Agricultural Credit Bill, 1946—Second Stage.

I move that the Bill be now read a Second Time.

The Agricultural Credit Corporation was established following the passing of the Agricultural Credit Act, 1927, which implemented certain recommendations of the Banking Commission of 1926. The capital of the corporation was fixed at £500,000. It was provided that dividends at the rate of 5 per cent. per annum on the paid-up capital would be guaranteed by the State. In order to raise further resources for its business the corporation was empowered to borrow money by issuing what were called certificates of charge, that is a form of security backed by first mortgages on land, to an amount not exceeding £7,500,000, but subject to a maximum issue in any one year of £1,000,000. These certificates of charge were to be guaranteed as to principal and interest by the Minister for Finance. These provisions in relation to certificates of charge, as extended by the Act of 1929, are still in operation and it is not proposed to interfere with them by the present Bill.

The 1927 Act defined in detail the persons to whom, and the purposes for which, loans might be made, and contained also some express prohibitions against particular forms of lending. The corporation had only just commenced to operate when it was found that the main security which farmers could offer was first mortgages on land. As a very large number of the farms in the country have been registered under the Registration of Title Act, 1891, subject to equities, many prospective borrowers could not show title to their lands without incurring undue expense and accordingly the Agricultural Credit Act of 1928, a short enactment, was passed, which solved this difficulty in the main by giving the corporation the right to register a priority charge for a principal sum not exceeding £400 against a farm without requiring the discharge by the borrower of the note as to equities. The provisions of the 1928 Act in this respect are in a slightly extended form continued by Chapter II of Part IV of the present Bill.

The Act of 1929 made certain changes in the capital structure of the corporation. The nominal capital was increased to £1,000,000 in 1,000,000 shares of £1 each, which are at present paid up to the extent of 10/- only, and are held in the manner described in the third paragraph of the White Paper which has been issued in connection with the present Bill. The balance of 10/- per share is payable only upon a winding-up. It is proposed to replace the present capital by a capital of £300,000, consisting of 600,000 shares of 10/- each, fully paid up, and all in the ownership of the Minister for Finance. 10/- shares rather than £1 shares are adopted in view of the nature of the existing partly paid holdings.

These provisions relating to reorganisation of capital are designed to bring to an end a situation which is out of keeping with present-day monetary conditions, whereby a security, bearing a Government guarantee and backed by the corporation's assets, is yielding 5 per cent. interest to holders. The original provisions of the 1927 Act relating to capital were early seen to be unsuitable, as it was recognised that the corporation, set up without reserves or free resources of any description, could not make loans with reasonable freedom and at a reasonable interest rate and at the same time carry out the obligation imposed on it by the Act of paying 5 per cent. on all its capital. The only relief afforded to the corporation by the 1927 Act was that if its profits were insufficient to pay the 5 per cent. dividend, it could borrow the necessary moneys from the Exchequer at such rates of interest as might be fixed by the Minister for Finance. The 1929 Act tempered the position to some extent by providing that any money obtained by the corporation from the Government for the purpose of paying dividends should rank not as a debt owing by the corporation to the State, but as a bonus right on the shares owned by the State. That Act also divided the shares into "A" and "B" shares, all the "B" shares and 109,237 of the "A" shares being held by the State. By this device, the Minister for Finance became as it were, a deferred shareholder, the "A" shares being given priority of claim to a dividend over the "B" shares.

This arrangement worked in accordance with anticipations for a few years, and the corporation paid the full dividend on all its "A" shares out of profits in the years 1930, 1931 and 1932, but by 1933, farmers' incomes had been so reduced by the depression that, for the time being at any rate, many of them were unable to meet their commitments to the corporation. Faced as it was with a heavy potential loss on bad debts, the corporation decided to build up its reserve position at the expense of dividends. By 1936, its position had so much improved that it began by degrees to make contributions, small at first and gradually increasing, towards the statutory dividend on the "A" shares. By 1942, it was back in the position that it could afford to pay the full 5 per cent. dividend on its "A" shares, other than those held by the State, having in the meantime built up a reserve sufficient to meet all ascertained losses as well as any to which, on a conservative estimation of possibilities, it might be exposed in the future, on its then existing loans.

The corporation had carried a further burden during these years in its mortgage bonds, of which it had issued £500,000 at 5 per cent. interest. Under the terms of issue, £250,000 of these were repayable on 1st November, 1944, and the remainder not earlier than 1st May, 1946.

By 1942, it had become clear that the corporation's interest rate was unduly high by comparison with current interest rates, so much so as to be to some extent a hardship on its borrowers and to imperil the maintenance of its lending business, and that a reduction in the rate was desirable. With the cooperation of the Department of Finance, the corporation made arrangements to provide funds to meet the 5 per cent. mortgage bonds in anticipation of their maturity. Accordingly, £500,000 3 per cent. mortgage stock was issued and the proceeds temporarily invested, until the 5 per cent. bonds should mature, when they were duly paid off.

Having thus cleared up any uncertainty as to the future cost of this part of the corporation's working capital, it became possible for the directors to reduce the interest rate to 4½ per cent. As this reduction applied to existing as well as future loans, it involved a considerable sacrifice of revenue—about £10,000 a year—by the corporation. The Department of Finance recognised that this sacrifice made it impossible for the corporation to pay more than a small proportion of the statutory 5 per cent. dividend, until the time the corporation became entitled to repay the 5 per cent. bonds.

These bonds having been paid off, the corporation is now in a reasonably good profit-earning position and should in the future be better able to fill a useful role in supplying farmers' longterm credit needs. However, at the present time and for some years past, the demand for loans has been very limited, owing to a combination of high agricultural prices and scarcity of farm materials and equipment of all kinds. Simultaneously, redemptions of mortgages by farmers in advance of contract dates have been abnormally heavy. For these reasons, a considerable amount of money, which at the present time cannot be suitably employed in loans, has accumulated in the corporation's hands.

It is the intention, under the provisions of this Bill, that part of these surplus funds shall be used to repay and cancel the shares owned by the banks and public.

The proposals involving this reduction in its paid-up share capital from £500,000 to £300,000 will simplify the capital structure and strengthen rather than weaken the corporation because it cannot at present invest its surplus resources at rates which will give a higher return than about 3 per cent. while the dividend on the "A" shares is 5 per cent. The saving resulting from this capital reorganisation will be at least £4,000 a year. To this can be added also the saving which will result from the reduction in the number of directors, at present seven, to a maximum of five. These savings of about £5,000 a year may not appear substantial in relation to a credit institution, but they represent a material contribution to the strengthening of a company, the net profits of which for the year to the 31st October, 1946, amounted to £16,222 only, when interest on the mortgage bonds had been met.

To strengthen the position further, there are the provisions of Section 13 which enable the Minister for Finance to advance to the corporation, from moneys voted by the Oireachtas for the purpose, up to £250,000 at a rate of interest not less than the rate on advances from the Central Fund to the Local Loans Fund, at present 2½ per cent., and also enable the corporation to borrow from its bankers up to £250,000. It is not anticipated that the first of these provisions will be required to be brought into operation in the early future, but it is designed to provide a temporary expedient enabling the corporation to continue to make advances if, during a period of general financial difficulty, its resources should all be used up and additional resources for the continuance of lending operations could not readily be obtained otherwise.

The reorganisation of the corporation's share capital involves no effective limitation on its resources for lending in view of the extent of its power to raise loan capital as required. Only £500,000 of mortgage bonds are at present in issue out of the statutory maximum available for creation, viz., £7,500,000 and it is unlikely that the demand for new loans will so seriously exceed repayments of loans already made as to require in the coming years the issue of more than part of the available balance of £7,000,000. The position at present is rather that many farmers have money in bank which they are unable to employ productively on their farms partly because of the acute shortage of materials.

The lending powers of the corporation are being widened considerably because it has been found by experience that the existing limitations are unduly restrictive. For example, the corporation cannot at present make a loan to a co-operative society which even as an incidental part of its business sells goods retail except these goods are produced by the society itself or by its members or are requisites of agricultural production or marketing. Many co-operative societies which are clearly agricultural in character cannot at present obtain loans because they sell ordinary household requisites produced by industrial concerns even though such sales may form only a very small portion of their retail business and an infinitesimal part of their total business. It is now proposed to exclude only co-operative societies which, in the opinion of the directors of the corporation, engage in retail sales as a substantial part of their business.

In general, it is proposed that loans may be made to the following:—(a) Individuals who are farmers, (b) bodies corporate which are farmers in the sense defined in the Bill, and (c) bodies corporate which have as their principal business the supplying of agricultural goods or services to farmers.

In Section 3 of the Bill, a "farmer" is defined as any person who carries on some form of agriculture or any body corporate which as its principal business carries on some form of agriculture. For this purpose the term "agriculture" is defined in the Bill as including (in addition to the activities covered by the definition in the 1927 Act under which the corporation is at present working) the processing, manufacture, preparation or completion for sale of any farm produce.

The nature of the foregoing definitions widens the field of operation open to the corporation. The purposes for which loans may be made to persons who qualify under these definitions may in general be said to include all purposes which, in the opinion of the directors, relate to agriculture.

These wide powers are qualified by certain restrictions and prohibitions contained in the Bill, of which the most important are: (1) The limit of £10,000 in the amount of the maximum loan which the corporation may make to any person with the exception of a co-operative society; (2) that power is not given to make loans for the purchase of land, save for the purpose of realising a security held by the corporation, and (3) that the corporation cannot alter the lending powers as expressed in its memorandum and articles of association in accordance with the terms of the Bill without the consent of the Minister for Finance and the Minister for Agriculture.

Part III of the Bill deals with chattel mortgages, which were first introduced into this country by the Act of 1927. It is proposed to establish a system which will enable chattel mortgages to be taken by the corporation (from persons or bodies corporate to whom the corporation may lend money) or by a bank from any person in the ordinary course of its business, and such mortgages may relate to specific stock or to the floating stock from time to time on the borrower's land. The proposed system will have the effect of restricting severely the manner in which the owner of stock the subject of a specific chattel mortgage may deal with it without the consent of the mortgagee. It is hoped that these provisions will have the result of enabling farmers to borrow from the corporation and the banks by means of chattel mortgages to a greater extent than has been possible up to the present.

Part IV of the Bill codifies and amends the law relating to charges on land in favour of the corporation. The ten sections numbered 37 to 46 in Chapters I, II and III correspond to the provisions of the 1928 Act and Part III of the 1929 Act. To remove doubts it is made clear by this Bill that the priority of corporation charges on land over the rights of equitable claimants (in the case of registered land) and of puisne claimants (in the case of unregistered land) extends not only to the principal of the loan but, in addition, to the interest on the loan and to any expenses incurred in realising the security for the loan. The power given to an executor or administrator, by the Act of 1929, to charge lands with repayment of a loan not exceeding £400 obtained from the corporation for any purpose for which the corporation is entitled to make advances, is strengthened and clarified. The corporation is also being given statutory power to sell and convey lands registered under the Registration of Title Act, 1891, without discharging the note as to equities (provided, however, that in the event of the sale realising a surplus the corporation will ascertain and pay over the surplus moneys to the parties whose rights are protected by the note).

Part V deals with miscellaneous matters. Section 53 re-enacts Section 26 of the 1929 Act which provided that debts due to the corporation might be proved in the Circuit Court by sealed certificate, instead of by sworn affidavit. This provision, which will have the effect of saving legal expenses which are recoverable from a defaulter, is necessary in view of Circuit Court Rules made subsequent to the Act of 1929. Section 54 abrogates the powers of the Commissioners of Public Works to make loans for farm improvements under certain existing enactments.

It is proposed in this Bill to give the corporation a more flexible instrument than was hitherto in their possession, so that they may be enabled to give financial assistance to farmers in need of it without imposing too great a burthen on them: and also to include among its beneficiaries many classes of smallholders who in the past were precluded from consideration on purely technical grounds.

Before finishing this statement, the members of the House may desire that I should give some facts in relation to the present position of the corporation. Its financial year ended on the 31st October, 1946, and up to that date it had made since the commencement of business 26,403 loans aggregating £2,716,000.

What was the aggregate amount outstanding?

£844,000. The total amount, £2,716,000. The average loan was thus £103. The total amount of loans outstanding at that date was £844,000 and the other main assets of the corporation consisted of Trustee Securities to the value of £328,000, the total of its assets being £1,181,000.

Would the Parliamentary Secretary make this clear—the loans outstanding at the present time are £844,000?

At the end of the financial year it was £844,000. The corporation's main liabilities consisted of £500,000 3 per cent. State-guaranteed mortgage stock and the paid up capital of £500,000. Sundry creditors stood at just over £125,000, the great bulk of which consisted of reserves including a reserve for bad debts of £110,000 approximately. There was a bank overdraft of about £47,000. The total of these and other minor liabilities was £1,181,000.

Attention may be directed to the provisions of Section 19 of the Bill which ensure that full annual statements of the financial and other aspects of the corporation's business will in future be presented to the Oireachtas.

I am very disappointed with the Parliamentary Secretary's statement on this measure. In the particular times in which we live and immediately after the war, one would expect the Government would be preparing for the future, when capital goods and equipment will be available and when material for building construction is likely to be available, and one would expect that we would have a scheme prepared in detail for the rehabilitation and reconstruction of agriculture generally. The canker of stagnation and rot in our primary industry is the greatest and most dangerous problem of our economic life. The crisis we are experiencing, of shortage of essential commodities, low incomes and high cost of living, is in the main due to the low productive capacity of agriculture. It is true that we have a profiteering problem but the failure of the Government to expand production over a long period of years has brought about this crisis in our economic life. We all live out of the national pool of production. Social schemes to give sops to individuals here and there and to make mendicants of them depending on the State are not a solution of the problems that confront us.

The solution, if we are to provide better wages, better incomes for all our people and a high standard of living for the community generally, is to increase the productive capacity of the country. The stagnation in the main branch of agriculture, in the dairying industry, in butter production, and the difficulties of providing even liquid milk for the community, the low productive level of the pig industry and the low production in poultry, are a natural corollary to the policy that has been pursued for 16 or 17 years, that paid attention chiefly to the production of wheat and neglected important branches of agriculture.

The whole economic and social life of the community can be improved only by an expansionist policy. One would expect from the Parliamentary Secretary in dealing with an important matter like this, capital provision for agriculture, some sort of plan to deal with this matter. This Bill is merely tricking with a big national problem. Capital must be provided in millions, not in a few thousands. Has the Parliamentary Secretary studied the recommendations of the Post-War Planning Committee, in particular of Dr. Kennedy? Dr. Kennedy has been stressing that agriculture requires capital to the tune of £100,000,000 if it is to be made efficient. Even with the most efficient advisory service—and, in my opinion, we have not anything like an efficient advisory service in agriculture—we cannot achieve efficiency in production because of the obsolete condition of farm buildings, lack of essential equipment, drainage problems, soil problems—which have been neglected and never been examined—poor housing conditions for the farmer and his family and for the agricultural labourer and the unsatisfactory amenities generally in the industry.

We can examine this problem and get some appreciation of our position by comparing it with another country similarly placed, namely, Denmark. It is a well-known fact that Denmark had achieved a high degree of efficiency in her economic life before the war. Soil conditions in Denmark were worse than here. Climatic conditions were more severe. The area is approximately 62 per cent of the area of Éire. The population of Denmark at one time was lower than ours but over a long period of years Denmark has had an expanding population, when our population was falling. In 1911 the population of Denmark was 2,757,000; in 1936, it was 3,700,000. In 1911 our population was 3,140,000; in 1936, 2,969,000, and we know what has been happening our population since 1936 and during the emergency. According to Banking Commission reports, Denmark's national income was in excess of ours before the war by about £66,500,000 or, in a country approximately two-thirds the size of our country, the national income was approximately 45 per cent. more than ours. The nature of the farming activities in Denmark involves considerable capital investment in buildings, machinery and equipment. The capital provided for this purpose before the war was given by Professor Beddy in a paper read before the Statistical and Social Inquiry Society of Ireland, in 1943. I will quote from that paper. The Parliamentary Secretary gave us some idea of the financial position of the corporation at the end of the financial year, October, 1946.

During the whole period of their activities, 26,403 loans were advanced, making a sum of £2,716,000, an average of £103 per loan. The loans outstanding—and this is a figure I want to stress — in October last were £844,000. Bearing that in mind, let us compare the position in Denmark before the war. The amount advanced to agriculture by agricultural credit societies in Denmark before the war was £89.5 millions. That was the amount outstanding as against something over £¾ million here. The amount advanced by Savings Banks was £32.7 millions; the amount advanced by the State, £15.4 millions; by commercial banks, £7.4 millions and by other financial organisations, £13.4 millions. The amount of credit actually provided for agricultural development and expansion, for the construction of modern buildings of the right type and for efficient working in the farmyard, for equipment, for drainage and soil problems and all the other things pertaining to agriculture aggregated at that time £179.4 millions. By contrast, the figures for Eire are very small and are symptomatic of our light agricultural capitalisation. According to the Majority Report of the Banking Commission, the advances to farmers by Irish banks amounted to £12.6 millions in January, 1937. To this should be added £800,000 for loans to co-operative societies and £1,400,000 for loans by the Agricultural Credit Corporation.

In 1937 there were advances by the corporation of £1,400,000. The aggregate amount of credit provided in Eire amounted to £14.8 million against £179.4 in Denmark. That gives some idea of the capitalisation of agriculture in both countries. It indicates for this country a low level of capital investment, and to anyone who has experience of agriculture shows the necessity that exists for a national scheme of capital investment for our main industry. Bearing in mind the stagnation that exists, there are problems that are real to the man in the street, such as the difficulty in this agricultural country of getting sufficient butter or bacon, while bread is also short. That is all due to a lack of an active constructive agricultural policy in the last fifteen years.

To carry it a step further, Professor Murphy, who made a survey of farms immediately before the war, gives some idea of the amount of capital invested in some 60 farms in North Cork. According to that survey the amount in North Cork was £21, and in West Cork £24, respectively, per acre on 60 farms, while on a comparable farm in Denmark £92 was invested per acre in buildings, live stock and farm machinery. The result of that sort of economy is that in Denmark there is an all-the-year-round production of dairy produce, bacon and eggs, while the very opposite is the case here.

We have seasonal production. Let us see what is happening in an important basic industry, dairying. We have seasonal production. In the spring when the cows go out on grass, there is a steep rise until the peak is reached in July and it then falls. There is a slight recovery in September, when cows are put on aftergrass, and production recovers for a few weeks, but then falls for the winter. If that is compared with the Danish curve it will be found that production there continues. They believe in autumn calved cows. The animals are fed in the houses during the winter period, and there is a fresh flush flow of milk when they go out on grass in spring and summer.

Anybody conversant with dairying districts, and with the system we are operating, apart altogether from the low production capacity of our cows, which do not give a straight yield in quality, because of the way they are bred, and of the neglect to provide straight capacity cows, must appreciate that they need to be treated properly, in our climate, with its heavy rainfall during the winter. Anybody who knows Limerick and Tipperary knows that in many cases the cows are not housed at all. They are wasting during the winter period. They then spend most of the early summer making good body loss when they should be producing milk.

I mentioned drainage in order to give some idea of the neglect of that problem. Since 1871 the proportion of agricultural and non-agricultural land declined here by 7½ per cent. while it increased by 13½ per cent. in Denmark, because they paid attention to the rivers and were very active in reclaiming non-arable land. If we turn our attention to what Government policy here has been, we find that the amount invested in agriculture is only about £14.5 million against £179 million in Denmark. Government policy here has resulted in a State debt, according to the Minister's Budget of last year, of £95 millions and the gross indebtedness of local authorities is £36 millions. The net amount of the latter figure was £26 million because there were subsidies and houses which reduced the amount. The national debt here is approximately £120 million or something over that figure. The Minister gave the dead weight national debt as £58 million but I imagine something would have to be added for local dead weight, making the total amount £69 million or £70 million. Some credit has to be allowed for rents and some value put on houses.

In Denmark the State debt in 1934 was £59½ million or £16 per head of the population as against £73 million here or £24 per head of the population. The value of State assets against the State debt amount in Denmark to £15 million but we have a dead weight debt of £65 million. Denmark has really no dead weight debt at all. Denmark has a national debt but she has sufficient credit to make her position really one with a national credit of £16 million. We have invested money in all sorts of schemes that, in my opinion, have been to a great extent non-productive, with the exception of housing. Many of our schemes have created deadweight debt, as the money has not been invested in something of a productive nature. The policy pursued in Denmark has been one of putting substantial sums of money into agriculture and getting results. Their national income in a country two-thirds the size of Ireland, amounts to £66,500,000 or 45 per cent. more than ours. I stress this, that the key to our whole problem of providing a higher standard for our people, and higher wages, is not one of social schemes of the type pursued by the Government, but a policy of stepping up production. We will not achieve decent standards for our people until we step up production.

When I read about what is happening in the crisis we are passing through, my mind always reverts to a figure given in the White Paper on national income, and published by the Government last summer. There is a particular figure there which sticks in my mind, indicating that out of our whole population only 190,000 people have an income of £3 per week. That means that the vast majority have an income less than £3 per week. When we consider that purchasing power is approximately 50 per cent. less than what it was, it means that the real income of these people is about 30/- on which they have to exist. I suggest that the solution is production, and more production, and organised plans for development but not individual effort. We have been relying for the past 15 or 16 years on individual effort without any constructive national stepping up and we know with what results. I could give information in these papers relating to trade.

There is a very low level of trade, a low level of output here as compared with Denmark, a country only two-thirds the size of ours. The agricultural output per worker in Denmark is 76 per cent. over ours. The output per acre is 52 per cent. more than ours. Taxation in Denmark per head of the population is a lot lower than ours. Is it any wonder, with these crushing burdens of taxation, and with an expenditure of capital in things that are not conducive to real wealth, that we have the situation that exists?

The Parliamentary Secretary, when introducing this measure, made no reference to agriculture and agricultural capitalisation, or to the necessity of putting a lot more money into our primary industry. We have one authority here who has studied this matter extensively and who has written a lot about it—Dr. Kennedy. He suggests that we want at least £100,000,000. If the provision made in this measure is an answer to Dr. Kennedy, then we know where we are heading for.

So far as this Bill is concerned, I suggest we want cheap capital. There is very little use in making provision such as this if the capital is not available at a cheap rate. Interest charges and the repayment of loans should be made as attractive as possible. Leaving out any other considerations, weather conditions cause wide fluctuations in farmers' profits as between one year and another. Potential investors should feel reasonably satisfied that their earning capacity will be maintained over a long period and will be sufficient to carry, without undue strain, the amortisation of whatever sums may be involved.

I suggest that we should plan to capitalise agriculture on a reasonable basis and we should aim at an efficient agriculture. If the new Minister for Agriculture were sufficiently interested in this problem, I feel he might have graced the House by his presence. However, I suppose he has such confidence in the Minister for Finance and in the Parliamentary Secretary that he does not think it necessary to do so.

There is any amount of surplus money in this country. If we are to prepare for the proper capitalisation of agriculture it is essential that we must have confidence and faith in the future. That situation will have to be created before you will induce people to borrow money and take on the responsibilities attached to borrowing and the repayment of capital advances. That is the difficulty. There is no use in setting people like the Post-War Planning Committee the job of planning for agriculture from now onwards when capital for the industry will become available, if such people spend months calling witnesses to give them information, if their reports are to be pigeon-holed, or if we do not implement their recommendations.

I cannot understand the attitude of the Minister or the Parliamentary Secretary in view of the recommendations made in various reports. They do not advert to those recommendations or to the problem of capitalisation. When I talk about confidence and faith in the future, I think the sums mentioned by the Parliamentary Secretary would seem to be very much out of proportion. I mentioned that in 1937 there was a sum of £1,400,000 representing loans outstanding. The Parliamentary Secretary said that the loans outstanding in October last amounted to £844,000. That clearly demonstrates that the corporation has not served any national purpose to any great extent. What is a sum of £844,000 in proportion to the value of our primary industry?

The Parliamentary Secretary is responsible to the Minister only; he is not supposed to be responsible to the House. He is, however, made responsible for this Bill and I presume he has examined our national problems. Is he satisfied merely to read out some statement prepared by his Department and accept no worry beyond that? If the House is sincere in improving conditions, now is the time to ascertain the capital requirements involved.

I will give the Parliamentary Secretary and the House some idea of what is happening in Great Britain. That country appreciates that her economic position is undergoing a fundamental change, that sterling has not the power in every market that it had before the war to purchase goods, and that her world trade for manufactured goods will be substantially reduced because the more backward countries, even before the war, were developing industries. That, coupled with her indebtedness, means that she is more and more thrown back on her reources.

Great Britain is preparing her agriculture for the years to come. They have carried out a comprehensive survey in England and Wales in order to see what the position is. They have prepared information with regard to holdings and occupiers, farms and farm labourers. They distinguish between the small occupier and the big farmer. They indicate the tenure by which land is held, the rent paid for the land and the length of occupation. They refer to the convenience of lay-out of holdings and the condition of farm houses and buildings. There has been a full survey of the country and important information is disclosed. They deal with the number and the condition of holdings, the type and fertility of the soil, the managerial efficiency of the occupiers, the condition of cultivated lands and the use of manures. They refer to the reclamation of land in order to bring it into production and, among other things, they deal with water and electricity supplies.

That gives some idea of what they are doing in Great Britain and what capital must be expended there in order to make agriculture efficient. They give particulars of the condition of farmyards, that must be a hive of industry in the winter if stock are to be properly housed and fed. If artificial heating is provided it helps to save the food ordinarily required to provide proper body heat among the animals.

I wonder has the Parliamentary Secretary or any member of the Government thought over these problems at all? I think the House must be forced to conclude, judging by the statement made by the Parliamentary Secretary, that no thought whatever has been given to this fundamental problem of rehabilitating the main industry of the country and that it is to be let sink lower and lower until eventually we are faced with an economic crisis. We have been living very definitely on our accumulated sterling assets. For years before the war the value of our imports exceeded the value of our exports, taking an average over five years, by £19,000,000 per year. When capital goods come on the market, when we can purchase freely and if there is no limitation put on our sterling balances, how are we to bridge that gap? Remember we have not purchased capital goods for years. We have any amount of worn-out equipment and machinery, not merely in agriculture but in industry as well, that is calling out for replacement when machinery is again available.

In year past agriculture, plus whatever amount came from invisible exports, provided the purchasing power. If Great Britain because of her economic circumstances is forced to put a limitation on the use of our external assets how are we going to bridge the gap so far as exports and imports are concerned? These are problems related to the whole question of agricultural re-organisation and the capital necessary for reconstruction.

The Bill is merely a small extension of what has been provided for years and Deputies generally are aware of the very limited service that has been provided for agriculture by this corporation. So far as the Bill itself is concerned, it is mostly a Bill for Committee Stage discussion. It is a Bill, however, that should be examined very minutely because there are aspects of it that are objectionable. The Minister proposes to eliminate private investment. I think it unfortunate that we have to do that, especially in view of the danger of inflation. I think the more money we should take from private sources the better. If you have to go to the banks for advances it means that you are going to allow the jointstock banks to create money. I cannot, however, have it both ways. If I am advocating cheap money for the agricultural community—my idea is that it should be advanced at 2 per cent.—I suppose one cannot expect the investing public to subscribe at that figure. They would have to subscribe below that figure in order that some provision might be made for the working of the corporation.

Except for that reason, I do not know why a decision has been made to eliminate them. The view evidently is that private money is too costly. I wonder at what figure we could get private money to-day, or whether in fact the matter has been considered by the Government before a decision was made to eliminate private money? Possibly the private investor would be prepared to have his money converted. I suggest he should have been given the opportunity, at all events, either to get out on the terms that are embodied in the measure or as an alternative to have his money converted at a lower rate.

Section 13 deals with this matter of the cost of money and the Parliamentary Secretary did not give us much information. Paragraph (b) of sub-section (1) of that section states:

"The corporation shall pay to the Minister on every sum advanced to the corporation under this sub-section from the date of the advance of such sum until such sum has been repaid, interest at such rate (not being less than the rate payable, at the date of the advance, on advances from the Central Fund to the Local Loans Fund) and on such date or dates as shall from time to time be appointed by the Minister in that behalf."

I do not know what the rate is for advances from the Local Loans Fund. I believe the rate of local authorities is 2 per cent.

Two and a half.

Is there any charge as between the Central Fund and the Local Loans Fund?

I feel that this question of the rate is all-important, if this corporation is going to serve any useful purpose at all to the community. When we consider the rate of interest, we must remember that the loans are of a very small amount generally. There is not merely the question of the rate of interest. There is also the question of security and the preparation of a deed. A solicitor has to be employed and the deed has to be stamped. The solicitor's fee has to be paid. That all involves cost, so taking all these things into account the rate paid by the borrower is very substantial, especially on small amounts. There is another aspect of the case which should be considered. If we are going to sell our surplus in Great Britain in competition with the British farmers and in a market where the primary producer can borrow money more cheaply than we can, then we are beaten. The financial conditions under which farmers, small farmers particularly, can borrow money here should be at least as good as those applicable to agriculture in Great Britain. I want to suggest to the Parliamentary Secretary that 2½ per cent. is not low enough and that the rate should be lower.

Section 26 is a section to which I take very strong exception. I do not know whether such a provision is in existing legislation. I did not get an opportunity of looking up the original Act or some of the other Acts referred to in the Bill. Section 26 deals with chattel mortgages. Where a chattel mortgage falls due and is not paid, and where there is any breach of any covenant or any condition contained in the chattel mortgage, we give the mortgagee—and the mortgagee is not merely the corporation, it is a recognised bank that has applied for registration as a recognised bank—power to make an order on the county registrar to distrain.

I have not studied the Constitution very closely, but, from what I know of it, I am inclined to suggest that this is unconstitutional. Two wrongs never made a right, and it does not follow that because certain legal powers exist to distrain for rates or for annuities, it is right and proper that power should be given here. In the case of the power in the Land Acts, before a county registrar can distrain for annuities, he must give 15 days' notice and the annuitant has the right of appeal to the court. In this case, there is no appeal. What have we got courts for, anyway? Is the intention not to ensure that justice is done in every case? There may be extenuating circumstances, so far as an individual is concerned, but we are to leave it to the mortgagee to decide what is right and what is wrong, because even the county registrar, who is an officer of the court, is given no discretion in the matter—he must distrain.

If we are to give more than lip service to the rights of the individual and to the administration of justice, we ought to get away from that type of provision in a Bill of this sort. If the mortgagor has failed to fulfil his obligations under the mortgage, he should be brought to court and a decision should be come to there. If a decree is given against him, let it be executed, but if you cannot provide money without putting in a provision of this sort, I would prefer to do without the money because that provision, in my opinion, is wholly objectionable.

With regard to this whole problem of providing credit, surely the Parliamentary Secretary is aware that it is not the man who can always give collateral who will always make good. There are considerations outside of the physical security by way of chattel mortgage. The fact that a man is a good worker, who looks after his job and— probably a more important consideration—who has a good wife, a thrifty wife, who will run his home properly— these are considerations which are not to be taken into account. There is no consideration for the man who has been an agricultural worker for years, a man who is ambitious and who buys a little holding with a few pounds he has got together in order to start as a primary producer, because he cannot provide collateral, because he has no chattels to offer.

In the case of a banking institution which has local branches, the manager of the local branch may have some knowledge of an individual, which is a very important consideration, and that institution has an advantage over the corporation by reason of their local information of an important nature from the point of view of making a loan. So far as the corporation is concerned, it has to depend sometimes on a Guard. That man is not by any means reliable, because he is not qualified to give information or advice to the corporation on a matter of this kind. Then again, an inspection has sometimes to be made in respect of a small loan which involves a visit by an inspector from Dublin and the expenses incurred are added to the cost.

I do not know whether any consideration has been given to this question of security and of reducing the charges which arise because of the machinery which is there and because of the circumstances of the corporation situated, as it is, here in Dublin. I cannot suggest an alternative, but I wonder if any consideration has been given to some sort of alternative, some machinery in the form of local branches or some arrangement of that nature, which would be in a position to give the necessary information with regard to the character and quality of applicants.

With regard to Section 28 which deals with a floating chattel mortgage, that is, a mortgage on stock which may be changed on the farm from time to time, paragraph (d) of sub-section 1 says:-

"Whenever the mortgagor sells any of the stock for the time being on the land to impose on him the obligation of paying such (if any) part of the proceeds of such sale as the mortgagee shall require to the mortgagee in reduction or discharge of the principal moneys secured by the chattel mortgage and any interest and costs due thereon and to confer on the mortgagor the right to pay the whole or any part of such proceeds of sale to the mortgagee in reduction or discharge of such principal moneys and interest and costs."

It is right and proper to have a provision that a mortgagor can discharge his liability at any time and pay up the amount in full, but that paragraph appears to me to empower the mortgagee to determine the duration of a loan at any time. The mortgagor may be selling stock because the stock has reached marketable condition and it is an advantage to sell at the particular time. He is merely changing stock, but if the mortgagor has asked for a loan to run a certain period, it ought not to expire before the period set out in the mortgage. However, that is a matter which can be more profitably discussed in Committee, but it does appear to me to limit the duration of a loan by the mortgagee intervening at a time when the borrower may be selling his stock.

Paragraph (4) of Section 39 relating to registered land which deals with priority charges as against puisne charges and the corporation's priority over puisne charges sets out:—

"such charge is duly registered in such register as a burden affecting such land,

then, subject to the provisions of this section, such charge (which shall be construed as extending, in addition to the said principal sum and interest secured thereby, to the costs and expenses of all legal proceedings instituted by the corporation for the purpose of realising the amount at any time owing on foot of the said principal sum and interest) shall as against such land be in priority to and shall override all equitable claims against such land."

We have something similar in Section 42 dealing with unregistered land, but there is a caution in Section 61 of the Act of 1891 in respect of which the Parliamentary Secretary may be able to give us some information.

Whether that caution puts an obligation on the intended mortgagee to give notice of his intention to have a mortgage charge on the property I do not know. Perhaps when the Parliamentary Secretary is replying he would tell the House what is the intention of Section 61 of the Act of 1891.

Section 53 on the question of proving a mortgage—time and time again in legislation of this sort you find that where an institution is a quasi-Government institution it is relieved of the responsibility of proving something in court and a certificate is sufficient. Why should we be asked to treat an institution differently from an individual? Why should not the onus be put on the corporation to prove that such mortgage existed?

More expensive.

Surely there should be no difficulty in producing the deed. Why we should be asked to facilitate the corporation to that extent I cannot understand. Whether it is an institution or not the same law should apply. I do not think it right to put into legislation a section exempting a State institution from proving a deed in the ordinary way.

I am glad that the Bill is extending its operation to co-operative societies, or groups of farmers, interested in the processing of agricultural produce. Hitherto, there has been a definite lacuna in our legislation in that respect.

I want again to emphasise the importance of a typed plan to deal with this whole problem of capital requirements and the provision of capital. Such a plan involves a detailed survey both of the farmyard and the farm buildings. But that is merely one aspect of such a survey. The survey must be much broader than that. It is an urgent matter and one which should be put in hands immediately.

There are people in this country who are nervous about borrowing money and committing themselves to the repayment of the loan and loan charges. If we are going to attempt to make any effort to emulate what has been done in Denmark, where they have succeeded in bringing into operation an intensive agriculture by the provision of ample capital, the first essential is to create in our people an atmosphere of faith and confidence in the future. In order to achieve that we must have a long-term policy for agriculture. The work of economists, who have studied this problem as to the provision of capital for agriculture, has been largely ignored. In my opinion, in the past money has been squandered and wasted and has thrown back upon the community generally burdens which they should not have been called upon to bear. It is a natural corollary to the development of agriculture that industry must develop, too. A thriving industrial development is dependent upon an efficient agriculture. We are far from that to-day. In order to reach that efficiency we must have ample capital provision and confidence in the future.

I approve of this Bill in so far as it seeks to facilitate the granting of credit to farmers in order to enable them to carry on their business, but I take serious exception to the extraordinary powers that the Minister proposes to give to this corporation. These powers have no parallel. Even the Government itself does not possess such powers. In particular, I refer to Part III of the Bill. Firstly, there is the provision relating to chattel mortgages. A register of these mortgages is to be kept but the right to inspect it is restricted. No member of the public or no trader may inspect this register. That is a complete reversal of the policy laid down in the Bills of Sale Act for the registration of ordinary bills of sale and a reversal of the policy contained in the Company's Act for the registration of debentures. If that is enacted I am afraid the result will be that the farmers will get no credit at all because no one will ever be able to ascertain whether the stock on their lands is their stock or is included in one of these chattel mortgages.

With regard to Section 26, I cannot understand why the corporation or the bank, in seeking to enforce its rights under the mortgage, should not be compelled to go to court and put its case before the court in the same way as a private individual or an ordinary company. Under a bill of sale there are circumstances in which a mortgagee is entitled to seize the property of the bill but there is no case in which a mortgagee is entitled to ask the county registrar to seize it for him. The effect of this is that you are going to appoint the claimant—the party to whom the money is due—to be the judge in the adjudication of his own claim. I cannot understand the reluctance of officials to have their cases decided by the courts. Surely, they must be satisfied that our justices will give a decision if the party coming before them establishes that he is legally entitled to a decision or to an order. I think it is wholly undesirable that any organisation should be put into the position of being enabled to grant a judgment itself. A clerk in the office of the corporation, or an official of the bank, could make a certificate, give that certificate to the county registrar and that certificate would have the same effect as if it were a judgment pronounced by a court. The implications arising from that situation might be very serious.

Only last year there was a Hire Purchase Bill before this House. It received almost unanimous approval. One of the main provisions of that Bill was to restrict the right of the owner of goods under a hire-purchase agreement from seizing those goods and it was enacted by this House that before any seizure could take place the owner must go before the court and obtain an order for such seizure. The policy outlined here in Section 26 is a complete reversal of that. It applies, of course, only to this corporation and to the approved banks. I think this corporation would be just as well off if it were subject to the ordinary rules, instead of being given this extraordinary power to act as judges in their own cases.

I object also to Section 53, which provides that a certificate of the corporation shall be received in evidence and be conclusive proof. There, again, you are trying to put the corporation beyond the law. You are putting it into the privileged position where a solicitor can stand up in court and say: "I have a certificate sealed by this corporation." That is that, and there can be no question raised about it. The objections to such a proceeding are obvious.

I suggest that these provisions should be dropped from the Bill. The ordinary law is good enough and effective enough for the corporation, and they will be able to enforce the mortgages quite effectively without having these extraordinary provisions.

In the ordering of the business to-day it was agreed that a motion standing in my name and the name of Deputy Beirne could be considered in conjunction with this Bill. I therefore propose to refer briefly to the proposal set out in the motion. It is to the effect that Dáil Eireann is of opinion that proposals for legislation should be introduced by the Government to enable farmers to obtain loans for the expansion and development of their industry at a rate not exceeding 1 per cent. I do not know whether it is possible to incorporate these provisions in the Bill or not. We shall have to consider that on Committee Stage.

One of the main causes for the failure of the Agricultural Credit Corporation is that the rate of interest has been altogether too high to encourage the ordinary farmer to avail of the facilities provided. The average farmer who has a little spare money on deposit in the bank is able to obtain interest at the rate of only 1 per cent. He naturally feels reluctant to pay a higher rate and thinks it is a grave injustice to be called upon to pay a higher rate for money which he requires to borrow. As far as I understand the financial clauses of this Bill—I do not profess to understand them thoroughly and I was unable to hear what the Parliamentary Secretary said when he was introducing the Bill—they seek to enable the credit corporation to be financed without resort to private investors. In so far as that is the position, it should be conducive towards implementing the terms of the motion I have referred to. It will be admitted that the private investor is not likely under any circumstances to advance or to invest money at the rate of 1 per cent. but there is nothing to prevent the State from advancing money at that rate or at a lower rate. At the present time the State has ample and adequate financial resources. It controls a Central Bank and, if it so desires, can make provision for loans at any rate of interest which it considers desirable. I have indicated that capital for agriculture must be provided at the lowest possible rate. I believe that it is physically possible for the Central Bank to advance whatever money is required at less than 1 per cent. but, even if it were not possible, it would still be desirable in the national interest to advance money for agricultural development at that rate even if it had to be provided out of other State sources. My reason in putting forward this view is that agricultural buildings, equipment, stock and the improvement of agricultural holdings are so important that nothing should be allowed to stand in the way of providing the necessary capital to finance them.

Deputy Hughes has referred to the low rate of capitalisation in agriculture in Ireland as compared with Denmark. We know that for many years agricultural development in Denmark coincided with intensive expansion of agricultural buildings and equipment and improvement of the soil. If we are to make any advance in agricultural production we must proceed along the same lines. I think we can do better than Denmark because, when the Danish farmer started out to improve the industry by raising loans for the improvement of his holding, he incurred a very severe burden of debt and interest charge. In most cases the Danish farmer had to borrow money at the ordinary commercial rate of interest, with consequent severe commitments. We all know that during the years of acute agricultural depression the Danish farmers were unable to meet the interest charges on the loans they had obtained. In this country, starting in what I think is a more enlightened age than twenty or thirty years ago, in financial matters at any rate, we can ensure that the money required for the development of agriculture is provided at a reasonably low rate of interest so that there will be no undue burden imposed on the agricultural industry.

In an earlier debate to-day an attempt was made to attack the Government's policy of self-sufficiency. I do not intend to follow that up, but merely to express the view that Government policy has not been one of self-sufficiency in regard to agriculture but one of selfish insufficiency. Selfishness has been their policy as far as agriculture is concerned, as they shaped their policy all the time with a view to capturing votes, by doling out small sums of money in different ways, without any big comprehensive policy of planning for future development.

A policy of self-sufficiency in agriculture would, of necessity, be based upon two things, a long-term guarantee of prices for the industry, and ample credit facilities to enable the industry to equip itself properly for increased production. Any person who has had experience of being present at threshings during the winter months, and these operations continued up to Christmas, must have had occasion to lament the enormous losses which were suffered, owing to the fact that haggards were not adequately protected, and that there were not sufficient hay-barns and other sheds for saving the crops. It can be reasonably stated that almost as much of last year's grain production was lost in the haggards, through want of proper care, as was lost owing to the bad weather. Farmers have not sufficient hay-barns or sheds to cover their crops, simply because they have not the necessary capital.

The reason for that is, that the profits of the industry are not sufficient to enable them to acquire capital, a second reason being that the credit obtainable up to the present from the Agricultural Credit Corporation and other institutions has been expensive and difficult to obtain. The average farmer struggling to live on a small farm has rarely been able to convince the Agricultural Credit Corporation that he is a creditworthy individual. He has never been able to answer the 101 questions submitted to him by the corporation. Because of the very elaborate machinery, which is provided to ensure that no farmer will obtain a loan except one who has more than sufficient money security, very few farmers have been able to avail of the corporation's funds.

The question of providing for a big expansion of agriculture is so important that the Government will have to be prepared to take risks, just as 50 or 60 years ago, when it was decided to buy out the landlords' interests, money was advanced on the security of the agricultural holding. I think the same security should be sufficient security for a certain sum of money so that a farmer would have a chance of expanding his industry. If the rate of interest is low, and the term for repayment considerably extended, I am certain that farmers will meet their obligations and that the percentage of losses would be small. In regard to land annuities, we know that the amount uncollected forms a very small percentage, notwithstanding the fact that the money was advanced to every individual farmer without exception.

What is really happening at the present time—and it is as well for the House to realise it—is that the only people who seek advances from the credit corporation are those who have failed to secure accommodation from banks. They may not be the only people, but they form a large percentage of those who failed to obtain money from banks. That is to say, that it is not the most creditworthy farmers who turn to the Agricultural Credit Corporation.

The average farmer who is making some progress, and leaving some little deposit in a bank, usually, if he wants credit accommodation, turns to the bank manager, and if his record is good, he frequently obtains it on terms which are, on the whole, as good as those of the Agricultural Credit Corporation. It is true that the rate of interest with the credit corporation is now slightly lower than that of the banks but, at the same time, the banks provide a less rigid system of collecting and recovering debts, and very frequently, if times are bad, a farmer dealing with banks can obtain an extension of time, facilities which may not be obtained so easily from the Agricultural Credit Corporation.

Strange to say, there is another reason why many creditworthy farmers have refrained from approaching the Agricultural Credit Corporation. It is this. The obtaining of a loan from the Agricultural Credit Corporation is what they call in rural areas a clear indication that a man is in difficulties. That is the inference that is drawn. If a man gets a loan from the Agricultural Credit Corporation he seems to hide it; he does not like his neighbours to know that he is borrowing money. The Agricultural Credit Corporation took over certain functions from the Board of Works. When the Board of Works was operating and advancing loans for buildings, obtaining a loan from them was never looked upon as a slur or as an indication that the farmer's circumstances were bad.

There is a marked distinction between the two bodies and it was suggested to me by a practical farmer that the Agricultural Credit Corporation should cease to advance money for buildings, or rather that they should hand over their function of advancing money for buildings to such a body as the Board of Works or to some new body constituted solely for that purpose. As we know, farmers who are in difficulties obtain money from the Agricultural Credit Corporation and, therefore, it is looked upon as the body that helps farmers who are down and out. The Board of Works advances money only for a specific purpose—that is, the provision of buildings.

That is an aspect which may not have occurred to the Government or to those who control the Agricultural Credit Corporation, but it has a big bearing on the fact that industrious, creditworthy farmers, perhaps well-to-do farmers, do not approach the Agricultural Credit Corporation for loans for extensions they might require in, for instance, the erection of hay-barns. The Parliamentary Secretary may reply that the Agricultural Credit Corporation has advanced a considerable sum of money for buildings. That is so, but it is nothing like the amount required. Let any Deputy or any member of the Government visit country farms, the farms of people who are fairly prosperous or who are well able to pay their way, and he will observe that on many of these farms the building accommodation is altogether inadequate; that the sheds for the storage of grain or other crops could with advantage be extended.

One of the first things to be done is to encourage the solvent, industrious farmer to avail of credit facilities and expand his equipment. Perhaps this could be achieved if there is a widespread provision of credit so that we may reach the stage when practically every farmer will avail of those facilities and utilise them for a really reproductive purpose and bring about a definite improvement in the provision of building and equipment on the farm.

It is true that many farmers are forced to apply to the Agricultural Credit Corporation for loans, not for the purpose of expanding their industry or providing buildings, but for the purpose of clearing off pressing debts. That does not help very much, because you cannot borrow your way out of debt. There is really no way to lift the agricultural community out of debt except by ensuring that the industry is a paying proposition. If a farmer is losing money annually on farming operations, no amount of borrowing will improve the position. What is needed is a sound, agricultural policy, a long-term policy guaranteeing an adequate return to agriculture. It is also essential that the loans required for farming expansion should be provided at the lowest rate of interest is possible. A low rate of interest is necessary, because no matter what we do to improve agricultural conditions, the profit-earning capacity of agriculture will be comparatively low when compared with industry and commerce. Therefore, agriculture requires specially low rates of interest. The farmer, particularly the industrious farmer, is reluctant to embark upon any development in his industry which involves a loan and in order to induce farmers to obtain credit facilities it is necessary that the loan should be as cheap as possible.

There is a provision in the Bill for what is known as chattel mortgages. The chairman of the Agricultural Credit Corporation, Mr. Barton, had very sound views to express on that question when he was a member of the Banking Commission. He pointed out that chattel mortgages are a very difficult thing to arrange in this country as far as live stock are concerned. He said that in the Argentine, and in North and South America generally, where there are big ranches and where live stock are permanently branded, it is quite easy to have chattel mortgages on live stock, but in this country, where cattle change hands two or three times in the year, where one beast may pass to three or four owners, it is very hard to arrange chattel mortgages on any form of live stock. It seems to me that chattel mortgages could be used advantageously for financing the purchase of farm equipment or machinery, such as threshing sets, grain processing machinery, reapers and binders and other fairly expensive equipment for the farm. Those machines could be purchased on some system similar to the hire purchase system, but at a much cheaper rate of interest.

I think the Agricultural Credit Corporation could finance such purchases of approved machinery. The corporation should not finance the purchase of any machine unless they are certain that it is going to give a good return and that it is necessary for the farmer in his particular type of farming. If a farm is small, for example, the corporation would not be justified in financing the purchase of very expensive equipment. I think that if discretion could be used in that connection—assisting in the financing of useful agricultural machinery at a low rate of interest and with a not too short period of repayment—great help would be given to farmers. There are various schemes for the purchase of machinery, but in most cases the repayment period is so short that the ordinary farmer is not able to meet the commitments involved.

Deputy Hughes was rather lucky, when he was speaking here to-day and drawing a comparison with Denmark, that the Minister for Local Government was not here because the Minister would certainly have broken forth into doggerel verse, as he did when I was speaking on the last occasion the Dáil sat. There is no doubt whatever that the progress made in Denmark clearly reveals how much room there is for expansion here. Some people think that the output of Denmark is double or treble that of this country. It is not; it is about 50 per cent. higher but 50 per cent. is an enormous quantity. If an increase of 50 per cent. could be brought about in our output, it would change the entire standard of living, not only of our farmers but of the urban community as well. It would ensure that we would have real self-sufficiency here so far as food supplies are concerned. There is an old saying in rural Ireland—it may be a bad saying and it may not appeal to some Deputies—that where there is muck there is luck. The meaning of that phrase is that where there is intensive feeding of live stock carried on during the winter months, there is certain to be prosperity. I think the younger generation to-day will not be attracted by muck. They would be more attracted by high-class efficiency in farming. Such efficiency calls for farmyards, farm buildings, and well-protected haggards. We should aim at providing all these facilities, so that the feeding of live stock can be carried on during the winter with efficiency and with a certain amount of comfort for those engaged in agriculture.

That is what is going to make for real progress in the country. We do not require so much in order to have luck in the country but we do require that the farmyard during the winter months should be a complete hive of industry. People in this country, when comparisons are made with Denmark, are inclined to say that the climate of Denmark is much more severe than ours and that it is necessary for the Danish farmer to have a considerable equipment in the way of sheds and buildings to deal with his farm produce. I think there is an impression that our climate is not as bad as we imagine whereas the truth is that our climate is much worse than we imagine. Simply because some winters are very mild and fine, a feelings has grown up in this country that we have a milder and much better climate than other countries. I think that, taking it all round, we have one of the worst climates in the world for farming operations. It may not be altogether the most severe climate but it is one of the most treacherous and deceitful climates. That makes it necessary to ensure that those engaged in agriculture are protected and that their produce is protected against the vagaries of the weather. It can only be protected by working on the assumption that we are going to get the worst possible weather we could get in this country. During the dry weather last autumn—I should say during the dry week which occurred last autumn—it was noticeable that the farmers rushed their corn into the haggards. They had to rush and work overtime in order to get it off the fields, at any rate, as quickly as possible, knowing as they did that the fine weather would not last very long. It was impossible in the few days that came to gather that corn, whether oats or barley, and to protect it adequately from the weather. The result was that enormous losses were suffered.

The same conditions apply in regard to some of what might be regarded as new branches of the industry—the growing of peas, root seeds and so on. Many farmers who had not sheds into which to put these crops when partially saved lost them completely. That is just an instance of how necessary it is to provide more accommodation on farms. I regard buildings and equipment as very important, almost as important as the improvement of the land and the improvement of fences, which in themselves are also of great importance.

With regard to the Bill itself, I do not think that there will be much objection to what it contains, although there may be some sections which may demand revision or amendment. There is one particularly interesting section which gives the definition of a farmer. I notice that a farmer is defined as any person engaged in, or intending to engage in, any form of agricultural production. Under that definition a man would require to be at least seven days dead before he could be described as not being a farmer. It opens the door very widely at any rate and, personally, I have no objection to that. I think that the facilities provided for the Agricultural Credit Corporation under the Bill to obtain money are not sufficient. It ought to be possible for the credit corporation to obtain money at such a rate as would enable them to lend it out at the rate set out in the motion. The Bill provides, I think, that £250,000 will be advanced to the corporation by the Minister out of moneys voted by the Oireachtas and that up to £7,000,000 or £7,500,000 may be obtained by the corporation by loan. If the credit corporation has to obtain loans in the ordinary money market, I do not think they can advance money at a sufficiently low rate of interest to meet the needs of the situation.

I had hoped that if and when we were presented with a new Bill purporting to give credit to farmers, it would be on a more comprehensive scale than this. There is on the Order Paper a motion in the names of Deputy Cogan and another Deputy seeking to secure loans for farmers at 1 per cent., and I understand that the arrangement was that we might discuss that motion on this stage of the Bill. One finds it rather difficult to decide how to reconcile one with the other. I should be prepared to vote for the motion, but I am rather afraid that it will be found rather difficult to reconcile the motion with the Bill.

There will be two decisions, if desired.

I understand that. I would have been glad if it had been possible to make an approach to the matter in such a way as to enable us to arrive at a result which would be acceptable to Deputy Cogan, to other Deputies and myself and which, at the same time, could be incorporated in the Bill. Cheap credit for farmers will be indispensable in the future development of agriculture. It may be that, in the very near future, in the course of the development which we hope to see in connection with agriculture, it will be necessary for farmers to incur great expense in one way or another. Take, for instance, the dairying industry which is at present in a particularly parlous condition. The difficulties of that side of the agricultural industry become more onerous every day and I can foresee a time when, possibly, owing to these difficulties—one of them is labour—it will be necessary for farmers to engage in another method of milking pursued in other countries— mechanical milking as against manual milking. If that is so, it will be necessary for the farmers to incur very great expense in equipping their dairies, purchasing milking machines and so on. I do not say that this is an absolutely necessary development, but it is at least a possible consequence of the difficulties confronting the dairy farmer at present.

Another point—it was touched on by Deputy Cogan—is that in the development of agriculture and particularly having regard to the lesson to be learned from the very inclement winter, the in-feeding of cattle will probably become more general. I hope it will, because a great quantity of food is wasted by out-feeding cattle, and if all farms were equipped with the necessary yards and open sheds where cattle could be fed—if necessary, they could be allowed out afterwards—there would be a great saving in fodder and the result would be beneficial to cattle in general. Anybody who has any interest in agriculture will recognise that some expense in these directions will be necessary in future and one would hope that it would be possible to have a credit scheme by which money could be advanced to farmers at a very low rate of interest, if not at the rate of 1 per cent. mentioned in the motion.

One cannot see from the terms of the Bill and the manner of its introduction how it will be possible to make loans at 1 per cent. under a scheme of agricultural credit. However, money was purchased cheaply by Governments at various times for the development of agriculture and for setting the farmer firmly in possession of his land. Money was borrowed at 2¾ per cent. when money was dearer than it is now, and, where there is a will, there is always a way. I recognise as well as anybody that for an individual farmer to borrow money at anything less than 4½ per cent. at which the Agricultural Credit Corporation lends it to him would be very difficult, even if his finances were very sound, but, borrowing in the aggregate, the Government could borrow sums sufficient to meet all the credit needs of the country at a very low rate of interest at present. This is probably the most propitious time we are likely to have for years in regard to borrowing money and the Government, with the will, could now do it. It was done at the time of the Land Purchase Acts to put the farmer in ownership of his land and it could be done now in order to put the farmer in a position to develop his land properly and to make it a profitable concern in the future.

Under the procedure of the Agricultural Credit Corporation, as it has worked up to the present, not all farmers were given loans. Under the Land Purchase Acts, when previous Governments became responsible for the advancing of moneys to farmers to purchase their land, there were no exceptions. All farmers, good and bad, got it, as Deputy Cogan rightly pointed out, and it speaks well for the farmers of this country that most of that money has been, and is being, repaid and that the percentage of loss is probably smaller than under any credit scheme for farming or any other operation. The money was given to everybody in that case, but the procedure under the Agricultural Credit Corporation is a different matter. I do not blame them —they probably had to do it—but Deputy Cogan has referred to the obstacles in the way of borrowing from the Agricultural Credit Corporation. Farmers do not like it because it looks like a forced loan or something of the sort. When the Government lent money to farmers to purchase their lands there was no restriction put upon them in any way. Every farmer got the money. The Agricultural Credit Corporation goes much further than did the Government in the matter of security. The land on which the farmer borrows is the same land which acts as security for every shilling which we borrow anywhere because, in essence, the lands and buildings of the country are security for all our loans. If the land is good enough for that then it should be good enough for a loan to the individual farmer. But the Agricultural Credit Corporation goes further. They inquire into the character and reputation of the individual. No Government ever went so far.

Possibly the reason is that originally the corporation had to borrow money at 5 per cent. and had to be pretty niggardly in order to pay their expenses. But I cannot see the reason myself for this inquisition which is held upon the farmer. The local sergeant of the Guards makes inquiries into his character. If there was a comprehensive scheme of credit for the country, as in the land purchase scheme, there should be no necessity for such an inquisition. At the same time, the money could be lent to the farmer at a small fraction above that at which the Government borrows on the credit of the State. To all intents and purposes the land constitutes the State.

I cannot see that this Bill is going to enhance the borrowing powers of the farmer in any way. No mention is made about lowering the rate of interest. One would have hoped that since it is now possible to borrow money at a little over 2 per cent. we would have been presented with a Bill which would make money available to the farmer at considerably reduced rates of interest. If it could be done I would like to see money given free to the farmer.

There are certain sections of the Bill which are objectionable. Deputy O'Connor drew attention to some of them in a cogent and precise analysis of certain sections of the Bill. As a lawyer, he understands thoroughly the implications of these sections. With regard to Section 21, I do not like the principle of chattel mortgage loans for farmers. That is a bad system and can achieve no good results.

As Deputy Cogan pointed out, cattle are a floating stock. I do not know how the corporation could keep track of them under a chattel mortgage. The fear that they were keeping track of them would render the sale or exchange of cattle exceedingly difficult for the borrowing farmers. That is a system of security which is particularly obnoxious. There might be some excuse for it with regard to machinery, but even there I do not like it. In Canada and America there is a system whereby credit is given for the purpose of purchasing machinery and most machinery is purchased under the hire purchase system. I know when I was in Canada that was the system in operation and I cannot recall one single instance of that machinery being seized for nonpayment of debt. The farmer was given every latitude. I am not enamoured of this system of chattel mortgages for farmers and it is particularly obnoxious in the form in which it is proposed here.

With regard to Section 26, Deputy O'Connor has already pointed out that this particular section gives the corporation a greater power than that possessed even by the Government. He put the case succinctly and correctly when he pointed out that a clerk in the office of the corporation or an official of the bank could give a certificate which would have the same effect as a judgment of the court. I think that the ordinary machinery for the collection of debts should be adopted here. This section will have to be amended and I am glad that its chief critic is a member of the Government Party.

There are other sections also in need of amendment, but the one that strikes me most forcibly is that more or less iniquitous clause—copied, I think, from one of the Land Acts—whereby a certificate of the corporation will be accepted by the court in lieu of direct evidence. That section should be withdrawn. There is no reason why the corporation should have that particular power and I do not think it is right to give it to them.

I regret that the Bill does not provide for a more comprehensive scheme of credit for farmers at a low rate of interest. That is a matter of vital concern to every farmer in the country. I would have thought that, in order to provide for the future development of agriculture in this State in a manner more in accordance with the agricultural progress made by other countries, we would have brought about a change over in the provision of agricultural credit for the erection of new buildings and the purchase of machinery. If our agriculture is to be developed to the point which it has reached in other countries we will have to make ample provision immediately for such development. It cannot be done unless there is available credit at a cheap rate of interest and at a long term. In the past the Government borrowed money at 2¾ per cent. when the borrowing of money was more difficult and the rate of interest was higher than it is now. It should be possible and I hope it will be possible for the Government to back such a corporation as this to lend money to farmers at at least half the rate at which it is now being made available.

The present system on which the Agricultural Credit Corporation operates is not in the best interests of agricultural production. In my opinion the corporation should be established as the agents of the Government to administer moneys that would be made available for the improvement and encouragement of agricultural production. In order to achieve that, the cost of that money should be not more than a little above the cost of administering the scheme. If the scheme is availed of and if agricultural production is increased it will indirectly repay the Government. Under the present system the Agricultural Credit Corporation as I see it is a profit-making concern. There are enough profit-making concerns in the country. If money were made available by the Government to encourage production, with the Agricultural Credit Corporation to administer the scheme, it would be much better for the country in general.

The man who is really in need of assistance from the corporation very rarely can get assistance. Before he can secure a loan he must satisfy the Agricultural Credit Corporation that he is financially sound. If a man is financially sound he can go into the bank and get facilities as good as and better than the facilities he can get from the Agricultural Credit Corporation but the man who is really in need of monetary assistance cannot go to the Agricultural Credit Corporation because, before he will get a penny, he must satisfy the corporation that he is well off and has a banking account or is well known in a particular bank. If a man is well known in a particular bank, the bank manager will give him facilities, particularly if he has fairly good security.

The next point I wish to make is in connection with the provision of loans for the purchase of agricultural machinery. As a result of the emergency, during which it was impossible to get machinery or parts for repairs and replacements, at least 40 per cent. of the agricultural machinery in the country is very nearly useless and, therefore, to replace it a substantial amount of capital would be required. In order to facilitate farmers in buying machinery I would suggest that the period for the repayment of loans for machinery should be extended to at least ten years. That is not unreasonable and if the Parliamentary Secretary looks up the records he will find that committees of agriculture have already put forward recommendations to the Department asking that the period be extended. In nearly all cases the machinery will be utilised by the individual farmer. Heretofore, machinery employed in agricultural production was utilised to a great extent on a hiring system. The life of the machinery will be much longer when it is used for the farmer's own purposes and there would therefore be no insecurity in extending the period to at least ten years. It is very important, particularly in a post-war period, to encourage the purchase of machinery. The period should be extended and the rate of repayment consequently reduced.

The period of repayment should also be extended in the case of the restocking of lands. This year, and probably next year, there will be a greatly increased amount of artificial manures and, therefore, the stock-carrying capacity of the land and the yield in grain crops will be increased. There will be more fodder and a higher yield from corn and barley for the feeding of live-stock, dairy cattle, and so on. I believe that many farmers will be applying to the Agricultural Credit Corporation, such as it is, for monetary facilities for restocking and, in order to encourage such enterprise, I would suggest that the period be extended to eight to ten years. We will say eight years in the case of live stock and ten years in the case of machinery. These are two important matters and if the Parliamentary Secretary carries out my suggestions he will be meeting the wishes of the agricultural community at this particular period.

Let us consider the question of housing on rural holdings. The Parliamentary Secretary will agree that 60 or 70 per cent. of the holdings in rural Ireland require a complete scheme of rehousing. Housing is needed for the protection of cattle and for the protection of grain after the harvest. I think money should be available at a much cheaper rate to provide such accommodation. The money would be well spent and would be a great encouragement to young farmers and rural workers to remain on the land. I hope the Parliamentary Secretary will direct attention to the points I referred to, and that they will be noted by the Department so that agricultural conditions may be improved.

As far as I can see, this Bill proposes to do three things. It transfers all share capital under the control of the Minister, it reduces the number of directors, and imposes more stringent penalties for certain offences relating to payments. These are the only three things that I see the Bill does. In no other particular does it differentiate from the Agricultural Credit Act passed in 1929 and later years. In his statement the Parliamentary Secretary gave no hint that on a later occasion the Government will implement the policy enshrined in the Report of the Post-war Agricultural Committee or, if they do implement it, whether another Agricultural Credit Bill will be introduced for the purpose of financing the provisions of the report. Admittedly, the Agricultural Credit Corporation has done a certain amount of good. It has relieved a large number of farmers, or has helped to relieve them, of obligations to banks and of private claims of institutions or societies. It has also helped to rehabilitate them by giving them a chance to make profitable use of their land.

But I do not think that the Agricultural Credit Corporation can be truly regarded as a farmers' credit organisation. I do not think that it was ever intended that it should be regarded as the ideal type of farmers' credit organisation. The conditions it imposed in order to get loans were too stringent, and the investigations carried out by officials of the corporation were rather too exacting. In fact, there was very little difference between the conditions imposed by the corporation and the conditions imposed by joint stock banks. During my fairly long experience I know two instances where people who applied to the Agricultural Credit Corporation for loans, that would not be granted, got loans subsequently from the joint stock banks. That bears out the point I made, that the Agricultural Credit Corporation cannot in any sense be regarded as the ideal type of credit corporation for farmers.

I always regretted that the Government had not the courage to produce a co-operative Bill. If such a Bill had been introduced it would be the ideal system of credit for farmers. Local co-operative societies could be organised as the media for dispensing and administering agricultural credit. That would ensure that the loan, when granted, was given to the right class of people. They would know that they were constantly under the supervision of the vigilant eyes of local people who knew their circumstances intimately. It is a pity the Government had not the courage to put such a co-operative Bill before the House. They would then have machinery for the administration of an ideal system of agricultural credit.

It is beside the point to compare the position in Denmark with the position here. Conditions are different. Farmers in Denmark fully appreciate the advantage of loans. They know that these loans have to be repaid, and they are always prepared and, in fact, educated to make the best use of them. Even though there is an opportunity with loans to develop their industry our farmers are very reluctant to borrow for any purpose whatever. They do not want to saddle themselves with the responsibility of loans, even though they know that the money could be used to increase the production of their land. The pyschology of the Irish farmer in that respect is completely different from any farmer in Europe. That is one of the difficulties confronting any Government, or any set of officials here, trying to put into operation an agricultural policy for increased production, so that we could keep abreast of other countries.

There is no use in claiming that this Bill represents the ideal type of farmers' credit. It is not. It was never intended from the outset that that should be so. The Agricultural Credit Corporation was intended to facilitate a certain type of farmer who could not get money from joint-stock banks.

Shortly after the corporation came into operation I think the banks simplified their methods and facilitated the type of people that this Bill would facilitate. As a result there is practically no difference in getting a loan from the corporation and the banks, except that it can be got for a slightly lower rate of interest from the corporation, which is some consideration.

If credit is to be availed of by farmers generally for improvement purposes it will certainly have to be available at a lower rate of interest than 4½ per cent. The Minister is empowered under the Bill to get money from the Local Loans Fund at 2½ per cent. but even allowing for the cost of administration, it should be possible to make advances at less than 4½ per cent. and still be able to make some profit.

I do not quite approve of a motion standing in the name of Deputy Cogan dealing with advances to farmers. I think that is an impracticable proposition, and while I am as anxious as any Deputy to give money at a cheap rate, I realise that in present circumstances it would be impossible to advance it at 1 per cent. I suggest to the Parliamentary Secretary that he should get the experts in the Department of Finance to examine the question, to see if it would not be possible to advance loans to farmers at a lower rate than 4½ per cent. If the Minister is able to borrow money at 2½ per cent. it should be possible to make advances at 3½ per cent. or, at the maximum, 4½ per cent. If the Minister could hold out such an inducement, in the way of cheap loans, farmers, despite their psychology, would be prepared to avail of advances from the credit corporation.

Linked with that, incidentally, is another matter of over-riding importance, and that is that taxation, either local or national, should be brought down. It is impossible in a country such as ours to expect farmers to give increased production when they are saddled with the high rate of taxation which they have to endure.

All other countries in the world to-day, even England which hitherto regarded agriculture as of second-rate or third-rate importance, are devoting a tremendous amount of attention to agricultural problems. England has experts examining all branches of agriculture with the object of placing it on a secure basis. It is quite conceivable that in the future we shall have to endure much more competition from English agriculture than in the past. We are not likely to have the same free open market in the years to come. At the moment we have a market on the Continent, but it is doubtful if that will continue for very long. When conditions get normal again in those European countries, they will rapidly become self-sufficient and they will not want our products.

Credit to some extent goes to the root of any successful agricultural policy in this country. It is essential we should bear in mind the developments taking place in other countries and it should be the ambition of whoever is responsible for our agricultural policy to keep abreast of those developments and, if possible, to try to get ahead of them.

It is quite useless on this stage to discuss the clauses in the Bill. Some are exceedingly contentious and, in a Second Reading speech, you can refer to them only in a vague way. They deserve to be discussed in a detailed way and that can be done only on the Committee Stage.

I see it is the intention to enlarge the activities of the Agricultural Credit Corporation; in other words, to make loans available for purposes for which they were not hitherto available. That is a decided advance, but while that is so, the activities of the corporation are circumscribed in other ways, especially with regard to credit societies. I do not understand Section 14, which outlines the additional power given to the corporation to make loans, nor do I understand the restrictions imposed by this section with reference to co-operative societies and corporate bodies. It seems to me that no credit society or co-operative society will be entitled to a loan if it engages in any other type of business beyond what is regarded as purely agricultural business. That is no justification for preventing a credit society from getting a loan. It is essential for a credit society to engage in branches of business that might not be regarded as definitely agricultural. In the absence of some explanation I do not feel too happy about this section. I imagine it is one of the sections that will require a great deal of examination on the Committee Stage. It needs to be amended in certain vital aspects.

I could say a great deal on Section 26. Deputy O'Connor has already referred to that section. It imposes penalties on farmers, especially those who do not repay their loans. I think that is a matter more suitable for discussion on the Committee Stage.

I should like to know how many borrowers have taken advantage of chattel mortgages. How many chattel mortgages does the corporation hold? I ask that for this reason. I have often wondered if the chattel mortgage is a type which suits this country. I am anxious, for my own reasons, to find out how that type of borrowing has worked, and to what extent the farmers have taken advantage of it. It is a type of borrowing which, until the establishment of the Agricultural Credit Corporation, was unknown in this country. I believe it has worked successfully in Continental countries such as Denmark and Norway; in fact, it is a popular form of borrowing in these countries. I can see wonderful possibilities for it in this country if our farmers could be educated into the advantages of that type of borrowing, under a suitable condition. I believe it would help to rehabilitate the live-stock industry and perhaps other branches of agriculture as well. I hope the Parliamentary Secretary will be in a position to give me some details in that respect.

While I welcome the Bill as a step in the right direction, I regard it as only tinkering with the problem. The members of the Government are very efficient as politicians but most stupid as agriculturists. For the past 25 years our farmers have been crying out for assistance, but sufficient aid has never been given them. Why is there such a state of affairs in an agricultural country? There must be something wrong. There has been far too much fumbling and changing in the past 15 years. There would be little need for credit if we had stability in regard to markets and we would have it if the Government did the right thing. They have been hitting their best customer between the eyes and insulting him, and now they expect him to come back bowing and scraping. All our troubles are due to the ignorance and stupidity of the Government. They have been fumbling and insulting the people who constituted their best market and now they are cringing and crying to get back the market they threw away.

To-day we are at a dead end. We have half the farming community in the position that they have no stability, no cash and no credit. A stable market over a long term is what the farmers need, not banks. There is hardly a farmer in the country who is not down and out. At the present time the members of the agricultural community do not know what market they have to send their stuff to. That is because the Government are chopping and changing, cringing and crying. They have done nothing to show they know a little about agriculture and are interested in it. They are far more interested in politics and holding to their positions than in putting the farmers on their feet. Money is needed to take the farmers out of a critical situation, out of the rut. We want not tens of thousands, but millions of pounds. This Bill is merely tinkering with the problem which will have to be faced in a few years' time by this or another Government.

I live in the midst of big and small farmers, many of whom are starving. I live in the County Meath, one of the most wealthy counties in Ireland. The wealth is in the hands of the big farmers and there is dire poverty among the small and middle-class farmers. Some of them are absolutely starving. Around them I can see luxury, wealth and comfort. You can see these things among the people with the money. Money makes money. Beside them you can see small, thrifty farmers on economic or uneconomic holdings and they have to set their land on the 11 months' system in order to get cash. One might say that before they draw that cash, it is gone in the payment of debts.

The position of these people is almost hopeless. The man I want to see assisted is the thrifty, hard-working farmer who has to rear his family by farming alone. The big man can always get credit facilities but the man who has been loaded down with debts, for generations past perhaps, never had the wherewithal to make farming a paying proposition. Most of the farmers of my own standard, the small and middle-class farmers, have neither the machinery nor the stock to make farming a paying proposition. At the present moment these men are a drag on the community. That should not be the case because I know these farms could be made a paying proposition if some Government or some statesman would only make a bold effort to provide facilities to enable agriculture to take a real step forward. This tinkering and scraping is of no use. The way to find out what the farmer wants is to consult farmers, not by consulting those who spend a great part of their lives in colleges and academies and who may have certain titles after their names. The people who should be consulted are the men down the country who have welts on their hands as a result of their hard work. In five minutes they could give you as much information as you would get in a year from the products of the higher colleges and academies. You must get out into the country to find what is the real problem. In that way you will find that what I am saying is true, that the majority of farmers who make this country a land worth living in, are starved for want of capital. They cannot appeal to the Agricultural Credit Corporation because as far as I know, the only man who will get any assistance from the Agricultural Credit Corporation is a man who is up to his neck in debt. He will get money merely for the purpose of paying off some other loans or clearing off some shop debts.

What I want to see created is some institution that will be able to give our farmers money to restock their land and to buy machinery. The unfortunate man who finds himself in difficulties has to go to the Agricultural Credit Corporation, and he is bowing and scraping for six months before he can get it. Had it not been for the facilities afforded by the ordinary banks of the country, I do not know where the farmers would be. I say, to the credit of the banks, that they met the farmers fairly in that way. I know some cases in which farmers were in great difficulties because of debts which they owed to these banks, and the banks, because they realised these farmers were doing their best to wipe out these debts, agreed to cancel as much as 50 per cent. of the amount due to them. The Agricultural Credit Corporation is not prepared to show any leniency in that way. The farmers have to pay through the nose for every penny they get from them. The farmer merely gets money from the corporation for the purpose of clearing off old debts but not for the purpose of restocking his farm or buying equipment. For that reason, we are faced here, after every period of five or six years, with a new Bill.

I say that unless you are able to put money on the market at about 2 per cent. to assist farmers it will be of no use. Surely we ought to be in a position in an Irish Parliament to lead our farmers along proper lines? What we require at the moment is stability and cheap credit. These things go hand in hands and if you provide them our farmers will make good. The farmer cannot make good at present because he does not know where he stands. We are told that new markets have been opened for our farmers. It is said that we are feeding starving Europe and that we are sending bullocks across to Germany.

That is all tommy-rot and the day will come before very long when these markets will not exist. They will then have to look across the Irish Sea to the stable market that was always there. I will not say that it was there for the love of us. It was there because the British farmer is a business man and he knows good value when he sees it. That is the market which has been despised for the last 15 years and, because of that attitude, we got a kick in the pants very often. We are paying for that attitude now. I want to see the farmer established in a position in which he can earn his living honestly. At the present moment he has more bosses than he is able to contend with. One of the most niggardly bosses with which he has to deal is the Government itself. I live in a county where there are tons of wealth and, on the other hand, tons of poverty. Nearly half the farms in Meath consist of holdings allocated by the Land Commission over the last 20 years. The tenants in these farms are in a bad way. The land has not been vested and they have no security to enable them to go into a bank. They have not as much security as would enable them to borrow £100. To get a loan of that amount they would probably have to bring half a dozen farmers into the bank with them. Some of them may not have a cow or a horse and many of them are letting their lands on the 11 months' system. The big fellow beside them rents the land from them. The fences which had been erected are in many cases gone so that the big man's cattle are rushed into these farms year after year. I want to see these people enabled to work the farms for themselves instead of handing them over to somebody else.

First and foremost these men need machinery. I do not think 20 per cent. of them at the moment have a pair of horses or that 5 per cent. of them have equipment such as mowing machines or wheel rakes. You cannot expect agriculture to get on its feet when you have credit-starved farmers of that type in the chief county of Ireland and Meath is the chief county of Ireland so far as land is concerned. I want to see these people placed in a position in which they can buy their own machinery by means of loans spread over a sufficiently long period. I want to see them provided with mowing machines, wheel rakes, tumbling billies and harrows. There is no reason why we should not give these men loans at 2 per cent. and spread the period of repayment over ten or 15 years. At the present moment these men as I say are a drag on the community. Most farms in the Midlands are eye-sores, and in most cases it is not the fault of the farmers themselves. They have not the credit facilities that they should have. They are willing to work but most of them have to wait for the loan of a horse or a cart or to let their lands on the 11 months' system at a certain price. That is not the way to promote agricultural production. I want to see these men stocking and working their own lands.

We must be prepared to lose, if necessary, tens of thousands of pounds for the purpose of putting agriculture on its feet. You cannot expect to get a 100 per cent. repayment of these loans. If 90 per cent. is paid back, I think you will be doing well. Any man who is depressed by financial difficulties is not going to work. I know decent honest men myself who are not working as they should because they are depressed. They merely say: "What is the use?" If a man does not see something in front of him he cannot be expected to have the spirit to work with sufficient energy. We should be able to give that guarantee to every farmer. We should be able to see a line across every paper in the country whether it be the Penny Liar or the Twopenny Liar announcing: "A new life and a new living for the Irish farmer."

Parliament has declared that money will be pumped into agriculture at a cheap rate no matter where it is to come from. I am quite satisfied that the money is in Ireland and can be got. We should not be afraid of the prospect of losing some of this money because, if it has the effect of doubling or trebling our production, we shall be doing something for the Irish nation and doing something to rehabilitate our people on the land.

At present, there is a flight from the land such as we have not had since the time of the Wild Geese. You cannot get a labouring man to work for you to-day. Whenever they get the chance, they are off to England, while here we are tinkering with the problem, the war period being behind us and depression facing us while the farmers cry out for cheap credit which they cannot get. More shame to an Irish Government which thought more of politics than of the farmer or agriculture. They are paying for it to-day and will be paying for it to-morrow. It is because of the mean way in which they treated the farmers that they are going to get a kick in the pants in the course of the next few years and the devil mend them.

They did their best to buy the farmers, the labourers and everybody else and it was a mean and cheap way they did it. They offered them a carrot but they never quite reached it. It was kept dangling in front of them and they are still trying to reach it, although the carrot has got rather sour to-day, when the farmer sees that the Government will not give him cheap money but will insult and sneer at the old market he had because they wanted a republic. You have your republic to-day, but you have not got your market. Our cattle must be sent across to Germany and France and they have to scrape and bow in the cattle market and shake hands with these big "nobs". The new market! That be damned. That is not what the Irish farmer wants. He wants the honesty and straight dealing which he himself always gave. Labouring men at present are working for farmers at a starvation rate of wages and, bad as that wage is, the farmer is not able to pay it because of the tinkering which went on here for the past 20 years.

I want the Government to undo the dirty work of the past 50 years and to give the Irish farmers an opportunity to get cheap credit facilities, long-term loans for machinery of all kinds, so that they will not have to bow and scrape to their neighbours to borrow money or to set their land, but will be in a position to work their own land in their own way in their own time and will be able to educate themselves for the future and so that their children will be honest, noble and hardworking, because at present, from the highest official in the land to the most lowly labourer, not one of us is pulling his weight. We are the most lop-sided nation on the face of the earth. If we all threw off our coats, what would happen in this country would be colossal. We could have a land flowing with milk and honey, and one thing at least is certain—we would have a land flowing with butter, milk, eggs, honey and grain of all kinds, instead of a land in which the people have to live on potatoes and salt as they did in the past.

And Indian meal.

And Indian meal which we cannot eat. I ask the Government to give the farmer what he wants— the means to earn his living on his own holding. There is not a farmer who should not be able to get facilities from an Irish Government to stock his land with machinery, to erect hay barns and provide himself with live stock. He would then be able to house these live stock during the winter and provide himself with his manure requirements which would make his land give double its present production within five or ten years. He would not then have to look to the manure ring for manure. These are the things I want to see done and they are steps by which agriculture can be put on its feet. At present we are not getting half the production we should get, but, if we pump millions into agriculture, we will get a return which will be almost incredible. A 300 per cent. increase could be got, because the land, the facilities and the climate are there and the market also is there, if we want to avail of it.

I appeal to the Government to withdraw these pin-pricking Bills and to give us something noble and honest. The money is there, and why not avail of it? Money can be pumped into industries, many of which were started overnight, and, before 12 months have passed, £10,000 has gone down the drain and the gentleman who got the money has skipped out. But the farmer gets nothing. He has to beg money at 4, 5 and 6 per cent. from the Agricultural Credit Corporation. Give him the right to get money at 2 per cent. for a long term of years and stop the political play-acting that is going on.

I do not intend to say very much on this Bill as I am not an agriculturist, but it seems to me that agricultural credit ought to do two things. It ought to improve the state of agriculture and it ought to enable thrifty people, good workmen, to set themselves up in farming on their own. I remember some years ago having to read a certain amount about agriculture and agricultural loans and one of the things which struck me very much was the success which attended various Bills like this in France. In that country and in other European countries, they seem to have worked out a system by which the small man in a district, by reason of his known good character to the farmers of the district, was enabled to set himself up in a farm or to improve his farm generally. It was said that the system worked very well in France.

I know that you cannot take systems out of one country and operate them with the same degree of success in another country and perhaps there are reasons here in Ireland why the system which worked so well in France might not work here. I do not say that it would work as well here. It might, but I do not know whether you could get quite the co-operation from local committees which they appear to have been able to get in France. At any rate, it has always appeared to me that it was a very desirable ideal in that the community in general would benefit from increased production and the individual concerned would benefit from being given a chance in life which no other agency but this special agricultural credit system could give him.

This was carried out successfully there. As an instrument of State policy I think it will be admitted by everybody that no claim can be made that the agricultural credit policy carried out in this country up to the present time has in any way changed the face of agriculture. Surely, as an instrument of State policy, that is what it should set out to do. If it does not do that then, as Deputy Giles said, we are only tinkering with the problem. Surely, we do not merely want to pay off the debts of a man to a shopkeeper? What we here in this Dáil are concerned with is the improving of agriculture and the rewarding those men who are worthy of reward. I do not think that any person can claim that, by and large, the agricultural credit system up to now has had that effect. As far as my limited knowledge of agriculture and agricultural credit goes there is nothing in this Bill which radically alters that situation.

The ordinary commercial banks are of their very nature incapable of contributing to an improvement of agriculture. I think that has been recognised in the setting up of the Agricultural Credit Corporation. But I think that the Agricultural Credit Corporation has adhered too closely to ordinary banking methods. Banks, because they cannot lend on long-term policies, are of necessity and for their own protection driven to exacting the most onerous conditions from the person who wishes to borrow from them. That is true of any borrower who goes to a bank, whether he be an agriculturist or an industrialist. The banks exist primarily to meet the needs of the industrial community. The Agricultural Credit Corporation exists to meet the needs of the agricultural community. It is to some degree a confession of failure that so many farmers can get the same facilities from a bank.

Deputies have said that the banks have been very good and that they have helped the farmer to a large extent. That, to my mind, is a reflection on the agricultural credit policy of this corporation because, if the joint stock banks can beat the Agricultural Credit Corporation at its own game, surely the Agricultural Credit Corporation is not fulfilling in the spirit those functions which we would like to see such a body rendering to the agricultural community.

Briefly, that is all I wish to say upon this Bill. Judged as an instrument of State policy, as it has been practised up to now and as it would appear it will be practised in the future, it is a policy which we cannot view with any favour since it makes no radical improvement in the face of Irish agriculture.

A couple of months ago members of this Party tabled a motion asking the Government to provide loans for farmers at a low rate of interest. We were told that this Agricultural Credit Bill would be introduced and we assumed that under such a Bill a cheaper rate of interest would be provided for the farming community. The Bill has now been circulated. It contains five parts, 54 sections and runs to some 34 pages. Everybody is safeguarded under the Bill in every waybut no mention is made of a cheaper rate of interest for the farming community.

Loans will always have to be made. Loans are very useful. Any government which makes loans available at a low rate of interest, either for the establishment of new industries or the improvement of the agricultural output of the country, is definitely taking a step in the right direction. But there is a vast difference in the giving of a loan and the giving of a bounty or a subsidy. A loan will repay itself in full both in cash and in kind. It will bring back increased production. A bounty or a subsidy is paid by the State and is not recoverable.

We were told in the White Paper that the purpose of this Bill is to amend the Agricultural Credit Acts, 1927 to 1929, with the main object of reorganising the capital structure of the Agricultural Credit Corporation. There is no doubt that the Agricultural Credit Acts of 1927 to 1929 may be a bit makeshift, but in certain cases they have done a certain amount of good. They have not, however, solved the problem and the fact that at this stage the Government have introduced this Bill is an admission on their part that the agricultural industry of the country as a whole is not up to standard. This Bill has been debated at length but the debate has run somewhat on the lines of a debate on the Vote for Agriculture rather than on an Agricultural Credit Bill. Even the Land Commission has been brought into the debate. The important point is to increase production and to make the small farmer as well as the big one competent to produce more at a lower cost than heretofore. In an effort to achieve that this Bill gives power to the Agricultural Credit Corporation to make loans. Section 14 is the section which interests me most. Not being a lawyer I do not understand the legal implications behind it. We all know that even the smallest farmers will at times find themselves in financial difficulties. I think everybody will agree with me that up to this the small town shopkeeper has been the greatest source of credit to such farmers.

The merchant or shopkeeper with whom certain farmers have been trading for many years has advanced money or allowed credit when the bank or the Agricultural Credit Corporation would not come to the rescue. Then in time, when the farmer, owing to the slump in agricultural production, cannot hope to redeem his debts to the shopkeeper, he is forced to turn reluctantly to the Agricultural Credit Corporation. As has been said here, the money obtained from the Agricultural Credit Corporation is used by the farmer to relieve himself of the debt that he has incurred through no fault of his own in some cases or through a fault of his own in other cases.

There are 101 things on which money could be used, even on the smallest farm. Out-offices could be reconstructed; machinery could be purchased; live stock could be increased. The farmer who otherwise might have to sub-let his land to his richer neighbour would be enabled to get on his feet if he could get a loan at a low rate of interest. In many, cases farmers prefer to go to the bank rather than to the Agricultural Credit Corporation because they believe their business will be transacted in greater secrecy and the terms are almost as good. The difference of one half per cent. does not amount to very much. The average leaseholder does not want it noised abroad when he is in financial difficulties. There are sections in this Bill demanding securities and sureties and a farmer applying for a loan who has no live stock or goods or chattels to offer as security or who is not a vested tenant of the Land Commission, will get a very insignificant amount.

That is wrong. These are the people who need monetary assistance most and these are the people who, after making effort after effort to get on their feet and having failed, will sell or sublet and will go on the road as agricultural labourers. That has happened in very many cases.

How many small farmers can afford to purchase even a mowing machine or other machinery? It may be hard to expect the Agricultural Credit Corporation to issue loans haphazardly. Machinery depreciates in value and the corporation must be safeguarded against the farmer who will purchase machinery and leave it out under the weather, but I think the corporation is fully safeguarded by the sections of this Bill. It has been said that it is doubtful if small farmers should get advances to purchase farm machinery or expensive equipment. As a small farmer, living in an area where 95 per cent. are exceptionally small farmers, my experience is that we could use almost any kind of farm machinery. Take the reaper and binder. In the harvest of last year, when there were so few fine days and so many wet days, it was a great toil with two horses and an ordinary reaper to save the two acres of oats or corn that the ordinary farmer had. The output of the individual who had to take a century-old scythe and swing it was very low. It is agreed by anybody who understands the conditions that a reaper and binder in such circumstances would be equal to the work of four or five farmers. It is quite feasible to bring such a machine into even half a statute acre and to do excellent work. When the work is done in that way the farmer can turn his attention to other work on the farm, such as draining and fencing. That would be for his own good and for the national good, because in that way the land would be improved.

There is a scarcity of first-class out-offices in every farm. It may be argued that a ten, 15 or 20 acre farm does not require to have as good out-offices as the large farm. That is entirely wrong. They may not require as extensive out-offices but they should be just as good and if the Agricultural Credit Corporation were to advance money for that purpose, it would be a very useful project. The same applies to hay-sheds and everything else.

Deputy Hughes compared the advances to agriculture in this country with those made to agriculture in Denmark. He said the figure for Denmark is £179,000,000 odd as compared with £12,000,000 odd here. That is an appalling difference. We claim, and it has been proved, that agriculture is our chief industry and that the nation has to look to agriculture for its maintenance. It is surprising that Denmark, with half the acreage of land than we have, with a poorer type of land, could advance £179,000,000 in loans—not in free grants—to their farming community while we advanced only £12,000,000. There is definitely one thing to be said: that the Department of Agriculture or the Government of this country are not paying sufficient attention to our chief industry. Then we are told that of the £2,716,000 advanced by the Agricultural Credit Corporation only £844,000 is outstanding. Loans should be given at a rate of interest which will make it profitable for farmers to undertake production, and should be given for a long term, with the option of being repaid at an earlier date if farmers are able to do so. That would also be security for the credit corporation which, I have no doubt, would be glad to see an individual who got £300 or £400 repaying it perhaps in two or three instead of in 15 years.

When comparing the position of farming in Denmark and in Ireland, there is definitely a big difference in the position in the two countries. The outcry in this country for the last 300 years has been against having too many big ranches, compared with the position in a country like Denmark. I remember reading a school book entitledDenmark and Ireland, that outlined conditions in the two countries. How many cattle are found in the fields in Denmark? Are not all the animals fed in the byres? By feeding cattle in that way manure is available as a soil fertiliser. The position is different in Ireland, where cattle are kept in the fields, except for short periods. A small farmer in the West of Ireland with three or four acres of land will feed three or four cattle in the stalls, simply to provide sufficient farmyard manure for his land.

In order to help individuals of that type loans should be provided at cheap rates of interest, at 1 or 1½ per cent. It may be said that money borrowed in that way would cost 2½ per cent., but I contend that agriculture is worth sinking more than £10,000,000 or £12,000,000 in it. There should be no limit to the amount of money to be sunk in agriculture so as to increase production and make farming profitable. Above all, I urge that financial pressure on the average farmer should be eased. The position of a farmer with ten or 20 acres of land is that he cannot afford to purchase machinery. He should be encouraged to do so by getting a loan at a less rate of interest than 4½ per cent, and without going to his neighbours for their signature as security, so that the credit corporation would not be losers.

This Bill sets out to do a great deal, but it would do nothing that it should do. Much more could be done by a Bill of two or three simple sections, providing cheap rates and longer periods for repayment of loans. If that was provided for in this Bill it would be welcome, and Deputies on this side of the House, who put down a motion asking for loans at 1 per cent., would support it as a step in the right direction. Definitely I cannot see any good coming from this Bill. It contains a mass of legal phraseology, which safeguards the Agricultural Credit Corporation or banks which advance money, but it is of no help to those who will have to borrow. Despite what has been said it is not general on the part of people to borrow if they have capital of their own. The average farmer prefers to work with his own money, rather than to get it from a bank, because a rate of interest of 5 per cent. or even 4 per cent. is too high.

If people who have money can be induced to borrow, and if the money is in circulation that is all the better both for financial institutions and for the community. If a farmer has £200 or £300 in the bank he will only get 1 per cent. interest on it. If he puts it in the Post Office he will now get 2 per cent. Why then should he be asked to pay 4½ per cent. to the Government for a loan when he knows that his own money is only worth 1½ per cent. or 2 per cent.? That is a discouraging factor. Until the Government introduces legislation to give loans to the agricultural community at a lower rate than 4½ per cent., they are making no effort whatever to help such people. Therefore this Bill is giving no encouragement to the class of people who are supposed to borrow under it.

I do not by any means welcome this Bill because, in the first place, I am suspicious of the sincerity of the Government in introducing it at all. My suspicions have been increased by the debate in this House. It was asserted by Deputies on the Government benches that the farming community were prosperous, that they were making money as fast as they could, and had large deposits in the banks. For that reason I am suspicious. If the Government believe that to be the case there is no necessity at all for this Bill. If they believe that such is the case, that the farmers are wealthy, that they have these deposits in the banks, I do not see where the necessity arises for the Government to come to the assistance of the farmers. If, on the other hand, I thought that this Bill was introduced through sincere motives, I certainly would realise that the Government had at last awakened to the responsibilities of the situation. I would say that it would be at least a confession by the Government that the farmers are in a rather depressed state.

They must, I am sure, realise that; they cannot be so blind as to underestimate the farmers' unhappy position. Members of Opposition Parties have put down various motions asking the Government in some way to alleviate the hardship and distress of the farmers. A motion has been submitted to the House, to which my name was attached, asking for better conditions for the farmers and loans at a rate of interest not exceeding 1 per cent.

I wish to reiterate my adherence to the terms of that motion. We all must realise by now that the agricultural industry is the most important industry in this country. We all realise that during the emergency the agriculturists carried a very heavy burden. I hope we realise, too, that the future cannot be regarded very optimistically by the farmers. They are now working on land which has been deprived of its fertility through intensive cropping during the past five or six years. At no time in the history of the farming community has more consideration been required from the Government.

The output in agricultural produce has gone down. To-day we are in the unhappy position that we have not a sufficient amount of butter, bacon, bread or flour and our egg production has also gone down. We know the reason for that, to a large extent, is that farming is not sufficiently capitalised. There is certainly a want of money no matter what Government supporters may think about deposits in the banks or happy conditions among the farming community. I come from a rural area and I have various dealings with farmers. I know that farming conditions are by no means what they should be.

Deputy Commons said that perhaps the greatest friends of the farmers are the small shopkeepers in the towns and villages. I wish to endorse that. I happen to be one of the small shopkeepers and I am thoroughly acquainted with the conditions of the farmers. I place implicit confidence in the farmers. I hold they are as honest a section as there is, perhaps the most honest section, and I have no hesitation, in so far as my means permit me, in giving adequate credit to farmers. I do not ask them to give me anything in the nature of security and neither does any other shopkeeper. Their honesty, integrity and pride are sufficient security for me and other shopkeepers.

I think the system of getting loans from the Agricultural Credit Corporation, in so far as I know about it, seems to be very cumbersome. It appears to be too slow and all for publicity. The farmer has a certain sense of pride and that pride has never become impaired in spite of the many inducements held out by way of bounties and sops which the farmer will not accept. He still maintains his pride. In going to the banks the farmer has a certain amount of secrecy which is not observed by the Agricultural Credit Corporation. The man who goes to the banks can do his business secretly, but the man who attempts to procure a loan from the Agricultural Credit Corporation finds his affairs are public property within a week. I have seen the application form, and from the number of queries put to the farmer inquiring into his means, his ability to pay, and his security, it is a most difficult, tedious process before he can acquire a loan. He likes secrecy, but there is no such thing when he is procuring a loan from the Agricultural Credit Corporation.

Agriculture is under-capitalised and it does not take a very keen observer to see that. It is regrettable to see, all over the country, the dilapidated condition of farm out-offices. The farmer is not in a position to repair them. He has not the capital. The result is that his cattle are underfed and his grain and other crops deteriorate with the weather. If the farmer had sufficient housing for his stock, he would be able to produce one of the best fertilisers he could procure, but unfortunately he is not in that condition.

I do not think the Government have ever seriously considered the importance of agriculture. I think industrial development received more attention than agriculture. In doing that the Government put the cart before the horse. Industrial development should follow agricultural development. This Government started out on a scheme of vast industrial expansion, while agriculture was daily declining.

To assist those engaged in industrial development, loans were granted at a cheap rate of interest, if at any interest at all. I have been informed that £10,000 was advanced to a certain bacon factory free of interest. If that is the case, I do not see why we, arising out of our motion, should not get a concession of loans issued at 1 per cent.

In order to make farming more attractive and to allay the flight from the land the farming industry must be put on a better basis. There must be greater inducements offered to the farmers. In a short time we may be confronted with a very small population because the drift from the land has continued vigorously for the past five or six years, with the result that agriculture is suffering. I believe that within the next nine or ten years agriculture will get into a position from which no Government will be able to withdraw it. I ask the Government to be sincere in this measure and to show their sincerity by reducing the rate of interest from 4½ per cent. to 1 per cent. Even if the Government loses on this experiment by providing loans at 1 per cent, I say the money would be well spent.

Everybody realises, particularly since the emergency started, that without our agricultural industry we could not survive and in future I think it is going to be even of more vital importance than it has been in the past. I welcome the Bill up to a point. I hope the Government is sincere in introducing the Bill and that it is not merely a bit of window-dressing on their part. I hope they are honest and sincere in their desire to allay the sufferings and hardships of the farming community. In conclusion, I would ask them to make loans available through this society on more advantageous terms to farmers. I would also ask them to make the process of procuring loans less cumbersome and slow and, finally, I would suggest that secrecy be observed in all matters related to the granting of loans to farmers.

The Parliamentary Secretary to conclude.

It is now 9 o'clock, and I want to know what is the position.

To-day it was arranged that Private Members' time would be taken at 9 o'clock and that motion No. 1 on the Order Paper would be taken in conjunction with the Bill now under discussion. Seeing that the debate is about to come to a close, I would ask the House to give the Parliamentary Secretary time to conclude. In doing so, we shall be preserving the principle of giving the private members concerned an opportunity of discussing their motion at 9 o'clock, because motion No. 1 deals with the same subject as the Bill.

As I understand it, it was agreed at Question Time that motion No. 1 be taken in connection with the Agricultural Credit Bill and that the Dáil was to take motion No. 2 at 9 o'clock.

That is right. Is there any objection to the Parliamentary Secretary concluding now?

The only point raised would be this, that we are going to encroach on the time of private Deputies. I understand that members of the Farmers' Party might wish to have the debate prolonged so that they would have an opportunity of replying.

It was distinctly stated that there was to be no reply. Deputy Cogan will have an opportunity of formally moving his motion and of having it seconded and a decision can be taken on it without further debate.

I have no objection but I do think that when an arrangement is made about the manner in which business is to be conducted it should be adhered to.

That is why I am asking, is there any objection to the Parliamentary Secretary concluding the debate on the Bill now?

I do not see that there could be any objection because we have been discussing the motion for the past half-hour.

I do not think anybody connected with the motion will object if a vote can be challenged, if it is so desired.

Certainly. That was stated by me, in fairly clear terms, about three times.

This debate, I am afraid, has ranged over a much wider field than I anticipated. I am afraid that a great many Deputies did not confine their remarks exclusively to the purpose for which the Bill was introduced, to criticisms of the Bill or to suggested amendments. In the explanatory memorandum which was circulated to Deputies in conjunction with this Bill, the purpose for which the Bill was being introduced was clearly set out in paragraph 1. I am afraid that many Deputies have not even troubled to read that paragraph. May I read it now? "The purpose of the Bill is to amend the Agricultural Credit Acts, 1927-29, with the main objects of reorganising the capital structure of the Agricultural Credit Corporation Limited, of extending its lending powers and of clarifying and strengthening its legal powers in relation to chattel and other mortgages on lines which experience has shown to be desirable." These are the reasons why this Bill has been introduced. It is not to be taken as some new panacea that will provide a remedy for all the ills and ailments of agriculture and agricultural policy in this country, as some Deputies would lead us to believe it should.

I do not propose to follow the bad example set by so many different speakers but I propose to deal with some criticisms that have been levelled at this Bill. The first speaker we had was Deputy Hughes. Deputy Hughes made a comparison between agricultural conditions in this country and in Denmark and by a most extraordinary system of reasoning, he suggested that the amount of money borrowed by farmers in Denmark should be regarded as assets. That is a new process of reasoning in my opinion. Other Deputies who followed made comparisons also with Denmark.

I do not propose to continue making comparisons between this country and Denmark but may I, once and for all, dispose of these arguments by quoting from a work written by a gentleman who can scarcely be accused of being pro-Fianna Fáil? I am referring toConditions of Economic Progress by Colin Clarke, M.A., Director of Queensland Bureau of Industry, government statistician, financial adviser to the treasury and formerly university lecturer at Cambridge.

On page 40 of this book is given a table which compares the real income per head of the population in the various countries. We can cut out borrowing and compare the real income, as this writer has done. In Denmark, despite all the borrowing and all the lending and the various wonderful schemes, that we are told are denied to the people of this country, what do we find by comparison of the real income? In Denmark, the real income per head of the working population, as expressed in terms of dollars, is 680 dollars while here in Eire it is 705 dollars despite the fact that in Denmark the farmers have been able to borrow according to Deputy Hughes to the extent of £170,000,000, whereas the amount which the Irish farmers, being far more conservative perhaps, have been borrowing is something in the nature of £12,000,000.

In what year was that?

From 1925 to 1934. Since then, the average income here would have increased considerably because included in the last three years was portion of the economic war-period, as well as, of course, the depression period, although it is only fair to say that the depression period was not confined to this country but was world wide.

I am sure that Deputy Hughes, as a farmer, reads practically every farming journal which comes within his reach, and I am sure he is a constant reader of an English periodical dealing with farming,The Farmers' Gazette. If he throws his mind back a little, he will remember that the income in Denmark, not of the average farmer but of what is considered to be a fairly large farmer in Denmark, a man with 75 acres, compares more or less with that of the rural postman or local policeman, which is not a very large income. I think I have said enough now with regard to the comparisons being made between Denmark and this country to show that despite the fact that our people are perhaps more conservative than those of other countries, there is perhaps something to be said for it and that the Irish farmer is as good a businessman as any other.

The fact remains that there is not the extraordinary demand for loans on the part of the farming community that one is led to believe exists at present. On the contrary, the experience of the Agricultural Credit Corporation has been that, rather than farmers borrowing, those who borrowed in former years have in recent times been repaying, with the result that the amount of loans outstanding is, as I have said, considerably lower than it was a few years ago. The same is true of the commercial banks. Their loans to farmers have fallen from £12,000,000 a few years ago to £8,000,000 at present, but the deposits by farmers in these joint stock banks have gone up by as much as £28,000,000 over a period of years, which goes to show that there is not that widespread demand for loans that we are led to believe exists.

The original intention of setting up the Agricultural Credit Corporation— I think it was Deputy Roddy who referred to it in his opening remarks— was to cater for a class of people who were not being catered for by the commercial banks in the ordinary system and the purpose of this Bill is to extend the powers given under the previous Acts to make it possible for the Agricultural Credit Corporation to lend money to classes of persons who, in the ordinary course of commercial banking, might not be accepted by banks or other credit institutions. It was found in the working of the existing Acts that there were certain restrictions and these are being removed by this Bill. It will be possible, when this Bill becomes law, to make advances to certain classes of farmers who, for various technical reasons, were cut out in the past.

That is all I wish to say with regard to Deputy Hughes's criticisms and I might pass along now to the criticism levelled by Deputy O'Connor, who objects to Sections 24 to 26. Section 24 gives the right of inspection of the register of chattel mortgages. Deputy O'Connor objects to the limitation of that right to the mortgagees. They, after all, are the parties most vitally concerned and this Bill is not a comprehensive measure. It deals only with a very limited class. He objects further to the right to seize without court order, arguing, as Deputy Hughes argued before him, that the corporation should go into court and prove their case in court. The corporation would have no objection at all to doing that and would have no difficulty in doing it, but the borrower has to be considered, and it is to save the expense of court proceedings that these sections are introduced—in the interest of the borrower and not in the interest of the corporation.

There is also a further objection by Deputy O'Connor to the fact that certificates are to be accepted as proof instead of the former system of proof by affidavit. That, also, is introduced in the interests of the borrower for the same purpose—to cut out expense. It is not going to improve the position of a borrower, if he has borrowed money and is unable to pay and proceedings are pending, if court costs, solicitor's fees and all the rest of it are to be added to the bill already due and he is to be called on to pay the lot. Perhaps in passing I might deal with the motion in the names of Deputy Cogan and Deputy Beirne, which will be moved by Deputy Cogan. It seeks shortly to make money available for loans for farmers at 1 per cent. In order to do that, the money would have to be provided by the Government. They would have to obtain the money from somebody else or by taxation and in order to make it available at 1 per cent. they would have to subsidise it to a considerable extent, depending largely on the volume of business which would ensue, because if the volume of business was not large, the overhead expenses would make it utterly impossible for them to lend money at a rate less than at least 3 per cent. Even allowing that the money was made available at 1 per cent., the working expenses would probably run up to at least 1 or 1½ per cent. extra.

The principal purpose for which these loans are supposed to be required at present is to provide machinery and fertilisers and to build houses and out-offices for the farming community. There is not so much a scarcity of money at present as a scarcity of many of the commodities required to carry out these various operations on the farms, and until we reach a position in which supplies will be available more abundantly than the ability of the farmer to pay for them, I do not think the time has arrived when these loans would be so eagerly availed of as some Deputies would have us believe. There is a scarcity of building materials. We would all like to see all these many improvements to which Deputies have referred carried out, but, even if you had all the capital in the world at present, it is very little use to you if you cannot get the wherewithal to erect these buildings and to provide these various amenities.

It has been found, in practice, by the credit corporation that the usual loan amounts to approximately £60. The average loan is £103, as I have said, but that includes some of the larger amounts, and the loan which the ordinary farmer seeks from time to time is in the neighbourhood of £60, and if we take the difference in the interest rate—whether it be 3½ or 4½ per cent. —it would represent such a small amount that it is very doubtful whether it would enter into a farmer's calculations at all when borrowing. It is not going to be a very serious argument I think, one way or the other.

It is an easy way out anyhow.

I think I have said sufficient to prove that the demand at the moment is rather for materials than for loans on the part of the farming community. I have also shown that the tendency amongst our people —that is, the farming community — is, because of their very conservative nature, to avoid getting into debt. "Out of debt out of danger" is an old saying and I think there is no section of the community where that saying has more effect than with the farming community.

The further possibility arises that if the money were to be made available and if the farmers were to avail of it to such a large extent that they would inevitably enter into competition with each other — such as one experiences at the present time where there is a surplus of money and a small amount of goods for sale — they would thereby enhance the prices of the various articles. There is the added danger of adding to the process of inflation by making money available on a large scale at a low rate of interest.

What commodities does the Parliamentary Secretary maintain would be inflated?

If money is made available at the present time and a large number of farmers are seeking to purchase agricultural machinery there is the danger of their demand increasing the price. If you go to any auction throughout the country at the moment you will see the prices at which machinery is being sold. I believe that quite recently there has been a downward tendency.

I can assure the Parliamentary Secretary that such a situation would not arise.

Is that not due to scarcity in supply?

It is a question of the scarcity of machinery with a plentiful supply of money. That is the very thing we want to avoid. The demand for money will not, I think, be so great amongst the farming community until such time as we reach the stage where there is an adequate supply of machinery, an adequate supply of seeds and fertilisers and an adequate supply of building materials which the farmers may require.

Deputy Cogan referred to the fact that the corporation were taking away from the Board of Works their rights to make loans for building purposes, etc. In actual practice it has been found that the number of applications received by the Board of Works was diminishing whereas the number received by the Agricultural Credit Corporation is increasing and it was felt that the body which was getting the larger demand was the body which should continue to supply the particular loans. Hence the change.

Various Deputies spoke of the necessity for improving out-offices, haggards, farmyards and buildings. Deputy Bennett referred specifically to the necessity for providing housing for cattle in the winter. All these are improvements which we would like to see, but naturally it will take a considerable time before any such improvements on a large scale become possible. You cannot deal with a situation such as that under the present measure.

Deputy Roddy sought information as to the number of chattel mortgages. Up to the 31st October, 1946, the Agricultural Credit Corporation had lent £8,455 on the sole security of chattel mortgages. The number would be less than 200. But, in addition, chattel mortgages have been taken out as additional security in many more cases —approximately 5,000 in all. I think those are the figures the Deputy was anxious to secure.

Deputy Dockrell made the point that the joint stock banks compete with the Agricultural Credit Corporation. That is not to be wondered at. As we all know the joint stock banks can at the present time get money at from 1 to 1½ per cent. They lend it to the farmers at 5 per cent., and that naturally leaves them a fairly reasonable margin of profit. They have the additional advantage that their bank managers throughout the country know their clients and know whether they are credit-worthy. The Agricultural Credit Corporation have no such facilities. For that reason the banks perhaps have a slight advantage in that respect. I do not know that there is any other point.

There is one question which the Parliamentary Secretary has not answered and I think it is a question upon which the Deputies of this House would like some information. When this Bill becomes law at what rate of interest will money be advanced to borrowers?

I am glad the Deputy has reminded me of that. We have not definitely stated the rate of interest.

No, you hedged around it.

We did not hedge around it. It was not definitely stated in the Bill or in my opening speech what the rate of interest would be for the simple reason that I am not in a position to make a definite statement. It is hoped, however, that as a result of obtaining this cheaper money and increasing business generally, ultimately it may be possible to reduce the rate of interest below what it is at the present time. Having regard to the present tendency towards increased salaries and other expenses, I do not want to make any definite statement or promise on that particular point.

But will the Parliamentary Secretary be in a position to make a statement at some future date? That is the vital point in the whole Bill.

I do not expect to be in a position during the passage of the Bill to make any statement in that respect. We will have to wait and see.

How long?

We will have to wait until the Bill is in operation for some time.

Are we to take it that the rate of interest will be reduced?

That depends on the operation of the measure. I hope so.

We can safely take it so that the rate of interest is more likely to increase rather than to decrease.

No. You may not take that at all.

Question put and agreed to.
Committee Stage fixed for Wednesday, 12th February.