Committee on Finance. - Financial Statement.

It is a matter of relief as well as thanksgiving that I am able to present this, my third Budget, or my fourth, if the Supplementary Budget of November, 1939, is included, while the country is still at peace. Since I spoke here last May the war has become more widespread and still more destructive. It has involved Russia, and has extended to the Western Hemisphere and to the Far East, and we are now a small neutral speck surrounded on all sides by nations in conflict. Our circumstances have become more straitened. Further heavy shipping losses have restricted our communications with the outside world, except across the Irish Sea. The United States, the other great external market with which we were in contact, has been drawn into the conflict, and many of our kith and kin in that great country are now engaged in active combat. Our thoughts and sympathies go out to them in their hour of trial. The future looks dark and forbidding, but we must not allow that to depress our spirits. We have so far withstood the storm with some measure of success. Under Providence, we may pull through without calamity or shipwreck.

Last year was the first time in our financial history in which we budgeted for a deficit. We got it, but it did not turn out as bad as we expected. As can be gathered from the tables circulated to-day the deficit for the year was returned at £2,697,000, as compared with £3,908,000 anticipated. Even at this reduced figure, it was almost £1,000,000 higher than in the preceding year, despite a heavy increase in the yield from taxation. It is the common lot of Budgets now to be unbalanced, and our heavy expenditure on the Army and the Defence Services associated with it is mainly responsible for throwing the normal working of our financial mechanism out of gear. Exchequer issues for Army purposes in the year just closed were £8,155,000 as compared with £6,682,000 in the preceding year, an increase of £1,473,000. In the last complete year of peace—to 31st March, 1939—Army issues were only £1,766,000, so that they have increased nearly five times or, to be exact, 362 per cent.

For many reasons it is to be hoped that peace will be soon restored, but not the least because the strain on Budgetary equilibrium all the world over will be relieved. In peace time Budgets generally became unbalanced because of deflation and falling prices which dried up economic activity and reduced revenue in every direction. In our time, despite higher prices and the extra yield ofad ralorem and other duties and imposts, defence expenditure tilts the scale in the wrong direction. With each successive deficit it is harder to restore equilibrium to the Budget because services which have once enjoyed a certain scale of outlay are unwilling to curtail it. The habit of spending readily grows and, like all bad habits, reform is difficult. Temporary spasms of virtue are not unknown, but they are almost as fleeting as New Year resolutions. Unfortunately, heavy spending on military objectives, while essential for national safety, creates nothing in the shape of communal assets, and accordingly, promotes the growth of deadweight debt.

Evidence of this is reflected in the increase in capital liabilities of the State. On 31st March last, these amounted to £80,662,000. If we add, as we must, the estimated capital value of the contributions to which the State is committed in respect of the Housing Acts, we get a figure of £90,223,000, which shows an expansion during the 12 months of £7,987,000 on the liabilities side. Against this must be set an increase of £4,631,000 in capital assets, mainly cash balances, making a net addition, during the 12 months, of £3,356,000 to the capital burden.

The position of local authorities in the matter of indebtedness is also of interest. The gross debt of these bodies on 31st March, 1941, which is the latest figure available, amounted to £35,872,000. An adjustment has to be made in this figure to allow for the value of the State contribution towards housing, and for certain electricity and technical instruction loans. After this adjustment, the net debt outstanding at the end of March, 1941, was £22,474,000 as against £21,200,000 on 31st March, 1940, an increase of £1,274,000. Treating as a capital asset that portion of the loan charges paid by tenants and valuing it at 4 per cent. on a basis of 35 years, we get a figure of £8,518,000, which leaves a total deadweight debt of £13,956,000, as against £13,600,000, on 31st March, 1940.

Looking at the combined position in the matter of indebtedness of the State and local authorities, we find that, on 31st March, 1941, it amounted to £102,594,000, after allowing for advances from the Exchequer to the Local Loans Fund to that date. If we assume an increase of £1,000,000 in the case of local authorities during the year, the total gross liabilities of the State and local authorities combined amounted at the end of March last to £111,270,000. These figures are a reproof to critics, who blame us for lack of initiative in developing our resources, whether local or national. Money has been made available in abundance—and some think, in super-abundance—for projects of all kinds. No worthwhile scheme has failed because of capital starvation.

The financial year closed with an Exchequer balance of £2,394,000, as against an opening balance of £728,000. In the interval there had, of course, been successfully floated an issue of £8,000,000 of 3¼ per cent. National Security Loan at 99, which brought us £7,920,000 in cash. We have thus already spent the greater part of the proceeds of this issue and have also increased, by practically £500,000, our total indebtedness in respect of Savings Certificates, while to Post Office depositors we owed, on 31st March last, in respect of principal and interest, a sum of £15,000,000, which was £2,600,000 greater than on the previous 31st March. These figures are further evidence of the expansionist character of our commitments. It cannot be said that we have kept too tight a hold on the purse-strings. Income and outgo have been equally free.

Payments of tax revenue into the Exchequer totalled £30,992,000, or £656,000 more than we expected. Non-tax revenue also exceeded expectations—by £59,000. The aggregrate increase, therefore, was £715,000, or about 2 per cent. of the total original estimate. In the circumstances, I submit that these forecasts, made nearly 12 months in advance, worked out with reasonable accuracy. So many uncertainties surround the estimation of revenue in present circumstances that it becomes little more than informed guesswork. This is particularly true in regard to customs, where we are dependent upon supplies from overseas which are liable to be reduced or cut off with little notice. These supplies also affect the yield of excise; for example, you cannot brew beer without hops and the latter must be imported.

If the revenue exceeded our expectations, so also did the number of Supplementary Estimates which arose in the course of the financial year just closed. These fell only a few pounds short of £3,000,000. A number of them had been provided for in the Budget, including food allowances and subsidies to local authorities for extra relief allowances. We also made provision for the purchase of shares in Irish shipping and for expenditure by the Department of Agriculture in connection with the outbreak of cattle disease. These additional Estimates, which were included in the Budget, came to £1,183,000. The remainder, amounting to £1,816,000, were not provided for, and must, therefore, be set against the surplus of tax and non-tax revenue, referred to above, of £715,000. The major part of this uncovered remainder was accounted for by a Supplementary Estimate for the Ministry of Supplies of £684,000, which comprised £550,000 for flour and wheaten meal subsidies, and £80,000 for bread subsidy.

The improvement in the yield of taxes is to be attributed in the main to income and surtax, which exceeded the Estimates by £1,125,000. Customs improved on the Estimate by £394,000, stamp duties by £25,000, and Corporation Profits Tax by £9,000. Motor vehicle duties at £978,000 were surprisingly good, being £378,000 over the Estimate.

On the non-tax revenue side, the increase in charges imposed last year helped postal receipts, which showed an improvement of £49,000, as compared with the Estimate, while receipts from the Currency Commission were up by £20,000, at £200,000.

The supplies position is of such interest to Deputies and to the general public that it may be worth while indicating how the main heads of customs revenue fared during the 12 months. As has been the case for years past, tobacco eclipsed all its fellows. It provided no less than £7,141,000 in the 12 months to 31st March last. This large yield was, of course, helped by the duty of 5/6 per lb., imposed in last year's Budget, of which, however, we had the benefit for only portion of that year. Even so, the increased yield on a reduced consumption was £550,000 above that for 1940-41. Clothing and apparel brought in £363,000, as compared with £249,000 in 1940-41, and boots and shoes, piece goods, tea and wine returned increases in varying degrees. Almost all other heads of customs revenue showed declines. The receipts from sugar, for example, fell away by nearly £1,000,000. All the spirits group was down and so was imported beer. Motor cars, parts and accessories at £54,000 were halved. The oil group— mineral hydrocarbons—fell away by £100,000.

This year, as last, tobacco saved the situation. It represented 65.6 per cent. of the total customs payments during the year, while customs duties themselves represented 35.1 per cent. of the total tax revenue, including motor vehicle duties.

Coming to the excise side, we find that the principal contributor again was beer—with £3,195,000—which was, however, a decrease of £19,000 on the previous year's figure, but still £65,000 above what we had hoped to get.

The beer duty was raised in November, 1939, by 12/- per standard barrel of 36 gallons, bringing it to £5 12s. 0d. This commodity seems to have reached a point where it can bear no further taxation. Despite a decline in beer imports, the consumption of the homemade article seems to be barely steady. Reduced to terms of barrels of a specific gravity of 1055º it amounted to 577,000 barrels in the year to 31st March, 1942, as compared with 576,600 barrels in the previous year, and 616,800 in the 12 months to 31st March, 1940.

In the spirits group, the excise duties brought in £2,027,000, an increase of £211,000 on the preceding year. The fall-off in the importation of spirits has been of some help to the home distillers, but the expansion in demand is, to some extent, attributable to forestalling and hoarding. It is difficult to estimate whether there has been any genuine expansion in consumption. As I pointed out in the last Budget, there is everywhere—amongst wholesalers, retailers and the consuming public—a tendency to lay in abnormal stocks of dutiable commodities, owing to fears of short supply, rising prices, and increased taxation. Abnormal movements of this kind inflate the revenue, just as the increased value per unit of import tends to inflate the yield ofad valorem duties. When such movements are no longer in evidence, as will be the case in the post-war period, revenue will undoubtedly suffer.

It may be of interest to record that beer and spirits between them provided, in 1941-2, £5,223,000, or 74 per cent. of the total revenue from excise.

If we add in tobacco, the total yield from these three commodities came to £13,300,000, or 44 per cent. of the total tax revenue, excluding motor vehicle duties. Consumers of these articles are certainly contributing their share to the national Exchequer.

So much for the past; what of the future? The White Paper of Estimates of Receipts and Expenditure for the year ending 31st March, 1943, has been circulated to Deputies. The Revenue Estimates, it will be seen, are prepared on the basis of existing taxation, and behind all the figures both on the revenue and expenditure side, lies the assumption that, despite the serious expansion of the war area and its growing intensity, we will be able to maintain the economic fabric of the country.

We are assuming, as we did last year, that we will not be deprived entirely of imported supplies and that, with the co-operation of home producers of food and raw materials, we will avoid any major economic catastrophe. These assumptions, of course, introduce an element of conjecture into our figures, but we can only hope that they will not be falsified.

With such considerations in mind, I have estimated the tax revenue for 1942-3 at £32,395,000, as compared with payments into the Exchequer of £30,992,000 for 1941-2, an increase of £1,403,000. Customs revenue is expected to be down from £10,881,000 to £10,265,000, a gap of no less than £616,000. It shows a drop under all heads except tobacco, but the greatest loss confronting us is in the sugar group, from which we received in customs revenue £1,343,000 in 1940-41, and £445,000 in 1941-2, but can expect only £25,000 in 1942-3. These figures relate to manufactured white sugar ex bonded stores, this sugar being made from imported raws which were brought to this country in the early part of the war. These raw cane sugars came mainly from the West Indies, Cuba and Peru, and are, unfortunately, not to be procured now. As a slight offset to this heavy loss of customs revenue in 1942-3, the excise duty on sugar at £635,000 is expected to be about £35,000 up on 1941-42. The assumption is made that the present domestic ration of three-quarters of a lb. per head will be maintained and that jam manufacturers will receive their full requirements on the basis of their 1940 consumption. I am informed that the area planted to sugar beet will not be up to earlier expectations owing to shortage of artificial fertilisers. This shortage will also affect the yield per acre even on the reduced area, but it would have affected the bigger area even more.

The mineral hydrocarbon group is another example of substantially reduced import and corresponding loss to the revenue. It yielded us £1,242,000 in 1941-42, but we can put it no higher than £895,000 in the current year, a drop of roughly £347,000. The general shortage revealed by these figures will, unfortunately, have much wider repercussions than those directly falling on the Exchequer. The private motor car has already, with certain well-marked exceptions, disappeared off the road. Garage proprietors and employees are faced with difficulties for which there is no solution in sight, and many people have to face up to a complete changeover in their methods of transport.

As might be expected in the circumstances, the yield of duty from motor cars, parts and accessories at £20,000 for 1942-43 is down by three-fifths on the preceding year, and by four-fifths on 1940-41.

Clothing and apparel duties also suffer with the times. As our covering becomes more scanty, so does the yield of duty. At £150,000 for 1942-43, it compares with a realised £363,000 in 1941-42. The latter yield was, of course, exceptional, being much in excess of the Estimate. We had the advantage of drawing on large stocks in the United Kingdom which were manufactured prior to the introduction of rationing. A marked decline in the value of the imports must be looked for in the coming year, in view of the decision recently taken to cut the British clothing ration by 25 per cent. as from 1st June, 1942. Allowance is also made in our Estimate for the reductions which we have effected in the rates of duty and the suspension of minimum duties.

Spirits—of the imported variety—are also a source of much anxiety. Stocks of rum, Geneva and other spirits have fallen considerably compared with a year ago. Brandy stands out as an exception, and here extensive imports from Portugal helped the situation. That country, as well as Spain, has also contributed helpfully to our stocks of wine in certain classes which, at the end of February, were somewhat in excess of those held 12 months ago. Over the whole of this field there is, however, a substantial decline in revenue to be expected—not less than £100,000—in the coming year.

The stock position in regard to tobacco has been a cause of even more anxiety, not only to the Exchequer, but also from the employment point of view. A year ago, I referred to the difficulties in regard to the importation of leaf which comes chiefly from the United States. These difficulties are being accentuated and manufacturers here have gradually been using up their accumulated supplies. In a number of cases, stocks of leaf are down to danger point. Added to the difficulty of transport is the fact that the area under tobacco in U.S.A. has been reduced in recent years in an effort to maintain crop prices. Now, since America's entry into the war, the aim is at a further reduction in order to make man-power, as well as land, available for purposes more appropriate to the prosecution of the war.

As regards inland revenue prospects for the coming year, pride of place must be accorded to income-tax. That tax has been the subject of very steep increases in recent years. The standard rate was raised by 1/- to 5/6 in 1939-40, and in November, 1939, a further increase to 6/6 in the £ was imposed for the 12 months beginning 6th April, 1940. The rate was raised by a further 1/- to 7/6 in the £ in May, 1941, and the receipts, as shown in the White Paper, amounted to £8,760,000. The full effect of the latest increase in rate has not yet been felt and for 1942-3 the yield should show a considerable improvement. It is put at £9,226,000, which makes it easily the most important single tax in our whole armoury of impositions. Allied to it are, of course, surtax and supertax which yielded £624,000 in the past year, but are expected to be less in the current year at £550,000. A number of taxpayers who had been resident in Eire have, since the emergency arose, become non-resident and will temporarily be no longer liable to tax.

Another important item in the inland revenue group of duties is the estate duty. Here also increased rates of charge were imposed in 1941, with beneficial effect on the yield. The new rates will be more fully effective in the coming year and there is also notable an upward trend in the values of real property, stocks and shares, bank, deposits, etc. These various movements should help to bring an additional £90,000 into the Exchequer in the coming year, and the yield of duty has, accordingly, been placed at £1,330,000.

The sharpest increase in yield shown on the inland revenue side occurs in the case of corporation profits tax which, at £910,000 in 1941-2, compares with £552,000 in 1940-41, and is estimated to bring in £2,570,000 in the coming year. The great expansion in 1942-3 is due to the tax becoming more fully effective, but the harshness of its incidence in certain types of cases has been brought very strongly to my notice during the year by a multitude of trading and commercial interests, and by the Minister for Industry and Commerce himself. I shall return to this subject later. It will suffice to say here that I am going to propose to the House certain modifications in regard to this duty which, while still leaving it severe in its operation and ensuring that anything in the nature of excess profits find their way mainly into the Exchequer, will not unduly discourage employment, or tend to force people out of business.

On the non-tax revenue side, the alterations made last year in postal rates and telephone charges have borne good fruit and will operate over the whole of the next 12 months, thus bringing in a substantially increased yield.

Another large item of non-tax revenue is land purchase annuities which, at £1,760,000, is expected to bring in £22,000 less than last year. This decline is entirely due to an anticipated fall in the rate of redemptions. These redemptions generally are not effected by tenant purchasers but arise when local authorities purchase agricultural land for housing purposes, or bodies like the Electricity Supply Board and other public utilities acquire land in the course of their operations. It will be noticed that the whole of the receipts from land purchase annuities are taken into the Exchequer and treated as ordinary revenue. This is a matter about which I must confess a certain feeling of disquiet. The capital element in these annuities is now of considerable proportions, the figure being in the neighbourhood of £650,000. It is not altogether correct or proper to treat as ordinary revenue this capital element. It should really be set aside and used for capital purposes in other directions, or diverted to a special fund the income of which would compensate later Ministers for Finance for the falling-off in these annuities in subsequent years.

The non-tax revenue also includes an item of £200,000, receipts in respect of surplus income from the Currency Commission. This figure will not, I expect, be materially affected by the projected legislation in regard to the central bank.

Deputies will note that no payment from the Road Fund is included in the White Paper. The income of the fund will, of course, be substantially down this year as compared with last— £600,000 as against £978,000. Refunds on a large scale will have to be made to motorists under the powers conferred in the Finance Act, 1941, and, at the same time, some provision will be necessary for road maintenance and improvement grants. When these and other liabilities of the fund have been met, there will still remain sufficient resources in it to justify parting once more with £100,000 to the Exchequer, and I accordingly propose to insert a clause for this purpose in the forthcoming Finance Bill.

I have now covered the whole field of revenue and expenditure, and it remains to be seen how we can strike a balance. The main figures are Central Fund Services, £5,034,000, and Supply Services, including two new items, £39,236,000. As in previous years, we deduct from the latter the provision for capital and abnormal expenditure which is appropriate for borrowing. The biggest single item on this list, which is set out in the table explanatory of the Budget, is £493,000 in respect of defence expenditure on Vote 10 for Public Works and Buildings and Vote 63 for the Army. Barracks, magazines and hospitals are among the buildings provided for, while out of the latter Vote, expenditure is defrayed on armoured cars, mechanical transport, guns, ammunition and other stores, as well as naval requirements on a modest scale. A.R.P. and evacuation equipment is also being purchased in substantial quantities.

Airports, including meteorological equipment, are again calling for additional expenditure. The demand is estimated at £252,000 in the coming year, and if we deduct the annuity required to meet the total estimated expenditure, calculated on a fifteen-year basis at 3½ per cent. interest, we get a figure of £83,000 to be borrowed. Of the combined cost of acquisition of land and of cultural operations for forestry, I propose to borrow £66,000, and in regard to employment schemes, I am borrowing, as in the past, one-quarter of the total provision of £750,000. For special emergency schemes, I feel justified in treating as a non-revenue charge one-third of the whole amount, viz., £417,000, and a sum of £100,000 for fuel subsidy mentioned later will also be borrowed.

The various capital items referred to above amount to £1,347,000, and if we deduct these from the total of Central Fund and Supply Services, we get a figure of £42,923,000. This is a large total for a small State, and I am afraid we can neither expect nor allow for any savings on this colossal bill. The experience of recent years shows that any economies which can be effected are absorbed by Supplementary Estimates.

The tax revenue on the existing basis, as shown in the White Paper, is estimated at £32,395,000, and the non-tax revenue at £5,970,000, making a total of £38,365,000, or £38,465,000 if we add the transfer from the Road Fund to which I have referred. This addition is, however, neutralised by the cost of concessions in regard to corporation profits tax which I have mentioned, and there, accordingly, remains a gap of £4,558,000 between revenue and expenditure. I must confess at once that I see no way of closing this gap by additional taxation. Neither is it feasible to do so by economies. As regards taxation, it is idle to suppose that we can bear here the unusually high levels reached in the United Kingdom, where the monetary incomes of the population have been vastly swollen by war expenditure. There, the aggregate national income measured in terms of money has increased by leaps and bounds, but here it has been relatively stagnant.

We have had pronounced shortages of fuel and of raw materials, of the semi-manufactured goods and chemical products required for industrial operations. Machinery and machine parts have been lacking. Unemployment and emigration have been the consequence. We have tried to keep our youth at home but the task, has proved more difficult than possibly was at first realised. Alternative work must be provided, and any kind of useful employment—housing, for example—requires the assembly beforehand of a vast quantity of materials of different kinds. They must be all there; it is not enough to have even 95 per cent. of them. It is noticeable, too, that the trimmings very often hold up the main job. For example, metal fixtures and requisites of many kinds which are essential are in short supply. High costs also militate against building as the rents at which it is possible to let become hopelessly uneconomic. But the money is available and has been sanctioned for many schemes. Finance is, therefore, not the obstacle here and those who seek to discredit bankers, Finance Ministers and others connected with monetary affairs should take note of this.

In the same spirit of liberal spending we have not hesitated to take liabilities on the Exchequer in respect of guarantees to outside bodies engaged in services essential to the well-being of the State or of its citizens. An Emergency Powers Order presented recently to the Dáil revealed the fact that the Minister for Finance had given, or was contemplating, extensive guarantees for payment of interest and repayment of principal by bodies connected with shipping, fuel, tea and bacon. My guarantee has already been given for the following amounts:—Irish Shipping, Limited, £2,000,000; Tea Importers, Limited, £1,500,000; Fuel Importers, Limited, £1,250,000. But, with the best will in the world, and considerable resources behind us, neither the Minister for Finance nor the Government can, in the shadow of a war situation, keep the wheels of trade and commerce moving at the desired pace, and the national income, accordingly, tends to become, as I have said above, relatively stagnant. The taxable surplus of the population is also reduced by the high cost of living, and the margin available for any raids by the Finance Department is accordingly lessened.

We have tried to spread our diminished supplies of essential commodities over the maximum number of people. We have tried to stabilise prices, wages and dividends and to take the profit out of emergency conditions. We have spent, and are spending, large sums on subsidising flour and butter. We cannot claim to have been uniformly successful in reaching all cut objectives. At times we have had to bow to the inexorable pressure of economic facts. We have to tread, it must be remembered, the hard path of neutrality. Possibly, if we were to abandon it we might find some easement of our supply position, but who is there to counsel such a course?

The Estimates for the current year provide abundant evidence of the determination of the Government to grapple with the problem of unemployment in our midst. I may refer, first of all, to the Special Emergency Schemes Vote of £1,250,000 which covers schemes for fuel production, farm improvements, seed distribution, lime distribution, etc. The Employment Schemes Vote of £750,000, supplemented by £165,000 from local authorities, and £700,000 in the Public Works and Buildings Vote for new constructional works of various kinds, directly or indirectly afford or stimulate employment. Expenditure on land improvements, forestry, coal and mineral development, Gaeltacht industries, fisheries, etc., and grants for housing, drainage, etc., all help to provide work. The various items of this nature shown in the supply Services Estimates total £4,344,000. In addition, we have provision for capital issues of various kinds, set out in the White Paper— for electrical development, road work, tourist development schemes, etc., totalling £976,000. Apart from the £100,000 shown therein for advances to the Local Loans Fund, arrangements are being made for advances to that fund from other sources of approximately £1,000,000. The aggregate of these figures is £6,320,000, and this total represents a significant effort on our part to cope with unemployment. I may refer also in this connection to a guarantee for £200,000 which I have given to Irish Steel, Limited, to enable them to have the vital steel works at Haulbowline restarted.

It will, I hope, be a further stimulus to employment that, despite the large deficit, I am proposing no fresh taxation, either direct or indirect, for the coming year. Accordingly, there will be no alteration in the standard rate of income-tax, or in the existing surtax scale. The first Financial Resolution which the Committee will be asked to pass to-day will include a paragraph proposing to apply to the year 1942-43 the same rate of charge to excess sur-tax as was in force in the year 1941-42 and on the same basis; but the Finance Bill will contain a clause making applicable to excess surtax provisions for relief in respect of deficiencies on lines similar to those which I will outline to the Committee later on in the portion of my statement relating to excess corporation profits tax.

A Financial Resolution will be presented to the Committee proposing a change in the law with regard to the valuation of trading stock in hand on the discontinuance of a trade. The change will take effect as from the beginning of the current income-tax year.

In the course of the debate on the Committee Stage of last year's Finance Bill it was represented that on the existing basis of assessment hardship may be involved in the early years in the treatment for income-tax purposes of a person who has commenced to carry on a trade or profession. I propose to include in the Finance Bill a provision which will give relief by altering the basis of assessment for the early years, and I also propose to include a similar relieving provision to meet the case of an individual first entering on an office or employment of profit. These are the only changes contemplated in the provisions relating to income-tax and sur-tax.

I now come to the corporation profits tax. The flat rates of charges on profits in excess of the exemption allowance of £2,500 will remain as at present.

Several changes are contemplated in the provisions regarding excess corporation profits tax. In the first place, I propose to have a clause inserted in the Finance Bill allowing for deficiencies, so that, for example, if a company's profits for the first chargeable period exceed the standard profits by £5,000 and for the second chargeable period fall short of the standard profits by £2,000, the company may claim repayment of tax on the latter amount against the tax which has been paid on the £5,000 excess for the first period. This concession has been urged by numerous deputations. After mature consideration I have come to the conclusion that it cannot in justice be refused.

I have had many representations on the question of the substituted standard, that is to say, the standard computed by reference to the issued capital which is taken as the "standard profits" of a company which has not had one pre-war trade year, and which other companies may adopt if it should prove to be more favourable than a standard computed by reference to profits actually made during the standard period. Under the existing provisions of the 1941 Finance Act the substituted standard for an Irish company is arrived at by adding together the interest on the debenture capital, the fixed rate of dividend on the preference capital and 6 per cent. on the ordinary capital. After a good deal of thought, and after having discussed the matter fully with my advisers, I have decided that it would be better to take a flat rate on the total paid-up issued capital, including debentures, which for this purpose I am treating as capital. What we are aiming at is to get a reasonable approximation to standard profits in cases in which for one reason or another we cannot compute such standard profits by reference to actual trading results prior to September, 1939. Having adopted the principle that such approximation is to be ascertained by reference to the amount of the issued capital there would seem to be no sound reason for having regard to the manner in which the capital of a company was subscribed. For example, if the capital of Company A consists of £200,000 in ordinary shares, whilst that of Company B is made up of £100,000 in ordinary shares, £50,000 in 6 per cent. preference shares and £50,000 in 5 per cent. debentures, making £200,000 in all, the difference in the method of obtaining their capital adopted by the two companies does not itself afford any ground for assuming that their pre-war trading profits would have been different, though, of course, the profits when made are differently allocated.

I have been very hesitant in allowing any increase in the substituted standard for companies which have been trading for many years, and which have had ample time to become firmly established. In such cases the actual trading profits in the standard years are known, increased profits since August, 1939, are generally due to emergency conditions, and in most cases there would seem to be no adequate reason for refraining from making such increases subject to the special tax. There may, however, be a small number of cases in which the profits of a particular trade were for some reason depressed during the standard years as defined in last year's Act, and I have decided accordingly to allow to old companies a substituted standard of 7½ per cent. on the total paid-up issued capital (including debenture capital, if any).

The position of companies which commenced trading in recent years has been specially considered. Many of these companies had not had time to attain their full earning power by September, 1939, and of those which had been somewhat longer in existence some had not had any opportunity to write off such items as preliminary expenses. On the other hand, in the case of some of the companies concerning which representations have been made, I have noticed a tendency to suggest that profits made subsequent to August, 1939, which were obviously swollen as a result of emergency conditions, were no more than the company would have been making by then if there had been no emergency. In fixing the standard I have to keep in mind as a fundamental principle that all profits which can properly be regarded as due to the emergency should be subject to excess corporation profits tax. Having carefully considered the matter in the light of all the representations which have been made to me, I have come to the conclusion that the case of the new companies will be fairly met by allowing as a substituted standard 9 per cent. on all the paid-up issued capital (including debenture capital). For the purpose of this concession I propose to treat as a new company any company registered on or after the 1st January, 1934.

There are two somewhat exceptional types of case which call for special treatment. One is that of a company which has completed a year's trading before the 1st September, 1939, but which for some reason has not made up accounts for a full year from the date when trading started. In this type of case I propose to confer on the Revenue Commissioners power to endeavour, on the application of the company, to estimate the pre-war trading profits of the company on a reasonable basis, and if they are satisfied with the evidence produced to them to adopt such estimate as the "standard profits" instead of dealing with the company on the basis of the substituted standard.

The other type of case for which some special provision is necessary is that of a company installing new machinery to produce a commodity at present urgently needed in this country, by means of a process which would not be economic in normal conditions, and could not, therefore, be continued when normal conditions are restored. It is obviously just that the Revenue Commissioners should be authorised to effect an arrangement by which the ultimate loss to the company, when the special machinery is finally disposed of, should be allowed as a deduction in computing the company's liability, and I propose to have a provision inserted in the Finance Bill to enable this to be done.

These concessions in regard to excess corporation profits tax will take effect as from the 1st January, 1941 the date as from which the tax has been operating. It is difficult to estimate the loss of revenue which they will involve, even in the current financial year, because there are numerous cases in respect of which the necessary figures are not yet available. I propose for the purpose of my Budget to take the loss of revenue in the current year at £150,000, offset by a gain of £50,000 in income-tax. The loss in future years is likely to be greater.

It has been urged on me that provision should be made to meet a probable decline at the end of the emergency in the market values of stocks then in the hands of traders. This is a matter which will merit careful consideration when the end of the emergency is reached, but I am satisfied that it would not be possible in the meantime to draft provisions which would make it possible to meet satisfactorily claims for allowances of this kind.

There are two minor matters which will be the subject of resolutions which the Committee will be asked to pass to-day. One of them is designed to secure that, in computing the liability to excess corporation profits tax of a one-man company, the proprietor cannot claim to be allowed in a chargeable period a sum for remuneration greater than the sum allowed in computing the company's standard profits. The other is directed to prevent a company from obtaining an unfair advantage by means of a fictitious writing-up of assets. These two provisions will not be operative in respect of accounting periods ended on or before the 31st December, 1941.

Before leaving the subject of excess corporation profits tax, I want to make one or two general observations. There is a large volume of opinion in this country which holds very strongly that no trader should be allowed to make and retain for his own use any excess profits arising out of the emergency conditions in which we are living, and, prior to the introduction of last year's Budget, representations from very influential quarters were made to me that a full-blooded excess profits tax at the rate of 100 per cent. should be imposed. After prolonged deliberation it was decided not to act on this suggestion. Apart from the fact that such a tax would be very drastic, I was advised that the necessary legislation would be exceedingly complicated, that the administration of the tax would impose an extremely heavy burden not only on the staff of the Revenue Department, but also on the business community, that it would be very difficult to obtain additional staff possessing the necessary technical knowledge, and that if such staff could be obtained the increase in the cost of administration would be considerable. In the result, the scheme of taxation which I outlined in last year's Budget speech was introduced. I was at once pressed to make very substantial concessions. I did so at a cost to the Exchequer (and a consequent gain to the business community) of a considerable sum. I feel that the business community did not appreciate these concessions as much as I might reasonably have expected.

The excess corporation profits tax has been designed on such lines as to reduce to a minimum the complications inherent in any tax of the kind, and the rate, while considerable, is not excessive. When it is remembered that the higher portion of the investment income of every substantial income-tax payer in the country bears a tax of at least 37½ per cent., it does not seem unreasonable to ask that excess profits made as the result of the emergency should bear a further 37½ per cent. I would ask the business community to bear in mind that, even taking the income-tax into account, 25 per cent. of such profits is left in their hands, and they should, accordingly, refrain from asking for refinements which might be appropriate to a tax levied at a higher rate but which, because of the difficulties in administration arising from them and the consequent increase in administrative costs, cannot be considered as long as the present rate remains in force. With the amendments which I am introducing this year I am of opinion that I have dealt fairly with the business community in this matter, and I hope that there will be no demands for any further concessions. The concessions will, as I have said, cost £150,000, and the yield of the tax will be reduced from the figure of £2,570,000, set out in the White Paper, to £2,420,000. Income-tax will benefit by £50,000.

At this stage, I may mention the old excess profits duty chargeable for the period 1914-20, which has been a long time dying. I propose to discontinue the making of assessments in respect of this duty, which involves accounting periods up to 30 years ago and is, in any case, an anachronism in view of the later and much more fruitful provisions which I have made. The financial contribution which this duty, so valuable in its day, will make to the Exchequer is put at £31,000 in the coming year. After that, no worthwhile revenue from it remains to be collected.

Apart from two minor provisions for relief I am not proposing any alteration in the provisions relating to death duties. A clause will be included in the Finance Bill to provide for relief being given under certain conditions in respect of death duties payable on deaths occasioned in this country by operations of the belligerents during the present emergency, and another clause will extend the relief for which provision was made in Section 26 or the Finance Act, 1940.

The Committee will be asked to pass one resolution relating to stamp duty. The need for the resolution arises out of the provisions of Section 42 of the Central Bank Bill at present before the Dáil. It proposes that a duty of £1 be charged on each licence issued by the Revenue Commissioners for the carrying on of a banking business.

The minor gains in revenue which I have announced are balanced by concessions, and the deficit of £4,558,000 still remains. As Deputies will have surmised, the gap will have to be closed by borrowing. I propose to borrow also a further sum of £100,000 to be used to assist necessitous families in certain areas to procure fuel during the coming winter. The details of the scheme for the distribution of this sum are being worked out by the officials of the several Departments concerned.

During the past year the country's trade and economic life have been seriously affected in many directions by difficulties arising from war conditions. The shortage of practically all kinds of raw materials and finished goods which were formerly imported from abroad has become progressively more acute with the passage of time. Coal is not now available for domestic purposes in any part of the country. Industries, railway transport and gas undertakings have been hampered by the scarcity of coal and by the fact that such coal as has recently been made available is of inferior quality. Supplies of all petroleum products have been much reduced and the effect of the shortage is evident in the curtailment of private and public road transport. The whole textile industry is gravely embarrassed by the drastic contraction in the supplies of essential raw materials.

These difficulties are causing a considerable measure of unemployment, apart from the hardship which arises in various directions as a result of actual shortages; and it must be recognised that there is no prospect of any improvement so long as the emergency continues.

On the agricultural front, things are a little more cheerful. Agriculture remains our principal industry and 49 per cent. of the persons recorded as gainfully employed are engaged in farming. Its condition is, therefore, a matter of concern to the country as a whole, and a state of prosperity or depression in agriculture has reactions on many other trades and industries and is immediately reflected in our towns and cities.

Our export trade in agricultural produce has always been the principal means of paying for the commodities which we import. The war and emergency conditions have, however, brought about substantial changes in the structure of Irish farming economy. In the first place, it has not been possible to import many of the raw materials used in agricultural production, such as artificial fertilisers and feeding stuffs. Secondly, the prices obtainable on the export market for some of the more important agricultural commodities are not adequate to enable our farmers to produce for that market, and naturally they could not continue to produce at a loss. This applies in particular to dairy products and bacon. There is also cause for dissatisfaction at the price being paid for our cattle and sheep. For example, although costs of production have advanced very considerably the price paid for first quality cattle exported has been increased by only 10 per cent. since the beginning of 1940. During the same period there has been no increase whatever in the price paid for the secondary grades.

Confronted with these difficulties, our farmers are obliged to make adjustments in their usual practice, and they have been turning their attention to production for the home market, particularly of commodities which we used to import in large quantities and which are now urgently required here. The growing of more cereals to take the place of imported wheat and maize constitutes one of the most important changes, but farmers are also growing more potatoes, more fruit and more vegetables to meet the needs of the people. The development of the home market to the greatest possible extent would appear to afford the best means of tiding the industry over the adverse conditions caused by the war.

As is now well known, there is a serious shortage of wheat for bread purposes in the current cereal year, but it is hoped that after next harvest the position will be much better. Sowings of winter wheat, particularly during the good weather in the month of February, were very encouraging, and the reports indicate that there also have been large sowings of spring varieties of wheat during the past two months.

Many advantages will accrue from the growing of our full food requirements on our own farms. In the first place shipping space, now utilised mainly for wheat, will be available for the importation of raw materials for manufactures, and thus help to keep in existence many of our industries which might otherwise be forced to close down with resultant unemployment of a serious character. Secondly, we would be relieved of the task of finding foreign exchange for the purchase of foodstuffs and could devote such sums as will be available to the purchase of other essential commodities. The information at present to hand indicates that there has been a substantial increase in village generally this year and, given a reasonably favourable growing season and a good harvest, we should be largely independent of imported food supplies. It is hoped, too, that there will be adequate supplies of oats for the oatmeal milling industry and of barley for the brewing and distilling industries.

Greater agricultural production here and meeting our home requirements to the fullest possible extent will be of material assistance in promoting general financial stability in these times of uncertainty. Taken as a whole, it might be said that there is no class of the community which is more deeply concerned in this matter than the farmers themselves. On any impartial view, therefore, it is in their own as well as in the national interest to spare no effort in ensuring the maximum production from their husbandry. The needs of the farmers in regard to agricultural credit have been brought to my notice again recently in the course of debates in the Seanad, and I am having inquiry made into the matter.

In conclusion I may remark that a large part of the expenditure for which I am providing is in respect of the remuneration of civil servants, and it may not be out of place to refer to the increasingly critical attitude towards the Civil Service which is evident in some quarters. This is a natural and, in perhaps, many ways, a healthy attitude. The Civil Service is a large and expensive organisation, and has increased greatly in numbers and cost in recent years. It is right that its growth should be watched with a critical eye by the Oireachtas, Press and public. Moreover, in these times of emergency, civil servants have the duty of administering many measures which are irksome to sections of the people, and some of the crities see in these measures indications of a desire among civil servants to dominate the life of the community. In this last respect the critics are wrong. The measures which the Civil Service is administering are measures passed by the Oireachtas, or by the Government with the authority of the Oireachtas, and the administration is conducted under the direction of Ministers answerable to this House. That is a fact so obvious that its assertion may seem a platitude, but it is frequently forgotten by the critics.

The expansion of the Civil Service has been a cause of constant anxiety to me since I became Minister for Finance, and I have done everything in my power to prevent it. With the co-operation of my colleagues, I have secured some reduction in normal services. As a result, and with the help of the extra hours voluntarily worked by the Civil Service without additional remuneration, I have been able to arrange for the loan of about 1,000 civil servants from their parent Departments for emergency work, mainly in the Departments of Supplies, Defence and Agriculture. In addition, many vacancies have been left unfilled in the normal services. As a further means of avoiding a permanent increase in establishments, I have authorised the recruitment of a number of temporary clerical assistants, through the employment exchanges, after interview by Departmental selection boards, and the borrowing from the Electricity Supply Board of staff whose services for the time being had become redundant. Earnest efforts have thus been made to provide for the vast addition to administrative work arising from emergency conditions without increasing the number of permanent officials.

It is sometimes alleged that the Civil Service is an out of date, cumbersome and inefficient machine. This is not my experience of it, and probably those members of the Opposition who have been Ministers will be able to say the same. Perhaps a more impressive fact in favour of the existing organisation is that a commission of inquiry into the Civil Service, having sat for nearly three and a half years and having invited evidence by newspaper advertisement and otherwise, was able to say in its final report in November, 1935:

"We have been offered no evidence from business circles or from any other section of the general community that they have experienced any practical need for reorganisation of the Civil Service."

One wonders where in those years were the present-day critics, and why they failed to respond to the commission's appeal and show how the Civil Service could be made more up to date, more efficient and less costly. The fact, at all events, is that they gave no advice when advice was sought, and that the majority of the commission of inquiry, after prolonged investigation, recommended only some very limited changes in the organisation of the Civil Service.

I am not suggesting that the Civil Service is a perfect organisation; I have yet to discover a human institution which is. Like every other collection of human beings, it has its faults; like every large organisation, it is composed of parts of varying efficiency; like every long-established body, it tends perhaps to cling to procedure which, through changes in conditions, may have ceased to be the most effective for its purpose. But, taking it as a whole, and making the allowances which reasonable men must make for human failings as well as for the effect of the checks and safeguards to which democratic government rightly subjects the administrative machine, it is in my opinion an efficient organisation. It has been required during the last 20 years, and especially since 1939, to deal with many new and difficult problems and, taking all the circumstances into account, it has dealt with them well and has shown a marked degree of adaptability.

The notion that the Civil Service is a static organisation is thus quite at variance with the facts, and while there is, as I have said, a tendency to persist in methods which have outlived their usefulness, this natural tendency is not allowed to prevent change where change is necessary. This has been particularly true since the beginning of the emergency. The need to release staff for the Departments of Supplies, Defence and Agriculture, without replacement and with much less than a corresponding reduction in their own work, has obliged the other Departments to keep under constant review their system of workings, and gradually to simplify procedure where this could be done without danger and without ignoring the requirements of the Comptroller and Auditor-General and the Committee of Public Accounts. This process is still going on, with periodical stimuli from the Government and the Department of Finance, and it will produce, I think, a lasting improvement in Civil Service organisation and procedure. I must, however, warn Deputies and the public that no such changes can alter the basic fact that the cost of the Civil Service must ultimately depend on public policy. If public opinion demands and secures additional services or extensions of existing services, a further rise in the numbers and cost of the Civil Service cannot be avoided.

The tables referred to in the Financial Statement are as follows:—

TABLE 1.

COMPARISON BETWEEN (i) BUDGET (MAY, 1941) ESTIMATES AND (ii) PAYMENTS INTO EXCHEQUER AND ISSUES THEREFROM IN 1941-42.

REVENUE.

EXPENDITURE.

Original Estimates

Actual Payments

Original Estimates

Actual Payments

£

£

£

£

1. TAX REVENUE

30,336,000

30,992,000

1. CENTRAL FUND SERVICES

4,844,000

5,106,000

2. SUPPLY SERVICES (net)

36,506,000

35,518,000

2. NON-TAX REVENUE (including £100,000 from Road Fund)

5,928,000

5,987,000

41,350,000

40,624,000

36,264,000

36,979,000

3. Deduct for Capital, etc., expenditure to be defrayed from borrowing:—

Original Estimates

Actual

£

£

(a) Defence expenditure on Votes 10 and 63

682,000

616,000

(b) Airports

84,000

(c) Afforestation

60,000

50,000

(d) Employment Schemes

250,000

180,000

(e) Shares, etc, in Irish Shipping, Ltd.

102,000

102,000

3. DEFICIT

3,908,000

2,697,000

1,178,000

948,000

40,172,000

39,676,000

40,172,000

39,676,000

TABLE II.

STATEMENT COMPARING EXCHEQUER ISSUES FOR SUPPLY SERVICES IN THE YEARS 1940/41 AND 1941/42.

A.—SERVICES ON WHICH ISSUES WERE GREATER IN 1941/42 THAN IN 1940/41, OR WERE UNCHANGED.

No. of Vote

SERVICE

1941/42

1940/41

Increase over 1940/41

Principal Causes of Major Variations

£

£

£

1

President's Establishment

3,754

3,691

63

——

4

Comptroller and Auditor-General

18,948

18,500

448

——

10

Public Works and Buildings

1,082,536

1,069,367

13,169

Purchase of emergency fuel stocks.

12

State Laboratory

9,625

9,573

52

——

14

Property Losses Compensation

——

17

Rates on Government Property

138,465

129,700

8,765

Increase in rates and acquisition of new property.

18

Secret Service

9,546

6,293

3,253

——

20

Miscellaneous Expenses

9,329

9,312

17

——

24

Supplementary Agricultural Grants

1,270,989

1,270,989

——

27

Widows' and Orphans' Pensions

450,000

450,000

——

29

Management of Government Stocks.

20,477

18,713

1,764

——

30

Agriculture

1,367,193

984,713

382,480

Expenses in connection with Foot and Mouth Disease.

32

Office of the Minister for Justice

42,872

41,310

1,562

——

34

Prisons

83,325

80,939

2,386

——

35

District Court

39,468

38,608

860

——

38

Circuit Court

47,210

38,250

8,960

Variations in Appropriations-in-Aid

39

Public Record Office

5,168

4,881

287

——

41

Local Government and Public Health.

1,225,729

1,196,408

29,321

Grants in connection with provision of Home Assistance and Assistance in kind (New Services); increased expenditure in connection with allotments.

43

Dundrum Asylum

16,854

16,717

137

——

44

National Health Insurance

310,202

300,305

9,897

Increased expenditure on statutory

benefits.

46

Primary Education

3,783,943

3,730,487

53,456

Payment of salary arrears to teachers (McEnancy case) and payment of part of salaries of teachers in Reformatory and Industrial Schools.

47

Secondary Education

475,351

462,352

12,999

More numerous capitation and incremental salary grants.

48

Technical Instruction

325,438

308,014

17,424

Increased number of annual grants to Vocational Education Committees

51

National Gallery

4,273

4,203

70

——

53

Forestry

181,258

156,283

24,975

Extra expenditure on materials; emergency fuel supply.

56

Transport and Meteorological Services

71,533

67,912

3,621

——

57

Railway Tribunal

2,938

2,929

9

——

60

Industrial and Commercial Property Registration Office.

13,345

13,101

244

——

61

Posts and Telegraphs

2,471,798

2,450,075

21,723

Extra expenditure on salaries, stores and air mails.

63

Army

8,154,938

6,682,231

1,472,707

Additional charges for pay, maintenance and stores.

64

Army Pensions

584,085

495,713

88,372

Increase in number of pensioners.

65

External Affairs

87,681

75,934

11,747

Filling of vacancies and higher expenditure on telegrams and telephones.

68

Agricultural Produce Subsidies

187,423

96,772

90,651

Higher guaranteed prices for dairy produce.

69

Office of the Minister for Supplies

546,453

7,955

538,498

Extra staff; extra advertising and publicity; flour and bread subsidy.

71

Dublin Institute for Advanced Studies.

15,772

6,300

9,472

Expenditure in 1940/41 covered portion of year only.

72

Repayment of Trade Loans Advances

84,344

84,344

New Service.

73

Emergency Scientific Research Bureau

11,981

1,450

10,531

Expenditure in 1940/41 covered portion of year only.

74

Shipping

101,993

101,993

New Service.

75

Special Emergency Schemes

478,100

478,100

do.

76

Food Allowances

193,000

193,000

do.

77

Damage to Property (Neutrality) Compensatinon

112,000

112,000

do.

78

Personal Injuries (Civilians) Compensation.

20

20

——

79

Repayments to Contingency Fund.

1,106

923

183

——

TOTAL £

24,040,463

20,250,903

3,789,560

B.—SERVICES ON WHICH ISSUES WERE LESS IN 1941/42 THAN IN 1940/41.

No. of Vote

SERVICE

1941/42

1940/41

Decrease from 1940/41

Principal Causes of Major Variations

£

£

£

2

Houses of the Oireachtas

118,282

120,727

2,445

——

3

Department of the Taoiseach

12,840

13,317

477

——

5

Office of the Minister for Finance

71,831

72,061

230

——

6

Office of the Revenue Commissioners.

887,957

890,013

2,056

——

7

Old Age Pensions

3,550,078

3,556,440

6,362

Casual variation.

8

Compensation Bounties

34,580

59,995

25,415

Reduced rate of bounty on sugar and smaller exports.

9

Office of Public Works

139,054

139,609

555

——

11

Haulbowline Dockyard

3,456

4,101

645

——

13

Civil Service Commission

21,106

22,964

1,858

——

15

Commissions and Special Inquiries

7,053

8,141

1,088

——

16

Superannuation and Retired Allowances.

488,259

499,709

11,450

Decrease in number of pensioners.

19

Expenses under the Electoral Act and the Juries Act.

16,570

16,903

333

——

21

Stationery and Printing

143,327

153,134

9,807

Economy in stationery. Scarcity of materials.

22

Valuation and Boundary Survey

32,511

33,159

648

——

23

Ordance Survey

27,120

31,160

4,040

——

25

Law Charges

65,570

66,680

1,110

——

26

Universities and Colleges

160,906

162,834

1,928

——

28

Quit Rent Office

3,009

3,146

137

——

31

Fisheries

13,907

24,553

10,646

Increased Appropriations-in-Aid. Repayment of loans.

33

Gárda Síochána

2,026,524

2,052,609

26,085

Expenses of Local Defence Force transferred to Army Vote from 1st January, 1941.

36

Supreme Court

54,548

56,531

1,983

——

37

Land Registry and Registry of Deeds.

45,173

45,309

136

——

40

Charitable Donations and Bequests

3,146

3,149

3

——

42

General Register Office

12,508

13,350

842

——

45

Office of the Minister for Education

182,453

185,717

3,264

——

49

Science and Art

43,045

49,435

6,390

Reduction in publications.

50

Reformatory and Industrial Schools

119,226

119,851

625

——

52

Lands

1,326,742

1,430,668

103,926

Reduced scope of operations. Vacancies on establishment.

54

Gaeltacht Services

37,053

85,500

48,447

Decreased housing grants and increased Appropriations-in-Aid.

55

Industry and Commerce

240,144

294,140

53,996

Grants to Turf Development Board, Ltd., transferred to Vote for Special Emergency Schemes.

58

Marine Service

6,000

19,281

13,281

Decrease in expenditure on “degaussing” and on compensation for loss of effects. Increased Appropriations-in-Aid.

59

Unemployment Insurance and Unemployment Assistance.

784,425

1,020,246

235,821

Reduced number of claims for Unemployment Assistance.

62

Wireless Broadcasting

60,028

67,526

7,498

Reduced expenditure on plant.

66

League of Nations

10,932

10,932

No contribution paid in 1941/42.

67

Employment Schemes

735,754

1,242,837

507,083

Reduced allocations of grants. Certain schemes provided for in this Vote in 1940/41 were provided for in 1941/42 under Vote for Special Emergency Schemes.

70

Irish Tourist Board

3,500

6,139

2,639

——

TOTAL £

11,477,685

12,581,866

1,104,181

Net Increase

Summary:

£

£

£

Total Issues on all Votes

35,518,148

32,832,769

2,685,379

Estimates

38,322,767

34,625,036

3,697,731

TABLE III.

STATEMENT SHOWING THE CAPITAL LIABILITIES OF THE STATE ON 31ST MARCH, 1941, AND 31ST MARCH, 1942, AND THE ASSETS (INCLUDING THE EXCHEQUER BALANCE) HELD ON THESE DATES.

On 31st March, 1941

On 31st March, 1942

On 31st March, 1941

On 31st March, 1942

£

£

£

£

LIABILITIES:

ASSETS:

Funded and Unfunded Debt:—

Exchequer Balance at Bank

728,321

2,394,375

5% Second National Loan, 1950/60

5,690,077

5,660,279

National Loans Sinking Funds unapplied

350,124

633,036

4½% Third National Loan, 1950/70

5,399,796

5,387,996

3½% Compensation Stock Sinking Fund unapplied

28,581

29,277

3½% Fourth National Loan, 1950/70

5,528,051

5,511,701

Savings Certificates (Interest Charge Equalisation) Fund

3,456,299

3,660,924

4% Conversion Loan, 1950/70

6,652,357

6,595,057

Exchequer Advances repayable:—

Shannon Power Fund

6,013,930

6,021,180

3¾% Financial Agreement Loan, 1953/58

9,759,680

9,639,200

Electricity Supply Board

7,225,095

7,407,463

4% Exchequer Bonds, 1950/60

6,961,200

6,877,770

Road Fund

455,610

269,632

3¼% National Security Loan, 1956/61

8,000,000

Local Loans Fund (see note below)

12,549,933

12,549,921

Advances to Guarantee Fund—Capital outstanding

3,670,000

3,629,000

3½% Compensation Stock

27,786

27,636

Savings Certificates (Principal and Interest)

11,096,000

11,578,000

Land Commission: Improvement of Estates, etc.—Estimated capital value of Excess Annuities outstanding

Ways and Means Advances

500,000

Loans free of Interest

50,431

62,031

1,400,000

1,400,000

Other Capital Liabilities:—

Purchase of Creameries

691,000

734,450

Under Telephone Capital Acts, 1924/38

1,401,603

1,441,353

Advances under Trade Loans (Guarantee) Act, 1939

138,243

40,141

Under Land Acts, 1923/39:

Advances for Costs Fund and State Contribution to Price (including 50-55% of tenant purchasers' liability for Land Bond Advances charged on Public Funds under Land Act, 1933)

15,475,715

15,465,000

Advances to Agricultural Credit Societies

10,795

9,765

Advances under Tourist Traffic Act, 1939

3,100

Advances under Sec. 49 of Finance Act, 1941

2,460,000

Shares of—

Compensation Annuity under Damage to Property (Compensation) (Amendment) Act, 1926

4,443,515

4,415,691

Agricultural Credit Corporation

292,118

292,118

Industrial Credit Co.

804,517

804,517

Comhlucht Siuicre Eireann, Teo

500,000

500,000

Aer-Rianta, Teo.

117,000

117,000

Monarchana Alcoilna hEireann, Teo.

275,756

275,756

Irish Shipping Ltd., etc.

106,062

TOTAL GROSS LIABILITIES£

72,986,211

80,661,714

TOTAL ASSETS£

38,707,322

43,337,717

Estimated Capital Value of State Contributions under the Housing (Financial and Miscellaneous Provisions) Acts (a) on 31st March, 1941, and (b) on 31st March, 1942

(a)

(b)

£9,250,000

£9,561,000