I move to delete, in line 8, the word "any."
SEANAD IN COMMITTEE. - LAND BILL, 1923.
Section 1, Sub-section (5):—For the purpose of redemption of the Bonds there shall be set aside in the Land Bond Fund at the close of each half-year the amount of the interest and payments in respect of Sinking Fund payable by the Land Commission, in accordance with the provisions hereinafter contained, together with any sums paid by tenant purchasers in redemption of purchase annuities payable under this Act, and any sums paid in cash by a purchaser on the sale to him by the Land Commission of any land vested in them under this Act, subject to the following deductions:—
(a) the amount of the interest on the Bonds so issued, and for the time being outstanding;
(b) the amount, if any, required for the payment off of any bonds which under this Act have been transferred by order of the Judicial Commissioner, in satisfaction of death duties or in redemption of land purchase annuities.
I accept the amendment, the deletion of that word is necessary.
Amendment put and agreed to.
I beg to move: In Section 1, Sub-section (5): To insert after the Sub-section a new Sub-section (6) as follows:—(6) "The Bonds shall be accepted by the Commissioners of Inland Revenue at par value, in satisfaction of any estate, succession or other Death Duty."
The amendment is to allow Land Bonds to be accepted in payment of estate, succession, or other duties. When the Compensation for Injuries Bill was before the Seanad a clause of very much the same effect was introduced into the Bill and accepted by the Government and formed part of the Bill. The wording of the amendment as it appears on the Order Paper is not altogether in the form that I personally would have drafted it. I think if the Government are prepared to accept these Bonds they should be also subject to the same conditions as they agreed to in the case of the Damage to Property Act. That is to say that the Bonds should be accepted by the Revenue Commissioners of the Saorstát by, or in respect of the death of the person to whom such security was issued or in respect of the death of any subsequent holder who had been a registered holder of such security of not less than twelve months previous to his death. I think that additional provision is required. It is admitted on all sides that Death Duties may be looked upon as a tax on capital. Communists have agreed on that point. It would be a very reasonable thing that where capital, such as land or property, is taken away from the holder of that land, and he has paid for it in Bonds that on his death those Bonds should be treated as capital, repayable to the State. I think there is very little doubt, but that the amendment will be accepted, but what I am really interested in is to hear what the Government will have to say on that point. I am sure there will be no hesitation in accepting it.
I rise to support the amendment, and to make one further point. By allowing those Bonds to be paid for in Death Duties you maintain their value and incidentally also the credit of the State. I make that point, because it is in the interests of the State that those Bonds should be accepted as has been agreed in the case of the Compensation Act, and as has been agreed in the case of certain securities in England. I want to ask two further points—not the subject of the amendment—(1) whether those Bonds would be trustees' stock, (2) whether they will be inscribed?
Would Senator Guinness give me the points he proposes to add?
"The Bonds shall be accepted by the Commissioner of Inland Revenue in part value in satisfaction of any estates succession or other death duty in respect of the death of any of the persons to whom such bonds were issued or in respect of the death of any subsequent holder who had been a registered holder of such securities for not less than twelve months previous to his death."
This amendment is very much in relief of the vendor. We have tried to meet the case in this way. We have provided that bonds shall be accepted in redemption of head rents and mortgages by intervening and superior interests. We have further provided in the Bill that the Judicial Commissioner, when taking into account the redemption price of those superior rent interests and of head rents, shall have regard to the price paid for the lands out of which the rent was payable. These are two provisions which we inserted specifically in relief of the vendor. I am prepared to accept the amendment which appears later on in the name of Sir Hutcheson Poë. That will go very far to relieve the case of vendors heavily encumbered. We have put in those provisions—the two I have mentioned—and I am prepared to meet that provision to go some way towards meeting the point that we should as far as possible meet the case of the heavily encumbered vendor. The Treasury are very much against the acceptance of that. Senator Guinness is right when he states that something similar went into the Compensation Bill. I am informed that a million of those bonds will come in in a year, and it will be necessary for the Minister for Finance to liquidate them. Inasmuch as we have tried to provide in three ways the purpose of this amendment, I would ask the Senator not to press it.
The Minister began by saying that this was in relief of the vendor. What harm does it do to the purchaser?
None.
The Bill is to deal with the vendor and the purchaser, and if it does no harm to the purchaser I cannot see why those two parties ought not to come together.
Outside the vendor and purchaser there is another party extremely interested, and that is the State. That is the real reason. In view of the fact that we have made provision for the same contingency in another way, I would ask the Seanad not to press the amendment. With regard to Sir John Keane's question, those are available for trustees' securities, and will be inscribed in the books of the Banks of Ireland.
I withdraw the amendment.
Amendment, by leave, withdrawn.
Question: "That Section 1, as amended, stand part of the Bill," put and agreed to.
Question: "That Section 2 stand part of the Bill," put and agreed to.
SECTION 3.
The redemption price of all superior and intervening interests, incumbrances and other claims attaching to purchase money paid by means of 4½ per cent. Land Bonds or payable out of such interests, incumbrances and claims, together with all arrears of and interest on such interests, incumbrances and claims and the vendor's costs of sale and the costs of making title to such interests, incumbrances and claims, so far as the same are payable out of the purchase money, shall be paid and discharged by transferring to the person entitled thereto, out of the Land Bonds representing the purchase money, Land Bonds of equal nominal value, and such payment shall be deemed to be satisfaction to the extent of the nominal amount of the Land Bonds so transferred.
In fixing the redemption price of superior interests the Judicial Commissioner shall have regard to the price received by the vendor for the lands out of which such superior interests issue.
I beg to move: To add to the section a new sub-section (2), as follows:—
"(2) The redemption price of head rents shall be fixed according to the following scale, viz.:—When the head rent was 50 per cent. or over, the redemption price to be 15 years' purchase; 40 per cent. and under 50 per cent. of gross rental, 16 years' purchase; 30 per cent. and under 40 per cent. of gross rental, 18 years' purchase; 20 per cent. and under 30 per cent. of the gross rental, 20 years' purchase; and under 20 per cent. of gross rental, 22 years' purchase."
I have very little time to frame a considered amendment, and I endeavoured to draw up a scale to meet the conditions which were existing in estates where there were large head rents, and where those head rents were bought by land speculators within the last twenty-five or thirty years for the purpose of securing to themselves large increments of capital when they believed that this question was about to be settled. I am absolutely against the idea that any man with any consideration for his position as a landlord or a tenant should rush into this question. I should say that they should be put in a position to secure some totally different proportion to the amount the vendor is going to secure. I feel we should be satisfied that it will not be possible for a land speculator to obtain any great increase on the amount he paid for the land. I know in many cases where he bought head rents for a small price he was most meticulous in his own rights, and my amendment is to prevent him now from getting from the vendor the sum of money to which he is totally unentitled. I think some promise might be got from the Minister that such a thing would be rendered impossible. I think that the terms cannot be considered unfair to the head rent charger, and I believe that they will give great consolation to a vast number of owners who have large head rents on their property, who were prevented hitherto from selling by the existence of the head rents, and who in many cases could not sell their property, even if they were prepared to, owing to the disinclination probably of some tenant to buy in view of future legislation.
The Senator wishes to save the vendor as against the owner of the head rent. His amendment does not succeed in doing that, but I suggest that Section 3 does:—"In fixing the redemption price of superior interests the Judicial Commissioner shall have regard to the price received by the vendor for the lands out of which such superior interests issue."
That was put in to save the vendor. I am certain that this amendment which tries to apply standard figures to something which is not standard itself, might save a particular vendor, but it probably would do more harm in the majority of cases than it would do good. It would be out of the question, I suggest, to apply standard figures like that to rents which are not standardised in any way. We meet his wishes by providing that in fixing the redemption price of the superior interest the Judicial Commissioner shall have regard to the price received by the vendor. The Judicial Commissioner in fixing the price of head rents formerly took into account the security and anything else. That was the old rule. We ask him to take into account a little more than the security— namely, the price which the vendor received for the lands out of which the head rents issue.
I should like to ask the Minister whether he would accept at the end of that Section the words: "and having regard to the price paid by the owner for the head rent," in order to meet the point of Senator Bennett? As Senator Bennett pointed out, there are certain cases in which speculators have come here and bought head rents at a ridiculously low price, say, ten years' purchase. A great many people have done that in the hope that there might be a redemption of 25 or 30 years. Power should be given to consider the price at which those head rents were purchased.
Senator Barrington called these people speculators. Some people would call them business men.
The terms are synonymous.
There is probably a lot in that. We really cannot be inquiring how the owner of a head rent came by it. Where there is a hardship done by our provisions as to price, we are trying to divide the hardship as fairly as we can. We ask the Commissioner to take into account the price of the land when fixing the price of the head rent, and we allow him to take into account the circumstances of the case in that way. I think it would be unfair to penalise a man who buys head rents by reason of the fact that he is a sharp enough business man to buy them at a suitable time. He will not get a tremendous price for them under this Bill.
With regard to the statement of the Minister, this Bill, in line 39 says: "In fixing the redemption price of superior interests, the Judicial Commissioner shall have regard to the price received by the vendor for the lands out of which such superior interests issue." That is entirely a new phase with regard to head rents and those other superior interests. The head rents, quit rents, and tithe rents, especially the head rents, were one of the finest securities in the world. These words: "received by the vendor for the lands," put a new complexion altogether upon that valuable security. I have been paid for head rents, and I have had to buy them out. They were excessively valuable securities. This introduces a new phase into the old rule that the price you could get for these had regard not to the price received for the lands, but to the security, which was a very fine security indeed. I am not personally interested now in any way, as I have sold, but I should like it to be clearly understood by the Seanad that by these words this security is being dealt with in quite a different manner from that in which it was dealt with under the Act of 1903, which settled the land question between many parties in this country.
Senator the Earl of Mayo has voiced what should occur to any person, that Senator Bennett's proposal penalises certain persons, who apparently have made good bargains, by attacking the quality of the security which they have purchased, and which has always been a first class security. I should have thought somebody might have criticised the Government, as Senator the Earl of Mayo has, for the way in which they decrease the value of that security by taking into account the price which the vendor is going to get. That is a question that has never been considered before in valuing a head rent. Many serious questions will come before us as to the value of title, and while, for reasons which may be sufficient, we may consider it wise to pass something which will damage the value of property which has not hitherto been damaged in that way, I do not think that it would be wise, because some people may have made sharp bargains, to put on a sort of penalty which will damage the legal value of the property. That would be a very dangerous thing for the Seanad to do, as we may very soon find ourselves wishing to appeal to the legal rights of the holders of property. If this can be quoted against us, it will be a very bad precedent, and I quite agree that the Section goes as far as any of us ought to agree to.
Amendment put and declared lost.
Question proposed: "That Section 3 stand part of the Bill."
The question of speculators buying the head-rents has never come before me before. I suppose there are cases of that sort and, therefore, it is an excessively difficult point to deal with. I admit that. I understood what the Minister stated was that you cannot particularise with these speculators. They have to take their chance in the financial world and in the market. I think the number of those cases is very small indeed, but I am subject to correction. It has come as a surprise to me that such cases occurred in this country.
Question put, and agreed to.
Sections 4, 5, 6, 7 and 8 added to the Bill.
SECTION 9.
(1) Subject to the provisions of this Act every advance made in pursuance of a subsequent purchase agreement shall be repaid, in the manner and at the times prescribed by the Minister for Finance, by means of a purchase annuity calculated at the rate of 4¾ per cent. on the amount thereof.
(2) The purchase annuity shall be paid until the whole of the advance in respect of which it is payable is ascertained in manner prescribed by the Minister for Finance to have been repaid.
(3) The provisions of the Provisional Government Transfer of Functions Order, 1922, shall not apply to purchase annuities payable in respect of advances made under this Act.
(4) The purchase annuity or any part thereof at any time outstanding may be redeemed in whole or in part by the person liable to pay that annuity by payment to the Land Commission in cash of such amount as shall be ascertained in accordance with Rules made by the Minister for Finance.
I move: Section 9, sub-section (1), to add at the end of the sub-section the words "for a period not exceeding 67 years." The Section does not indicate to the purchaser for what period or number of years he is to pay this annuity. If the amendment is accepted the purchaser will have some idea of the period for which he will be liable for the annuity. In some previous Acts the number of years the annuity was to be paid was specified, particularly in the Ashbourne Act, which provided that the annuity was to be paid for 49 years. I am not sure about the other Acts.
There is no necessity to insert the figure. It was not inserted in any previous Act except the Ashbourne Act, which was financed in a different way, and not on the same principle as the Acts of 1903 and 1909. It is a mathematical matter, a matter of addition, subtraction, multiplication and division I am told. The term is between 66 and 67 years. I am as sure of that as I would be of any matter I would be informed of by my particular authorities. It is quite certain, I am told, as a matter of mathematics, that it will be 67 years. People who have not forgotten their logarithms have looked it up. The figures may be 65.9 or 66.8. In any event there is no necessity for the amendment as the Bill provides that the annuities shall be paid until the advance is repaid, and that the Sinking Fund shall be 5/- per cent. Putting all these things together you get 67 years.
Are we to understand that the ¼ per cent. Sinking Fund will in 66 or 67 years accumulate to such a figure that the tenant can then become holder in fee-simple of the property?
That is the position, the reason being that it is really invested at 4½ per cent.
After the Minister's statement I withdraw the amendment.
Amendment, by leave, withdrawn.
Section 9 put and agreed to.
Sections 10, 11, 12, 13, 14, 15, 16 and 17 added to the Bill.