I want to join with other Deputies here in opposing the character of this Bill. I agree entirely with the principle of establishing and maintaining a national stud in this country. I believe that with our history of successful breeding of blood-stock both by private breeders and by the national stud, as it was known in the past, it is up to us to maintain that leading position in the world. Not alone that, but we should facilitate in every way possible private breeders and particularly small breeders to continue their work and we should assist them in securing the best type of bloodstock at prices within their command.
The character of this Bill is one to which I cannot subscribe and one on which Deputies and people outside have recently commented. A most striking condemnation of its character is contained in the Vocational Commission Report. That commission was set up by the Government, but what particular cognisance the Government has taken of its findings, I am unable to say. I followed with some interest certain publicity given to the differences of opinion existing between Ministers and the chairman of the commission. Like others, I have not been able to follow the finish of that controversy, if it has finished, and if it continued we were not given an opportunity of reading it in the papers. Irrespective of the attention which that received from the Government, it is a matter of some significance that a body of this kind, set up by the Government —who selected the personnel for, I presume, reasons known to themselves —should have reported in such an adverse fashion on a company of this nature. I propose to read the commission's observations on this matter, at page 430, paragraph 683 of their report:
"Another method of operating State enterprise has come into Government favour in recent years: it is by means of a nominal company registered under the Companies Acts."
Then the commission continues, at the end of that page:
"This method of administration is clearly fraught with great dangers to the prestige and integrity of democratic government. It offers a wide field for the exercise of political patronage of a very costly and undesirable type, for not merely may large salaries be given to persons as a reward for political services, but large sums of money for capital and working expenses may be placed at their disposal without adequate safeguards. It could provide an unscrupulous government with a means of making a large number of persons dependent on it for salaries and wages and of obtaining electioneering support by promoting enterprises or industries in certain localities without due regard to economic factors."
No words that any Deputy in this House could use could condemn more strongly or more clearly than that the type of company that we now propose to continue. It may be that the companies which were set up here prior to the establishment of the Commission on Vocational Organisation, or at any rate prior to the introduction of this report, were set up in ignorance; but the Government has seen the report and has had an opportunity of reading it and of realising the dangers the commission points out. I, for one, am in entire agreement with the commission in their findings on this matter. I think it is wholly undersirable that this Parliament should abrogate its right of control, which is one of the most sacred principles of Parliamentary institutions, over the expenditure of public money. Whatever type of board may be set up, and bad as some of the other Bills in this regard have been, this one seems to me to reach the limit. In Section 13, the Bill says:
"(1) The articles of association of the Company shall be in such form consistent with this Act as shall be approved of by the Minister for Agriculture after consultation with the Minister for Finance.
(2) The following provisions shall apply in respect of the articles of association of the company, that is to say—
(a) the said articles shall provide that the number of directors (including the chairman) shall not be less than three or more than five;
(b) the said articles shall provide that the qualification for a director of the company shall be the holding of at least one share of the company;
(c) the said articles shall provide that the chairman and all the other directors of the company shall always be appointed by, and may be removed from office by, the Minister for Finance, after consultation with the Minister for Agriculture;"
The very type of board which this commission has found to be fraught with great dangers to democratic government, which gives first-class opportunities to political patronage, is the type of board envisaged in this section. Further, the section says:
"(e) the said articles shall provide that no person shall be nominated as auditor of the company without the approval of the Minister for Finance given after consultation with the Minister for Agriculture."
Here, again, the auditor appointed must be appointed because he suits the Government. While it may be quite reasonable to expect that the Government would appoint an auditor qualified, in the ordinary interpretation of that word, there is no guarantee that the auditor will have proper training or proper knowledge or that he will be in any way beholden to this House, or that the findings of his accounting will be laid on the Table of the House and so put at the disposal of Deputies.
As a matter of interest, it may be well to read another paragraph out of the report, paragraph 685:
"Up to the present the directors of nominal companies have not been appointed on any standard pattern or principle. The boards of directors are composed in whole or in part of one or more of the following categories: (i) civil servants, (ii) persons without special technical or vocational knowledge, and (iii) persons with special technical or business knowledge and skill.
The practice of appointing civil servants as salaried directors of Government companies is open to several objections and should be discontinued. In the first place, their position as civil servants is a whole-time position and should not permit the withdrawal of their time and energy from official duties; secondly, civil servants should not be exposed to the accusation that in drafting legislation they create remunerative positions for themselves. Furthermore, they should be completely judicial and unbiased in administering the affairs of their department, and it would be certainly very difficult for them to be so, if they have actually or prospectively a financial interest in enterprises which are subject to them in their official capacity.
There would appear to be little justification for appointing persons without special technical or business ability. The practice of making appointments on the ground of rank or political affiliation is most questionable and is open to many of the abuses concerned with interlocking directorships and the utilisation of political personages for company promotion."
I am sure many Deputies are aware of the system which company promoters seem to have adopted in having subsidiary companies and having the share-capital held by a subsidiary company which, in fact, has the same personnel of directors as those who held the share capital of the parent company.
Companies of this nature are able in many ways to prevent the Revenue authorities from ascertaining their actual earnings or anything relating to their activities. In that way what are known as fictitious companies are promoted and the directors or shareholders are able to avoid taxation, to avoid coming under the full weight of taxation which the original or parent company would normally bear. This commission points out the grave dangers which are inherent in that type of fictitious company. Under this Bill it is proposed to continue that type of fictitious company, appointments to the board of which will be largely because of political patronage, if not because of political patronage; there is no indication that it will be because of special technical knowledge, practical experience in administering a stud, any particular business association, management of stud farms or bloodstock breeding for sale.
There is no mention in this Bill of any activities, beyond that the company shall promote a stud. There is nothing to prevent the board of the company leasing racehorses among themselves or their friends, engaging in competition with private owners, or indulging in all sorts of subterfuges to prevent the public, whose property this stud is, from ascertaining their true activities. There is no safeguard which in the normal way would be given to the public in relation to their money, no method of control over the board, unless it be that it will hold office at the whim and pleasure of the Minister for Finance and the Minister for Agriculture, who will appoint the board, after consultation.
However objectionable this may have been in the past, however unknowingly members of the House may have subscribed to companies of this nature, there is no excuse or justification for its continuance, now that we have the report of the Commission on Vocational Organisation. After very careful consideration, the commission brought in a lengthy report. They made reference to this particular type of company. I have no doubt the members of the commission were fully and accurately informed and did not arrive at their conclusions without the most careful consideration. In the face of that report, I see no justification whatever for supporting this Bill.
In connection with the provisions of the Bill, the Minister told us very little about what stock it is proposed to acquire. As Deputy Hughes and other Deputies have pointed out, the acquisition of suitable high-class blood-stock is a costly business at the present time. Any studs that were established here within recent years must have cost their promoters far larger sums than they would have cost several years ago. The suitability of the type of animal in a stud of this nature may not always depend on paying the highest price. It is reasonable to assume that animals will on the average be fairly costly.
I cannot understand the delay in bringing forward this Bill, considering that we have had the stud for at least one and a half years. Now that the Bill has been introduced, I think it is unreasonable to rush it. It has been introduced in a week in which there were various distractions and Deputies have been unable to consult the various interests concerned in this industry. They have not been able properly to ascertain the opinion of bloodstock breeders or inquire into the desirability of purchasing stock. Naturally, Deputies are anxious to come into the House fully armed with the most accurate information on the subject of bloodstock breeding. This stud is unique in so far as it is the property of the people, and the interests concerned in establishing and maintaining a stud of this nature are very diverse. Not merely are blood-stock breeders interested, but there are also other stud owners greatly concerned; indeed, everyone connected with racing, and particularly the people living in the county in which the stud is situated, people in various walks of life, have a direct interest in it and it is only fair that the interests of all those people should be taken into consideration. I suggest that we should have been afforded a reasonable time in which to consult various people before we are called upon to debate this matter.
The Minister gave very little information as to what the functions of the State are likely to be. I was glad to hear him state that the main interests so far as he was concerned would be that of the small breeder; that he regarded, and rightly so, the small breeder as the backbone of the industry. That being so, it is not out of place if I dwell for a moment on the difficulties which small breeders have had in procuring suitable sires and mares. For a number of years, more especially since the emergency, high-class sires have been scarce. There has been a decline in racing, both here and across the water. For that reason there has been a reduction in the number of racehorse owners and trainers of racing horses. The number of horses in training may not have declined very much—it is difficult at the moment to give any definite figures. Formerly, when we had a large number of valuable races each year—and there certainly was one high-class race at each meeting—it was easy to estimate at the end of the year the number of suitable horses which small or large breeders could purchase.
There are three classes of sires, the first class, such as Derby or Cup winners, the second class and the third class, and, according to the weight of his pocket, a prospective purchaser purchased a first class, a second class, or a third class animal. Since the war started small breeders have found stud fees rising. In addition to that, the first class sires are mainly owned by large breeders, and it is only natural that large breeders who have a first class sire will give preference in nominations to other high class breeders who, in turn, will secure for them the services of valuable animals from their studs. In that way the small breeder is crowded out. He is pushed aside, not only from the financial point of view, because many small breeders are prepared to make financial sacrifices if they can procure the services of a good sire, but also from the point of view that the large owner is anxious to facilitate the persons who are anxious to assist him. The position then is that the small breeder is often dependent on second class sires.
As a result of all this, a number of small breeders have considered the desirability of purchasing a sire and keeping him in joint ownership, establishing some form of association in which they will have first claim on the services of the sire. There are certain objections to that kind of ownership. First of all, these men may not all live near each other and that means that whoever is responsible for keeping the sire has to bear, among other things, the cost of maintenance, and on small stud farms it is difficult for a man to have all the facilities requisite for maintaining a horse of this character. These people are often put to considerable expense bringing the horse around the country because they may not have sufficient land to meet the requirements of visiting mares.
I think the small breeders deserve the greatest consideration from this House. This is the first opportunity we will have of assisting these people. While the Department has here and there through the country certain thoroughbred horses, which are placed at the disposal of small breeders, these horses are mainly for the breeding of hunters. Small breeders want a thoroughbred that will breed a fast horse and, unless the fee is within the reach of the small breeder, he will not be able to avail of the services of such an animal. I move the adjournment of the debate.