On the section, is the Minister not going to amplify those sections any further? Is the Minister prepared to accept those bonds in payment of revenue?
Land Bond Bill, 1934—Money Resolution. - Land Bond Bill, 1934—Committee.
Section 1 put and agreed to.
Question proposed: "That Section 2 stand part of the Bill."
I do not think that question arises on the section.
You are going to ask people from whom you take lands to accept those paper bonds. Those people have debts to pay, many of which may be revenue—income tax, land annuities, etc. Would the Minister not be prepared to accept them at their face value? He is proposing to buy land at a time when land is at its lowest market value—at a time when it is acknowledged that land is not paying. He proposes to reinvest that money and to put a heavier load on the land which he proposes to vest in other people, and ask them to meet the commitments on that land. How will the interest and principal on these bonds be paid by an industry which at the moment is not a paying concern? The credit which the bonds represent will not be utilised in another business, but in a business which already is not paying and which has to carry a bigger load and is still expected to pay.
May I point out that the principle of the Bill has already been accepted by the House and that is what the Deputy is challenging now?
I am not now challenging the principle of the Bill. I am criticising the arrangement by which "all purchase money... payable by the Land Commission after the passing of this Act to vendors shall be paid by means of an issue under this Act of Land Bonds created under this Act equal in nominal amount to such purchase money." You take a farm of land from a man and you pay him, say, £2,000 for it. You do not pay him cash; you do not pay him legal tender. You pay him bonds. What is he to do with those? If he owes a debt of £100 to the Land Commission or to any Department of the Government, why should he not be able to pay £100 of that £2,000 which he will get from the Minister for Finance to that Department—£100 of an annuity, which, by the way, will go into the Central Fund in future? Are we dealing, Sir, with the whole section or merely with sub-section (1)?
Section 2. It is taken by sections.
That is the only point I have to raise on that sub-section.
I do not know whether the Deputy who has spoken is serious in what he said. After all, the House has accepted the principle of this Bill, which is to make provision for the creation and issue of Land Bonds for the purpose of the payment of purchase moneys under the various Land Acts. That is to say, we are asking, if one likes, the vendor of this land to make a loan to the State at interest. The terms of the issue of the loan which he will make to the State will be such that if he wishes to realise his bonds, he will be able to do so at par, without suffering any loss and if he wants, therefore, to redeem any annuities upon any other holding of his or to discharge any other liability which he owes to the State, he can do that by the simple process of selling his bonds and offering legal tender to the State in discharge of whatever obligations he has to discharge.
The Minister said that the vendor is obliging the State by giving the State a loan to the amount of the purchase money. The Minister knows quite well that that is not the principle involved in this transaction. He knows quite well that this is not a loan by the vendor but a forced loan from the citizens by the Government to the vendor. The vendor is not in a position to lend. He wants the money for other calls and what is good enough for the vendor to take for his property, surely ought to be good enough—face value and pound for pound—for the State to take from the vendor in respect of the discharging of the vendor's liabilities to the State. I do not want to carry it any further, but I should like an answer from the Minister as to whether revenue can be paid or land annuities redeemed by those bonds, pound for pound, face value.
I do not think that is the sort of question that requires a serious answer.
It does not?
No.
Well, the Minister may learn.
Section 2 agreed to.
Question proposed: "That Section 3 stand part of the Bill."
On sub-section (2) of Section 3, I think we are entitled to some information from the Minister. Perhaps, he will let us know what is the meaning of the word "guarantee" in the sub-section which reads:—
(2) The provisions of the Land Purchase Acts relating to the making of advances by the Land Commission for the purposes of the Principal Act, the payment of interest on and the repayment of the capital of such advances by means of purchase annuities or otherwise, and the guarantee of such payment and repayment shall apply to advances made under this section...in the same manner as applied previously in respect of the Principal Act.
This is the complement of the 1933 Act which sets out that the annuities will be halved. I understand that, under the other Land Acts, the annuity was fixed, roughly speaking, to meet the price paid to the land-owner. That was guaranteed to the Guarantee Fund by the grants ordinarily accruing to local authorities. Under this Act, I understand that when the annuity is fixed, roughly, I presume, on the same basis as formerly, it will be reduced by 50 per cent., making the State immediately liable for a loss of 50 per cent. upon the issue. Is that so? Originally, the annuities were payable in whole by the farmers and they covered, roughly, the amount that was advanced through the land-owners in respect of the purchase of the land. The amount was also secured, as I have said, by grants accruing to local authorities. What is the position now with regard to the Guarantee Fund? Has it the same security still?
Precisely.
And what is the position with regard to the financial obligations of the State in respect of the halving of the annuities? Does the State stand to lose 50 per cent. or does it not?
First of all, I think there is some confusion in the Deputy's mind as to the use of the word "guarantee"——
Possibly.
——in this section, which reads:
The provisions of the Land Purchase Acts relating to the making of advances by the Land Commission for the purposes of the Principal Act, the payment of interest on and the repayment of the capital of such advances by means of purchase annuities or otherwise, and the guarantee of such payment and repayment shall apply to advances made under this section....
Quite obviously, that can be related only to the bonds to be issued under this section. First of all, their interest and repayment are guaranteed by the State and become a charge on the Central Fund. The State itself is guaranteed or indemnified, if one likes, against loss arising from the failure of the land annuitants to meet their obligations under their purchase agreements by what is commonly known as the Guarantee Fund, which consists of the local taxation grants and the various grants in relief of rates upon agricultural land. That will still remain.
That will still hold?
That will still hold, as a guarantee to the State against loss in the issue of bonds, but the bonds themselves are guaranteed by the State and their interest and sinking fund will become, as I have already said, a charge on the Central Fund.
I understand the Minister's point. I see the difference in the word "guarantee" there. That means a guarantee to the people who hold the land bonds, a guarantee by the State.
Yes.
With regard to the Guarantee Fund, what is the position there? Does not the State stand to lose at least 50 per cent. of the total land bonds issued?
The State is going to bear half the cost of completing land purchase henceforth, because it has to bear the loss due to the difference between what the tenant purchasers will be asked to give and what the vendor will agree to take for his land or what the appeal tribunal will decide to fix.
Will the money be properly apportioned?
Not apportioned; the Guarantee Fund must be taken as a whole against all the liabilities that the State has as regards land purchase. If the State's whole liabilities were to be £2,000,000 a year and if nobody paid, then the whole of the Guarantee Fund would be impounded for the purposes of the Central Fund in order to enable it to discharge these obligations towards the holders of the land bonds issued since 1923.
The State ought to stand for the loss of 50 per cent.——
I am afraid this Bill is not the Bill under which this can be done.
Perhaps it does not arise under this particular section. The local authorities ought not to be liable for a greater amount than 50 per cent. of the fixed annuities.
The trouble is that if the Deputy believes that, this is not the Bill upon which the issue can be raised.
The Land Act of 1923 has set up the machinery.
This is complementary to it.
It is not suggested that the Guarantee Fund will be called upon to bear more than the annuitants' liability?
That has never been questioned. I have not said at any time that the Guarantee Fund would be called upon at any time to indemnify more to the State than the loss which would arise if the tenant purchasers fail to meet the liabilities.
Let us take it that the annuitants' liabilities amount to between £2,000,000 and £3,000,000. That is the maximum that can be taken out of the Guarantee Fund. If there is 100 per cent. default that is the maximum.
Section 3 put and agreed to.
SECTION 4.
(1) In order to provide for the making of advances and the payment of purchase moneys which are required by this Act to be made or paid by means of an issue under this Act of land bonds, the Minister for Finance may, from time to time as occasion requires but subject to the provisions of this Act, by order create a series of land bonds of such total amount and such denominations (not less in any case than one pound) and bearing interest at such rate (not less than three nor more than four per cent. per annum) and subject to such conditions as the said Minister shall think proper and shall specify in such order.
(2) An order made under this section may specify or restrict the class or classes of advances and purchase moneys for the making or payment of which land bonds of the series created by such order may be issued.
(3) Where the rate of interest payable on a series of land bonds created by an order under this section is the same as the rate of interest payable on a series of land bonds created by a previous order under this section, such first-mentioned series of land bonds may, by the order creating the same, be consolidated with such previous series of land bonds.
I move amendment No. 1:
In sub-section (1), page 3, line 25, after the word "conditions" to insert the words "in relation to registration or inscription."
This amendment has been introduced to meet the point which was raised by Deputy Thrift at an earlier stage, that possibly the Minister for Finance might attach conditions which might be described as vexatious. This makes it clear that the only condition which the Minister would specify would be the conditions relating to the registration of the bonds.
I accept that and I am obliged to the Minister for putting the matter right. These three amendments down in the name of the Minister meet very fairly the points I made. I think they do get over the difficulties that I saw. The words used by the Minister oblige me to stress one point. I am turning now to amendment No. 3—"within the limits imposed by this section." I recognise the necessity for these words in this way, that this sub-section could not go beyond the general terms of the Bill. I do not know that the terms would enforce the main provisions in the Act, namely, what the interest should be. It is quite impossible to foresee far ahead the state of the money market. Some cataclysm may come in; something that some people do not call unexpected, say, a European war, for instance, and a fall in money might follow. I think the Minister ought to give an undertaking that, if any serious change in the value of money came so as to make the rate between 3 per cent. and 4 per cent., something that would make it impossible to get a fair value on the stock exchange for these bonds, then he should come back to the Dáil for further powers.
I am afraid I could not give that undertaking that Deputy Thrift asks for, because I could not bind any other person. If so revolutionary a change should take place that the rate of interest would go up considerably, that land purchase would possibly come to a standstill, then the Land Commission would compel the Minister to come to the Dáil and ask for such an amendment of the Act as would enable the land purchase to be resumed. On the other hand, if the rate of interest fell much below 3 per cent., then the Minister himself would come to the Dáil. The reason that the limit of between 3 per cent. and 4 per cent. has been put in is that it was thought undesirable to ask the Dáil, in view of the relationship which the rate of interest bears to the purchase price, to allow the Minister to fix the rate of interest entirely at his own discretion.
I cannot ask the Minister to go any farther than his own declaration but his declaration binds succeeding Governments and he has said that he would foreshadow that in the event of any such revolutionary changes coming about it would be necessary for him to come back to the Dáil for further legislation.
Amendment put and agreed to.
I move amendment No. 2:—
In sub-section (2), page 3, line 28, to delete the word "An" and substitute the word "Every," and to delete all from the word "may" to the end of the sub-section and substitute the words "shall restrict the issue of land bonds of the series created by such order to the purpose of making advances and paying purchase moneys the amounts of which are agreed or fixed during a specified period."
Amendment agreed to.
I move amendment No. 3:—
Before sub-section (3), to insert a new sub-section as follows:—
(3) When fixing under this section the rate of interest to be borne by any series of land bonds, the Minister for Finance shall have regard to the prices at which the lastest issue of National Loan and previous issues of land bonds under this Act or the Land Bond Act, 1933 (No. 33 of 1933), are quoted on the Dublin Stock Exchange, to the intent that the rate of interest so fixed may (within the limits imposed by this section) be such as to secure that the market price of land bonds of the said series shall, for a reasonable time after the creation of the said series, be at or near par.
Amendment agreed to.
Amendment No. 4 not moved.
Section 4, as amended, agreed to.
Section 5 agreed to.
Amendment No. 5 not moved.
Sections 6 to 12 and the Title put and agreed to.
Bill reported with amendments.
I was anxious to get the Final Stages now.
Could we not take the Final Stages to-morrow?
I would remind the Deputy that when the Bill was last before the House I did point out that we wanted it rather urgently. It was originally suggested that the Bill should be put down for Friday. I think the Deputy himself said we could get all the stages on Friday. Deputy Thrift asked me to extend the time until Tuesday and I agreed, on the assumption that the original undertaking would stand.
Very well.
Question—"That the Bill be received for Final Consideration"—agreed to.
Question put: "That the Bill do now pass."
The Dáil divided: Tá, 52; Níl, 30.
Tá
- Aiken, Frank.
- Bartley, Gerald.
- Beegan, Patrick.
- Boland, Gerald.
- Brady, Brian.
- Brady, Seán.
- Breen, Daniel.
- Briscoe, Robert.
- Browne, William Frazer.
- Concannon, Helena.
- Crowley, Fred. Hugh.
- Crowley, Timothy.
- Keyes, Michael.
- Killilea, Mark.
- Kilroy, Michael.
- Kissane, Eamonn.
- Little, Patrick John.
- MacEntee, Seán.
- Maguire, Ben.
- Maguire, Conor Alexander.
- Moane, Edward.
- Moore, Séamus.
- Moylan, Seán.
- O'Briain, Donnchadh.
- O'Doherty, Joseph.
- O'Grady, Seán.
- Derrig, Thomas.
- De Valera, Eamon.
- Donnelly, Eamon.
- Flynn, Stephen.
- Fogarty, Andrew.
- Goulding, John.
- Hales, Thomas.
- Harris, Thomas.
- Houlihan, Patrick.
- Kehoe, Patrick.
- Kelly, James Patrick.
- Kelly, Thomas.
- O'Kelly, Seán Thomas.
- O'Reilly, Matthew.
- Pattison, James P.
- Pearse, Margaret Mary.
- Rice, Edward.
- Ruttledge, Patrick Joseph.
- Ryan, James.
- Ryan, Martin.
- Ryan, Robert.
- Sheridan, Michael.
- Smith, Patrick.
- Victory, James.
- Walsh, Richard.
- Ward, Francis C. (Dr.).
Níl
- Beckett, James Walter.
- Belton, Patrick.
- Brennan, Michael.
- Costello, John Aloysius.
- Davis, Michael.
- Dockrell, Henry Morgan.
- Dolan, James Nicholas.
- Doyle, Peadar S.
- Esmonde, Osmond Grattan.
- Fagan, Charles.
- Fitzgerald, Desmond.
- Fitzgerald-Kenney, James.
- Keating, John.
- McFadden, Michael Og.
- McGilligan, Patrick.
- McGuire, James Ivan.
- McMenamin, Daniel.
- Morrisroe, James.
- Mulcahy, Richard.
- Murphy, James Edward.
- Nally, Martin.
- O'Donovan, Timothy Joseph.
- O'Higgins, Thomas Francis.
- O'Leary, Daniel.
- O'Mahony, The.
- O'Sullivan, John Marcus.
- Redmond, Bridget Mary.
- Roddy, Martin.
- Rogers, Patrick James.
- Wall, Nicholas.
Tellers:—Tá: Deputies Little and Moylan; Níl: Deputies Doyle and Brennan.
Question declared carried.
The Land Bond Bill, 1934, is a Money Bill within the meaning of Article 35 of the Constitution.