I move: "That the Bill be received for Final Consideration."
Industrial Credit Bill, 1933—Final Stages.
Motion agreed to.
I move: "That the Bill do now pass."
The Minister will remember several references in dealing with this Bill, to certain major industries that were to be undertaken— sugar beet, cement, industrial alcohol, paper and so on. When dealing in the Budget debate with these great developments the Minister for Industry and Commerce said that if certain reports that they were having made at present turned out in the way he expected they would establish an industry for peat that would be the most important industry in the country. The Minister has now got permission to introduce a Bill dealing with the sugar beet industry and we will be able to have a discussion upon that. We already had a very restricted discussion on the question of cement. If there is to be any development in respect of industrial alcohol, paper and other industries of the size and magnitude that the Minister has spoken about, are we to have measures introduced to deal with the organisation of these industries, or, once a company is set up can a very elaborate industry be embarked upon for the development of certain mines or industrial alcohol or beet or sugar without any discussion taking place in the House here, or would there be a discussion as there is to be on the question of beet?
This is the Final Stage of a measure the outstanding characteristic of which is whether in this State we are going to invest £5,000,000 in an industrial credit corporation the main purpose of which will be to lend money to individual industrial undertakings about to be started. There is no limit upon the proportion of the investments which will take place in these various industrial organisations or companies. Viewing the matter from the financial point of view the position we find ourselves in is this: We have undertaken to borrow £1,000,000 on the strength of the Road Fund. The interest on that will fall upon employment in the next five or ten years whatever the term of the loan. We have, secondly, in these years Budget proposals for borrowing approximately £3,000,000, £2,000,000 of which is in respect of local loans, and £1,000,000 of which is on the strength of the assets of the land annuities— £1,225,000 if my memory serves me right. Now we add £5,000,000 so that before the financial year ends we may be in the position of having borrowed £9,000,000.
We have before us, at the moment, a Land Bill which proposes to issue land bonds in respect of the acquisition of land, and the consequence is that within the next ten years we will find ourselves in possession of debts of £9,000,000 in respect to the Budget of this year and last year and the proposals in connection with the Land Bill before the House. That has been the policy of most Continental countries whose currencies were upset and finances were seriously disorganised by reason of their appetite for borrowing money. Nobody objects to the borrowing of money on a sound basis or purpose. There is an element of speculation in connection with these transactions, and, from all we hear in connection with the Land Bill and matters of that sort there is much to make us apprehensive, because in the next four or five years we might find ourselves fairly heavily in debt and that in respect of our own internal economic organisation. The country is not sufficiently supplied with investors, and others, as to be indifferent to the unloading on the Exchequer of huge blocks of Government securities. The quotations in respect to these securities for some years past have been eminently satisfactory. They have maintained a stable level notwithstanding the extraordinary variations in one way or another. The facts are that the whole world has been subjected at times to peculiar financial cycles. At one period there is plenty of money; at another period there is a shortage of money, but it is always at such a time when these peculiar financial disturbances take place that we think we are never going to get out of the particular phase we are in.
It will be within the recollection of Deputies that during the last ten years there were three periods in which there was a definite tightening of credit, a shortage of money, reductions in the value of gilt-edged securities, and so on. Then the time came when there was an expansion in the value of these gilt-edged securities. The most extraordinary situation of all is that which we witnessed in the last 12 months or two years. Fifteen or 18 months ago gilt-edged securities were at a discount. There was apprehension on the part of holders of industrial securities which apparently gave rise to sales and large investing in gilt-edged securities, and they advanced in price.
It is, I admit, at once a favourable time for borrowing, but a favourable time for borrowing would not connote a disposition to spend with strict attention to economic results. It does not need great experience of either municipal or national finance to know that borrowed money is spent much more freely and easily than money raised in revenue and taxation. It is right at this moment when this Bill is passing, and when huge sums of money are available, that particular attention should be directed to the fact that this is not a rich country, that there is no margin in respect to which one can speculate without very great advertence to the fact that whatever liabilities are now incurred will have to be met. Nobody, no matter how erudite he may be in connection with financial or economic matters, can estimate the result of events in the next few years. There has been a catastrophic fall in prices and in the maintenance of prices of commodities lies the only hope of meeting liabilities in respect of such borrowings as we are making to-day. And although there is money available now for investments, and plenty of it —there was never, during my time watching public events, money to be had so easily or so cheaply as at the present moment—it is not by any means to be inferred from that, that the situation is to be continued or that the immediate future years may not require all those reserves that we have got to weather the economic storm to which the world is subject and from which no country has been free. Again, I would sound a note of caution with regard to these matters. We have had the extraordinary benefit in this country of having had a reserve. Some people regard it as unfortunate that we have so much money invested abroad. Sooner of later, it will come home to these people that it was particularly advantageous to this country that, at a time of world crisis, we had those savings to balance the losses which we, in common with the rest of the world, were bound to sustain by reason of the fall in the prices of commodities. The fact that these savings were there in no way entitles us to prejudice the economic and financial stability of this State.
Unfortunately, I have to be in the Seanad at 11 o'clock. Otherwise, I should like——
If the Minister has to be in the Seanad, I take it that he is not necessarily concluding now, if any other Deputy wishes to speak.
Deputies have an opportunity to speak now.
I merely make the point that if the Minister wishes to intervene now, and if other Deputies wish to speak, the Acting-Minister for Industry and Commerce could wind up the debate.
I shall have to leave now. The Acting-Minister for Industry and Commerce will wind up the debate.
I agree with a great deal of what Deputy Cosgrave says as regards the need for exercising the greatest caution and getting the best advice possible in regard to this whole matter. It must be quite clear to those who have experience, as he has had, of the difficulty of getting persons to come forward and invest in Irish projects that some State or other machinery, such as is now contemplated, should be set up. We have not a money market in this country and, as he says, our margin for speculation is not very great. Our investors have not, perhaps, the same aptitude that investors in other countries have. They have not the feeling that they have detailed, personal knowledge of these enterprises or that they have the technical experts to advise them. On the other hand, the only machinery the Government has to deal with the matter at present is the Trade Loans Act. Under that Act, if in connection with any particular proposal such as the peat proposal, which has been mentioned, or the industrial alcohol proposal, the Advisory Committee were to report to the Minister for Industry and Commerce in favour of a loan of £100,000 or £150,000, it would be doubtful whether the Minister would not have a certain compunction in giving his assent to a project of that magnitude without coming before the House and giving the House as much information as possible. However, the machinery which is contemplated regarding industrial credit may work out, I think, I am safe in assuring the House that, before any substantial sum of Government money is advanced for such a purpose or before the State is definitely committed in a direct manner in any of these enterprises, the fullest possible information will be given to the House.
The only other matter which I need mention is as regards the need for caution and getting the best advice. The Government have, of course, to depend largely on their official advisers, but, in a matter of this kind, the House will understand that the Minister for Finance will necessarily have to consult other financial people outside. It is obvious that a project of this kind would not go through without some consultation between the Minister for Finance and people outside interested in these matters. If the Minister for Finance can get a certain amount of co-operation from those who represent the investing public outside, I think that will be the best security that ordinary commercial standards and ordinary commercial safeguards will not be neglected. So far as the House is concerned, if the State is to be definitely pledged to an unusual extent in regard to any of these projects, the House will be made fully acquainted with all the details. I could not say, in reply to Deputy Mulcahy, whether, in regard to any particular proposal, it will be necessary to introduce a Bill. However, since the practice is that the House should be made fully acquainted with matters concerning expenditure, and since the Minister concerned will be always anxious to see that whatever powers he proposes to exercise will be absolutely legal and above board, I think it will be the general course for legislation to be laid before the House.
With regard to the particular projects mentioned, the peat briquette proposal has been under consideration but a final decision has not, I think, been reached in the matter yet. As regards the industrial alcohol project, certain proposals have been made by people from different countries. So far as I can make out, if industrial alcohol were to be developed in this country on anything like the same basis that it has been developed in other countries—so that we could produce, say, one-tenth of our power-alcohol requirements in the form of industrial alcohol—I think that an expenditure of more than £500,000 would be necessary. That is a matter, however, which will have to be gone into in detail. As regards beet, the position will, no doubt, be discussed next week on the Second Reading of the Bill dealing with that matter. Therefore, I do not think that I could usefully take up the time of the House in dealing with it now. I think I can assure Deputies that as soon as Ministers have their proposals in a form in which they can bring them before the House— when they are in a position to state that they are going to enter into certain commitments with people outside regarding these projects—they will give all the information at their disposal to the House.
Question put and agreed to.
Bill certified as a Money Bill within the meaning of Article 35 of the Constitution.