Trade Loans (Guarantee) (Amendment) Bill, 1934—Committee Stage.

The expression "manufacturing undertaking" wherever it occurs in Section 4 of the Trade Loans (Guarantee) (Amendment) Act, 1933. (No. 10 of 1933), shall, by way of extension of the meaning given to it by Section 1 of that Act, include and be deemed always to have included an undertaking of which the principal or only object is the erection and equipment in Saorstát Eireann of dwelling-houses, including the acquisition and development of land for that purpose, and the said Section 4 shall be construed and have effect and be deemed always to have had effect accordingly.

Amendment No. 1 on the Paper was put down by Deputy McGilligan. The Deputy was not present when the Bill was being considered on the Second Reading. To have this amendment inserted is, of course, quite contrary to the whole purpose for which the Bill is introduced. Acting upon the advice available to me it was considered necessary——

It would be better that somebody should move the amendment to initiate discussion.

To give an opportunity to the Minister to explain why he wants this legislation I move amendment No. 1:—

In lines 25-26 to delete the words "and be deemed always to have included".

An application was received for a trade loan guarantee in respect of a loan to be raised for the purpose of developing a certain building proposition in the State. That was two years ago. The question of the legality of such a guarantee was considered, and I was duly advised that there was full legal power to give the guarantee in respect of a loan for such purpose. The question of policy was then considered, and it was decided that the Trade Loans Acts would be used for such purposes where large scale building operations were involved, either in the development of new areas or involving a very large number of houses. The particular application upon which these questions arose was in itself not proceeded with. It was dropped after certain discussions had taken place, and last year another application of the same kind was received and was referred in the ordinary way to the Advisory Committee. It was favourably reported on by the Advisory Committee and approved of by me and by the Minister for Finance. In accordance with the usual practice a letter was sent to the applicants informing them of the Government's willingness to give the guarantee, and advising them to proceed with the negotiations for the loan. The applicants acted upon that advice and entered into negotiations about the loan, and started the work. When, however, the preparation of the Debenture deed was being undertaken, certain eminent lawyers were consulted. In the minds of some of them a doubt arose as to whether there was in fact legal power to guarantee a loan for this purpose. Some of those concerned in the discussion held that there was adequate power under the existing law. Some held there was not. Under these circumstances the Attorney-General advised that it was preferable to put the matter beyond all doubt by the introduction of a Bill of this kind. This Bill is therefore to remove doubts. If the Bill were not made retrospective and this is what the amendment proposes to do— the purpose of the Bill would be defeated and serious complications would arise. The acceptance of this amendment and the others would nullify everything that was done already, and would necessitate the applicants proceeding with the fresh application which would have to be referred again to the Advisory Committee, and the normal procedure followed. Having regard to the fact that the Government had intimated to the parties concerned, according to the regular procedure, their willingness to give a guarantee, and that action had been taken by them before the legal doubts arose, it would be unjust to have the amendment accepted.

That view is strengthened by the fact that eminent counsel consulted and those who have advised me on the matter are of opinion that the Bill is not necessary, and that there is adequate power under the law at present. However, as the amount involved was the large sum of £50,000, it was felt that as there was some doubt it would be better to remove that doubt. Remember arrangements had been already made, and the applicants had entered into certain commitments on the strength of the letter sent them. There would be a substantial loss if the matter had to be gone over again. I gathered that the Bill had received general acceptance, judging from the fact that no discussion took place upon the Second Reading. I believe that the submission of these three amendments on the Paper is due to a misunderstanding of the position.

Then I may take it the amendment is withdrawn?

The same applies to amendments Nos. 2 and 3, which are consequential.

Bill agreed to without amendment and ordered to be reported.

Report Stage fixed for Friday, February 16th.