Dáil Éireann debate -
Wednesday, 6 Nov 1957

Vol. 164 No. 4

National Loan, 1957. - Statement by Minister for Finance.

Minister for Finance (Dr. Ryan)

A new National Loan will open for subscription on Monday next, the 11th November. The loan will be for £10,000,000 and it will be underwritten jointly by the Banks and the Government. The rate of interest will be 6 per cent. per annum and the issue price is £100 for every £100 of stock purchased. The stock will be redeemed at par in 1967.

To facilitate investors, there is, as usual, provision in the prospectus whereby only 10 per cent. of the purchase price need be paid on application, the remainder being paid in three further equal instalments over the months of December and January. On the other hand, those who wish to pay the full amount on application or to complete their subscription on allotment will be entitled to discounts which will give them approximately 6 per cent. interest from the date of payment.

The loan is for the relatively short period of ten years.

The tax privileges which have been a feature of recent loans are again included. Interest will be paid without deduction of tax at source, though, of course, holders will, if ordinarily resident in the State, be liable to whatever tax on the interest is appropriate to their respective incomes. Stock of the issue will be accepted as the equivalent of cash in satisfaction of death duties on properties of which it formed a part. The stock and the interest on it will be exempt from all Irish taxation, present and future, if owned by a person neither domiciled nor ordinarily resident in the State.

The issue is being made under the authority of the Appropriation Act, 1957, and other statutes. Both principal and interest will be a charge on the Central Fund. The market value of the stock will be upheld not only by its short life but also by the high interest rate it carries, by its status as a trustee security, by the concession whereby it will be accepted in payment of death duties and by the substantial sinking fund allocations which are being provided. A continuing and active market will be ensured by the arrangement under which the Government Stockbroker will be prepared at all times to buy and sell blocks of the stock in reasonable amounts.

Three and three-quarter per cent. Financial Agreement Loan, 1953-58, is due for redemption next September, and I am giving holders of that stock an option of converting into the present issue. This is a very attractive offer and I hope it will be availed of to a large extent.

Five and a half per cent. National Loan, 1966, which was issued in October, 1956, carried a right of conversion into any public issue made by the Government within five years. I am giving effect to this right in the present issue.

Stock of the new loan issued under these conversion arrangements will be additional to the £10,000,000 of stock offered for cash subscription.

The prospectus will be published in to-morrow morning's newspapers. Copies of the prospectus, with the application form for cash subscriptions appended, may also be obtained as from to-morrow from any bank, stockbroker or post office. The lists will close not later than Friday, 15th November.

Mr. J.A. Costello

We wholeheartedly support this loan and recommend every patriotic citizen who has the means available to do the same.

Where the national interest is involved there can be no disagreement between Parties and there can be no question but that the national interest requires that this loan should be a success. We have at all times, whether in Government or in Opposition, maintained that there can be no disagreement about the proposition that the national interest requires the investment in Ireland of the national savings, current and past.

We are quite appreciative of the urgent necessity that adequate capital should be available for private enterprise, the carrying-on of agriculture, business and industry, but every Government in the circumstances now confronting us must carry out an extensive capital programme if the problems of national development, emigration, unemployment and poverty, are to be expeditiously and effectively dealt with.

Accordingly, Irish people who have investments abroad should so arrange their affairs as to secure that at least a substantial proportion of those savings should be invested in Irish securities. No Irish person with means should have it on his conscience that any Irishman has been left unemployed who could be put to work but for lack of national investment. It is quite literally true that unless the people with money are prepared to invest in Irish prosperity they will do injury to themselves, their fellow-citizens, and the future of the country.

The financial structure of this State is very strong and justifies every confidence. The improvements in the balance of payments and in the banking position are very encouraging. A well-supported loan will mark another stage in the recovery which the nation has made from the economic blizzard which hit it last year.

Mr. Norton

I should like to welcome the Minister's announcement and to commend the terms of the loan to all those who can afford to subscribe to it. The terms are attractive. The relatively short-term character of the loan makes it additionally attractive. The provisions for maintaining the stability of the loan and for repayment all offer attractions which no doubt will be realised by those who propose to invest.

Whatever differences there are on other matters between the various Parties in the House, there is, happily, agreement on the fundamental question that capital investment is essential if we are to promote the development of our shipping potential and of our peat resources; if we are to erect houses for our people, promote electrical development, carry out our air developments, provide for schools and proper afforestation of the country.

The best way of raising the capital necessary to finance these projects is by the savings of the people. No country that has been able to achieve a high level of capital development has been able to do so without relying on the resources of its own people to finance those capital developments. Therefore, the best form of investment from the Irish point of view is savings by the Irish people. Savings by our own people which promote capital development are much more desirable than seeking moneys elsewhere for the development of our resources.

Savings, too, have the additional merit that they promote thrift and it is that thrift—a virtue in itself—which makes national development possible. We have all heard from time to time cynical comments on savings. Some people are so warped in their approach to the problem that they take the line that savings are undesirable and that they have no responsibility to participate in a savings movement. That is an unhealthy outlook. The poorest person in the country, whether he likes it or not, must be interested in the success of a National Loan and must be interested in the promotion of a savings campaign. It is savings that make development possible. It is the fact that we can develop our potential and carry out essential capital works that provides work even for the poorest person in the country.

Investment in a National Loan, therefore, has the merit that it provides a reasonable return for the investor. For those who are not able to invest it makes possible the development which enables them to secure work and thus lubricates the whole economy. I have great pleasure in commending this loan to the general public. I hope it will be oversubscribed and that the Minister shortly will be able to announce that the success of the loan is evidence of the faith of our people in the development of their own country.