I would like a little information about this Bill. Could the Minister give us some information as to the purposes and intentions of the Bill?
Public Business. - Agricultural Credit Bill, 1929—Second Stage.
There are two purposes in the Bill. As I explained in the Dáil there were originally two Bills but they have been welded into one. The purpose in part is financial, really to provide money for the Agricultural Credit Corporation otherwise than by calling up the unpaid ten shillings on the shares that have been issued. Instead of calling up that money it has been decided to issue an additional £500,000 in shares and to leave the ten shillings unpaid on the old share capital, that ten shillings to be called up only in the case of the winding up of the Corporation. Instead of calling up the ten shillings outstanding on the shares the object is to leave the uncalled portion so as to give the Corporation certain facilities in the matter of temporary borrowing. Another change that has been made has been to divide the shares into A and B shares. The B shares are shares upon which interest will not be paid for the first few years. The position at present is that dividends are payable on all shares, irrespective of the profits made by the Corporation. The result is that the Department of Finance has to pay out of the Exchequer the money required for the payment of dividends on the shares held by the Minister for Finance. That creates a false appearance in the balance sheet, and it is thought desirable to make arrangements which, after one year, will, I think, provide that no dividend shall be paid except a dividend paid out of profits. Generally that is the extent of the financial section of the Bill. There are other sections which are designed to make it easier for the Corporation to obtain a good charge upon certain classes of land than at present. That is part of what was originally the second Bill which was being promoted by the Minister for Agriculture. Amendments were introduced in the Dáil which slightly widened the class of objects for which loans might be made by the Corporation.
This is a double-barrelled Bill. I am not concerned with the financial provisions of the Bill; the methods of the Corporation for raising finance do not concern me, and I intend to speak only on the question of assistance for farmers. Perhaps the Minister for Agriculture would be better able to explain this matter to the Seanad than the Minister for Finance, because he has been very much interested in the question of agricultural credit, and has taken some very important and, to my mind, some very satisfactory steps in that direction. This is really one of the most important Bills this Session has produced, and I do not think that I should miss this opportunity of congratulating the Minister for Agriculture on the continuing success of his policy, because I think his policy is really the foundation of the prosperity of the country, recognising as I do that the whole prosperity of Ireland depends on the industry of the farmer.
There are one or two points to which I would like to draw the attention of the Minister for Finance —they are more or less departmental points—that occurred to me because I have been interested in agricultural co-operation for a great many years, and I have studied it in a great many countries. But I would prefer not to delay the Bill, as I know it is an excellent Bill and one that the farmers require, and I would prefer to make these suggestions to the Minister privately, if that would be agreeable to him. I do not want to delay the Bill more than is necessary, but there are certain points which, I think, would be useful to the farmers' organisation and might lead to a satisfactory solution of this branch of the problem, which is not confined to this country, but which affects many other countries. It is vitally important for this country, and I am glad to say this country has been the pioneer of this movement for the assistance of agriculture all over the world.
It would perhaps save time on the Committee Stage if we could get some explanation from the Minister for Agriculture as to the purport of Section 23 and its effect, regarding the limitations on the lending of money by the Corporation, and enlarging its powers. In regard to Section 29, will the Minister explain the purpose of this section? It seems to make valid rules of agricultural societies, which, without this Bill, would be invalid but under which they have been lending money to individual members of the societies without a particular class of security. It is made valid only in respect of money which the Corporation has advanced. I am not criticising this, because I do not understand it, but I think it would be well if the Minister would give some explanation of these two points, so that it may save discussion, and perhaps attempts at amendment for the purpose of elucidation, on the Committee Stage. It would probably shorten the proceedings if we had the position regarding these two section made clear by the Minister.
With regard to Section 23, it may look very formidable, but the point covered in it is quite simple. In the original Agricultural Credit Corporation Act, the Corporation was entitled to lend money to a person for certain purposes. The purposes specified in paragraphs (a), (b), (c) and (d) are exactly the purposes specified in the original Act. After some experience in the working of the original Act, it was found that a situation like this might arise: a loan is incurred by a farmer for a purely agricultural purpose, say for the purpose of purchasing seeds. After two or three years that farmer dies and his son takes out administration. A loan could not be made to the son because it was not the son that made himself liable for the original loan. At least, it was doubtful whether the Agricultural Credit Corporation were entitled to make a loan to a son in respect of a debt incurred by his father. A position like that is met under Section 23. Paragraph (a) provides that it shall be lawful for the Agricultural Credit Corporation to make a loan
(a) to any person (other than a co-operative society) for the purpose of paying off a loan which was originally made to another person before the passing of the Principal Act wholly or mainly for the purpose of purchasing land for agricultural purposes;
(b) to any person (other than a co-operative society) for the purpose of paying off a loan or other liability which was originally obtained or incurred, whether before or after the passing of this Act, by him or any other person...
That is the vital clause in the section, and the same thing applies to every single one of them. The only point in that section is to ensure that a loan made by the Agricultural Credit Corporation shall be valid even though that loan is made now to a person who had nothing to do with the original purpose.
In regard to Section 29, certain things could be done and certain things could not be done under the Industrial and Provident Societies Act of 1893. It is thought that the Agricultural Credit Corporation should have the power, notwithstanding anything contained in the Industrial and Provident Societies Act, to do the things set out in paragraphs (a), (b) and (c) of Section 29 in this Bill. The Agricultural Credit Corporation are there being given the powers to do certain things. It was thought right to clear up the matter, and to make sure that the Agricultural Credit Corporation could take power to advance money for the purposes set out in paragraphs (a), (b) and (c) of Section 29. Under paragraph (b), where the Agricultural Credit Corporation lends money through a co-operative society to individuals who are members of co-operative societies, a new situation is created, and we want to make absolutely sure, notwithstanding anything contained in the Industrial and Provident Societies Act, that the co-operative societies may be a valid and a legal guarantor for a loan made to an individual shareholder. That arises out of the scheme which the co-operative societies are perfecting at the present moment. It will enable the Agricultural Credit Corporation to lend money to members of co-operative societies, leaving the societies the guarantors. It is fairly certain that there is not legal power to do that at present, that is, to make a loan of money in that way. We think that it is desirable to do so.
Senator Johnson is right when he says that there are a number of other points and matters arising out of the Industrial and Provident Societies Act which it might be well to have cleared up. That Act was never meant to meet the situation that we have at present. It was principally meant to deal with quite different sorts of societies. At present we propose to change the Industrial and Provident Societies Act only in so far as it affects the Agricultural Credit Corporation. So far as it affects co-operation as a whole, we propose to change that particular Act in a great many respects by the Co-operative Bill, which is an extremely difficult measure to draft, and which I am hoping we will be able to introduce in the autumn session.