Vol. 47 No. 11
I move amendment No. 1:—
Before paragraph (a) to insert a new paragraph as follows:—
(a) the limitations imposed by Section 2 of the Trade Loans (Guarantee) (Amendment) Act, 1932 (No. 12 of 1932), shall not apply in respect of loans so guaranteed or made;
This is really only a drafting amendment to cover a point which it was discovered was not provided for.
I move amendment No. 2 standing in Deputy McGilligan's name:—
In paragraph (a), line 28, to delete the words "five years" and substitute the words "one year."
I see no case for accepting this amendment at all. It has been the practice up to the present that the Act was carried on from one year to another which necessitated the introduction in June of each year of an Act continuing it for another year. I do not see any sense in it at all. It causes a certain amount of uncertainty because nobody knows whether, in fact, the Act is going to be continued, and it led sometimes to a rush of applications at one period of the year and was a very unsatisfactory position. That position arose in the past in view of the fact that the Government was not altogether satisfied with the Act and, indeed, I think that each year, when the continuing Act was introduced, the Minister announced that it was the last time it was to be introduced. Now that we have made up our minds as to the utility of the system we propose to continue it for five years so that there will be that period during which the Act will be in continuous operation and all uncertainty removed on that score.
So far as the Bill being introduced each year is concerned, it must be remembered that there is a considerable amount of money involved. There is practically a five years' lease in this Bill, and the House is entitled to know to what extent its commitments are involved and what is the amount of money. It has cost the State a considerable amount of money. When it had the five years' run from the beginning it is quite possible that some public attention would have been drawn to it, but the House ought to be made aware each year as to the likelihood of its continuance and the policy connected with its continuance. The fact that such a long period has elapsed without any applications being made rather mystifies me in connection with the Minister's statement that there is a rush.
There has been a very large number of applications, and a large number of them have been granted within the past year.
Very good, but what is the objection? It does not take up the time of the House to any considerable extent. I should like to know from the Minister how many applications have been made last year.
I gave the figures on the Second Reading discussion. There is no case for the one year period. Full information is given to the House. There is a quarterly return of all applications granted, together with a return of any advances from the Exchequer, which has been made on foot of guarantees and the amounts recovered by a realisation of the assets. The only other information that might be given would be a review of the working of the Act. That can be equally well done, I think, on the Minister's Estimate.
All moneys are voted from year to year, and it is not unreasonable in the case of a facility such as this that the same course might be adopted. We do not give a five years' lease in connection with money in the case of any other Vote. I think it is advisable that the House should be presented with full information.
When this matter was under discussion before, the Minister was asked to consider having a separate Estimate in respect of this Trade Loans (Guarantee) Act. The Minister said that he would give consideration as to whether it was feasible or not.
There is no expense incurred at all which is definitely associated with the Act. The only expenses are administrative expenses. There is, in fact, no expense, except perhaps, a little postage arising out of these Acts, except when a guarantee has to be made good.
Would the Minister find himself hampered in practice by sticking to the one year period or is the advantage of the five years' a purely theoretical one?
There is a practical disadvantage, and that is the element of uncertainty and, consequently, there is at the relevant periods of the year either a demand that applications should be speedily considered and dealt with or else the withholding of applications, because there did not seem to be any prospect of getting them through in time. That has been the experience, I think. I see no case at all, if we decide that this type of legislation is desirable, why it should not be put on the same footing as all other types of legislation —that is, be introduced and given the effect of law for a definite period or until repealed.
It has been continued from year to year for a period of seven or eight years. I recollect those periods of uncertainty mentioned by the Minister. They were speedily resolved by the then Minister introducing an Act to continue trade loans for another year. Our experience in connection with moneys advanced under trade loans legislation has not been particularly happy. I hope that the experience in the future will be better. The corrective of having the Act introduced yearly will not interfere with any person who intends to engage in business and has a good sound proposition to put before the Minister. Is it likely that a person will delay until March or April next before putting forward a proposal which would then put upon the Minister the onus of continuing the Bill for another year. I do not think that is likely at all. Having had seven or eight years' experience of this Act I see no great disadvantage in having it introduced yearly instead of passing it now for a period of five years.
Will the Minister say why he objects to a closer scrutiny in the future than that which has taken place in the past?
I do not object at all.
As I understand the position, this measure, if it were to be in operation for 12 months, would come up annually under the Expiring Laws Bill. If there was any particular issue that a Deputy wished to raise in connection with these trade loans he would then have an opportunity of doing so and of getting definite information from the Minister. The Minister's alternative to that is, that such an issue can be raised on the Estimate for his Department. My difficulty in connection with that procedure, as I pointed out on the Second Reading of the Bill, is that a great many matters are raised on a Minister's Estimate about which we get no information at all. It is quite within the Minister's jurisdiction to reply to certain points raised as well as to refuse to reply to others. Consequently, we may raise some particular issue on the Estimate for the Minister's Department, and for reasons of time, or some other cause, we may get no information whatsoever. We have had an unfortunate experience in connection with this Act, due to the fact that a large sum of money has been lost. It is, therefore, eminently desirable that in future a strict scrutiny should be exercised by the Dáil over the moneys advanced. That is all we want.
All that sounds very well, but this money was lost two or three years ago. In fact, there has not been that scrutiny which the Deputy speaks of by the Dáil, either before or since. What happened was that a yearly Act was introduced at the end of the summer session. It was rushed through all its stages in the Dáil in the one day and then sent off to the Seanad. Because of that you could not have the scrutiny or the discussion the Deputy speaks of, or that he thinks should take place. If the Deputy wants to scrutinise anything in connection with this he can do that at any time. There are quarterly returns issued and an annual statement published, and there is always the opportunity of getting information by way of Parliamentary questions. A motion can also be put on the Order Paper. Deputies, as well, have the opportunity of raising anything they like on the Estimate for the Minister's Department.
The Minister knows quite well that if one puts down a Parliamentary question the amount of information given is exceedingly limited. One cannot scrutinise loans issued under this Act by way of Parliamentary question unless one raises the matter on the motion for the adjournment, and that is not desirable. With regard to the Minister's point of putting down a special motion on the Order Paper, there are so many motions down for discussion that one could never know when a motion dealing with a matter of this kind would come up for discussion. I have seen motions appear on the Order Paper for months, and no one appears to know when they are likely to be reached. That is not a desirable method of dealing with this. I am speaking now as a business man, and I submit that what I am suggesting is necessary in the interests of the State. This is a commercial transaction on the part of the State. It is necessary that the State, and those representing it, should scrutinise those loans at intervals as banks and other bodies dealing with money do in the ordinary course of business. All that the Dáil asks is that such scrutiny should be exercised.
And we are not preventing that. The theory advanced by the Deputy could be applied to almost every Bill that comes before the Dáil —that it should be subject to renewal each year.
This is quite a different Bill from many others that come before us, because it is concerned with loans issued to private persons for the purposes of trade.
Would the Minister consider as an alternative a proposal to associate some sort of a committee representative of the various Parties in the House with his Advisory Committee?
Definitely not. The Advisory Committee is a committee of businessmen appointed to examine the applications in the first instance and report to the Minister. There could be no question of associating a Committee of the House with this Advisory Committee.
Does not the Advisory Committee watch developments after the loans are made?
No. The Advisory Committee, having made their recommendation on an application, are finished with it. The application then goes forward to the Minister for Industry and Commerce who comes to a decision as to whether he will accept or reject the recommendation made. If he decides to accept the recommendation, the application goes forward to the Minister for Finance who examines it from the financial aspect. The application, having gone through all these stages successfully, the applicant gets a guarantee, sometimes.
Provided the applicants are still living.
As a rule they are dead.
A lot of money has been lost.
I move amendment No. 3:—
Before paragraph (c) to insert a new paragraph reading:—
"No loan shall be so guaranteed or made amounting to more than 25 per cent. of the net resources of the borrower."
The amendment which has just been defeated was an attempt to restore a safeguard which in the past has proved ineffective. The amendment in my name is an attempt to provide a new safeguard. In moving it I do not wish to tie myself to the figure of 25 per cent. nor necessarily to the expression "net resources" if some more suitable expression can be found. What I mean by "net resources" is the surplus of assets over liabilities, whether of an individual or a corporation. The need for some safeguard of this kind seems to me to be obvious. The record with regard to these loans and guarantees is exceedingly bad. We have heard that out of the first £340,000 advanced or guaranteed £215,000 was lost. If we went on the same proportion in regard to this additional million there would be another £600,000 lost. That being so, I think we ought to make a serious attempt to protect the interests of the taxpayer. When Deputy McGilligan was speaking on the Second Reading of this Bill, he made a statement that there was only one loan fully repaid of all the loans made. I presume that that means all the loans made prior to 1932. He also said:—
If one leaves out the loans that were made to public utility concerns, there has not been a successful loan yet.
He then asked:—
Has there been a case of a company keeping its commitments up to the schedule first arranged? I doubt if there is a single case.
He also remarks:—
...in the main the concerns operating on Trade Loans (Guarantee) moneys have not alone that facility but are also nearly all in tariffed industries.
Later on he says:—
I certainly think that if the test on which the Committee has been obliged to rule their decision was this: What would they do with their own money?, we would not have even the £350,000 or £400,000 of State money granted, but that it would be much more nearly one-third of that.
It seems to me that the root trouble with all these loans and guarantees has been that there has not been enough clearness of thought as to the principles on which the loans or guarantees should be made. We have heard that, in every case the Advisory Committee was consulted, they passed judgment on the loan or guarantee and agreed to it. But it is no good having an Advisory Committee, whether it consists of civil servants or business men, unless they have some sort of notion as to the principles they are to go on. As a matter of fact, the way, apparently, in which these loans or guarantees were made was so speculative that the advice of a committee of business men would not be of much use, if any. If you go on a visit to Monte Carlo and decide to spend a couple of weeks speculating on the roulette tables, the fact that you have a committee of hard-headed business men to consult does not make your chances any better than if you went alone, and I think that is the parallel that applies to what is going on in connection with these loans and guarantees. It is a fearfully dangerous thing to make a 12 years' loan at all. It is a terribly long period during which to tie up money, and the fact of this Bill being subject to reconsideration, after one year or five years, seems to me to be of much less importance than the fact that these loans are for such very long periods, and that there is at present no guiding principle as to the proportion which such loans should bear to the capital of the person or institution borrowing.
I suggest that some sort of measure, some sort of yard-stick, ought to be agreed upon. If 25 per cent. is thought too little, let us have 50 per cent., and if it is thought desirable to proportion the loan rather to the amount of capital invested in the particular undertaking than to the total resources of the individual, or company, that might be a matter for discussion and consideration as to which was preferable. I am personally more attracted by the idea of proportioning them to the total resources, because, if a man has £100,000 and has £10,000 in a particular business, it is naturally safer to give him a bigger loan in that business than the man who has nothing in it at all. It is conceivable that a man might wish to keep, for reasons of his own, part of his capital employed elsewhere. The former Trade Loans (Guarantee) Acts have turned out badly, and actually they are being enlarged by the present Act, because hitherto certain facilities have been available only for corporations and not for individuals. Now, those are being made to individuals also. Hitherto there has been a limitation which prevented such loans being made for working capital. There had to be fixed assets against them. That limitation is being removed, and all that makes it much more essential that there should be a safeguard of this type introduced.
At the present moment, for all we know to the contrary, a man may get a guarantee for a company which has no money at all. It may be that the plant has been erected with borrowed money, and he may come to the State to get money to enable it to go ahead. I suggest that, when making these loans, the principle ought to be that, even if the business turns out to be a failure, if it turns out to be an unprofitable business, the State should get its money back. We should not take it for granted that, if the business fails, the State loses its money. That is not the way in which loans are made by a bank or by any business concern. You only get your modest return for all loans. It is not as if you were investing and taking a half share in profits and the situation ought not to be that, if the business is a roaring success, you get your money back, and if the business is a failure you lose all your money. I suggest that, normally, however great our desire to encourage Irish industries, we should not have money lent to industries at the expense of the State unless there is reasonable ground for believing that the State will get that money back, even should the industry not be a success, and that there is something solid there by which the State can be recouped even if the industry turns out not to be profitable and has ultimately to be abandoned.
I think that an amendment of this kind would be most undesirable, indeed, and it is probably moved by the Deputy, because he has not quite grasped the procedure which is followed in the administration of the Trade Loans Acts. Each loan must be considered on its merits. I think that is the first cardinal principle that we must get accepted. An application is made and it has to be considered on its merits. It would be entirely undesirable that a loan, which was associated with an industrial enterprise, which had every promise of success behind it, and was as sound as any likely to be undertaken in the country, could not be guaranteed because of the insertion in the Act of some limitation of this kind. The practice has been, undoubtedly, to regard 50 per cent. of the total capital requirements of the project as the maximum in respect of which a guarantee could be given, but even that maximum might be departed from on occasion and might be departed from quite justifiably on occasion.
In every different industry, the proportion of capital which would be represented by the fixed assets to the total capital will vary. In one industry you might have 80 per cent. fixed and 20 per cent. working capital and, in another industry, you might have quite the reverse. The main things to secure are: (1) that industrial development is going to be helped and (2) that the State has reasonable security for its guarantee. I do not know that the second consideration can always apply because a substantial amount of money might be invested in the erection of a factory and its equipment with machinery, but, if the industry fails, the amount that would be realised by the sale of the factory and the machinery would, of course, be substantially less than their cost, even though it might be a new factory and new machinery.
The Deputy, I think, also, is misreading the history of the Acts. I do not think the Acts were bad at all. I do not think that a mistake was made when this legislation was first introduced. I think that many mistakes were made in the administration of it, but, even if that had not been the case, I think that the history of the firms that were assisted under it would probably have been no different, in any event. I do not want to say it in any party spirit, but, in fact, there were a number of industrial failures up to 1932 and not all were enterprises which had been assisted under the Trade Loans Acts. The circumstances of that period must be taken into account, and, if you take out of the list of failures the big ones such as the Glass Bottle Works, the Drogheda Meat Factory and Alesbury Brothers, the total amount lost becomes quite small in comparison with the total guaranteed. I do not think there is any necessity at this stage to go into the history of the guaranteed loans that were secured by these three concerns, but I do think that the Administration at the time were open to criticism. They were, in fact, criticised by the Committee of Public Accounts, as well as by members of all Parties in the Dáil.
Different circumstances now exist. Concerns that might have been regarded as doubtful 12 or 15 months ago are now making substantial profits and there is no reason to think that situation will not continue. It is desirable that the State should be certain of getting back its money if the guarantee has to be made good. Even if this limitation that is now suggested had been in the original Acts, and if the amounts guaranteed in respect of the Glass Bottle Factory, the Drogheda Meat Factory and Messrs. Alesbury had been only 25 per cent. of the total investment, the 25 per cent. would not have been recovered. Nothing was recovered in the majority of cases. If there was anything recovered, it was a very small amount indeed. That was something that arose out of the circumstances of the case.
In my view these Acts are good, and they can be used in a manner that will facilitate industrial development here. Any restriction of the kind suggested by the Deputy would only militate against such development. If the Acts are wisely administered, and if the assistance under them is confined to the types of cases that deserve to be assisted, we can turn them into an instrument for good and we can protect the State against all reasonable prospect of loss. No one can estimate the circumstances that may exist ten years ahead. These loans will be for ten or 12 years, and circumstances may arise in the course of that period which we could not possibly foresee when we decide to give a guarantee. I think there should be no limitation at all. The procedure laid down is so elaborate and is so designed to protect the State that the main complaint against the Acts is that it is almost impossible to get a guaranteed loan. Anyone who has experience of the attitude of industrialists towards this legislation will agree that that complaint is voiced much more often than any other. An applicant has to undergo a rigorous examination in regard to his proposals and a considerable time elapses before any application is decided upon.
And only stupid concerns want to get the loans.
Only concerns with considerable staying power have got them up to the present. It is quite true concerns made application for loans and were informed, after they had gone out of existence, that guarantees would be given, it took so long to consider the applications.
How many concerns got guaranteed loans?
A few.
Were there more than two?
There were two.
I do not think there were two, but if the Minister insists there were two, they should be named.
I do not propose to name them.
Did the Government lose very much in that respect? Surely there were very substantial assets there?
In one case the guarantee was for £70,000 and about one third of it was recovered upon the sale of the assets. I think the amount was £24,000 or £25,000.
How much was realised on the ships?
I am afraid I cannot give the Deputy that information at the moment. There was a return laid upon the Table of the Dáil setting out the amount secured on the realisation of the assets.
The Minister is aware that in the case of an institution where a mortgage exists that institution will always have a rule as to the proportion that the loan will bear to the value of the property. Does the Minister suggest that such a rule is worthless?
No.
Why should such a rule be worthless in one case and not in another?
I am not saying it is worthless. There may be a rule, but it is not a statutory rule. There is a general practice and most people making inquiries are told——
The Minister said the practice has been that the State should advance up to as much as 100 per cent., or even more than 100 per cent., of what the other person put in. For example, if I had £10,000 I might be able to borrow not alone £10,000 but perhaps £15,000 from the State. That is not a proposition that will appeal to any business institution. It is an outrageous thing to grant so much in comparison with a man's capital.
Why are these Acts here? Why was this legislation introduced originally six years ago?
Because people wanted a 12 years' loan.
There are no institutions prepared to give these loans.
The State is running too big a risk. It is giving an extraordinarily long period of time and it is giving guarantees that are altogether out of proportion, according to ordinary business principles, to the net resources of the borrower.
I do not agree. We get a charge upon all the assets of the concern, even though we guarantee a loan of only half of the total capital invested. Half is the general practice, but it can be departed from if occasion seems to justify it. We give either a lower guarantee or a higher guarantee. It is most undesirable to have a rigid rule in the Act. Anyone who has any experience in this respect will see at once that to tie oneself up in that way would be to limit one's usefulness. An Act could be badly administered with the 25 per cent. maximum the Deputy suggests, and it could be badly administered even with a 10 per cent. maximum. You could introduce a safeguard by inserting words that will prevent the possibility of loss by bad administration, but assuming that the administration of the Act is going to be sound, and all the indices point in that direction, then it is much better not to be tied up so that you can deal with all the cases that deserve to be dealt with. Ordinarily speaking, the safeguards are regarded as too severe and too numerous, with the result that delays, vexatious from the point of view of the applicant, often occur. A long time elapses between the making of an application and its consideration, and during that time the applicant has to deal with every possible kind of criticism that could be advanced against his application.
When a loan or guarantee is made, is it normally from the point of view that the State expects not to lose money even if the business proves unprofitable?
Yes.
If a loan is made to an individual—I do not know whether any such loan has yet been made—is it the policy that a full disclosure would be expected of his financial position aside from the financial position of the undertaking?
Quite.
Has any loan been made to an individual?
Not yet.
This raises to a certain extent the whole future administration of these Acts and their utility in the State. Ministers thought fit to pass certain commendation upon the introduction of the previous Acts and certain criticism on their administration. I want to examine what the Minister means by bad administration. He mentioned three cases, Alesburys, the glass bottle factory and the Drogheda Dead Meat Factory, in which the State lost money and he said these three cases were criticised by the Committee of Public Accounts.
I do not think he is right in regard to the third. With regard to the other two, what was the criticism? It was that under the old Act administration had been such as the Minister is now going to establish. It was not anything more than that. A certain position had been accepted for the security of the State's money. That the State should have been put in a position where it should have no preferential security was what was complained of. But under this Bill the State is not getting any preferential security at all. The Minister is taking entire responsibility.
What is the meaning of bad administration about which the Minister has spoken? Let us take it with regard to these three cases. Does it mean that once loans were advanced on the security given that there was not sufficient care in looking after the business? Because if that is so there is a complete misconception of the old Act. There was no condition and no responsibility on the part of the Government to look after this business after the loan was given. There is nothing in the old Act about that. At any rate it is quite impossible for civil servants to administer business and the Minister knows that. Where was the bad administration? The Minister made use of the phrase "vexatious delays in the granting of the money."
I remember the time when the case of the Drogheda Dead Meat Factory came up. There were investigations into the application. The Advisory Committee were not satisfied that the application came within the heads of the Act and then there were delays and I heard the old complaint about Freemason influence. I asked them to remake their scheme and they did remake it. They were then told to get more working capital and there were further delays for some months. Then we agreed that the thing should have a chance. There was a particular doubt in our minds. There was this thing in favour of the application that there had been much talk in this country for years about the necessity of having a dead meat industry and the insurance that such a factory would be against an outbreak of foot and mouth disease.
Advice was given to us as to the running of the Drogheda dead meat industry, and we began to realise from the very beginning that the care and attention that was paid to the purchase of cattle and particularly the care and attention that was paid to the marketing in England were going either to make for the success of failure of this business. With a great deal of reluctance—because it looked like interference in private business—we did investigate who it was that was going to be the real manager and we made considerable reservations with regard to individuals. In the end we refused to accept one person who was proposed as manager. However, the money was given. Under two points that had been put up—that there was not enough working capital and these other matters I have stated—there were delays. Working capital was afterwards raised after the State had advanced the money and this let the State in for more loss.
The industry failed simply and entirely because there was not a manager fit to live on the premises, to look after the cattle as they came in, to see whether there were good purchases made and to look after the selling end of it in the Smithfield Market. Instead of that there were as to the delays made in the sanctioning of the money stories about Freemason influence. The Minister speaks now about vexatious delays. If there had been more "vexatious delays" those individuals who sank their money in that factory might have been protected from loss.
As to what the Minister means by bad administration, I submit there was no bad administration on the part of the State. But whatever conditions there were then, whatever obligations were insisted on, these obligations are now entirely removed from the Minister. He is swimming out now into new adventures entirely on his own responsibility. These conditions not so much to get reasonable security for the State as to get individuals properly interested in the business are not now obligations on the Minister.
The Ringsend glass bottle case was badly administered! The loan was criticised by the Public Accounts Committee on the ground that it was not within the four corners of the Act. Here we had a case of a body of laymen, on the advice of the Comptroller and Auditor-General, another layman, telling me that the loan was not within the four corners of the Act. I happened to have the advice of three separate Attorneys-General on the matter and I felt on that point that I was basing myself well. I did not care what the Comptroller and Auditor-General said on the matter of law. I had the opinion of the legal advisers of the Government on a point of law rather than the opinion of the Comptroller and Auditor-General and a body of laymen on the Public Accounts Committee.
But at any rate the limitation was there and that limitation is now being removed in this Bill. The criticism as regards the administration is the opinion of a body of laymen against that of the views of three Attorneys-General. That cannot be said in the future because the Minister is removing the handicap in the lending of moneys. What were the prospects of success for the glass bottle business? It is quite clear to anyone that (1) a tariff on merchandise bottles in this country and (2) a particular measure passed in this House which insisted on the capacity of the bottle being marked and that that marking under the regulations we established here could be more cheaply done by the bottle makers here than elsewhere were important factors. The market for one line of bottles seemed to be a good security for its success.
But, as a matter of fact, the factory broke down when there were orders lying on its shelves. The biggest cause and the chief explanation of that breakdown was because there was sabotage on the part of the workers. Indeed there was most expert sabotage. There was the case of a gas tap turned on at one time and so fixed with regard to time that it required considerable expert knowledge to find out why the heat was not at the proper point. That was not merely sabotage, but sabotage done by an expert in sabotage. That was because there was a collection of men at Ringsend who held that there was no bottle made in the world equal to the old bottle made at Ringsend and these men were against the introduction of machinery. A number of men came in to me and told me that there was never a factory in the world where machinery had been introduced that had not failed. These men had the same idea as the men who went about breaking machinery 100 years ago. It was that sort of mentality and a certain amount of bad management of the concern that brought that factory to an end. Where has the State mismanaged? Where has there been bad administration on the part of the Department? If there is anything it was on the one point that certain limitations in the Act were not adhered to. That was the criticism by the Public Accounts Committee. I will deal with that now.
Was the Drogheda loan not given against the advice of the Advisory Committee?
No. That again was said. I told the Committee that I had some doubts about it as a business proposition and I asked the Committee to see me. They had a certain consultation with me. In what I am saying now I am open to correction, as I am only speaking from memory. They came to me and they said that they had to weigh this as a business proposition and they told me they had grave doubts about it as such, but they sent no formal rejection to me. I never gave a loan where the Committee had opposed its being given. The Committee knew that I had given that guarantee publicly. They met me to discuss the matter of this Drogheda loan. After the discussion they said: "Very good." They took the view of the proposition as a future insurance against a foot and mouth outbreak and also a means of trying to put on a fairly good basis a thing that had been spoken about so long—the question of having a dead meat business in this country. They said "Go ahead." I do not say that they gave it their blessing in any sort of a cordial way. It was a moot case and they came to consult me about it.
Now there is the case of Alesbury Brothers. What was the position in the case of Alesbury Bros? There was some question of the payment of the old company so as to get reconstruction of the company. Again the only point that was queried by the Public Accounts Committee was the legal question as to the application being within the four corners of the Act. And again I had advice on that point from our legal advisers. I had my doubts about that business as a business proposition but that was recommended by the Committee. That is queried by the Public Accounts Committee on a legal point as against the advice of our legal advisers. Why did that fail? Bad management on the part of a person who is now trying to manage the State. That is all.
That statement is a deliberate falsehood.
At one time that person asked leave to examine the business and reported that with good management it could be made a success. Then he was put in himself and he failed. I shall leave it to the criticism of the Dáil.
I shall say a few words about that.
Very good, and I shall reply.
Is it in order to accuse another Deputy of deliberate falsehood?
I did not take it that that accusation had been made.
It is not in order for any Deputy to say that another Deputy's statement was a deliberate falsehood.
I withdraw it.
I was not taking it that I was accused of falsehood, because I cannot be accused of falsehood in that particular case. There are the three cases picked out by the Minister. I want the Minister to attend to what I said the last day and which I now repeat, that if one leaves out the loan to the Dundalk Harbour Commissioners, the loan to the Waterford Harbour Commissioners and the Mitchelstown Co-operative Society, which paid off its loan in about one and a half years, I do not know that it can be said that there is a concern which is at the moment meeting its liabilities in regard to interest payment and repayment of principal as arranged on the first schedule. I made that statement before and one of those concerned thought fit to write a letter to the papers afterwards. The last phrase in the letter admitted what I had stated, because it wound up with the statement that this person knew of his own firm and some others which were, not making payments according to the original schedule, but making them according to an amended schedule. That is my point. They had to get amendments. The schedule of repayments and the payment of interest and the rest were always arranged after consultation with them at the beginning. I suppose that is part of the vexatious delay, part of the hardship to which they were put. They had to wait until these things were arranged because we were trying to deal with them in a businesslike way.
I want to get this clear, that although I do think we tried as well as we could to procure reasonable protection for the State money advanced, that was not our main object. Our main object was to get the business successfully going. We always felt when we went into this that unless we were only to give a loan of so much money as would eventually result from the sale of the assets at scrap value we could not get security. We never let it go so low as that. What we did look for was to get the corporation or group of individuals deeply involved with their own money, because we wanted to get their personal effort, and whatever business capacity there was, put into the business. That is the main thing. You cannot really look for security to the fixed assets unless you go to the point that you only lend what you would realise at a scrap sale afterwards. The best security you can get is the security that the business is run as well as the person was capable of running it, and you get that by getting the person to put his own money into it. That is no longer here and that is the great defect in this proposal. The Minister said that even if we had Deputy MacDermot's amendment in operation in respect of the old trade loan guarantees and that on the average only 20 per cent. of the loan was secured by fixed assets and that we had looked to the industrialist to supply even 80 per cent. of the entire capital, even then if the business collapsed we would not have recovered the 20 per cent. from the assets. Even the 20 per cent. would be lost. So it would. That is possibly an exaggerated statement. I do not know if normally we recovered as little as 20 per cent. That, however, is not the point. That is not the aim that there should be behind these Acts. The aim should be to get the successful working of industries. The best way to get the State money protected is not to go on the basis of estimating the percentage to be put up by the State and then estimating the percentage to be put up by the person on a fixed basis, because you will not get that. That percentage will be far too low for the ordinary loan. You must see that the corporation or group of individuals put a considerable sum of money into it. When it comes to the point of the Drogheda Meat Factory when it depended on whether the man was in his premises at seven o'clock in the morning, instead of taking the nine o'clock train from Amiens Street, the man that has his own business will be on the premises at seven o'clock, while the man operating with State money, when a cold morning comes, will not bother about it. You must get his effort involved and his capacity engaged.
Will the Deputy's point not be met by providing that the guarantee or the loan should not exceed 50 per cent. of the total amount invested in the business?
That is nearer to it. You will have to insist that a person invests a sum of money in the business, not that he has any resources which must be involved in the business. I think the Deputy's amendment can be changed, but the principle has not met with any acceptance from the Minister —none at all. He must have principal to lend for the plant, machinery and working capital. In the end, there is no hold on the individual in these circumstances. That is what I object to. I think the whole thing is very much of a gamble. We recognised it as such when we introduced this Act. I think in my first speech in 1924 I said that. It is as big a gamble as tariffs. It has this advantage over tariffs, that whatever loss occurs is seen at once and you can be more or less finished and done with it at a certain time; whereas if you tariff an inefficient industry that only means that the charge on the population, instead of being indicated by a sum of £50,000 over two or three years, is an annual charge which is hidden, nobody having any idea whether the business is going well or not because it can lumber along in an inefficient way under a protective tariff. Although it is a gamble I think this way is to be preferred in dealing with industry to the haphazard tariff business.
The Minister is clear that these concerns are profit making. I wonder could he get a bank to adopt that point of view? Has he ever approached a bank to know for what sum it would allow the State to off-load the remaining trade loans guarantee cases in the present tariff conditions? If the Minister thinks that these are profit-making concerns where obviously they were not, that would be an interesting investigation to make to find out for what sum in respect of the loans on moneys previously guaranteed, would any finance corporation, any investing corporation, or bank take on the remainder of the loans. It might be an eye-opener as to what he considers to be profit-making concerns.
In the end we got the criticism that in the old days it was almost impossible to get a loan. It was not almost impossible to get a loan. Quite a number of these things went through quickly, relative to the documents which had to be examined, the resources to be brought into them, and the examination there had to be as to the prospects of the business. Of course the tremendous complaint was that people were not able to get a loan. I do not know now what the calculation is, but it is on the files of the Department. There must have been close upon 1,000 applications in the early years of these Acts. I doubt if 100 or even 50 went to the advisory committee because there were 900 foolish applications. People wrote up to say "I understand you have an Act under which you can grant money. I want some, as I am going to run such and such a business." That was the type of appeal which came and which the Minister is going to get with greater frequency than that with which I got them because all the conditions are gone now and he can not merely guarantee but grant moneys.
It is wrong to say that it was almost impossible to get a loan. You cannot say that, because the implication there is of terrific meticulous examination, and in the same breath say that there is bad administration; the two things are not compatible. I think quite a good line was steered as between the two extremes of delay and of coming to sudden and ill considered decisions. If the Minister is taking that as his headline, that there were vexatious delays, that it was almost impossible to get a loan, and that it was because of the old restrictions, then I think he is definitely out for a big gamble on this business. At any rate it is surely worth while his taking some hint of the experience that there has been before. It is on the files. He can disassociate it entirely from individuals. He can deal with it in conjunction with the officials who were previously dealing with this matter, and find out what the difficulties were. I think he will find that the difficulties were mainly in the people who got the loans. It can be definitely said that there was scrutiny, and yet the record is what has been referred to here, that there has been so much money lost. I should like to see some amendment put in. Twenty-five per cent. is far too low. It will probably restrict to a very great extent indeed any dealings under this Act at all.
I can quite understand the extreme anxiety on the part of Deputy MacDermot and Deputy McGilligan. Those two gentlemen are so anxious to relieve and end unemployment that I can quite understand their anxiety to throw forward their so-called safeguards, which are really obstructions in the way of getting industries going in this country. We are in an entirely different position now and industries are in an entirely different position now to what they were even twelve months ago. They have now a five years' guarantee that they have a sympathetic Government which is going to see them through. That is an entirely different position. We know what their position was before. We heard Deputy McGilligan talking here about firms that had got a loan under the Trade Loans (Guarantee) Act and could not pay that back. We know why. We know, for instance, why the waterproof factory in Glanmire found it difficult to repay their loan. We know they had a difficulty in repaying it and we know why—because we had a Minister for Industry and Commerce at that time who had so little knowledge of the matters with which he was dealing that he put a tariff on material coming in which was not made in this country, and placed the Irish firm in the position, to put it in plain words, of having a preference given in this country to British made material as against the Irish material. We had a definite proof of that—a 25 per cent. tariff on waterproofs. We know the change and we can see the change. We can see that firm on its feet now. We can see that firm employing from 100 to 130 people. It was closed down for four months before Fianna Fáil came into office to reopen it. I know the handicaps, because I have been week after week with the Department of Industry and Commerce and elsewhere looking for trade loans for people who were anxious to start industries in this country, but found they had not sufficient capital for the job, and found that because of the red tape that was provided under the Trade Loans (Guarantee) Act they could not get ahead. I know one man whom I brought up here some five months ago. He was anxious to start a spade and shovel factory. He came up here and found it practically impossible to get any loan under the Trade Loans (Guarantee) Act. He went back and sold the home which he had made for himself and his wife. He sold it for £750 and put that £750 into the industry. At the present moment he has 18 hands employed and is making money. Those are facts. If that man could be given a trade loan of £500 or £600 he would provide employment for from 60 to 70 men at smithwork. We know the manner in which, within the last nine or ten years, motor cars and lorries have driven blacksmiths practically out of existence. They are walking around now idle, on the dole or begging. I quite realise the anxiety of Deputy McGilligan and Deputy MacDermot to bring their jeremiah prophecies into effect by trying to introduce here not safeguards but obstructions. I quite realise it. We know the facts: we can see the facts.
I am glad that the Minister is not accepting this amendment, or any other amendment which is going to hamper us in putting industry on its feet here. I consider that the money that has to be thrown away each year on unemployment relief grants would be far better spent in starting industries in those towns if possible. For instance, you see £3,000 or £4,000 spent on unemployment relief, spent on digging up good roads to make them better, or work of that description which is not necessary. If that £3,000 or £4,000 were given even as a free grant to an industry to put that industry on its feet, and if that industry provided employment for only 100 persons, that money would have been better spent than £3,000 or £4,000 spent on unemployment relief. To my mind that is the only way of tackling the problem of unemployment in this country. Even if a firm went down afterwards, if you take their wages bill for the period they were working and deduct that from the loan they got, you will find it was a good investment. That is the way to look at it. You throw away £3,000 or £4,000, and two or three months' work is provided. The money is gone and the men are idle again, looking for another £3,000 or £4,000 to provide more work for them. It may be, as Deputy MacDermot said, something on the Monte Carlo style—I am sure he is a good gambler—but I consider that the odds are something better and something safer. Even if all the money were lost, if the wages bill is higher than the money that has been spent, then, in my opinion, good work has been done. You have, I would say, at least something better than a 50 per cent. chance that, in the industry which is started with this money, the wages bill will be not alone for three months but for ten or eleven years. At least the people have this safeguard now, that if they start an industry here they are going to get protection for that industry for the next five years, and I think the next 25 years. Having got through the muddle that the Government took over when it came into office we could go through anything.
I do not think that Deputy Corry could have listened very carefully to the speech made by the Minister, because if he had, he would have learned that even in the case of the small borrower the result of taking these loans was to impose upon them a burden that they found it very hard to bear. It is quite possible Deputy Corry would think it wise to stop an ordinary businessman from doing so, who thought it better to realise his assets than face the fixed burden of a State loan.
He will do much better now.
That remains to be seen. If the State were to act in the spirit that Deputy Corry wishes, they would be much better advised to make investments direct, and to become industrialists, rather than indulge in mere speculation. Deputy Corry would not pursue any inquiry into the business capacity of persons who wanted to borrow. As long as a person was inspired to start an industry it would be the duty, in Deputy Corry's view, of the State to advance the money without further inquiry.
We may rely upon the Department's officials for that.
The Deputy said nothing about that and I gathered that he would think that any precaution, on the part of the Department, would be extremely unpatriotic. The Minister defended the change in regard to working capital by citing the case of a man who might come to the State having invested all his capital in fixed assets. He pointed out if that man had come to the State, in the first instance, he would have got a loan, and that it is unreasonable that because his capital was in fixed assets he should not get a loan. I suggest in that case he should put into the Bill the protection that we want, and at the same time, avoid the dangers of which we are afraid. The Minister should agree to insert a clause providing for an advance not exceeding 50 per cent. of the total amount invested in the business. That would not happen in the case of a man who had already put his money into fixed assets. On the other hand, it would provide a very reasonable protection. I would say, from the business point of view, that 50 per cent. should be the extreme limit that the State should give. I appeal to the Minister to introduce something of this kind into the Bill and enable me to withdraw my amendment on that understanding.
Deputy MacDermot's amendment seems to me to be quite impossible. I have listened to the discussion here. Deputies seem at variance and are talking about different things. The difference has not been made quite clear between private temporary accommodation and private capital. It seems to me in some of the instances given as if the State had gone in for company promoting. I do not know how far the Minister wishes to draw a line between a person who requires temporary accommodation, and a person who requires capital. If a person requires temporary accommodation he ought to be able to pay that back in a certain number of years. If he requires capital and amortises it in 12 years, as Deputy MacDermot said. I think that is a loan.
I pointed out that the Minister told us 12 years had, in fact, been the normal term of these loans.
I am merely taking the Deputy's adaptation of the Minister's phrase, and I am suggesting that 12 years to pay back the capital of a company is quite impossible in these days of stringent conditions. I think the Minister does not realise what a blot it is in trade circles to put out about a place that it has a mortgage upon it. However, I do not see how the Minister could do it any other way. The State must have some security. At any rate, the State seems to be coming in now somewhat on banking lines. I think most of the people who approach the State in these matters have been turned down through the ordinary channels of credit. If there is any moral to be learned from it, it could be drawn from the notice exhibited in an American restaurant recently. It read: "We have lately made arrangements with our bankers. They do not sell soup and we do not cash cheques."
We have lately made arrangements with our bankers, by which loans guaranteed by this State, under these Acts, are taken up by them on terms most favourable to the borrowers. That is a point that Deputy McGilligan should have brought to his notice. He asked if I had attempted to get any bank to buy the right of repayment—the right to secure the repayment of any of these loans guaranteed under these Acts? It is an interesting point, because I can give him some information upon the matter. All these loans were guaranteed by him, not by me; and, in fact, all the banks are willing to take them over, and to take them over at a reduced rate of interest. That is an interesting sidelight upon the improved prospect of industrial concerns in this country since Deputy McGilligan crossed the floor.
For what period are the banks prepared to take them?
For whatever period they were guaranteed. Deputies who have spoken on this matter are entirely under a misunderstanding. A loan could be given in error, an Act could be badly administered, but there is no necessity to put all this into an Act as a safeguard. The whole scheme of this Bill is to try to facilitate its administration by removing some of the causes of delay which were regarded as safeguards heretofore. This Bill is not entirely my own production. When we introduced last year the Trade Loans Act again, I mentioned we had under examination the whole system of trade loan guarantees, and were concerned whether we should be able to amend them. We have taken officials from the Department of Industry and Commerce and from the Department of Finance and constituted them a committee to go into the history of all the cases, to examine the present position, and to consider it in relation to present day development, and to make recommendations in the matter. Their recommendations are embodied in this Bill. It is their product, although the Minister is finally responsible for it and must defend it. I mention that because it indicates that it is not some revolutionary idea brought in here by a hard-pressed Minister anxious to get factories established to justify his existence. This Bill is based upon six years' experience of those who had direct contact with the administration of the previous Acts. It is not intended to guarantee the whole of the capital of any undertaking. We want power to guarantee the capital that is going to be invested in fixed assets or the capital that is required in liquid form.
We shall endeavour to secure the State. We shall endeavour to ensure that each undertaking is one that is going to succeed. We shall investigate applications as fully as applications have been investigated before, no matter what the nature of the purpose to which the loan to be secured is to be devoted. I gave, on Second Reading, the type of case I had in mind: A man who decided to embark upon an enterprise and who invested a considerable amount of capital in the enterprise, who built a factory, installed machinery and commenced production and then found, as people very often find, that he had underestimated the building costs or the equipment costs or the capital requirements of the industry—that he had left himself in a position in which his working capital was too small to ensure success. We have had such cases and we have had to say to these people: "We cannot help you. If you had come to us before you built the factory, we could have given you a guaranteed loan in respect of the whole cost. As you built your factory, or bought your machinery first, we can be of no assistance to you." Very often, the machinery is bought first. Valuable machinery may be offered for sale at a very cheap price. Somebody will say: "There is an opportunity I can get now which I may never get again. I should buy it at the cheap price and have it available." He buys it and then he comes to seek his guaranteed loan. He finds he cannot get it. That is the position. It will be for us to see that as regards loans guaranteed in such cases—we will not guarantee the whole of the capital— the State does not lose.
We had a discussion of cases in which the State had lost. I do not want to initiate a discussion on these cases. I do not want to say anything about them with the exception of one case in respect of which Deputy McGilligan said that failure was due to bad management on the part of the person who is now Minister for Lands and Fisheries. Who told him that? From what source did he get that information?
His own letter.
When he was asked to undertake the management of the concern, what did he say?
That with good management it could be made a success and he was put in himself.
Deputy McGilligan should be the last man to criticise the person concerned because no man worked harder to cover up as long as possible the very serious blunder the Deputy had made.
What was that?
He had paid for assets which were not there.
After that was done, the Senator said it could be made a success with good management. He did not do it.
He was asked to go down and undertake the management of that concern. He was told that the stock-in-trade amounted to so much. He was told that there was so much timber there to be turned into the work of the factory. Not merely was he told that, but it was shown to him in the accounts of the company. Money was paid for assets and they were not there. That was dishonesty, if you like. I think that no other term could be applied to it. Certain people got away with money upon false representations —by writing up the value of the assets to a ridiculous extent. They got the money from Deputy McGillgan and that enterprise started off not as it was intended to start, with liquid resources, but burdened with a load of debt which it could not possibly carry, so much so that another charge in favour of a bank had to be inserted in front of the State's charge to enable the enterprise to carry on at all. It was bound to fail. The burden of debt upon it was so heavy that it could not possibly pay the interest on it much less pay it off, even if working to full capacity and selling at a profit everything turned out. One man went down and tried his best to put the enterprise upon a basis that would enable it to carry on. When he found he could not do that, that the burden was too heavy, he had the courage to make recommendations which might have saved the greater part of the enterprise if unexpected developments had not taken place and if a fire which occurred a couple of weeks ago had not terminated it. I think that it was most unfair for the Deputy to make that allegation here because he cannot back it by any statement made to him by the board of the company.
Except his own letter.
The Deputy cannot back it with anything within his own knowledge.
His own letter.
There was nothing behind that allegation but sheer vindictiveness.
His own letter written before he undertook the management.
What did he say in the letter—that it could be made a success with good management and that he was willing to try.
Was that after he examined the whole situation?
Yes.
He had not found the big blunder the Minister is talking of.
He had found everything the Minister is talking of but he went into it in good faith. It is not necessary to go into that now.
I shall go into it.
Most Deputies who know the facts can have nothing but contempt for the Deputy who made that allegation under all the circumstances.
I have the greatest contempt for the Senator who made that attempt and failed and then tried to clear out of it by writing a definitely wrong statement to the newspapers.
I have said, and I say deliberately now, that the Act was badly administered and that in relation to some of the cases in which guarantees were given it was the political exigencies of Cumann na nGaedheal that were the deciding factor and not the merits.
Give an example?
I gave these three cases—the Glass Bottle Works, the Drogheda Meat Factory and Alesbury Brothers.
They were due to political exigencies?
Yes.
What were the political exigencies?
The imminence of by-elections or general elections or because people who were adherents of that Party had to be placated.
Would the Minister mention a by-election that was pending when any of these loans was given?
The County Dublin by-election. That was the date the Minister decided to give the Glass Bottle Works guarantee.
Give us the dates of the loans and the elections and we will test that statement?
I will not.
It is like the 300 factories.
That was a failure due entirely to the same cause as the other cases, due to the fact that those finally determining the matter—in one case without the recommendation of the Advisory Committee—were much more concerned to get at least the appearance of certain developments in particular constituencies or in particular districts than to get a sound enterprise established.
Might I put this to the Minister—in view of what he has stated, is there not a case for protecting Governments against such exigencies?
This is one Government which does not require that protection. Every loan guaranteed by me—some of them have been guaranteed already—I am prepared to stand over here, to justify in full on its merits as a business matter, and the day I cannot do that I shall not wait to be kicked out, I shall get out.
Will you give as much information about the loans as you are giving about the factories?
Yes—quite as much.
Just about that amount.
There is only one other point that I want to mention. Deputy MacDermot referred to the question of the State investing in industry and said that it would be preferable to have the State invest in an industry than to have guaranteed loans raised by industrialists in this manner.
Better than to do it in the spirit of Deputy Corry's advice to us.
I think that both methods may be required. Not merely may we require this Act enabling us to provide long-term loan facilities, but we may also have to provide machinery by which industrialists of another kind may get capital invested in their undertakings—I mean put into the business, left in the business and remunerated in proportion to the profits. We are examining the possibility of meeting that particular deficiency in our financial organisation. It may involve legislation, or it may not. We propose to try to get that deficiency filled in, in any case. I am clear that this amendment is most unwise. One could contemplate places where any overriding limitation might be defined as an impediment to the proper utilisation of the Acts. Ordinarily speaking, our practice has been 50-50. Our practice will be to guarantee not more than 50 per cent. of the total capital. There may be cases, and one could contemplate them, where the working capital is very small in relation to the fixed capital, where one could safely guarantee a large amount, and where one might have to do so to get some enterprise established in this country. I am quite certain that it will never be the case that we will guarantee all the working capital and all the fixed capital. I am prepared to give a guarantee that if any such case is likely to arise, I will come and inform the Dáil, because it would be an exceptional case, and I cannot contemplate that if we are going to put up the whole of the capital we will not want a greater interest in it. There should be no overriding limitation. These Acts have suffered in the past from too much limitation and too many safeguards.
I propose to draft an amendment for the Report Stage.
As far as I understand the Minister's reason against this, as far as he had any, it was that there were certain cases which came under his notice of people who had put money into the plant. He adverted to that notice, and then came along and said that the Minister was forbidden by the Acts to give grants against these fixed assets. It is an easy and a simple change to make, to allow money to be granted against fixed assets, whether they have been purchased or installed prior to the application for the loan. At any rate, it secures that there are fixed assets against the loan. It secures that in the main no money is to go for working capital, and that an industrialist, if he has any capacity, will be made put the money into the business. That is a simple change to make in the Act. It is not the change that has been made. The change made is to wipe out all the limitations. I wonder how many cases of that type have occurred. The Acts have been going on since 1924, and were renewed year after year with the proviso which allowed for particular overlapping such as the Minister described. There was no reason at all for any wide-awake prospective industrialist not seeing what the Acts were for. If that was the difficulty I do not see why it would occur. That was the only argument extemporised by the Minister. It cannot be met by extemporised arguments. It is not met by the point Deputy MacDermot's amendment is designed to meet. All we have is a promise that in exceptional cases where you must supply the whole, or nearly the whole, of the fixed and working capital, the Minister will come and make a statement to the Dáil. That is no good. The cases will be very rare in which the whole, or nearly the whole, of the capital, will be required. Cases may be frequent in which a considerable amount of working capital will be given or secured. To that extent there is a diminution of the amount the individual will put up, and to that extent a diminution of the interest he will take in the business.
The other point the Minister made was that the banks give a lower rate to those who can give a guarantee. That is given because the bank rate has gone down. If the Minister says he is responsible then he is taking more on his shoulders than he can claim. The bank rate has gone down because of world depression. The Minister has a lot to answer for for the depression in this country. Beyond these extemporised arguments he makes no substantial case except that the banks now give a lower rate to those with the guarantee.
That is not what I said.
That is exactly what the Minister said.
The Deputy asked if there was any bank willing to take over all or any of the guaranteed loans. There are, even though the Deputy guaranteed them.
At what rate? At some sort of scrap rate. That is all right. If I was Minister I would sell every one of them. If the Minister wants to estimate for the loss of half the guarantee——
The Deputy guaranteed them.
I did not guarantee them. The Advisory Committee recommended and I took responsibility, in the circumstances that there was an attempt to get the wheels of industry going, and that we were not going to lose money. If the Minister takes out one Dundalk case, and could get an offer that would give half the money guaranteed, then he is lacking in any sort of discretion in not accepting.
May I say that the statement made by the Deputy that in all cases there was an amendment of the Acts was not correct?
It is.
I mentioned the Killaloe slate quarries.
Am I to be allowed to discuss that?
I say that no amendment of the schedule was made.
The Minister knows the way the difficulty was got out of. Does he want me to go on with that?
I do not care; I am stating facts.
Does not the Minister know that the person was fined for a breach of the revenue laws?
Is the Deputy certain?
Quite definite. That was his way out of the difficulty. That is one way of amending the schedule. But there are other ways.
What the Deputy stated was wrong.
I am prepared to say that the Killaloe Quarry made a success of the original schedule.
What the Deputy said was wrong.
My point was that there was not a clean-cut success, except in the case of Mitchelstown. The Minister knows that this is such an odious case that it cannot be opened up. Will the Minister answer the questions I have put to him with regard to the management of the concern? He could refuse to do so in the public interest.
It is easy to make implications. That is what the Deputy can always make. He knows that the concern is well run and is very successful.
A person who runs a concern very well does not go in for the particular trickery in connection with that concern. Is the Minister prepared to stand over what he says?
I am prepared to say that the Deputy is throwing out a mean insinuation.
Rubbish. Was the person not fined?
What has that to do with the trade loans?
It was in connection with that business. I am stating the facts. I repeat them and they are not denied. Going back to Alesbury's, the money was granted on the advice of the Advisory Committee and I took responsibility. It was investigated by the Committee, passed by them and the money was granted. This particular gentleman was to investigate the proposition, and after the investigation——
When it was granted.
After investigation of everything in connection with it.
After the money was lost.
Nothing was lost then. After it was granted this particular gentleman said that the management of the business could be made a success. Having said so he took on the job. Having taken on the job he afterwards got the company involved in extra capital in another part of the business, which also failed.
With the Deputy's consent.
Possibly, relying on that person's capacity in which I was wrong.
Again the Deputy will not take responsibility.
I took the responsibility in the sense that I am certain in time to be held up to public odium and to scorn for ever setting any confidence whatever in that man.
The Deputy has to take responsibility for the Act.
Yes, and for the peculiar inefficient people that from time to time came to operate it, and that person was one of them.
And the Deputy is another.
I was not at the start of the business, as the Minister and his colleagues were. He took on the post to make the thing a success.
The Deputy has the wrong job. He ought to be bolting musk-rats in Nenagh; he would make a good ferret.
I think we ought to cease discussing the Minister's colleague. Certain statements were made and I allowed them. I also allowed a reply, but I think we should cease discussing the Minister's colleague now and come down to the paragraph before us which relates to the amount that is guaranteed.
I am speaking, sir, of the necessity for getting people's interest involved in a particular industry if it is to be kept right and I think that Alesbury's is a relevant example. The last point the Minister made was that an extra charge had to be inserted. In more than one case the Minister may have it. The point was made by some Deputy as to the amount of loss incurred in the Drogheda Dead Meat Factory. The loan there was guaranteed and said to be £70,000. £24,000 was realised but the amount guaranteed and the final or gross liability to the State are two different things. You cannot cut your losses in these cases in the way in which business men can do it. When you get involved in such a case, there comes a point where most business men would say that it would be better not to go any further and that to continue would only be throwing good money after bad. Business men in such a case would say: "we are closing down". The State never can say that because there are always such questions as that of unemployment arising. In the case of Alesbury's it was said that the whole of Edenderry was at stake. You continue on in the hope that you might get somebody else to take on the business and you go on running it at a loss for weeks, or for months as it was in that case.
Similarly, in the case of the dead meat factory, there was a question of its being sold at one time and the whole thing was scrapped. There was tremendously good machinery and good plant there and there was the question of delay in order to get a sale at scrap prices. The liability which the State takes on its shoulders in a guarantee and the gross liability it is faced with at a particular point are two different things. The Minister is only saying in relation to one case what could be said almost universally. If Deputy MacDermot is going to withdraw this amendment and if he does it without better reasons or without better satisfaction than has been given and if we are going to wipe out of this new code the limitation with regard to the preclusion of working capital from the scope of the scheme, then, there is a tremendous and unjustifiable example on foot and the mathematical chances are that there will be far more lost than was lost previously. It is bound to happen. The Minister is in the position to give this money, either to guarantee it or lend it, and he is faced with the question of getting employment. Once it gets going, it is almost impossible, no matter how hopeless the position is, to close down, because you are then faced, sitting in an office, with the unemployed in your mind's eye and so many people walking the streets because you would not let it go on. When you have so many channels through which to pour money I think the chances of losses have been immeasurably increased beyond what they used to be.
In regard to the question of loss, if any loan that I guarantee is lost I will take responsibility for it and not put the responsibility on the Advisory Committee and if I allow any charge on the assets to be placed in front of the State's charge, I will take the responsibility, and not try to put it on my advisers.
I am prepared to withdraw the amendment, but I propose to bring forward an amendment on the Report Stage in the hope that the Minister will have taken a more benevolent attitude by that time.
I should like to know will it be in order to bring forward the same amendment on the Report Stage?
It will not be the same amendment.
I move amendment 4.
Before paragraph (a) to insert a new paragraph as follows:—
(a) different advisory committees may be appointed for the purposes of the said section in respect of different matters or for different occasions.
This amendment is, in a sense, a drafting amendment. I mentioned on the Second Reading that it was intended to have a permanent chairman with a panel of business men to act on advisory committees constituted as required. It was thought that that could be done under the powers conferred by the previous Act but it had been found necessary since to put in this clause in order to make sure that that power exists.
Would it not be advisable to have a certain continuity for this committee?
There will be.
How is that to be ensured, because as I read it it says that different committees may be appointed for different matters?
The intention is to have, say, a panel of six people with a permanent chairman. There would be three committees, but we would arrange that the same committees would meet on similar applications so that there would be that continuity and also the benefit of previous experience.
I think the Minister will agree with me that in transactions of this kind special experience is necessary. If the Minister could have a panel of different trades on which he could draw representatives to assist the committee in investigating demands made by any particular trade rather than getting a special committee to consider a special demand from a trade, it would be advisable. Matters of that kind require special experience in the particular persons who are investigating them and I should like to see one committee carrying on the investigations—and that an experienced committee—and then having the right to call for representative men in particular trades in order to assist the committee in its investigations in any particular trade. I think the Minister would find that that would be the preferable way to get the information he desires.
I move amendment 5:—
In paragraph (a), line 41, to delete the words "the said," and before the word "shall" to insert the words "of the said section."
This is purely a drafting amendment.
I move amendment No. 6:—
Before paragraph (b), to insert a new paragraph as follows:
(b) in the application of the said section to loans raised in connection with or for the purposes of a manufacturing undertaking, the said section shall have effect as if the word "capital," where it occurs in the expression "capital undertaking" were omitted;
This is also purely a drafting amendment.
Why is it a drafting amendment?
If the Deputy will read the terms of the original Act he will see the necessity. The original Act makes reference to loans proposed to be raised for the purpose of the carrying out of any capital undertaking or in connection with the purchase of articles required for the purposes of any such undertaking. We are deleting that and making it possible to give a loan for working capital. This amendment is merely intended to deal with a drafting point and it is necessary because that word "capital" would have the same limiting effect as the Act as originally framed.
If the word "capital" is retained in sub-section (1) of the original Act no money could have been granted for working capital?
It is consequential on paragraph (b) of Section 4 of the Bill.
That is the point I am asking. Does the Minister mean that if he left in the word "capital" it would prevent him from granting the money for working capital?
Yes.
If that is so, why was it thought necessary to put in Section 4 previously?
I am afraid I cannot answer that. I am advised that the continuance of the term "capital undertaking" there would have the effect of nullifying the deletion of sub-section (4).
I move amendment 8:—
In line 52, page 2, and line 1, page 3, to delete the words "if he thinks fit with" and substitute the words "after consultation with the Advisory Committee set up under the Principal Acts subject to."
The object of the amendment is to ensure that, before these loans are either granted or guaranteed, the Committee which the Minister sets up will have an opportunity of examining a claim made and reporting on it before any grant is made or any guarantee given.
It is now clear to me that the Deputy's amendment is based on a misunderstanding. Every application will go to the Advisory Committee in the first instance. This section does not deal with anything relating to the application. The application, as I have said, goes to the Advisory Committee who will make a recommendation on it. If its recommendation is accepted by the Minister for Industry and Commerce and sanctioned by the Minister for Finance, it is only at that stage that Section 5 will come in. There then comes the question as to whether the loan should be financed by an advance from a bank or from the Exchequer. We are taking this power to make advances from the Exchequer because of the considerations that I mentioned before, though I do not think it will ever have to be exercised. The question as to how the loan is financed is not a matter for the Advisory Committee. It is a matter for the Minister. Before there is any question of financing a loan there is an examination of the application by the Advisory Committee. It is only after that has been done that a decision, as to how the loan is to be secured, is arrived at.
Would the Minister tell the House under what particular section of the original Act he is bound to consult the Committee?
Section 1.
Is it a primary obligation on the Minister in every case?
Section 1 states: "If the Minister for Industry and Commerce, after consultation with an advisory committee nominated by him ... is satisfied" etc.
If the procedure as established is now taken to be the law and to be compulsory procedure then it is all right. Deputy Good's point is one that was often raised here before. It is this. What is the Minister bound to consult the Advisory Committee about under Section 1 of the Principal Act? Only this. If the Minister after a consultation with the Advisory Committee "is satisfied that the proceeds of any loan proposed to be raised ... are to be applied towards or in connection with the carrying out of any capital undertaking"—it is now "undertaking"—or in connection with the purchase of articles manufactured or produced in Saorstát Eireann required for the purposes of any such undertaking, and, that the application of the loan is calculated to promote employment, etc. These are the only things under the Act that the Advisory Committee is called upon to advise the Minister on—not as to the chances of success or anything like that.
"Calculated to promote employment".
Take that point. In connection with that certain things were put forward previously, that in the carrying out of a particular operation, say the building of premises, employment would be given. It was put that the Advisory Committee might consider that that came within the scope of this. There may be a point of difference as to whether it would or not. It was often raised in my time. We said that we had a certain procedure and that we were going to abide by it. It was frequently pointed out that it was not obligatory under the Act. What Deputy Good's amendment seeks to get is this: if there was consultation with the Advisory Committee; to find out if certain conditions precedent were established, if the loan is required in connection with the purchase of articles manufactured or produced in the country and is calculated to promote employment. There is the other point: the terms and conditions under which a loan may be made. There are intermediate to these whether, after these conditions precedent have been satisfied, the Committee advises that the loan should be granted. That is entirely different, but it is something more than they are bound to consider under Section 1 of the Principal Act. It is a matter that was raised in the House in 1926. When I saw the amendment in Deputy Good's name I thought there was a familiar air about the whole thing— that it was the point aimed at, to make obligatory and compulsory on the Minister the procedure which is now established and which can be evaded, and yet keep within the Act.
The amendment is merely to ensure that the Advisory Committee would have to be consulted if it was decided to make an advance from the Exchequer rather than enable the borrower to get a loan from some financial institution.
Will the Minister read Section 5 which provides that "the said Minister may, if he thinks fit, with the sanction of the Minister for Finance... himself grant such loan". Now what will the ordinary layman take from that but that the Minister may do what the section says without any consultation whatever with the Committee. What the amendment aims at is that the Minister cannot do that.
The Deputy misunderstands it. The Deputy has not read the whole section. The section reads: "Wherever the Minister for Industry and Commerce could, after the passing of this Act, guarantee a loan," he may instead of guaranteeing the loan make a loan, but there is no difference as far as the liability of the State is concerned and nothing which he need consult the Advisory Committee about. They are not concerned with the manner in which the loan is financed, whether the borrower gets the loan from one of the banks or from the Exchequer. There is no necessity to consult the advisory committee about that.
After application is made for a loan does the Minister adjudicate on that without any reference to the Advisory Committee?
On what?
On the application either for a guarantee or a loan.
No.
Does the Minister adjudicate on that without reference to the Committee?
No, and cannot.
He can, except for certain limited purposes of consultation.
There is no change in the law being made, being suggested by Deputy Good.
There is a change.
I think Deputy Good will soon see that Deputy McGilligan is pulling his leg.
I possibly could do it more successfully than the Minister is trying to do at the moment. Let us get the point clear again. The Minister is bound to consult the Advisory Committee with regard to what is in Section 1 of the Principal Act but on nothing else. Is not that a fact?
Yes.
And the matters are set out there explicitly.
All that has nothing to do with Section 5 of the Bill.
These are the conditions under which the Minister might previously guarantee and they are brought into Section 5 of the Bill. Therefore, this has to do with Section 5. Now we are not proposing a guarantee to him but a grant and the question of the terms and the conditions is not what Deputy Good is aiming at at all. There are two other things aimed at—that before he grants, instead of guaranteeing he should get the Advisory Committee to say "yes" or "no" to that, or even to take it another way, that after the advisory committee have been consulted as to whether this is a capital undertaking for the purchase of articles manufactured in the Saorstát or an undertaking which is likely to give employment, there should be consultation on the point as to why they should be given a grant rather than a guarantee or whether you should grant or guarantee at all. The third thing I mentioned does not arise and Deputy Good does not want it to arise —consultation as to the terms and the conditions on which the loan is to be granted. That clearly is a matter for the Exchequer or whoever is in charge of the Exchequer. There is the intermediate point of consultation with the Committee on the net point, as to whether there shall be a grant or a guarantee. It is not a bad thing to have the advisory committee passing judgment on that point.
Might I put it this way to the Minister? I do not want to go into the technicalities. Would there be any disadvantage in embodying these words in this particular form?
The Advisory Committee has nothing whatever to do with it.
In certain circumstances would it not be very helpful to the Minister? The Minister cannot be a master of every phase of industry and commerce and a master of finance. He has his limitations like the rest of us. There may be occasions on which it would be very desirable that he should have this consultation, by reference to the Advisory Committee.
On this point? The Deputy is not serious surely.
Why not?
On Section 5?
It may be advisable to consult them at that particular stage.
What is the point in Section 5?
The point in Section 5 is that where he gives a guarantee he can also make a loan if it is considered advisable to do so. That is the stage where all has been settled. It has been decided that the company should get this loan. The terms and conditions upon which it should get the loan have been decided. It is merely a question of whether they will get the loan from the Exchequer or from some bank. What has the Advisory Committee to do with that?
Surely if they are men of finance—these are all matters of finance—with special training that would be a matter primarily for them to consider and to assist the Minister with advice as to whether in the circumstances it is better to discharge this liability one way or another. I cannot understand the Minister in raising these technical points. My only desire is to help him. We have heard a good deal to-night about what happened in the case of previous transactions. They all point one moral and the moral is that these claims should be more carefully scrutinised in future than they have been in the past.
This section has nothing to do with that.
More than half the money advanced has been lost. If that had been an ordinary mercantile transaction where would the firm be who would carry on business in that way? I think these transactions should be scrutinised much more carefully.
Does Deputy Good want joint responsibility? No answer!
I move amendment No. 10:—
Before Section 6, to insert a new section as follows:—
(6) Different Advisory Committees may be appointed for the purposes of Section 2 of the Act of 1924 in respect of different matters or for different occasions and the said section shall have effect accordingly.
This is consequential on No. 4.
I move amendment No. 11:
Before Section 6 to insert a new section as follows:—
A properly audited balance sheet and profit and loss account shall be furnished to the Minister for Industry and Commerce at least once a year by every borrower under the Principal Acts and under the Principal Acts as amended and extended by this Act and shall be laid by the Minister before each House of the Oireachtas.
This amendment explains itself. It is an attempt to get more information for the Dáil about advances and guarantees than has been available in the past. I understand that there is a quarterly return made showing the loans that have been actually made but I do not think any information is given to the Dáil to enable it through its individual members to form an opinion as to the soundness of the business. I should like to know whether the Minister would see any objection to such information being given.
I think this is an entirely indefensible proposal. There is adequate power to enable the officers of the Minister to get all the information necessary in regard to the finances of a company but that we should publish that information concerning the accounts of the company to members of the House is I think entirely out of the question.
Why?
Because it would mean giving information to rival firms that would be of considerable value to them. It would be doing something in relation to the company that every business man would protest against. The proposal that we should use our power under the Bill to compel a company to give information about their private accounts for the purpose of revealing these to the public is out of the question.
Is it not the normal practice for companies to publish their balance sheets?
That is so in the case of public companies but these are not public companies. They are private companies and they are under no obligation to publish their balance sheets.
I maintain that when a private company comes to the State for accommodation it should be certainly called upon to give whatever information is necessary to enable representatives of the people to judge of the soundness of the business.
I think the Deputy should bear in mind the effect that would have on the credit of the undertaking as well as all the information that would be given to other undertakings, rivals in business. If a man had to publish all this information he would be a darned fool of the worst type to come to seek a guaranteed loan.
It is quite right that the obligation imposed by the amendment would have the effect on most small companies that they would certainly avoid seeking State aid. That might be a good thing, but publicity of some type should be the consideration given by any of these people who get State aid for that aid. It was the principle accepted by the House generally with regard to the biggest undertaking that was brought before the House—the Shannon Electricity Supply Board. If there has been any complaint about that it has been that the publicity has not been given as was intended. If it had been given in an up-to-date form, as it is hoped it will be given in future, there might be a considerable amount of difficulties obviated. Part of the objection the Minister has made may be met. It is evident that these companies will present sheets of this type to the Minister because he gets them. At least, it has been the practice that he gets them. I am not sure that what is presented would come under the description given here, but the Minister certainly gets not merely what could pass under the phrase "a properly audited balance sheet and profit and loss account," but a considerable amount more.
Why should not that be published to the Public Accounts Committee, if not published to the House? They are the body who inquire, year by year, into the working of this Act. They are the people who are set up to investigate certain matters. I agree that this is not distinctly in line with what they are supposed to investigate, but it is somewhat on the line that they are disposed to investigate, and there is a big distinction between the two points. The Public Accounts Committee was originally intended merely to decide whether certain moneys had got into the proper hands, the hands being defined as the hands for whom the Oireachtas intended the particular moneys or subventions, but quite a different type of inquiry is, in fact, year by year, established by the Public Accounts Committee and it would be nothing outside their ordinary practice —nothing, at any rate, very abnormal to their ordinary practice—to have this included as a matter for their consideration and examination every year. If they found anything which warranted comment from them, they could make the comment, and I think they could be relied on not to comment unless there was something of such an anxious and disquieting nature as would cause their comment to be justified.
I think there is a great deal more to be said for this than to have it simply turned down in the brusque way in which the Minister has turned it down. There should be some way in which, to a financial group or some financial committee of the House or to some committee on industry or the Public Accounts Committee, publicity could be given, and I think it is no harm, particularly now when we are entering on a career of giving the Minister liberty to give, not merely money against fixed plant and machinery, but even working expenses, we should ask some publicity in return. The return as published to the House —I do not know whether Deputy MacDermot has ever seen it but, having been interested in the preparation of it, from time to time, I know it—gives no information to the House. It is typescript and it merely states the name of the firm and the amount, and I think it is supposed to state what the purposes are—but that has been very scantily defined up to date— the terms and conditions on which the loan was guaranteed or granted, some statement as to interest payment and so on. After that, there has to be a statement made, in cases where loans go bad, of the payments that have been made from the Central Fund and any repayments made into it but, certainly, the information as given to the House up to date has been of the scantiest type.
Nobody, in fact, has got any information. The information that has been given came out on discussion on the Estimate when it was discussed or, and more frequently and always better, on the annual discussion which took place on the renewal of the Trade Loans Acts. Again, I think, Deputy MacDermot might be well advised to accept the Minister's point of view that to put these accounts in all their nakedness before the Oireachtas might possibly be asking too much at this stage of the country's development but there might be some body to which these accounts might be presented which would have some responsibility to the House and be elected by it.
If the Minister would arrange for this information to be given to the Public Accounts Committee, or, as I should prefer, to a specially constituted committee of this House, I would quite willingly withdraw the amendment, but if I have to choose between the amendment and the amount of information given hitherto—I have seen the typescript Deputy McGilligan spoke of—I should stick to the amendment. I think it is outrageous that such power should be in the hands of the Minister as we are putting there, without a system under which information would be available to the people here who are responsible to the electorate for the proper management of the country's finances.
These accounts are available to the Comptroller and Auditor-General and the Public Accounts Committee if they want to see them.
They always have been in the past?
They always have been if they wanted to see them but they must ask to see them.
Only if the Comptroller and Auditor-General refers the matter to them.
The Committee can demand to see them if they wish to do so.
Would the Minister have any objection to a specially constituted committee?
Decidedly so.
The Minister would object?
Yes.
On what ground?
On the ground that it is not at all necessary.
"Necessary" is a word one can argue about.
If there has been no failure to pay interest, or a sinking fund instalment on a loan, why should we parade the accounts of these companies that were assisted in this way, either amongst members of the Dáil or amongst members of a Committee of the Dáil? If there has been a failure, the Comptroller and Auditor-General comes in and then the Public Accounts Committee will have the matter brought to its notice and will have to examine the accounts.
After the event.
Why should there be any penalisation of a company which has made this application?
It is not penalisation. It is perfectly rational information that you should give to people from whom you are borrowing money.
Not necessarily.
If a man goes out to borrow money, it is his duty to give that sort of information. He is not justified in borrowing unless he is prepared to give it.
The Deputy is not serious in suggesting that business people should say that they want to borrow money.
I do not understand what the Deputy means.
I know you do not.
The information is already given to the House as to who is to borrow the money. There is no secret about it. We get a list every quarter of the people who have borrowed. They do not want to advertise that they have borrowed, but what we want to know is is the condition of their finances, as near as we can get to it, in order to see how our money is being used. We have a duty here, and a very serious duty, to watch over the nation's finances. The Minister says: "If there has been no failure." In general, there has been a very great failure. The result of these Acts hitherto has not been at all satisfactory and that is putting it mildly.
Not under the present Ministry.
The Deputy misunderstands the position. He has no responsibility whatever for administration. He has responsibility for legislation.
Exactly. We are undertaking a very grave responsibility in passing this Act and it is up to us to see that all the safeguards possible are provided. I cannot see what objection there would be to having a committee of this House constituted for the purpose of watching the affairs of these borrowers so far as it could.
Because the House has already decided to give the responsibility for these affairs to the Minister for Industry and Commerce.
And we have confidence in him.
The Minister asked why should there be a demand for the publication of accounts so long as the company was meeting its interest obligation and its obligation to repay the principal. I can think of four of the undertakings which failed and about which statements could have been made at certain times, with regard to two of them, that they had paid in full their interest and had met their obligation with regard to repayment of capital and, with regard to the other two, that they had certainly paid all interest and had met, in the main, their obligations with regard to repayment of capital, and, yet, the four failed. Merely to say that the repayments are being made does not, in every case, prove a healthy condition in a company and that is what Deputy MacDermot's amendment aims at discovering. It aims at giving some body connected with the House an opportunity at some period of the year of discovering how the thing is operating. I simply call the attention of the Public Accounts Committee to the statement made that it is possible to get the accounts of all these companies who get any loan from the State under this Act at the Public Accounts Committee through the Comptroller and Auditor-General during the year. I am glad to know that.
Is that quite definite?
I do not know what the Deputy implies by that question.
Is that quite definite? I just want to be satisfied that the Minister is 100 per cent. certain.
The Comptroller and Auditor-General and the Public Accounts Committee can demand to see any papers of that kind that they want to see.
Will they be supplied to them, if they make that demand?
Sure.
With all respect to Deputy Kelly, I want to know from the Minister if the demand is made by the Public Accounts Committee for these accounts will they be submitted?
If they are not, I suppose the Committee will write a long report about it.
If the Committee of Public Accounts, appointed by this House, makes a request for the accounts of particular companies will they be submitted to them?
I answered the question once and I expect Deputies to accept my answer.
The Minister's answer will surely bear repetition. I am sure he would like to be clear on this matter. Will the Minister answer my question?
No.
I thought so much.
The innocent Deputy with the twice as innocent smile upon his face knows well that his Party has representatives on that Committee. Why can he not ask them to answer the question?
This is a very serious matter. It is a matter that involves hundreds of thousands of pounds belonging to this country and I submit I am entitled to an answer from the Minister. The Minister has been invested by this House with very great responsibility and to this extent I agree with the Minister—the responsibility is his.
Quite.
It should be remembered, however, that that responsibility is vested in the Minister by this House, and the moneys are also voted by the House, and to that extent Deputies from all sides of the House share the Minister's responsibility.
Any money that was lost was lost on guarantees given by the Deputy's Party.
That is not the point. The Minister is merely begging the question. The Minister does not want to confine himself to a definite answer. It does not matter whether there has been a gain or a loss. A lot of the money which the Minister is now seeking power to deal with may be lost. I will not say that if it is lost the fault will be due to the Minister or to his Party. The Minister ought not to take that line. He ought to look a little ahead. He may not always be the Minister for Industry and Commerce.
I am beginning to hope not.
I am quite sure the Minister was beginning to hope that a long time ago. I suggest we ought to know very definitely from the Minister now if the Committee of Public Accounts ask that certain accounts should be placed before them will that request be met by his Department?
Ordinarily, yes. There may be some cases where it would be in conflict with public interest to submit them, but that fact will be stated to the Committee.
I agree with the Minister in this as against Deputy MacDermot, that I do not think it is fair that the ordinary private companies applying under this Act should be compelled to put their whole position before the public.
Hear, hear!
I suggest that if the Committee of Public Accounts think it is necessary in the public interest to ask for certain accounts, those accounts should be placed at their disposal. That is all I require. The Minister, I think, will agree that that is fair. I would like the Minister to indicate if the Committee of Public Accounts are satisfied it is in the public interest that certain accounts should be submitted to them, that those accounts will be so submitted.
The Deputy's Party has watchdogs on that Committee.
That applies all round.
Will it mean that there might be a majority vote on the Committee?
Not necessarily.
The Committee of Public Accounts has power to summon into its presence any person, or to send for any papers or documents that it may require. Under certain circumstances, the person so summoned may refuse to attend, or the documents demanded may not be presented. The responsibility then rests upon the person refusing to attend or to submit the required documents. Ordinarily, all such papers demanded by the Committee must be presented to them.
Deputy MacDermot talks about a majority vote on the Committee and the Minister talks about certain responsibilities, but it must be remembered that at least two years elapse before all this is due to come before the House.
They are getting up on the work now.
The position is such that they can never do that. They are examining accounts for a preceding year.
There must be always a period of two years. If the Minister, like some of us, had suffered for his sins on the Committee of Public Accounts he would know that.
We are getting away from the point at which Deputy MacDermot is aiming. The Minister left the House under the impression that these accounts ordinarily went before the Committee of Public Accounts. That is not so.
I never said that, or even suggested it.
Apart from whether it was said or not, it is clearly not a fact. Are they ordinarily brought before the Committee of Public Accounts by the Comptroller and Auditor-General? Again, no.
No.
Would they ordinarily be given by the Minister if a request were made by the Committee of Public Accounts? Again, I would say, no. As the practice has been, it would only be the abnormal case in which the Minister would think it his duty to send the details before the Committee of Public Accounts. Deputy MacDermot has suggested that people should know that one of the obligations that would be put upon them if they ask for public money is that their accounts will go automatically before some select body.
Which will not be pledged to secrecy.
They can be pledged to secrecy, if the Deputy thinks that is a point——
—It must be remembered that it is public money that is being dealt with.
——but why should there be any pledge to secrecy with regard to how a certain firm proposes to handle public money?
The Deputy introduced at least six Trade Loans Acts and why did he not think of it?
Because I had definite limitations imposed on me.
You lost a lot of money.
And there is going to be more money lost—necessarily. It cannot be otherwise. There were certain limitations imposed and with the continuance of the same limitations and with a diminution of the danger there might not be the same necessity——
An earlier loss, not a later one.
If certain people are to be given public money for working expenses, if their own capital and interest are not going to be involved, then there should be some annual review and that has been refused to the House. Let it be that the accounts ordinarily come before the Committee. That body has quite sufficient to do not to concern itself in any detailed way with accounts which, on the face of them, are good accounts. They will only look into the bad ones, the ones which are doubtful and which reveal an unhealthy position from time to time. There is one thing I like about Deputy MacDermot's amendment. The suggestion there is that people who ask for Government money ask for it in the knowledge that they do put themselves into a certain amount of publicity; they subject themselves to a certain limited amount of publicity. Their accounts will go before a selected body year by year, in the ordinary course, not that they are sent for and not as a matter of privilege or anything like that. That is not the situation, but I think it is the situation that was understood from the Minister's first answer.
The Minister said some time ago to Deputy MacDermot that he had no executive responsibility upon him. The executive responsibility is a responsibility which rests upon the shoulders of the Minister, but it is the duty of Parliament to watch the actions of the Minister. He acts as a member of the Executive Council, subject to Parliamentary control. Does he not think that in a matter of importance the Parliament should have the knowledge before it which would enable it to know whether the Minister has acted wisely or unwisely? The Minister surely has got some confidence in himself. If he has confidence in himself why is he afraid his actions should be reviewed by the Parliament with full information before it?
The Deputy walked in and made a speech on the amendment. Obviously he had not the remotest idea of what he was talking about.
The Minister knows quite well what I am talking about.
This is a matter of the publication of the accounts of private companies. The Minister for Industry and Commerce has a lot to do and he does not want to go into the affairs of private companies.
The Minister for Industry and Commerce when he makes a loan must watch and see the condition of solvency of the particular company and must keep himself informed upon that matter if he is to discharge his duty.
Quite.
If the Minister does not discharge that duty satisfactorily the House should have the means of knowing it.
There is another point in connection with this amendment. Clearly the shareholders are entitled to get a balance sheet of the company at the end of the year. The Minister states that the State is not a shareholder and is not entitled to get the information.
On the contrary the Minister for Industry and Commerce gets full information at the end of the year.
The Minister is not the only lender. The State is the lender. The State is the debenture holder and the State is not allowed to see how the debenture holders stand. That may be all right for the Irish Press, but it is not good enough in commercial transactions.
If an assurance were forthcoming that there would be a system under which this information would be normally available year by year to a Committee of the House I would withdraw this amendment; otherwise I press the amendment.
Submitting the balance sheet to the Public Accounts Committee would mean that it would be submitted to them two years after.
I realise that.
