of view, that it is just as necessary to feed the farmer as it is to feed animals, and that, therefore, where there is a legitimate account for groceries due by the farmer—and every farmer and everybody else owed money for groceries at some time—it is just as necessary to give him the wherewithal to pay for his groceries, and it is as truly an agricultural purpose as it is to give him money to buy foreign cotton cake or something else to feed his animals. There is a marked difference in the scope of this Agricultural Mortgage Corporation and that of the Irish Agricultural Credit Corporation. I notice that this Mortgage Corporation in England is allowed to lend money up to two-thirds of the value of the security. The Irish Agricultural Credit Corporation is limited to one half. Fifty per cent. is all that they give, and of that 50 per cent. it might be truly said—in fact I think it has been said by the Corporation when they issued their last appeal for money—that they never issued up to 50 per cent. They held it out as an inducement—if you can call it an inducement—to the investing public, that these certificates of charge were on land and other securities on which less than 50 per cent. was lent by the Corporation, which left the other 50 per cent. of security for those who were asked to invest. But the strange part of it is that people who made any inquiry into this question of the ramifications and operations of the Credit Corporation were aware of the fact that the Credit Corporation has been constantly saying and giving as an excuse for not lending money that the security offered them was not good enough in law.

That is the situation, according to the Credit Corporation—that the large percentage of those applying for loans cannot get them, although the Corporation are ready to pass the loans, and have passed them in many cases, because there is a legal difficulty in the security. If that is so, why do the Agricultural Credit Corporation come to the public to look for money on security which they themselves have condemned? That was the position when they floated the last loan, or attempted to float it. For these, and other reasons which I have stated before. I have grave doubts that the Government have approached the question of agricultural credit in a serious manner. I believe that the only solution of it is to scrap all the Acts and Bills and start de novo with a proper system of agricultural credit. It is the only way they can do it, and then perhaps they will find a better way than they followed in the past. No amount of patching, in my opinion, will repair the serious blunders they have made in the past, and make the Acts in any way an adequate means of dealing with agricultural credit. I do not want, at this stage, to be too critical of the Bill, but I do hope that the Government and the House generally will go into the matter very seriously. There is one aspect of it I do not like, and that is that it has been going on for almost two years, and still we have the well-known fact that the Agricultural Credit Corporation is not operating as it should. That is admitted on all hands, while the necessity is there for agricultural credit. We have now a very difficult Bill to deal with, and it is going to be rushed through like the others, without proper consideration. I do not believe, if this Bill is to be passed before the Summer Recess, that it will come out of the legislative factory a useful measure. I would suggest that time be given to the Government and their advisers, and to the House, to go very carefully into this amending Bill. Presumably, this will be the final Bill in connection with this question, and plenty of time should be given, so that the Government will not leave themselves open to the criticism, which they undoubtedly are open to in connection with all the moves they made up to this; and so that every Deputy who is interested in this question can examine this Bill and the other Acts that were passed, and try and put all our heads together and produce something which, in the end, will enable us to say that we have produced a measure which, in the general view of the House, is adequate to deal with the question of agricultural credit in the future.

I do not pretend to know what is the subtle meaning of these A and B shares. I do not think there is anything in that, except that very possibly they have so run down the credit of the Corporation with the public that the Government have come to the conclusion now that there is no hope of getting any money from the public. I believe this will be only a temporary expedient, these A and B shares and a bonus to be paid, and that it will fall to the ground afterwards. For that reason it would be much better to give adequate time for the consideration of this Bill. The Government should not rush the measure through but should consider scrapping the whole lot and bringing in a new Bill. I have nothing more to say, except that I hope my pessimism will not be warranted when the Bill is passed, and that the best efforts of the House will be put into this, so as to produce something useful to the people generally.

Deputy O'Hanlon is an optimist if he thinks that this is going to be the last Bill upon this subject. This is, I think, the third Bill that we have dealing with agricultural credit, so that in order that the Deputy may get over the shock at once and for all, I shall tell him that there will be many more Bills dealing with the same subject in the next five or six years. If I were not to take the criticisms which I have heard seriously I could reply to them in the language of Dr. Johnson. However, I propose to take them seriously. We are asked why we did not prepare a proper scheme of agricultural credit in the beginning. The answer is in the language of Dr. Johnson: "Ignorance, pure ignorance." Deputy Ryan tells us that he is omniscient. If he was consulted he would, in fact, have given us the benefit of his advice in outlining a scheme that would have been absolutely water-tight. I notice that on some subjects, particularly on the difficult subject of the land law and finance, especially high finance, there are more experts in this House than probably in any other assembly in the world. Anything that is to be known about agricultural credit and banking and credit generally, is all known here, and particularly on the Opposition Benches. You have all that kind of easy, facile, superficial criticism levelled at the Government whenever any Bills dealing with any of these subjects in introduced. The fact is that if Deputies had any appreciation of the intricacies of a subject like this they would realise that such superficial criticism of that sort is really out of place.

I am rather proud of the first Agricultural Credit Act. It was a model Bill. It was copied almost faithfully by the British in their Bill. The difference between our Bill of 1927 and the British Bill is very slight and in my opinion any changes made on the other side were not for the better, but such as it is I am rather proud of it as the first Agricultural Credit Bill and I am proud of the scheme upon which it was based. It was formulated by the Banking Commission after evidence had been given before that body by a number of bodies in the country and mainly by the Department of Agriculture. I take to myself the credit for the evidence that was given by the Department of Agriculture and I am glad to say that most of the proposals put forward in evidence by the Department were adopted by an extremely efficient body like that particular Commission. The Chairman of the Commission was one of the best known bankers in the world. There were two or three very able Irish bankers on the Commission—and there are some able bankers in Ireland still—and these were representatives of other interests. I realise of course that the Chairman of the Commission, Dr. Parker Willis, was a dud as compared with Deputy Ryan and Deputy O'Hanlon and that he knows nothing of high finance, particularly agricultural finance.

It seems to me significant that the Minister for Finance could not stomach this Bill, he has left the House.

Mr. Hogan

Will I not do. I realise that Dr. Parker Willis, although he has a life-long training in finance and in banking with special reference to agricultural banking, knows nothing and has nothing like as much experience as Deputy Ryan or as Deputy Kennedy who is another great financial expert. I quite realise all this, but the fact is that all this easy, facile criticism is just a joke and would never have been directed against this Bill by anybody who had any appreciation of the difficulties that existed in other countries and especially in Ireland with regard to agricultural credit. If Deputies would only consider the Land Acts passed by the British Parliament —and I know they have the greatest possible respect for the British Parliament and every thing that it does —they would see the difficulties. The English, of course, are all experts. They have passed Bills dealing with banking and they have amended them time and again. They have passed Land Acts and they have amended them time and again. They have passed Acts dealing with such narrow problems as income tax and they have amended them time and again.

The English, being a third-rate people, know that the only way to do anything practical is by the system of trial and error. We have that same Imperial, inefficient tradition. We do not, know everything, we are not omniscient, and hence all we could do is to get the very best experts, both inside and outside, to deal with problems. But, unfortunately, we had not the benefit of the Fianna Fáil advice at the time. They were engaged in other highly productive enterprises at the time. All we could do was to get the best advisers we could from all over the world, regardless of expense, and put to them our point of view. We had in these matters to tell these people what the special problems of this country were. They had to hear all about the conditions, and they had to bring to bear upon the problem all the special knowledge which they have in highly technical matters like finance and banking. Then we got their reports and then our Bill was drafted and put through. We waited then to see in practice what further addition, subtraction, multiplication and division had to be made in our Bill. That is the system which we adopted. In fact, if we had the inspired legislators in finance like Deputies Ryan and Kennedy, and all the other illustrious gentlemen on the benches opposite, they would immediately have formulated a scheme of agricultural credit and banking.

I hope the Minister will not forget the Bill.

Mr. Hogan

I shall come to the Bill. The Deputy got fair play, and he spread himself pretty considerably, and he will have to allow me to do pretty much the same thing. However, we had not the advantage of the advice of Deputies opposite about that. All we could do was to go to the very best experts on the question. We had an excellent Commission. They had the views and advice of the Department of Finance and a highly efficient body like the Department of Agriculture. We produced this scheme of agricultural credit. The highest form of flattery is imitation, and the English scheme is practically on the same lines as ours. I ask Deputies opposite to develop a sense of humour and give up this nonsense. First of all, it is insincere. We had a Bill here last year to deal with one section of the Agricultural Credit Corporation relating to registered banking. That Bill provided that mortgages which the Corporation had on registered land should have certain priorities, and I remember spending at least two hours here arguing with Deputies opposite and trying to point out to them the necessity for the change, and explaining to them at great length the intricacies of the Land Law and of the Registration of Title Law. I had considerable difficulty in persuading Deputy Ryan that while that particular amendment might be an advantage, nevertheless, we had foreseen all the dangers that might arise as the result of carrying that amendment. I spent a long time trying to persuade him.

You have now adopted one amendment which we suggested last year.

Mr. Hogan

Anyway the Bill that we introduced last year dealt with one amendment only which, after the most mature consideration, and after seeing the original Act in operation for some time, we considered to be necessary. With all that experience we brought forward a Bill amending one particular section or arrangement of the original Act in a certain direction giving certain priority charges on registered lands. That Bill was opposed in debate by Deputies opposite. It took me a very long time to explain to them first of all the intricacies of the Land Law in relation to it, secondly the necessity for it, and thirdly that we had safeguarded the position. Now what has happened? Deputies come along and they have the impudence to tell us across the House that this amendment should have been inserted first. Surely they expect that I have some memory left. I remember when we introduced the amendment Bill last year not a Deputy opposite knew the first thing about it nor understood it, and it took two hours to explain to them the provisions and the implications of it. Now we are told they knew all about it two or three years ago and they could have done it all themselves. If Deputies would come down——

Why do you not explain the present Bill? I desire to call attention to the fact that the Minister for Finance said you were going to explain the legal side of it. If you did that, you would get more sympathy and consideration.

What point does the Deputy wish to have explained?

The Minister's statement is incorrect. There was no opposition to the Bill last year.

If the Minister will look up the debates——

Mr. Hogan

I am obviously getting home.

I hope we will not grow up as ignorant as you are. If the Minister looks up the debates on last year's Bill, he will find that sub-section (1) of Section 16 of this Bill was what we wanted last year and the Minister would not give it.

The Minister is entitled to make his own speech in his own way. I have said over and over again that Deputies labour under the delusion that they can dictate to other Deputies as to how they are to make their speeches.

Mr. Hogan

So far, this debate is a joke. I have listened to all the speeches, and at least three-fourths of each of them was directed to the following points, namely, why did we not introduce a Bill in the beginning that was absolutely water-tight, and what was the necessity for this Bill if we had taken time, in the first instance, to produce a proper Bill? When I was endeavouring to deal with that flippant criticism seriously, Deputies hopped up and interrupted me. There should be some sense of justice. Deputies opposite indulge in facile criticism and adopt a superior tone, even an insulting one, to anyone who is ready to answer them back. I insist on my right to answer criticism without interruption. I want to repeat the first point. Deputies on the opposite benches, at great length, stated that these amendments were unnecessary, and that if any real consideration were given to the original Bill no amendments would have been necessary. Last year an amending Bill was introduced, and it took me a long time to explain its implications to Deputies opposite. They had not the first idea about it, either as to the law or the merits. Though there was no vote upon it, it was opposed in debate. All the defects were pointed out. That Bill was not received with anything like enthusiasm. It is not for Deputies who received the Bill in that way now to say that they knew all about it the whole time, and that if they had had their way the matter would have been properly dealt with in the beginning.

This Bill deals with one point, apart from finance; that is, that the same priority shall be given to unregistered as to registered land. Deputy Dr. Ryan stated that if we looked up the report of the debate on the previous Bill we would see that someone asked for that. I am sure he did. Fianna Fáil are in the happy position that they can ask for anything. They have not to try it out. A Deputy on one bench opposite can ask for one thing, and another Deputy of the same Party on another bench can ask for the exact opposite. This Bill proposes to make exactly the same provision in regard to unregistered land as was made in the last Bill in regard to registered land. Two years ago, in my ignorance, I would not have agreed to such a suggestion. It is quite a serious proposal. We need not argue it, as, apparently, all Deputies are enthusiastically in favour of it, so that I can look at it from an entirely different angle now.

As I say, it is a very serious proposal, and one which can only be justified by sheer necessity. It is a very serious thing to take priority for a mortgage on unregistered land. We would not do it except for the sheer necessity. Speaking with some knowledge of land law and of agricultural credit, I agree that this particular provision in this Bill is necessary in the circumstances of the case, but I would not have agreed to it were it not for the fact that I have to some extent been in touch with the operations of the Agricultural Credit Corporation during the last three years. As I said previously, I believed that legislation in regard to agricultural credit would have to be further amended. It must be remembered that in this country and in England—I do not know much about Continental countries as I have not much time to inquire what they are doing in France, Timbuctoo or elsewhere—agricultural credit, especially the establishment of an agricultural bank, is an entirely new thing.

In this country, in any event, when we are considering the establishment of a special system of agricultural credit we must remember that we are faced with special difficulties here. I have listened to Deputy Dr. Ryan and Deputy O'Hanlon criticising, quite legitimately if you wish, the slowness of the Agricultural Credit Corporation in making loans. Deputy Dr. Ryan pointed out that they were tied in a great many ways and should get a freer hand. Deputy O'Hanlon was of much the same opinion and said that their powers should be extended. I would ask them to remember that there are two sides to the question. There is the taxpayer or the investor who is putting up the money, as well as the farmer who gets it. It is right that a national Parliament should look at the question not alone from the farmers' point of view but also from the point of view of the investor. During this discussion I did not hear a word from the point of view of the investor or the taxpayer. There is little, apparently, to be said for the man in this country who has earned his money hard and who has saved it.

I pointed out that there were certain things which did not make the security a bit better.

Mr. Hogan

Yes, but you pointed out that the Credit Corporation had to refuse loans because better security was uncertain, because legal possession was insecure, and that there was a very large class of farmers who had no security, who had neither their rent nor rates paid and, by implication, it was suggested that the Credit Corporation was the body to deal with them. Everything was said for the man who wants money, but we should occasionally think about the man who lends it. There is little said about the man who works hard and who has earned his money, but, after all, he is the backbone of the State and we should safeguard him. We will not get close to this problem unless Deputies realise that those two parties exist and that it is the man who puts up the money who must in the long run call the tune. He must get a fair dividend. We cannot borrow money at less than 5 per cent. The cost of administration of the Corporation is one per cent. The Credit Corporation is a commercial proposition and lends money at 6 per cent. but Deputy Dr. Ryan says that that is no good to the farmer. What does he suggest? Does he suggest that the taxpayer should subsidise the farmer? He suggested saving certificates but they could not be got at less than 5 or 5¼ per cent. He also suggested that the money put on deposit should be lent by way of long term loans. It could not. We considered this question at great length and from the technical advice which we got I am satisfied that the use of deposits would not to any great extent help the Agricultural Credit Corporation to lend money. That is only one aspect of the question.

Let us come to another aspect—the question of helping the man who has no security. Are the Corporation to lend the money of the taxpayer or investor to a man who has no security? I know that there is the problem of the man whose land is entirely unstocked, but I suggest that that is not a problem for the Credit Corporation. When the Corporation are operating for some time they will be in a strategic position to advise whether there is a real problem there, so far as that particular class of person is concerned, and how it should be dealt with. We have had no data in regard to such person up to the present. When they have got experience in the various counties and when they know the lie of the land it may be that it will emerge that there is a problem there which should be dealt with. Meanwhile it was never intended to deal with such a problem within the terms of the Agricultural Credit Acts. It was intended to set up a body that would operate commercially but which would have certain advantages by reason of the fact that State credit was behind it and which would organise itself from the point of view that its first and natural purpose was to give special sorts of credit which were required for the farmer but to do it in a commercial way. We did not contemplate that the State should come in with a subsidy. Once it begins to come in with a subsidy in favour of the Corporation it will have to continue it and it will become a charitable body in the long run. Once it reaches that stage, there would be a sort of temptation in that atmosphere to lend money without security. It will be a real charity in the sense that it will never come back.

We are considering a commercial proposition. We are considering a body established as a commercial body; we are considering its difficulties as such, and any criticism that it is not able to lend money without security, any criticism on the lines that it will not lend money at 4 per cent. and borrow it at 5 per cent. is not relevant criticism. It must be accepted that it cannot lend money at a lower rate than that at which it borrows it. It should be accepted that the administrative costs have been reduced to a minimum and cannot be reduced lower than one per cent., and it should be accepted that it cannot lend investors and taxpayers money without security. If the Deputies would come down from their pedestals they would probably be the people to help us in a great many necessary amendments that will be required before the Agricultural Credit Corporation is a perfect body.

Who suggested that the money should be lent without security?

Mr. Hogan

Deputy Dr. Ryan.

I did not.

Mr. Hogan

In fact, you did. Deputy Dr. Ryan devoted a large portion of his speech to that particular problem.

How "in fact"?

Mr. Hogan

Deputy Dr. Ryan devoted a considerable amount of his speech to the problem of the man who, he said, had no security, whose lands were unstocked, who was unable to pay his rent or rates, and who was refused loans by the Agricultural Credit Corporation because he had no security.

Mr. Hogan

Surely the implication is that the Agricultural Credit Corporation should have made the loans.

No. I was saying that the Agricultural Credit Corporation had not solved the whole question of credit.

Mr. Hogan

Exactly, and it was to be solved by agricultural credit and by a body dealing with agricultural credits. There was no point in the Deputy's remarks about that particular class unless he was criticising the operations of the Agricultural Credit Corporation or criticising the Act. However, I will leave that. We are blamed, of course, because the Agricultural Credit Corporation failed to get money. We are told that the first flotation was a joke, that it was not properly done. Deputy O'Hanlon made reference to the flotation recently, and he pointed out that an English mortgage bank was advertising in Irish papers for agricultural credit. First of all, it is the Agricultural Credit Corporation which makes arrangements for its advertising in connection with the flotation of loans. We have to get the point of view accepted in the country that when a body or an individual gets a job to do, he or they should do it. We cannot all be butting into other people's jobs. In countries where there is any sort of success, the theory on which they proceed is that the individual or body which is charged with a definite work should do it, and if not, that his or their services should be dispensed with. In this country apparently nobody is to be sacked, and everybody is to go in and give a helping hand in work for which they are not responsible.

The Agricultural Credit Corporation is in charge of its own propaganda and in charge of raising its own loans. I happen to have, for certain reasons, a considerable amount of knowledge of the arrangements made to float the last loan, and I say, with all deference to Deputy O'Hanlon, that they could not have been better. There was an immense amount of care taken to bring that loan to the notice of everybody in the country. I prefer not to tell the Deputy the amount of money which was subscribed. I do not think it would do any good. If Deputies have any suggestions to make as to how loans can be more successfully floated, and how propaganda and general publicity can be improved, we would be glad to have them. We have not heard them yet, though we have not heard a certain amount of criticism. The Department of Finance has floated National Loans with some success up to the present. Their advice was available, and I happened to know from my own knowledge that there was a great amount of care and attention given to the flotation of the last loan. If a great amount of money was not subscribed, I do not believe that more money could have been got in this country by even the most efficient system of publicity that Deputy O'Hanlon could suggest.

May I ask that while Savings Certificates are a great success, that while the National loans have been a great success, and while anything the Government, in the matter of loans, properly put before the people has been successful, could the Minister explain to me how in the case of agricultural credit you have failure written all across it, a gilt-edged security which gives a return of five per cent? Why is it a failure?

Mr. Hogan

There are possible reasons of detail, such as the fact that the loan for the Agricultural Credit Corporation was offered at 100 at five per cent., while the National Loan was offered at 95 at five per cent. There are other factors. There is this factor which we must face up to, that nobody regards land as a good security. We are largely to blame ourselves. Deputy O'Hanlon mentioned that the English farmer can get money easily at five per cent. That may be a fact, and he is entitled to it, but it is probably due to the fact that if he is unable to repay the loan he does not think he is done any injustice if he is sold up. When the Irish farmer got money, in a great many cases at three, four or five per cent., and was unable to repay the loan, there was a combination in the neighbourhood to prevent his being sold off. I really think that the sooner we face up to the facts the better. First of all, nobody with money will buy such land, and nobody will be allowed to buy if he desires to buy. Thirdly, if he buys he is not exactly comfortable. That particular fact has done more to make the problem of agricultural credit a more difficult one than any other, a more difficult problem than it is in any other country.

Is it not a fact that there is the same security behind it as any other Government loan?

Mr. Hogan

Absolutely.

What loan is the Minister referring to when he says that the Irish farmers did not pay back money lent at three and four per cent.?

Mr. Hogan

What loan does the Deputy think? Did the Deputy ever see a bank selling out a farmer in his district? There is no use in talking like that. Everybody knows that land is a security that it is very hard to liquidate. An investor is extremely logical. The Agricultural Credit Corporation is a new institution. It is generally known that the basis of credit is land, and land has not a great reputation in this country as a basis of credit. The fact that there is a Government guarantee behind it is not adverted to, to any great extent, especially in view of the fact that there are other loans available with full British and Irish guarantees.

That is my point. The floating of these loans was badly handled, and the fact that it was a good Government security was not put before the public.

Mr. Hogan

We could argue that at great length. We want to get money for agricultural credit in this country. No amount of advertising will get money until there is a change of mind amongst the farmers about repaying money lent and until land becomes liquid. If Deputies would admit that and make it easier, we could get money more easily than at present.

What about the farmer who has no money?

Mr. Hogan

Remember, I do not say that the farmers are tremendously well off either here or in any other country. At the same time there is a fair amount of money in agriculture in Ireland. There is a fair amount amongst small farmers. I regret that it is not into the Agricultural Credit Bank they put any money they have. They come to it to look for money, but they will not invest money in it. If the Agricultural Credit Corporation gets a chance, and if it is realised that it will take some years to work up to its full efficiency, I think it can do a tremendous amount to deal with this particular problem. Deputy O'Hanlon made one remark with which I did not agree. He said that it made farmers less credit-worthy and that it stopped their credit. He quoted the case of a farmer who will not get credit in shop goods because the shopkeeper knows that there must be priority.

Where does that argument lead? It is simply an example of the difficulties we are up against in dealing with this extremely intricate problem. It leads to this: that we should not give this special priority to the Agricultural Credit Corporation, whereas it is admitted that the Agricultural Credit Corporation cannot function without it. If Deputies took up both sides of the case and discussed it dispassionately and calmly and weighed it up, I would not mind. What has been happening? One Deputy denounces us for giving them those powers, and another for not giving those powers. That very remark Deputy O'Hanlon made shows the difficulties.

I do not want to be misrepresented. The point I made was that men were promised loans months ago and have not yet got them. They promised their creditors, banks and drapers, that they would pay them when they got the loans, and their credit is stopped. With regard to the point raised by Deputy Dr. Ryan and myself, that of farmers owing money to grocers, a lot were turned down and would not get loans because they owed money to grocers. It is a very small thing. A man who wants a loan of £100 may owe £10 to his grocer, but it is not worth talking of.

Mr. Hogan

Very well now.

We are not discussing the administration of the Agricultural Credit Corporation.

Mr. Hogan

There is a section in the Bill which tends to extend the scope, and it would be relevant. With regard to loans, I know of cases where the Agricultural Credit Corporation promised a loan to a man on his stating his title. Afterwards the following state of things was found. The father died three years before and administration was not taken out. That is common all over the country. Will anyone tell me how to solve that problem? Can you make a loan on the security of a mortgage of land, the mortgage to be signed by a person who is not the owner? Farmers will not take out administration when the father or mother dies. Yet those people will come along and expect loans on the security of their land.

With regard to the case the Deputy mentioned, I know of plenty of cases where that occurred. Loans had been promised. Something simple like that has turned up. They have not taken out administration. They have no title to their lands and the loan from the Corporation must be held up until administration is taken out. If Deputies imagine anything like that is simple in this life they are mistaken. A problem dealing with a very large number of farmers is especially complicated and cannot be dealt with simply by a number of rules and regulations. I did not know that there was any difference between the time loans were promised and the time in which they were actually paid. If there was, I would like to know any particular case, because I may tell Deputies they do not always get the whole story. There may have been extremely good reasons for holding up the loans. Certainly, as far as I know, the loans have been given fairly quickly after agreement has been reached, but there may be cases in which the loan had to be held up for certain reasons, arising out of title, and so on. Also Deputies should remember that the Agricultural Credit Corporation, when it was an entirely new body, had to build up its own procedure and staff, and what surprises me is that they got into their stride so quickly. I honestly believe that in five or six years' time that body will be one of the most successful institutions we established to deal with a problem more difficult than the division of land. Everyone expects money. It is easy to criticise the Agricultural Credit Corporation, but notwithstanding that, I believe it will prove itself to have solved the problem, if it is really soluble, if it gets time. Up to the present it has lent about £400,000.

With regard to the second point that the Deputy raised, namely, the question of a man going for a loan who has a bill of £10 for groceries and will not get a loan because it is not for agricultural purposes, there is a section here dealing with that point extending the powers of the Agricultural Credit Corporation. I think it is Section 23. Deputy Dr. Ryan pointed out that, in his opinion, it was not wide enough. I asked him the question: where will you draw the line? He suggested himself that the Corporation should be allowed to lend money for the purpose of educating a farmer's son. If that is so, should the Corporation be allowed to lend money to a farmer for him to buy £100 worth of Guinness's shares to be put aside for his daughter when she would be married? There may be a good arguable case for extending the powers of the Corporation. There is undoubtedly that difficulty mentioned by Deputy O'Hanlon, which is being solved in a round-about fashion, as is suggested by Deputy Dr. Ryan. At present, a man sells a couple of cattle to pay the bill and he comes to look for money to buy more cattle. Let Deputies consider this. We will try to extend, within limits of safety, the powers of the Corporation. There is time. Let them consider an amendment and we can discuss it in a reasonable way. I would like to see the Corporation put in a position to deal efficiently with most of these problems. Remember this body should be confined to agricultural credit, and that all the tendency will be to push it to deal with things other than agricultural credit, and remember, to keep it within limits, to safeguard the investor's money, it will be necessary to draw a line definitely somewhere, and I imagine myself, wherever you will draw the line you will be solving one difficulty but creating another.

Is the Minister drawing a distinction between agricultural credit and farmers' credit?

Mr. Hogan

I am not. I do not understand the Deputy. They are the same thing.

Would the Minister tell us the cost of the administration of the Corporation?

Mr. Hogan

It is one per cent. on the amount lent. I do not know the absolute figures.

May I ask the Minister would he state has any estimate been made of the cost to the State by reason of the agreement to pay the foundation charges, the guaranteed dividends, and so on, say during the next five years?

Mr. Hogan

I will get that question answered if I can on the winding up.

The Minister for Agriculture is exceedingly satirical and ironical because members of the Fianna Fáil Party have the unlimited and unbounded audacity to criticise any legislation on which he has set his almighty and infallible hand. We unfortunately are in the position here of being representatives of the people and we sympathise with the Minister for Agriculture that the legislation which he now introduces cannot so easily secure acceptance in this House as it did a few years ago. It undergoes a more severe examination. If that examination is microscopic I think the Minister should not find any fault with the Fianna Fáil Party on that count. He has only to read the judgments, opinions and criticisms of the judiciary of his own Executive to know what they think about some of this legislation.

The judiciary?

What the Free State judiciary think about this legislation that the Minister is so anxious to rush through without anybody being allowed to speak about it. Some of it, a recent book says, might be held up certainly as a beacon light, more of it ought to be held up as a warning. I think that the original Agricultural Credit Corporation Act, no matter what the Minister himself may think about it, no matter how high his opinion may be of it, considering that it was his own baby, is not the be all and the end all of agricultural credit legislation. The Minister tells us that that Act was not alone highly successful, apparently in this country, but that it was the model for the English Agricultural Credit Act which was not passed until a subsequent year. It does not matter to us whether it was the model or not of the English Act as actually passed. What I say is that in regard to the administration of the two Acts there is no comparison whatever. The English Agricultural Credit policy is administered in an entirely different way, and when we criticise legislation here we are criticising it with reference to its effect on the administration.

In the first place, the British Government is lending the English Agricultural Credit Corporation a sum of money free of interest for sixty years; in the second place the administration of the granting of loans is being carried out through the English banks, which undoubtedly are giving far more assistance and far more support to the scheme in England than the Irish banks are giving here, although the Minister for Agriculture himself went out of his way before ever a credit corporation was set up, to eulogise the Irish banks and to say that they were going to do a lot of the work, and the Banking Commission, which is the Bible of the experts on the other side, said that if by any chance we failed to get money, as we have failed to get it apparently, for the working of our Agricultural Credit Corporation, we can certainly, with the State behind us, easily get money abroad. If that was so, why was not the money from abroad looked for? "In that event," the Banking Commission says, "it is to be hoped that a reasonable amount of them (that is, of the land bonds) will be purchased and held by the banks. As the investor becomes interested in them a genuine market for such bonds can be developed, and as it develops further the banks will be able to buy more and more of them until the amount so held corresponds roughly to the volume of the savings received in agricultural districts."

Then it goes on to say that the time will arrive when the total amount of loans which are granted by the Agricultural Credit Corporation will be represented by a corresponding amount which will be invested in the Agricultural Credit Corporation by the banks, but will, in the first place, be provided to the extent that they will have got rid of a large amount of their frozen debts and of loans which they were unable to collect, and, in the second place, because the additional security they would have, and whatever prosperity was reached among the agricultural community as a result of the operations of the Credit Corporation itself would have, of course, strengthened and have a very good effect upon the Irish joint stock banks themselves.

The Minister for Agriculture talked about the investors, and said there is not enough attention paid to the investors. I say the State is the investor in this case. The State is the only person who can lose, and when the Minister comes here and advances the hypothetical investor who up to the present has refused to invest, why does he not tell us what the Irish banks have done in this matter? Why have not they fulfilled the promises that were held out by both himself and their representatives on the Banking Commission, that when the Agricultural Credit Corporation got under way they would give the money, the only thing necessary being to get a certain amount of money in circulation through loans, and that the money apparently was to come along through the joint stock banks. If that process is being followed out, and if it is the case that the banks are in process of reaching a stage where they are going to finance the Agricultural Credit Corporation, because they are in the first place benefiting in the way I have stated, and in the second place the banks have reasonable security—they have State security and there is a reasonable yield—there is not the slightest danger, so far as I can see, of their losing on the transaction. Nevertheless, the Minister for Agriculture and the Minister for Finance are not able to show us what the banks have done in this matter. We cannot got liquid resources, they say. The trouble with the Agricultural Credit Corporation, they say, is that they have their money invested in land. People do not want to invest in land. They are shy of these certificates of charge which are issued against land. The Minister himself foresaw that when he introduced the original Corporation Act. He said that other securities would have to be provided, and undoubtedly they will have to be provided, and the other backing which would enable the Agricultural Credit Corporation to go into a foreign investment market and get money there, will have to be provided either by the taxpayer or by the Irish banks. Up to the present the banks have not done their share. The taxpayer is the man who is responsible for the whole thing. He is the man who will have to foot the bill if the Corporation goes smash. He is the man who has to sacrifice income tax and stamp duty to pay the preliminary expenses and lose the interest on whatever money is put into it by the State, because although the taxpayer is supposed to draw interest like all the other investors up to the present, presumably there is no interest to draw.

While the taxpayer, therefore, who is an investor, has to suffer the loss of the interest on the State money invested, he will have to pay the interest to the bank and to the other people for whom principal and interest are guaranteed by the State. So that this is simply a State transaction, a State institution from beginning to end. What we want to know is why? Because the banks do not like the Agricultural Credit Corporation to be given a fair chance to make good. We, as well as any other party in this House, are anxious that the Agricultural Credit Corporation should make good. The only way in which it will make good is through the men on the opposite side of this House. Quibbling or talk about competition with the Irish banks is not going to help us. If we feel that Irish agriculture is in a sufficiently bad position, and if we feel that big action will have to be taken by the Corporation, let us do it. If we do not the position will become worse later on and eventually steps will have to be taken. There is the alternative. The Agricultural Credit Corporation should have been allowed to take deposits the first day. The Minister for Agriculture and the Minister for Finance came in here and proposed that that Credit Corporation should be allowed to take deposits, and then because the banks, through the representatives of Trinity College in this House, said they should not be, they swallowed the pill. They allowed the fifteen who are dominating them in their Irish language policy, and every other policy, to dominate them in this. Of course the fifteen have another thought, and how could they be expected to do the right thing by the State, the taxpayer and the farmer? They swallowed it and withdrew clause 9 of their original Act, which said that the Agricultural Credit Corporation should be allowed to take deposits. Here you have the Banking Commission saying that the only way in which we can get credit for the farmer, the only way in which finance can be placed at the disposal of farmers for agriculture, will be first by getting the deposits from the farmer. But the deposits, of course, must go into the joint stock banks. They must not in any circumstances be allowed to go to the Agricultural Credit Corporation, although the taxpayer has to face the losses if there are losses.

He has to pay the interest and the principal as well. The one moneymaking side of the whole business, the one thing that could enable the Corporation to work properly, naturally and well, and to put it on a firm foundation, like the credit corporations of other countries, Germany and so on, which really have the State behind them, and the commercial banks working with and for them, is not given an opportunity here. That kind of thing is going to be prevented. I would remind the Minister for Agriculture, also, when he is jibing at the Fianna Fáil Party, at their audacity and impertinence in discussing this question and pointing out the defects of his mighty, original Bill which, we are told, is the model for legislation in the Imperial Parliament, that the officials of the Agricultural Credit Corporation say it is so unworkable that there is hardly a single clause of it that is not utterly impossible. Even at this hour of the day it is so bad that, as regards the memorandum of association and the articles of association, things which an ordinary joint stock company has power under the Companies Acts to change and adapt to altered circumstances, the Agricultural Credit Corporation has to come here and ask us to pass a special Act so as to enable them to change their memorandum of association or the articles of association in order that they may do as they want. Still we are told this is a model piece of legislation and that it is a wonderful contribution to statesmanship.

Before ever the Minister for Agriculture became a member of the Dáil the National Land Bank was set up by men who certainly were not experts any more than we here are experts, but who decided to set up an institution which, in the first place, should be national, and, in the second place, should have a definite aim. Though the institution did not turn out as satisfactorily as it might have—the bank had very hard and unsettled conditions to strive against in the country—the work was still carried on.

I am sure Deputy Gorey would be very anxious to point out the particular transactions where it paid too much for land. So it did, undoubtedly, but it had men behind it who were determined to make it a success, and in spite of these huge difficulties the Land Bank held its head up, it kept its head over the water, until better times came along. When better times arrived, and when the bank, which was the real kernel for the future agricultural development of this country, because it had the power to accept deposits and it had good-will and a trained staff which had some familiarity with land legislation and with transactions concerned with land, was doing well, the whole thing was swept aside and handed over to the Bank of Ireland, which has found it a very profitable transaction.

The Bank of Ireland has found it, perhaps, a more profitable transaction than any other bank in the thirty-two counties. The Minister for Agriculture, the Executive Council and the Government Party were responsible for handing over the bank which ought to have been the genesis of the whole thing, and from which everything concerned with agriculture should have developed, and the Minister says here that there was nothing known about agricultural credit until he came with his Bill. As a matter of fact, at the Banking Commission a statement was made that the really authoritative Commission, on the whole question of agricultural credit, was the Commission which sat in Ireland under Mr. Cahill in 1914. There is nothing to stop any member of the Fianna Fáil Party or the Cumann na nGaedheal Party, be he Minister or back bencher, from consulting the report of that Commission and learning what has been done in other countries.

The Minister says: "What can you do when you cannot sell out the farm, "and he pushes aside the whole question of what is to be done with the down-and-out people, the 200 farmers who are derelict in County Wexford, and points to the hundreds of thousands due to the banks in Tipperary and other counties. We said here before, and it was said by the farmers when the original Act was introduced, that steps ought to be taken by the Government to approach the banks and clear off the old loans. One of the worst things the Agricultural Credit Corporation is suffering from, and one of the biggest obstacles it has to face, is the whole question of taking over old loans which are hanging on and which make it impossible to approach this question from any new angle.

When it was suggested here that the bankers ought to be made accept the position on account of deflation and of the particular circumstances in the country, and on account of the fact that if prosperous conditions follow, as they certainly would if the banks were reasonable, that the bankers would be the first to profit and they would profit a great deal more in the long run than the farmers who would get away with some of their obligations or responsibilities, we were told that that was embezzlement and bankruptcy and it was preaching dishonesty. We were told that that was actually telling the farmer not to have all the civic virtues and not to be honest. Now we find in almost every county the banks are making arrangements of their own free will. What was wrong and what meant embezzlement and bankruptcy when it was preached from these benches is quite right from the point of view of the banks. I do not understand that sort of policy in regard to banking. When part of a national assembly here says a certain thing ought to be done, we are told it would amount to bankruptcy and embezzlement; but when the banks see fit to do it we are told that is good commercial credit.

Let us know where we stand in regard to the banks. Are they or are we the masters as to the future progress and development of the agricultural industry? If the Minister got in touch with the banks I believe he could have got at them by telling them that this thing was an obstacle in the way of the successful working of the Corporation and he would have got them to come to a general arrangement so as to enable the old debts to be liquidated and so give the farmers a chance to start off again. The Minister for Agriculture also said, when he was introducing his original Act, that one of the principal objects he had in view in regard to the part of the Act which dealt with chattel mortgages was to give a chance to the congests and landless men in the West of Ireland and other areas. I would like to have some figures that would show us the valuations of the counties in which the £400,000 has been distributed.

Under the original Act, this precious Act which is to be the model for all future legislatures all over the world, Section 17 sets out: "The Agricultural Credit Corporation shall keep all such accounts and other records and in such form as may be prescribed by regulations made by the Minister under this section." I think it is one of the blots of the present Bill that no attempt has yet been made, after so many years, to frame definite regulations in regard to the manner in which those accounts are to be published. Deputies from all over the country have asked questions in the House as to the amount of loans that were granted and the areas in which they were granted, and other matters like that. There was no information given, although the taxpayer is the man who has to foot the bill for the whole thing, as to the amount of loans, the areas in which they were distributed, or the type of farmers who have benefited, or the reasons why loans were refused. Deputies got letters saying that loans were refused, but the reasons could not be stated. At least we might have been told here if the loans were refused because of inherent difficulties in regard to title and so on, or whether they were refused because the man had no security to offer. We have not the remotest idea into what categories those refusals were placed. We are told now that it is cheeky and impertinent for us, having been refused on so many occasions the most elementary information from the Minister about the working of the Corporation, to speak here on this matter. If that is representative of Parliamentary Government, then the sooner we get a Mussolini here the better.

There are a couple of candidates for that job.

Are you one of them?

On the Government side?

To come back to the question of the landless men and the congests, the Commission that sat in 1914, and every Commission or every expert who has examined the policy of the country on the question of agricultural credit, examined it from the German point of view. They examined it from the point of view of the problem of giving a loan to a man who had very little security, perhaps no security at all, to offer except honesty; that if the man was an honest man, a man in whom his fellow-parishioners believed, a man who they thought would make good, and who, when they came together in their little Credit Society, they decided was a good-enough man for them to stand over, that was the security they had. That was that man's security, the confidence of his fellow-men in his own area in his honesty.

But because Professor Parker Willis, or whatever he is called, comes across here from America comes across from a country where the ranches are as big as whole counties here, and tells us about American farming and the Farm Board system of credits on a very large scale, we are to forget completely all about the small farmer who is the backbone of this country. I do not care whether he is a congest or a man with 15 or 20 acres, at any rate, a man for whom a loan not of £50, £40, or £30, but even a loan of £10 or £15 would be a big thing and which would place cash in his hand that would enable him to buy stock or even poultry and who, when these were sold off, would pay back the loan. We were promised that not alone would the system of chattel mortgages deal with these small farmers but that there would also be a system of intermediate credits. I would like to know what the Agricultural Credit Corporation has done with regard to intermediate credits. Intermediate credits, the Minister said while introducing the Bill, were credits for nine months or twelve months or perhaps for one, two or three years, for the planting of crops or for the buying of cattle or for seed, or for such periodical work on the farm.

The loans which would benefit the fairly large farmer would certainly be of inestimable advantage to the small farmer. If the chattel mortgages system is a failure and is a fiasco, I would ask why the system of credit societies cannot be developed, and why you cannot, through that system of credit societies, establish this intermediate credit system throughout the country? I admit that you have difficulties with regard to administration expenses. These expenses can be low if you get, as in Germany, the local school master to do the secretarial work. But nothing whatever has been done to spread the good effects, no matter what they have been to the big farmer; nothing has been done to carry the good intentions of the Government into operation in the West of Ireland, and to many small farmers throughout the country.

The Deputy is now on the question of administration. I do not think that would be in order.

I would like to know what exactly is not in order.

The Deputy would not be in order in discussing the administration of the Agricultural Credit Corporation in this Bill.

I think the Minister referred to the amount of money that had been put into circulation, and he referred to the administrative difficulties. If we knew where to draw the line it would be all right. I am sorry if I am trespassing.

The point is, is the Deputy in order. I am suggesting to the Deputy if he is going to deal with the question of administration it ought to be in relation to this Bill. I was not in the House when the Minister was speaking. I take it that the Minister, in dealing with it, was pointing out the necessity for this Bill.

We can, on a Second Reading, criticise the things that are not in the Bill as well as the things that are. The Minister for Agriculture and other Ministers can get up and tell us the necessity for these particular sections in regard to priority and so on, although I notice that the Minister for Agriculture took very great care not to explain the sections in which he is himself expert, namely, the legal sections —Sections 25, dealing with first mortgages, 28, dealing with the Irish Land Commission sales, and so on. In regard to the organisation of credit societies, I regard that as being essentially part of the development of agricultural credit.

These societies must be organised at some time or another. Now that there is need for agricultural organisation when everybody says they want the farmers to develop their industry and when they want to be able to have them in the position that they can speak for themselves, when they want them to come together and to bind themselves, it is extraordinary that no effort has been made to keep these societies in existence. They have been blotted out by the Registrar of Friendly Societies. The I.A.O.S., the body responsible, I think, and which receives Government subsidies, is so intent on the work of financing creameries, which is a difficult business, that it has no time, staff or organisation for organising the Credit Societies in every part of the country. If they have no time, money or staff, the time, the money and the staff should be made available for them. Giving evidence at the Banking Commission, the Minister for Agriculture himself said: "I believe it would be of great value if some central bank would establish connection with these societies. The functions of such a bank would be twofold, to provide a secure investment for credit societies receiving surplus deposits, and to make extra capital available for Credit Societies in those districts where it is difficult to obtain deposits." That is taken almost straight from the reports on the Raffeisen and other German systems. It is extraordinary that the Minister for Agriculture, having given evidence to that effect, and the whole trend of opinion even in the Department for which he is now responsible being in the direction of the organisation of these societies in this country for the past twenty or thirty years, that not alone are they not being organised, and not alone are the small farmers not being brought together to enable them to reap the advantage of this Act, but, on the other hand, the societies are being absolutely wiped out. If it is the position with regard to agriculture that because we have a particular scheme of dairy reorganisation going on here, we cannot devote any attention to those areas where there are no creameries, and particularly so in the poorer areas, where £20 might mean more to a small farmer than £200 in other cases, if we have no scheme or policy to help them and to deal with these other areas, let us then be quite frank about it. Let us say that the Agricultural Credit Corporation, doing its best for the creameries, has not been able to deal with the congests, the tillage farmer and the small farmer. Let us be frank, and do not let us be deceiving ourselves. Do not let us deceive ourselves when this Bill is passed, with a chorus of "hear, hears" from the back benches on the Government side, that everything is going to be rosy and that everything is to be paradise. It will be no such thing.

Another matter to which I want to call attention is the matter of expenses in connection with loans. I do not know whether these expenses are high or low. What I do know is that other members of this Party who have come in contact with them say that the expenses in connection with probate and administration are exceedingly high and that one of the means by which it would be easier for the Corporation to deal with questions of title would be by reducing the expenses. In the long run, if the expenses are maintained at their present level, the Corporation will lose, the State will lose, and certainly the man who has applied for the loan will lose. That is one of the elementary things that ought to have been faced. If we can devote so much time here to remedying the question of title, to giving priorities, and so on, it ought to be easy for us, if we set our mind to it, to reduce the legal expenses in connection with administration. Perhaps this is only a small point, but I think, taking it all in all, that the expenses are unreasonably high.

In regard to the attitude of the Government in its dealings with joint stock banks and its failure to secure cheap money for the Agricultural Credit Corporation, in my opinion it is absolutely essential for its success to get the joint stock banks to face up to their responsibility and to put their resources into the Agricultural Credit Corporation until such time as the ordinary investor here can get over his shyness, which, of course, must be very widespread, because land, as the Minister for Agriculture says, is an uncertain kind of security, and there is, perhaps, a prejudice against investing money in new Government institutions; and from that point of view I think that the flotation itself was premature. But in any case, having decided that money was necessary, that the Corporation could not proceed without it, that money should be got on the most reasonable terms, and that it is far more reasonable, far better for the country in every way, and far better for the banks themselves that they should begin to learn that the proper home for their investments is the Free State itself, in which they get their deposits, it would have been far better if the Government had approached the banks and had tried to get them to do their duty.

This Bill, however it may succeed in rectifying difficulties in regard to title, in dividing up the shares and increasing the share capital, does not touch the fundamental point. The Minister refused to touch it in his speech, as indeed he refused to deal with any other pertinent matter. I put it to the Government that it is time for them to make up their minds as to whether this institution, to which they have pledged the full security of the State by their numerous Bills, is to be made a success of, a course for which, I claim, they have secured the co-operation of every Party in the House in advancing. It is really up to the Government, and it would not be too much to ask them, to go to the banks again, even though they have a shot in their locker, and tell them that they are not doing the right thing. Remember that Germany built up her industries because her banks invested their money in those industries. Not alone did they invest money in them and keep them going until they became remunerative, taking the entire expense and trouble of financing them in the initial stages, but they actually borrowed money from abroad for that purpose, and they borrowed that money by pledging their own assets.

This is a very technical point, and I am not an expert, but I wish that somebody, like the Minister for Agriculture, who knows all about these banks, would tell us what is the precise position with regard to the marketing of these certificates of charge in the foreign investments market. I say that they can never become a security which would realise the same return as the Irish banks themselves could have realised if they were prepared to extend over their liquid assets the same kind of certificate of charge as the Agricultural Credit Corporation is now proposing to do. I say that the difficulty that you have about the security of land—the difficulty of selling out farms—will reflect itself in the foreign markets in the dealings which the Agricultural Credit Corporation will have with the London discount and clearing houses. There will be a difficulty there, and you would need some intermediate organisation to step in. It might not be so bad if the banks had a national attitude in this matter, if they were really out, as the English banks are, to make a success of the Agricultural Credit Corporation. They are not. It might make a difference if they were. The fact is that you have either to get deposits or cheap money, or you have got to get the Irish banks to do their duty by transferring their deposits, by means of some system of negotiation, in order to make their liquid assets and their deposits available as further backing for the Corporation in its transactions in the foreign market.

Yesterday the Minister for Agriculture, replying on the Vote for Agriculture, gave us a lecture on practical things, and advised the Opposition to come down to facts and to forget about oaths and constitutions. Now when we come to a practical thing he scorns all criticism, and he says that we have no right to criticise this Bill at all. Previously, when there was a Bill to amend the original Act, he told us that there were only five people in Europe who knew anything about the vagaries of credit. Apparently those are the people who whispered to him that it would be unbusiness-like or wrong for the Agricultural Credit Corporation to take deposits. He told us, further, that the Chair ruled out all discussions on the matter of credit and that we are debarred from discussing that very important subject. If that were so, we might as well close this House, because it would be nothing else but a talking shop, and appoint three commissioners, nominated by the bankers, to run the country. Deputy Derrig asked who were the masters —the bankers or this Assembly— and it would seem from the hole-and-corner way in which the Agricultural Credit Corporation is doing its business that the bankers are the bosses. As far as I can see, the chief achievement of the Agricultural Credit Corporation was to give jobs to the defeated candidates of the Farmers' Party for their support of the Government.

The Deputy is not in order in discussing the Agricultural Credit Corporation, its personnel, or its administration, under this Bill.

I ask you, A Leas-Chinn Comhairle, if it is right that a leading politician in a public position who used his spleen against his political opponents, is a right and proper person to be a member of the Agricultural Credit Corporation?

That is not a point for the Chair, and the Deputy knows that it is not a point for the Chair.

Is it right——

The Deputy must not ask me questions.

I am coming to another question. I ask if it is right that the members of the Farmers' Union should say, at chapel gates in the South of Ireland, that only through them and through their defeated candidates could loans be got?

Is the Deputy correct in saying that there is such an organisation as the Farmers Union?

The signboard is still there.

I think Labour is pretty well in the same boat.

I suppose on account of the ruling of the Chair it would be better for me to leave them in peace. The Agricultural Credit Corporation deals with the question of credit for agriculture, and as we all know, agriculture is the principal industry in the country. If this Agricultural Credit Corporation is to achieve anything it must act with broader vision. The Minister for Agriculture stated that the Corporation had lent half a million of money. I question the accuracy of that figure. It may have sanctioned the lending of half a million of money, but I do not think it lent that amount. Even if it lent half a million of money, if we analyse the assets of the joint stock banks, and assume that at least half of these assets are loans for agricultural purposes, we find that these run into millions of money, and we see that the Agricultural Credit Corporation is only jobbing at it. Of course there were all kinds of legal barriers put up. I know one case where a widow——

I think that is not relevant to this Bill.

I was going to say that this lady went to about £15 expense to prove title, but as she had only a life interest her application for a loan had to be turned down. We have an attempt here to tear up the original Act, and to try to put it on a proper basis. I submit that on the Second Reading of this Bill we should have the right to criticise the Agricultural Credit Corporation in its working, and to suggest how it should be worked to meet the situation it was supposed to deal with. The Minister for Agriculture stated that deposits would be no good to the Corporation. He said deposits were for long term loans. I ask the Minister if any loan for agricultural purposes is anything but a long term loan? A farmer goes into a bank and gets a four months' bill but he renews that bill for years. Beyond paying the interest at frequent intervals it is a long term loan.

Irish banks find their deposits very useful. We know that bankers contend that 10 per cent. is enough to keep in hands to meet any demand. We contend that if the Agricultural Credit Corporation, spread throughout the country as the principal credit institution, did banking business in the orthodox fashion, and if it was given the fiduciary issue given to the joint stock banks at 1½ per cent., then it would work on a bigger margin than one per cent. We who may be unorthodox on these things want to know why a fiduciary issue should be given to one credit institution and not to another, or if it is right that the State should lend to one credit institution a note issue at one and a half per cent., while another State institution should have to go to the original party and borrow that at five per cent. Why not pass the issue direct to it and let it have the same benefit? Of course we know that in all these things the bankers' word is final. The bankers' nominees on the Agricultural Credit Corporation say that what is practicable for the ordinary banks in impracticable for the Agricultural Credit Corporation.

We have an example, however, in the Commonwealth Bank of Australia which, when it was set up, got in actual cash £10,000. It has spread all over the Commonwealth owing to being able to receive deposits. That Bank had never to call on the Federal Government for anything more than that £10,000, and now it has branches all over the Commonwealth and is the principal financial institution in Australia. It is not a theoretical Bank. What is true of that Bank could be true of the Agricultural Credit Corporation. When I hear the Minister for Agriculture saying that nobody knows anything about this question of credit unless what the Minister has learned I begin to ask what was Griffith, whom the people opposite glorify, writing all those years about banking? If he was right all those we are suggesting, how is it all these suggestions have now become so silly and so nonsensical?

The Minister pointed out—I cannot recall his exact words—that land should be a commercial commodity, capable of realisation. He is the one Deputy who says that it is absolutely right that the farmers of Ireland, who have been fighting for fifty years to establish fixity of tenure, should be sold out, so that every expeeler and ex-pensioner can buy them out, after they had sustained the fight for Irish nationality. Well, here is one Deputy who stands behind the Irish farmers. They are not always such a pack of wasters as the practical people opposite suggest. They have to work hard every day.

Deputy Derrig dealt with the question of a composition, or of the writing down of the debts due by farmers to present valuation. At present we have going on what one might call a squeezing-out process. The farmers hold on, but the land annuities and local taxation pile up. The land is derelict and because of an Act passed in this House, no one can take it. Eventually, when the land is sold, even in a free market, it does not realise sometimes one-third of the debts. We have this long-drawn out process, and land that could be utilised for production is lying fallow, because of the stupidity of the joint stock banks.

We say that there should be a general national policy of writing-down these debts to present valuation, and a fresh financing of farmers who are in such sore straits. That is not due to slackness or negligence on their part. As we know, they bought land when they did not know what was going to happen. It was the bankers who called the tune of deflation, and when they called the tune they should be the people to pay. It would be of great benefit to the country if there was a writing-down of these debts, so that the farmers might get on with their occupation. If this Agricultural Credit Corporation is going to be a success it has got to get out of the hole and corner in Merrion Square, come into the main street, spread its branches all over the country, and carry out a national policy of credit, a policy in sympathy with the country and with its needs. You will have amending Acts here ad infinitum unless you legislate in such a way that this Credit Corporation will become, in every sense, a proper State institution for the financing of agricultural credit in the State.

I listened very eagerly to the speech of the Minister for Finance, and was rather hopeful that some word of encouragement would come from him as regards the better working of the Agricultural Credit Corporation. The whole burden of his speech appeared to me to be a justification for the Bill in so far as it proposes to give powers for increasing the capital of the Credit Corporation. The principal reason he advanced for the Bill was that the margin of profit of one per cent. on the working of the Credit Corporation was very small, that the present capital of half a million was in reality so small that the margin of profit might possibly lead to dangerous consequences, and that from the financial point of view the country might find itself in difficulties. That was the one point that was brought forward very forcibly in the Minister's speech. I could not see, in the Minister's speech, any hope for a betterment in the conditions of the people who look to the Agricultural Credit Corporation for some form of redress. Following him we had the Minister for Agriculture, who emphasised very strongly that the Credit Corporation was a commercial body. Any attempt on the part of Deputies to suggest that it had failed to provide terms to meet the ordinary requirements of some sections of the people was, in the Minister's view, all skillywash. The important factor was that this was a commercial body. The same might be said of the joint stock banks and of various other kinds of financial institutions in the country. They are all business and commercial undertakings, but the people who control them do not go out on the hill-tops and emphasise that. They carry on their business without making that factor the predominant note at all their meetings. If that is the big factor—that this is a commercial body —that the Minister for Agriculture wishes to emphasise, will he explain, when he is asking the security of the State to back it, how, when it enters into competition with the other commercial bodies such as joint stock banks, it is to have any hope of dealing with that section of the community that, in many instances, these joint stock banks and other commercial institutions have refused to deal with.

This commercial undertaking that the Minister speaks of will have to borrow from the joint stock banks at five per cent and lend money at six per cent. The joint stock banks that lend money to it will, in the first instance, have been able to get that money themselves at the rate of from one and a half to three per cent., or perhaps slightly over three per cent. Is not the Minister placing himself and this State in the position of a man who deals in a secondhand commodity? Is not this commercial undertaking, that he emphasised so strongly, in the same position as a person who has a huxter's shop down the country, who buys his goods in the nearest town from the big man in that town, and re-sells them to the people in the immediate locality in which he resides? I think, if this commercial undertaking, on which the Minister laid so much emphasis, was a really sound financial and commercial undertaking that he would not have needed to emphasise the fact so much. Another point which the Minister for Agriculture looked eagerly for information and enlightenment upon was: how he was to deal with a set of people down the country—farmers— who are now in the position of what is known as "down and outs." Since a lot of these farmers are to be found in the West of Ireland and in the congested areas, I suggest to the Minister that the first advance to be made in meeting the position of the "down and out" farmer is to remove from the statute book a law that was passed in the Dáil a few years ago. The Minister for Agriculture was, I suppose, primarily responsible for the passing of that law. It was sanctioned by the other representatives in the Dáil at the time. The Minister's first advance should be to remove that penal code which has put the "down and out" farmer permanently on the run, which has placed a ban on his position and which has left him for all time, as far as legislation can do it, a "down and out." Remove from your legislation a law that prevents the farmer who now finds himself a "down and out" from utilising his land in any way that he can utilise it. The first thing to be done is to remove that penal enactment. The legislation which was passed a few years ago, and to which I am referring, was, in effect, a notice to quit to the farmer. If the Minister takes steps to remove that penal enactment, then he will be taking the first important step in the way of dealing with the "down and out."

A very important factor to be borne in mind by a person or a body which has to deal with applications for loans is, not always the assets that the borrower puts forward as security for a loan, but rather the character of the person seeking the loan, his ability, and his will to make good. The personal qualities of the applicant count more, perhaps, in transactions of this sort than the amount of assets he may have in the way of land or live stock. As far as I can see, the only office which the Agricultural Credit Corporation has is its head office here in Dublin. Therefore, what prospect has it of getting in touch with, and taking advantage of, what I have described as the essential qualities in a borrower. It will have no means of making inquiries to ascertain whether or not a prospective borrower is possessed of those qualities and has the ability to make good. I do not know what system the Credit Corporation has at its disposal for dealing with that important factor. If the Minister wants to deal with the "down and out" farmer he will have to find ways and means of getting in personal touch with him. He will have to find ways and means of getting to know the personal qualities of the "down and outer." That is a first essential if there is to be any prospect of assisting him by commercial loans. I suggest that if the Minister was anxious to provide ways and means of helping those people, whom he sees no prospect under present conditions of reaching, he could easily find them. He has at his disposal the experience of other Departments of the State which dealt with the same class of people in these localities some years ago.

The old Congested Districts Board had a scheme for lending money to farmers in the West of Ireland. That is a very important factor—that the experience gained in that way is available. The old Congested Districts Board lent money to farmers for their farms. These were farmers who had no great interest in their holdings. They were farms that had first been divided up by the Congested Districts Board and then apportioned out to the new holders. The interest of the incoming tenant farmer in these holdings was naturally very small compared with that of a farmer who had been in possession of his holding for a great number of years. These men had no money to purchase stock. The Congested Districts Board, under their scheme for lending money to these men, placed them in the position of being able to purchase cattle. In addition, they had a scheme of insurance for cattle. During all the years in which this scheme was carried on with great advantage to the farmers, the Congested Districts Board did not lose one penny that they lent to them. An important fact to be emphasised in connection with it is that not alone was the scheme of insurance carried out by the Congested Districts Board years ago a safeguard for the money they lent to the farmers, but what is more important still, it proved, on its own basis, a financial success. There is no use in the Minister for Agriculture trying to rid himself of responsibility for his neglect, or of the inability of the Credit Corporation to meet the wants of the ordinary small farmer in the West of Ireland or elsewhere by questions across the floor of this House, such as "Will you show me how it is to be done. This is a commercial undertaking, and that is the be-all and end-all of it."

If the Minister for Agriculture is right in saying he has employed the greatest experts in the world in connection with his efforts in the direction of the formation of the Agricultural Credit Corporation he is quite entitled to make that statement. I presume he did employ expert persons, but the proof of the pudding is in the eating of it. If the Minister had it in his mind to found a scheme of credit that would be primarily commercial, and after years of successful working show a strong balance to credit, then, no doubt, the work of the experts may bear fruit; but if the object, on the other hand, of the experts who examined into and recommended this scheme was that the farmers should benefit from the Agricultural Credit Corporation, then I can tell the Minister that the farmers of Leitrim, who do not claim to be financial experts, will tell him that the scheme to provide money for their requirements has been a colossal failure. I suggest in all seriousness that there is no Act which requires amendment so much as the Agricultural Credit Corporation Act. There has been no measure introduced that has been such a complete fiasco.

I am speaking of conditions in the West. If the Minister wants to improve those conditions he will have to come down to the ordinary small requirements and the ways and means of the people of the congested areas. Without in the first instance coming into touch and acquiring personal knowledge of the applicants, there is no hope of making things better for the people in those areas. Efforts have been made from time to time by the I.A.O.S. to establish credit societies, and in that way to get a better understanding amongst the people themselves, and a stronger sense of their responsibility of what business in a general way means and what credit and financial transactions mean. Unfortunately, in the past the I.A.O.S., possibly with the best intentions in the world but with no business experience, made so many serious failures that they have made themselves unpopular. They have antagonised the people, and that has interfered with the efforts of the society. A good deal of spade work will have to be done before the people's confidence will be secured again. I am satisfied no other course will have the same effect, or reach the same ultimate end, and do as much good as the extension of credit societies all over the country.

If the State were to give the same guarantee to the local depositors who lodge their money with the local credit societies, as they now give to those who invest their money in the Agricultural Credit Corporation, there would be no difficulty in getting as much capital as the Corporation would require at a rate of interest of 3½ or 4 per cent., and get it on terms of a guarantee deposit of from three to five years. I have experience enough of local conditions and the sums of money saved and the conditions under which that money is invested, and the length of period for which depositors are prepared to loan. By such an arrangement and linking up the societies with headquarters in Dublin who would take charge of the deposits and bigger transactions, leaving the credit societies to transact business to the extent of £15 or £20, small loans of that sort, they would be able to get the considered opinion of local people as to the personal character of those who apply for loans and their ways and means. That appears to me quite a simple and feasible proposition. If the Minister followed the experience gained by the Congested Districts Board in its operations in the West of Ireland, he would be going in the right direction, and it would prove to him that the granting of loans to farmers and the work of local credit societies could be carried out very effectively if the State is prepared to give the necessary support and sympathy. As I have said, if the object of the Agricultural Credit Corporation is merely their financial success, then they have no justification in coming to this House and asking the guarantee of this State for funds for the operations of such a Corporation. If, on the other hand, they tackle the problem in the proper way, and put as a first essential meeting the requirements of farmers, if that is their primary consideration, then they need have no hesitation in coming to this House and asking for the fullest support and assistance, and they will be sure of receiving it, and with such an object the condition of the farmers in the Free State would be improved.

I would like to congratulate the Minister on this Bill. To my mind, it is a very important measure, for it deals with agriculture, which is our main industry. Everything produced in the country comes, directly or indirectly, from the soil. Credit at the present time is one of the most perplexing and pressing problems with which one could deal. Various factors have operated in the recent past against credit. There were high prices for farming produce for a few years, but a slump in the prices for cattle, produce and land came in 1921. The farmer who borrowed heavily, especially for land, lost most of his money. When those who lent the money tried to realise they found there was a great difficulty in doing so, and that they had not the security in land they thought they had. They found that land was not a liquid asset. The Banking Commission which sat in 1926 made recommendations with regard to the setting up of the Agricultural Credit Corporation. That Corporation was brought into being for the purpose of loaning money to farmers for the purchase of stock, seed and manures, to drain their lands and improve their buildings. The first year they were to give £500,000. Personally, I thought that amount small, and that the Government might be more generous and extend it to £1,000,000, and lend it for a few years, at a low rate of interest, until such time as farming became stabilised. I do not think they could lend it for nothing. They cannot get free money. They have to buy money in the world's market, and they cannot get it at less than five per cent. Consequently, there is no use in talking of cheap money. This Bill is an extension of the Acts of 1927 and 1928. The principal provision of this measure is to facilitate the Agricultural Credit Corporation in advancing money to men in connection with lands not registered.

What is holding up the Corporation at present, I understand, in connection with a good many applications is that in the Land Act of 1923 there is a section which gives absolute power almost to the Land Commission to take even a small holding from a farmer. Consequently, if the Credit Corporation lent money to a tenant farmer, and if the Land Commission wanted to acquire the land for increasing or consolidating an estate adjoining for some purpose which they thought was in the interests of the community, or for the benefit of small holders, the Corporation would have a charge upon it, so that neither would know what was the position. However, this Bill gives power to the Corporation to take a mortgage from that particular tenant.

Reference was made by some Deputies to "down-and-outs." There are, of course, a good number of these. In some cases it is their own fault, but in the case of others they have been unfortunate and have borrowed money, and have lost money. Some of them have not made up their minds to change from one system of farming to another. In many cases farmers have not changed their outlook to meet the changed conditions in marketing, etc. Very often they are slow to change from one system to another. It is a very difficult problem, because profits have been so small in farming recently, and it is not easy to blame them for being slow to change. If they adopted a different system of farming, and if, for instance, in tillage areas they went in more for dairying, I believe it would pay them. I agree with the Minister for Agriculture when he says that if in the tillage areas they went in more for dairying it would be better for the farmers in general, because it would lead to an improvement in live stock and to increased tillage.

Another matter to which I should like to direct the attention of the Minister is that some provision should be made for giving credit to barley producers. Barley comes in in October and November, and it is sold within three or four weeks. Last year it was practically sold within a fortnight. There is only one market for it at present, and that is the maltster. The output of the maltster at present is only about 40 per cent. of what it was in 1914. There should, therefore, be some credit provided for barley growers to enable them to retain their barley for three or four months so as to carry them into the spring. They might then be able to find a market for their barley in non-growing barley districts. People fail to appreciate the value of barley as a feeding stuff. Barley is considered by many people to be as good for stock feeding as maize, although there was a difference last year of about £4 per ton between the price of barley and the price of maize. For that reason I should like if some provision were made whereby loans could be made to barley growers to tide them over a period of three or four months, until such time as they could dispose of their crop.

Reference was also made to the system of credit in Germany and the fact that the Government was behind the farmers there. I do not know anything about that, but in Belgium there is a big co-operative system amongst the farmers themselves. Probably the farmers there have more trust in each other than they have over here. After the war the farmers in Belgium established a co-operative system amongst themselves which has gradually increased year by year until it has now assumed enormous dimensions. I believe their capital is now something like seventy or eighty millions—or some big figure, at any rate. I do not believe we could ever get as far as that in this country. As I say, they have probably more trust in each other than we have here. I know it has been found very difficult to make a success of the credit societies here. In some cases they have been successful, but, on the whole, I would think they have not been.

At any rate, I should like to see the Government, if they possibly could, being more generous with the Credit Corporation, and the Corporation loosening themselves up a little and not holding so hard and fast to title and small points like that as they have been doing. I might cite the case of a farm which has changed hands on three different occasions within the last fifteen or sixteen years. On each occasion a loan was given to the purchaser of the farm. The title was vouched by the law agent of the bank concerned. The title was also vouched by the solicitor acting for the purchaser. In that case, although a loan has been sanctioned by the Credit Corporation for over twelve months, the loan has not yet been given. I believe it is being held up by some very small point as to whether a certificate has been got showing that the estate duties have been paid. I do not believe that was ever required before by any of the law agents of the banks who advanced the money when the land was being sold. For that reason, I should like to see these small points waived, so as not to hold up the giving of loans which would be very useful to farmers.

Before the debate closes, it should be made clear to the Minister for Agriculture that nobody on this side wants the Corporation to lend money without proper security. I think the Minister very well understands that. He seemed to be in the mood to misrepresent anyone who had a word to say in criticism of the Corporation, and, for that reason, he slipped into the error of accusing Deputy Ryan of advocating that money should be advanced to farmers who had not proper security. I would remind the Minister that there has been no opportunity to discuss agricultural credit this Session up to this. The other day, when the matter was mentioned on the Estimate for the Department of Agriculture, the Minister himself stated that he would be shortly introducing a Bill which would provide an opportunity for discussion. The problem of the bankrupt farmer is a credit problem —at least one is entitled, without making a big mistake, to call it a credit problem.

When Deputy Ryan spoke for that very large number of farmers he was not surely, by implication, suggesting that they should be given money on the same terms as a farmer who could provide ordinary security. I do not know whether the Minister has observed, with regard to the bankrupt farmers, that while there is no provision for them to get credit under this Bill or any Act, they are going to be made to pay for the credit of the prosperous farmers. That is rather an extraordinary situation, and that is why I asked the question: what this is going to cost the State? It is obviously going to cost the State a certain amount. The bankrupt farmer will have to pay the subsidy, grant or gratuity, whatever it may be, in his taxes on sugar, liquor or anything else you like, and I think that creates a rather unfair situation. Even the Minister himself does not go so far as to state that all the bankrupt farmers are bankrupts through their own fault. He did not say all; he said a certain number. We agree. There are a certain number of farmers not bankrupt through their own fault, and I think they have a very serious grievance, indeed, through this measure. While there is still the admission that we cannot do anything for them, they will have to pay out in helping their brother farmers to get credit from the Agricultural Credit Corporation. It is rather an extraordinary situation, and I think the House should not decide, as far as that fairly large class is concerned, that nothing can be done until at least a Commission or some body set up specially to examine their position, has reported that there is no possible way of helping them except at an expense which the country cannot afford.

A country with a very small population can hardly afford to ignore any class like that, many of them very industrious, respectable people, who cannot get on their feet because of the trials they have been subjected to. I suggest the Minister should give a promise that their cases will be looked into before long. I am sure if a small committee, or commission, was set up it could make a suggestion with regard to them. It could examine the problem and inform the country whether it must face for a long time ahead the spactacle of a large number of farms in the country, covering some of the best of land, with big buildings going to decay, land unused, and all this trouble about the failure to pay annuities and rates persisting. I think if people properly understood the very big loss these farmers mean to the State in their present circumstances they would insist that some inquiries should be made into it. Of course I have no idea of the amount of time spent upon it. It may be that the Minister had had such a commission appointed privately, and if he has had, I should be glad if he would say so. I am more inclined to think that on account of the pressure of other work no more than a limited amount of time has been given to this problem. There are two or three questions on which I would like more information before the debate closes. With regard to the creamery scheme, so far as we are advised it is working pretty harshly in some ways, in that the best farmers are required to furnish securities. Farmers who have no mortgage on their lands and whose farms are absolutely good security are required to provide personal guarantors before they get a loan from the Corporation; they have to give the names of two people to guarantee them. That seems to be an extraordinary situation, and I would be surprised if it is one that is going to help the Corporation to get on. So far as I have heard, it is not a popular feature of the creamery scheme, and I suggest that it might well be looked into.

I would like the Minister to give some explanation as to why creameries in existence for many years, well-established and having no big debts, cannot get loans for rebuilding through the Corporation. I heard of three recently that are paying seven per cent. on loans to the ordinary banks. They are well-established creameries and, I think, were prepared to offer the usual joint and several security of a certain number of their members. Two of these were in the County Monaghan, and another was in the South of Ireland. There may be some explanation for it; if so, I would like to hear it. The Minister was rather hard to-day upon farmers who will not go to the trouble of taking out administration. Has it occurred to him that many farmers cannot afford that cost? And has it occurred to him that it would be worth while making the cost of administration cheaper? To a great many people the cost is prohibitive, and I know a case at the present moment where administration is not taken out simply because the person whose duty it was to take it out could not afford to do it; it would be depriving somebody else of money due.

Then there is a further question with regard to the Corporation and its dealings. It appears that all certificates of charge and other public issues will be guaranteed by the Government. Is it the case that the Corporation will not have to borrow for short terms? Will there not be any transactions between the Corporation and the banks or such institutions as discount houses? and will these be guaranteed by the Government? It is not, perhaps a very important question, but it is well, I think, that we should understand all about the Corporation before this Bill goes through.

With regard to the financing of the Corporation, it appears to some of us it would be worth while now, since the Corporation is a trading body, that they should go out after certain good business the same as the banks. There are ever so many farmers in the country who could do with new out-offices and improvements of their dwelling-houses, and who are in a rather good position to offer security for long term loans. Through timidity, conservatism or some other cause, they do not have these improvements effected. If the Corporation is to be a live institution, competing with other banks, I do not see why it should not have an organiser to go out after that business. It surely would be worth while to the Corporation to get business of that kind instead of having to depend on the broken reeds that seem to be the major part of their customers at the present time. In that connection it must be remembered that the banks have shown no hesitation in striking out in competition with a State institution, the Post Office Savings Bank. In recent years nearly all the banks have gone in for thrift accounts and for attracting small depositors, although they knew that the Post Office was established in this business and that it had heretofore been regarded as a State preserve. There is no reason, therefore, why the Corporation should not enter into competition with the banks with regard to the big accounts and try to meet the banks on their own ground. It is very generally reported throughout the country that the banks are now endeavouring to get in touch with people who are thinking of borrowing from the Corporation. If these people are good accounts they are prepared to offer the money on the same terms as the Corporation, or even at less in some cases. It appears evident then that the Corporation cannot afford to lie down under its problems, but that it will have to go out and show it is alive.

It seems a regrettable thing that the Dáil has to admit that notwithstanding the very big problem in front of it, it can do nothing in regard to the rate of interest.

Numbers of farmers and others throughout the country are lending money to the banks at 2½ per cent., while other farmers with the best security can only borrow money at 6 per cent. It seems a pitiable thing that the Dáil has to admit that we can do nothing to lessen that difference. That is a thing which we have, apparently, to accept for our generation, and we are told no amount of thinking on our part will improve it. It seems to me to be the position, so far as I can understand it, that, even though the State is engaged in banking to some extent and even though it knows that millions of pounds are deposited in the banks at a low rate, it can do nothing to overcome the problem of getting hold of that money so that it may be lent on more generous terms than the Agricultural Credit Corporation is at present prepared to lend it. I think that a remedy for it will be found in time, but at present it is very regrettable that the Government have nothing to purpose in regard to it. I think that they cannot be too confident, despite the Minister's statement that he looks forward to this being a most successful institution— I think that the Minister knows too much about the profits in agriculture at present to be satisfied that farmers are going to do well with this money and that it is perfectly safe for them to borrow money at such a high figure. I think that the Minister can hardly be satisfied that it adds to the security of the country or that there is absolute certainty that all these debts will be repaid. We hope that they will be repaid. It is our desire to see the Corporation a very big success, and I cannot imagine what possessed the Minister to say that we opposed the Bill last year. He had no grounds for that assertion, as there was not a word of opposition spoken on the Bill last year.

There is nothing that gives this side of the House so much pleasure as when the Minister for Agriculture starts abusing us, because we know that he is simply doing what the lawyer always does when he has a bad case. Of course, he made a historic speech yesterday which will go down to future generations and be known as the whiskey speech, a speech in which he asserted one of these maxims of political science which escaped Bentham, namely, that whiskey is better than politics. When dealing with the Agricultural Credit Corporation one would have expected that the Minister would have been in a more sensible mood, as he was yesterday on the Forestry Estimate, when he showed certain glimmerings of common sense mixed with large doses of bluff. When he came to deal with the Agricultural Credit Bill he showed that he was suffering from a kind of invincible ignorance, because he pointed out most of the defects of the previous Bill. We pointed out on that occasion that what was wanted was a link which would establish real agricultural credit. The mistakes that the banks made were, as we pointed out, lending on what might be called raw material, mere title, lending on mere land. What is really wanted is the granting of loans upon the prospect of success. Credit could not be administered without having men with expert knowledge of farming, so that they would know where these loans should be given, not merely on title, which is often complicated—this Bill is a good example of the difficulty of getting over questions of title.

That is not the way to make a success of agricultural credit. What you want is to do what is done in Germany, where you have schoolteachers who know the farmers, and others who are likely to make a success of farming, and also those who would probably turn out to be duds. You should either have that system or the system which they have in Denmark, where men make a career of being successful experts in credit. Although the Minister has been reminded of these things, he is absolutely determined that he is not going to open his mind to what is being done in other European countries. The result is the Irish farmer is placed at a great disadvantage compared even with the English farmer, who is going to be de-rated, and in England credit societies will get free credit from the Government. In Ireland, we are sticking to the terms of usury. We are absolutely bound up with the five and six per cent. There is no attempt on the part of the Minister to assert different principles of economy for Ireland different to that prevailing in England. There is no attempt to get away from the banks in Ireland. Even in England, bankers, such distinguished men as Sir Reginald McKenna, have demanded time after time to have a real inquiry into the question of credit and the control of credit.

In this country one would imagine that a Government which claims to be the successor of the Government which started the Land Bank, would have tried to assert principles which would put Ireland and the farmers' interests first in the matter of credit, and put such interests before the interests of those who established a rate of five per cent. These are people interested in financial transactions in London and, apparently, we must follow in the wake of different sets of interests which are neither Irish nor on a footing similar to that of the producer on the land. It is really on these two cardinal issues that I am afraid the Credit Corporation is not going to succeed. I admit that I made severe criticism of the Corporation on the previous occasion. I confess it, and I am sorry that my statement has come true. I wish that it had not come true. We must pay attention to the two fundamental things which form the whole basis of credit and we must have a real inquiry into it. Canada is ahead of us in this matter and has had such inquiry. Australia is also ahead of us, and there they have a bank which has been referred to—the Commonwealth Bank.

It is not yet too late for the Minister, if it is psychologically possible for him, to open his mind and take up a different attitude, and to set up a proper inquiry into the whole question of credit rather than to consult the bankers, whose interest is to keep things as they are. The Minister should set up an inquiry which will lead somewhere to the advantage of farming in Ireland. Fifty per cent. of the farms in Ireland are of £10 valuation, and under, and 90 per cent. are of £50 valuation and under. We are dealing all the time with small farmers. Unless the Minister is going to justify every charge made against him—that what he wants to do is to change the whole system of farming by sweeping away the small farms and leaving only farms of 200 acres—he must change his whole attitude and policy in regard to agricultural credit.

I wish to make an appeal to the Minister in regard to a certain type of farmer who makes application to the Agricultural Credit Corporation for a loan. This type of farmer has incurred debts in the bank for land purchased in recent years at exorbitant prices, at a time when land was at its highest price. These lands are now derelict and are left without stock. That is a serious loss to the nation as a whole, because the lands are producing neither food nor wealth. Those farmers are in difficulties through no fault of their own, because they are most enterprising and industrious, and would continue to be so if they got any assistance to help them work and stock their lands. If we are to survive as a nation we must produce all the food possible from the land, as we are mainly dependent on agriculture. Up to the present the Agricultural Credit Corporation has been very slow in giving loans. At least, that has been my experience in some cases. I have found a few cases in which farmers made applications for loans and were kept waiting months before getting them. It is very disappointing to them when they cannot get loans at the time at which they require them to buy stock. I have known cases where queries of a very simple nature delayed the loan for a considerable time. Farmers like to buy stock in the spring time of the year, and it would be of much more advantage to them to get a loan at that period than when cattle are fetching higher prices. It would be much more profitable to them if they could get a loan at a suitable time. Certain of these farmers, as I have pointed out, bought their land at exorbitant prices some years ago. The value of that land has decreased to a considerable extent, and the lands have been stripped of stock and left almost derelict. That is not due to any fault on the part of the farmers themselves, as they are most industrious. If they got any help or encouragement I am sure they would work those farms to the best advantage and to the benefit of the community as a whole. I hope the Minister will consider the case of those farmers favourably, in the matter of granting loans.

So many points have been raised that it is not possible to take them all seriatim. I will deal with one or two. The question of the man who is down and out is. I think, bound up with the possibility of forming local credit societies. I think the man who is down and out can only be dealt with if his neighbours who know his character are prepared to pledge their own credit in some way on his behalf. I do not see that any big body such as the Agricultural Credit Corporation could directly do anything for him. They cannot distinguish between the man who is down and out through no fault of his own, through misfortune, and the man who is down and out because of his own fault, and they cannot consequently directly touch on his case at all. One of the main functions of the local credit society would be to deal with such a man and with the man whose requirements would be very small. It is very difficult to get these local credit societies going. It might be possible to build up a system of local credit societies, but so far the Agricultural Credit Corporation, which has given an amount of time and energy to them, has had no success with them.

It is all very well to tell us that they do great work in other countries. We all know that. Perhaps because of the different histories of those countries it seems to be easier to get them working there. Anybody knows that there is nothing in existance at present here in the way of local societies which corresponds to the efforts put into organising for many years past. I know of one or two which have a fairly long existence and which have done, and which continue to do, good work, but in all the other cases that I have heard of, the success is due to one or two special individuals who are not only of high character but who have courage and perseverance to settle into this work and who do it, not only in its pleasant aspects, but in its unpleasant aspects, men who are not merely willing to help individuals by grants but who are willing to refuse when refusal is necessary, and who apply pressure for repayment when pressure is necessary. Sometimes you get people who are willing to do all the work except applying pressure for repayment.

A great many of these societies, started in the past, did reasonably well for a period and then collapsed. People do not readily take to them at the moment. I believe that some steps must be taken in that direction, because there are classes of people who should be given credit who can only be found and who can only be isolated from those who seem to be like them on the surface but who do not deserve credit, by these local societies. Creamery societies might deal with a large number of people, not merely with the bigger farmer, but also with comparatively small farmers. I believe the creamery scheme is a good scheme. There are one or two points that Deputies mentioned with which I am not familiar and which I could not answer, but I am satisfied that it is a good scheme. So far, however, very few creameries have been willing to take it up. Out of about 400 creameries only ten or eleven have taken up the creamery scheme. The reason some of them have given for refusing to take up the scheme is that they do not want the responsibility for refusing loans. It is just that very factor that has made the small credit societies a failure. People do not like that end of the work, the end of refusing loans and also of recovering loans. In the case of the creamery societies recovery would be comparatively simple, because it would be accomplished by means of a deduction from the milk cheque. We have here a whole barrier of psychology to fight against.

I do not see that any methods that can be adopted are going to break that down very rapidly. It can only be broken down, I think, by outcries, by propaganda, by the force of example, when something is done successfully and the people in neighbouring districts take it up. The question of individual creameries who could not get loans for extension or rebuilding is a matter I cannot deal with because it would require a knowledge of the individual cases. There is not a great deal of money which it would be possible for the Agricultural Credit Society to get on deposit. If there is anything that the history of the Land Bank proves, it is that a body started like that cannot get the deposits. Before the Land Bank was sold it was a nightmare, because all sorts of efforts had to be made to get certain Government funds which could be kept with money in hands, subsidiary funds. I think the Road Fund was with it and some others, because of that need to maintain liquid cash to meet cheques that might amount in some particular weeks to a very big amount. I know that from the beginning in the Land Bank, people who were hot about it and advised that branches be started here and there, and spoke in public as if they were tremendous supporters of it, and were supporters in a sense, did not bring along the deposits to any great extent. The keeping of deposits is extremely difficult work. A body like the Agricultural Credit Corporation can keep very small deposits without branches. If it sets up branches any advantage you get from deposits is more than lost for a long period. In fact, great numbers of the joint stock banks' branches do not pay at all. They are a dead loss to the institution and are only set up because of the excessive competition in the creation of branches which has grown up amongst joint stock banks. Capital has to be expended on a house; a manager has to be paid a relatively high salary, and two or three other members of the staff have to be maintained. Travelling and other expenses have to be incurred in connection with the branch. As a matter of fact a great lot of branches represent a dead loss to the banks which establish them, and very few new branches are otherwise than a loss for a considerable number of years. I do not know, after a long period of years, as a result of an effort on the part of the Agricultural Credit Corporation to get deposits, that they would not get them, but no help would arise in the early years from that. There would be no possibility of its getting money on the whole at less than 5.2 per cent. which it looks to get it at.

The loans that have been made, amounting to something like £110,000, have been well spread over the country. They are over all counties, but I do not think any information can be given to Deputies that will carry them very far in that respect. After all, lending and borrowing are private transactions. Although public money goes to the setting up of the Agricultural Credit Corporation, nevertheless the transactions between the Agricultural Credit Corporation and the borrowers are private transactions as between banker and client, and I do not think detailed information can be given to Deputies with regard to them. As I said, the amount which has been actually lent is £410,000. The amount that is authorised, and will be lent shortly, is £850,000. There has been applied for and under consideration, roughly, £1,500,000. Somebody asked as to what the Bank was costing, what it would cost the public. As a result of this Bill it will cost £5,000 down. As I said when introducing the Bill, the full dividend on the A shares would be available out of profits in 1931, and certain dividends on B shares and the amount of interest that will be lost through its not being paid on B shares will run to about £43,000, and that will, if all goes well with the Corporation, ultimately come back by way of bonus payment on the B shares. This is on the basis of the Corporation being able to get money at 5.2 per cent. and being able to extend the business, as I indicated in the opening statement.

Of course, there has been a good deal of talk about the alterations. The alterations have been, while numerous, minor alterations. The main scheme is not affected in any way by this Bill, or by the last Bill. Changes have been made in the law with regard to the giving of charges on a loan. They were, perhaps, in some respects substantial changes, but they only deal with the outside of the scheme, and so far as any other changes have been made inside they are minor changes. The changes in this Bill, in the matter of making A and B shares and all that are relatively minor changes. They simply mean that money is not paid out of the Exchequer and paid back again in the form of dividends. It practically amounts to that. The capital is being increased, but that is not an alteration of the scheme. I think the scheme is a sound one. It is the only kind of scheme that can operate here.

I do not think we could manage an Agricultural Credit Corporation that is directly controlled by a State Department in any way. I think in that case the difficulty of considering applications on the merits and irrespective of political pressure would be extremely great. I certainly would not like to face up to the administration of a Bill like that if I were the Minister responsible. I am sure that the Minister for Agriculture, in the course of the debate, has expressed the same thing. Political pressure can be resisted, but it is unpleasant, and it is disturbing, and it certainly would be exercised. Everybody, if this were in any way directly controlled by the State, who wanted to borrow would get at representatives, and representatives would be obliged, by the laws of competition, to take up the cases and ask questions about them. All sorts of things would go on. I do not think that we could possibly have any other scheme than this. I do not think again that we can go putting pressure on the banks to lend money to the Corporation at a rate greatly under the market rate. This is, I gather, what some people suggest. If the bank will lend it because they see the advantage, well and good, but for us to put pressure on them would have very bad reactions on the general economic outlook of the country. The same thing applies to any question of forcing the bank to cut down the debts that were owed to them by farmers. If the State were to come in and force the banks to do this it seems to me not only should farmers' debts be cut down, but apparently farmers' deposits should be cut down. For the State to intervene in the way Deputy Kennedy suggested it seems to me would have the most damaging reactions. For the bank itself, as a matter of business dealing with a client, to reduce his debt is an entirely different matter. It is quite free to do it, and it is a thing which banks habitually do with all sorts of clients. When clients are in difficulties they perhaps do not think it wise to put them out of business; they take something less than the full amount, and a fresh start is made. Nobody would interfere with that. Some of the things which have been suggested, it seems to me, should not be contemplated at all. I think the Agricultural Credit Corporation must be managed as nearly as it can be managed on a business basis. Money must be lent at a rate that will be governed by the market rate of money; it must be lent on security. If there are people who have no security of their own to offer, then it can only be lent to them if their neighbours in organised credit societies, or some similar way, gave security for them. If we once begin to have the need for agricultural credit met by some system of dole there is no end to it. As a matter of fact, the credit element would be squeezed out, and the dole element would be increased. I think it is necessary to deal with it right from the beginning as a matter of business. While certain changes have been shown to be necessary in the Bill, and perhaps further changes may yet have to be made, the line on which we have attempted to solve this is, I am convinced, the only line on which it can be solved. I am satisfied that it will be successful in some respects. We may, as a result of experience, be able to get along quicker than at the present time. We may manage to operate successfully branches in which there has been no success. I see no reason to contemplate any fundamental changes.

The Minister stated that in order to have liquid assets at the disposal of the Land Bank, certain Government funds were placed on deposit. Would the Minister say that if all Government funds were passed through the Land Bank there would be a different story to tell? Would the Minister not say if the Agricultural Credit Corporation is open to receive deposits and if all Government funds were passed through that Corporation that it would make a very big difference?

No, I do not think it would. As a matter of fact, after the first National Loan we had very considerable sums for a couple of years to credit. It was possible, therefore, to make deposits. Since then the position has not been like that, and it is not likely in the future that we are going to have big sums to the credit of the Exchequer, and the possibility of having subsidiary funds that could be dealt with as cash in hand. That was an abnormal situation. As a matter of fact, towards the end of the time when the fruits of the first National Loan were becoming exhausted, it was extremely difficult to find any cash that could be put into the National Land Bank. The same sort of thing would operate in the case of the Agricultural Credit Corporation. Possibly at the moment when the Corporation most needed cash there would be no cash in the hands of the Government to place on deposit there. I think nothing can be done, therefore, along those lines.

Would there not be, always a continuous flow of about £1,000,000?

No. Frequently about £1,000,000 was procured by getting the banks to take up bills.

Question—"That the Bill be read a Second Time"—put and agreed to.
Committee Stage ordered for Wednesday next.