I want the Minister to tell me at some time if a lender of money gets the guarantee of the State that the money will be repaid on the due date and if the lender of money further gets a guarantee that he shall receive an annual payment of 2½ per cent., what does the lender give to anybody for the remaining 2½ per cent. if he makes it a condition of the loan that the borrower will pay 5 per cent.? I can understand on a loan that carries no guarantee other than the lender's assessment of the solvency of the borrower the lender saying the 5 per cent. consists in part of a charge for my forbearance in not using money I could have used for myself and in part as a sort of insurance premium against the risk I run that you will not pay me back. I can understand that defence in the practice of usury, but where a man has a guarantee from the State that he will get 2½ per cent.every year punctually, what conceivable consideration does he give to anybody for the remaining 2½ per cent. that he exacts from the borrower? I do not belive that wholly irrational arrangements like that can long survive in civilised society. It may be that I have a blind spot. I have given a good deal of thought to this subject, and it seems to me that that difference between the State guarantee of interest in circumstances such as this is a payment in respect of which no service or consideration is given by the lender to the borrower, or to anybody else. How, in the name of Providence, can Oireachtas Éireann give legislative sanction to that practice unless there is some explanation of it which I have so far failed to find. I am dealing strictly for the moment with loans guaranteed by the State. I think we are entitled to expect that the Minister would face that dilemma and answer that net question: what consideration does the lender give to the borrower, or to anybody else, for the 2½ per cent. interest over and above the 2½ per cent. guaranteed by the State?
Committee on Finance. - Trade Loans (Guarantee) (Amendment) Bill, 1952—Committee and Final Stages.
Last year we guaranteed and paid over £16,000,000 in interest in relation to semi-State organisations. The Minister has the figures. I gave him the figures and he acknowledged the receipt of them. I would like to know from the Minister or the Taoiseach—and this matter is serious enough to have the Taoiseach's opinion on it—what service have the people who got that £16,500,000 interest guaranteed to semi-State organisations given in return for it? Probably we will be paying an additional £1,000,000 this year. It is no good the Minister shrugging his shoulders and saying this has been discussed for the last 100 years and nothing has been done about it. I suggest that much of the trouble here and many of the deprivations suffered by certain sections of our people are due to the tribute we have to pay on money borrowed to do things that are socially desirable. The Minister, as the representative of the people, should be able to lend this money and issue credit for these works without paying £16,500,000interest to those running the country's business under State guarantee. The Minister as Minister for Industry and Commerce is responsible for a number of semi-State industries. Like Deputy Dillon, I too ask what service have the people who received that £16,500,000 given to the people of the country as a whole? Have they grown an acre of wheat? Have they grown an acre of beet? Have they produced anything that could be called wealth during the last 12 months? This matter merits the Minister's serious consideration.
If I save my money and invest it in national loan I do so because I will get interest on my money. If I am not going to get interest I might as well keep it in the stocking.
Is that the answer?
That is one answer. An insurance company with money to land will lend it to a borrower backed by a State guarantee under this Bill at a rate of interest determined on the basis of what other people will pay for the loan of the same money.
It probably will lend it at a lower rate to a borrower who has a State guarantee than to a borrower who has not, but the rate of interest is determined on what a whole lot of other people are prepared to pay for the same money; in other words, capital has its market price or living wage just the same as goods or labour.
This Bill is certified as a Money Bill within the terms of Article 22 of the Constitution.