Last week I proposed that the Committee Stage of this Bill be postponed until the first sitting after the summer recess. There is no reason to reiterate the arguments I then put forward. The matter was sufficiently debated and I shall content myself by moving again that the Committee Stage of this Bill be postponed until the first sitting after the summer recess.
Control of Manufactures Bill, 1932—Committee Stage.
I second that motion.
I do not know whether the motion is in order or not. This matter was debated last Friday, and I do not think it is in order for a Senator to move the same motion within the number of days that have elapsed since last Friday.
Cathaoirleach
On a Government measure it is in order. It would not be in order on an ordinary measure.
You rule that it is in order?
Cathaoirleach
Yes.
I oppose the motion. Like Senator O'Hanlon, I put forward my argument against postponing the Committee Stage last Friday and also set out the reasons why this Control of Manufactures Bill should be taken and disposed of this week. I do not propose to go into these arguments again. If the Bill is held up in this way we can only look upon it as obstruction, in the sense that the proposals of the Government, embodied in the Control of Manufactures Bill, are being held up with very serious results to the whole industrial development of the Government, and to employment in the State generally. The amendments have been all considered. I am prepared to go right on now and to deal with the points that arise. I hope the House will not agree to the further postponement in view of the position I have outlined.
I hope Senator O'Hanlon will not press his motion. In the previous discussion most of us expressed the views we felt in regard to this proposal. Even although the Parliamentary Secretary may have aggravated us a great deal by his lecture, I see no good reason why we should not go forward. On the Committee Stage the whole matter can be considered on its merits. I do not want to go over what I have already said with regard to this matter on a previous occasion.
I do not see any reason in the world why the House should proceed with the Committee Stage, unless they are in a position to give the Minister an assurance that it will give him the Bill in all its stages. I am half inclined to think that, if we proceed with the Committee Stage, we should make up our minds that we are going to give the Bill complete, otherwise, I do not see any reason why we should go ahead with it. My own opinion is that there are no great developments likely to be held up and the country will not be much worse for waiting another nine or ten weeks. This is a most difficult measure and it has to be carefully considered and I admit that I, for one, have not given, or have not had the opportunity of giving, sufficient consideration to these amendments, and I say with the greatest possible respect that for the House to proceed with the Committee Stage would, to me, anyway, seem rather foolish and a thing which the House should not commit itself to. I am rather inclined, although I do not wish to go against the wishes of the House, to ask you to put my motion to the House.
Some of us have studied this Bill very carefully and I do think that what Senator Douglas has just said is really the wisest course for the House to adopt. Let us go through the Committee Stage, and, if we do decide that it has to be put off, let it be because we know, after having put it through Committee, that there is no good going on; that it is impossible to do justice to it, but to divide about it now, when, even Senator O'Hanlon admits that he has not had time to go through the things, will not get us much further. Let us, at any rate, thrash it out. We may all come to the conclusion that he is perfectly right, but at present some of us are not persuaded. We think that we ought to see if there is a chance in Committee of arriving at the conclusion that it can be done. At present I believe Senator O'Hanlon is right. I do not think the House can possibly give us enough attention, but I do not think that we ought to decide on that now. I think we ought to see what we can do with it in Committee.
I would appeal to Senator O'Hanlon not to press this motion. We cannot possibly know how far the Minister for Posts and Telegraphs is going to meet the wishes of the House, or accept amendments, until we have put it to the test of debate here, and, for that reason, I would ask him not to press it.
In deference to the wishes expressed, I beg leave to withdraw the motion.
Motion withdrawn.
I do not want to prolong the argument on the particular point——
Cathaoirleach
We have 73 amendments to deal with.
——but I do think that there is a good deal to be said for Senator O'Hanlon's point of view that, if we deal with the Committee Stage, we ought to go right through with the Bill. Would I be in order in proposing that we complete the Bill?
Cathaoirleach
I think not.
In what time?
Before the end of the week. There is a good deal of the week to go yet.
Cathaoirleach
I cannot accept such a motion. There are 73 amendments on the paper. Of the 73 amendments on the printed sheet for the Committee Stage, I am obliged to rule 18 out of order, namely, Nos. 1, 8, 9, 10, 28, 30, 31, 37, 42, 43, 46, 47, 48, 51, 66, 67, 72 and 73. These amendments, read in conjunction, seek to alter completely the system of control contained in the Bill as read a Second Time. In effect, they propose that control should be exercised not by the Minister but by a Commission to be established under the Bill when it becomes an Act. For this reason, they are not in order.
Might I ask if you intend to proceed straightaway with the Committee Stage or to adjourn for an hour?
Cathaoirleach
We will go on to 7.30 and adjourn until 8.30.
Might I suggest that we should adjourn now? I think we will break the continuity of the debate and, if it were agreeable to the House that we should adjourn now, we could reassemble at five minutes to eight o'clock, or at a quarter to eight.
Cathaoirleach
We have already made the other arrangement.
And some people have made their arrangements on the basis of that arrangement.
I want to ask you, sir, if your ruling is that this House is definitely limited in the nature of amendments it can make to a Bill by its own Standing Orders? I take it that your ground for ruling these amendments out of order is that they refer to a Commission instead of the Minister.
Cathaoirleach
They are against the principle of the Bill as read a second time.
I am trying to avoid discussing it but I want to be clear on the grounds —
Cathaoirleach
My ruling is: "Read in conjunction, they seek to alter completely the system of control contained in the Bill as read a Second Time." The Bill, as read a second time, gave control to the Minister and some of the amendments seek to have control by a Commission. That is the position and I ruled them out of order.
I should like to ask whether, these 18 amendments having been ruled out of order on the ground that they seek to substitute a Commission for the Minister, I would be in order on Report Stage in putting in other amendments?
Cathaoirleach
I should think you would be in order, if you make them amenable to the Bill, but that is not for me but for you.
Am I to understand that Senator Staines is raising the point as to whether he can re-introduce amendments already ruled out of order?
No. I intend to put in amendments that will be in order.
SECTION 1.
(1) In this Act —
the expression "the Minister" means the Minister for Industry and Commerce;
the expression "prescribed" means prescribed by regulations made by the Minister under this Act;
the expression "body corporate" means a body corporate whether constituted before or after the passing of this Act and whether constituted within or without Saorstát Eireann;
the word "shares" shall be construed as including stock but excluding debentures and debenture stock;
the expression "adapt for sale" includes pack, bottle, or label for sale, but does not include the packing, bottling or labelling by a retailer of an article intended to be sold retail by him.
(2) Each of the following persons shall for the purposes of this Act be a national of Saorstát Eireann, that is to say:—
(a) a person born in Saorstát Eireann or the area now comprised in Saorstát Eireann;
(b) a person who at the relevant time is and for not less than seven consecutive years immediately preceding that time has been resident in Saorstát Eireann.
I move amendment 2:
Section 1, sub-section (1). After the word "labelling" in line 22 to insert the words "alteration or repair."
This is a comparatively small amendment and I think the Minister will appreciate the reasons for it. I found a good deal of difficulty in drafting most of the amendments that stand in my name and I quite recognise that it may be necessary, on Report, to make some alterations, but I gathered from the Minister that it was not the intention generally to control the retail trade. The provisions of the Bill, as amended in the Dáil, allow retailers to pack, bottle or label goods. In other trades, it is quite usual to make repairs of a minor nature, and, so long as the repairs are made by a retailer for sale by him, it would be clearly in the spirit of the Bill, and I propose, therefore to add the words "alteration or repair."
We propose to accept this amendment. The drafting of it will have to be gone into; it will have to be slightly altered in order to conform with what the officials believe will be necessary. In principle we accept the amendment.
If that is the case, I would like to withdraw this amendment now and put it down again for the Report Stage. I can then withdraw it once more if another amendment is brought forward by the Minister.
The form in which we would like to have the amendment is as follows: "To add the words ‘or to agriculture or to the altering or repairing by a retailer of an article intended to be sold retail by him.'" Perhaps that meets Senator Douglas's point?
I do not know what agriculture has to do with it, but I have no objection to it. I take it the Minister will put down that amendment on the Report Stage?
Yes. The reason agriculture is brought in is because it is co-related with Section 14 of the Bill.
Amendment, by leave, withdrawn.
I beg to move amendment 3:—
Section 1, sub-section (2). To delete lines 26-27 and to substitute therefor the following:—
"(a) a person born in Ireland or a person born outside Ireland whose mother was a resident in Ireland but temporarily absent from Ireland at the time of his birth."
I am not at all satisfied that my amendment is drafted as well as it ought to be. However, it raises one of the most important matters in connection with this Bill. It deals with one of the issues in which, judging by his speech on the Second Reading, the Minister held rather different views to those held by me. It deals with a matter which I consider is of the greatest importance, not only to this Bill, but to the country. The Bill, as it comes to us, provides that a person will be regarded as a Saorstát national only if he has either been born within the area of the Free State or if he has resided in the Free State, no matter where he was born, for a period of seven years. I was not able to be here during the debate, but I gathered from what I read of the Minister's speech that he was afraid people would reside in Northern Ireland and then come in here on short residence. I can quite understand that attitude and I am not proposing to provide that residence in Northern Ireland would be sufficient.
I hold that in a Bill of this kind it is absolutely wrong to exclude a man who is carrying on business here, who has put money into the country, because he had the fortune or the misfortune to be born in the Six Counties, which was then Ireland and which we still all regard as Ireland. To show something of the absurdity of it, I would like to point out that the present acting-Minister for Industry and Commerce, the Minister for Industry and Commerce in the last Government, the Minister for Finance in this Government and the Minister for Finance in the last Government were all born in the Six Counties. If this Bill is to be taken as it stands, we are in the extraordinary position that we believe birth in the Six Counties is quite good enough for a Minister for Finance or a Minister for Industry and Commerce, but it will not do in the case of a person holding shares in a company here. Frankly, I am unable to see why a person who was born in the Six Counties should have to reside seven years here before he can hold shares in a company.
If the Bill provided — though I am not advocating it — that birth after the partitioning of the country was to count I still would not be in favour of it, although I could understand it. But it does not provide anything of the kind. As we know quite well, in most cases the people who will be ruled out under this Bill will be people who were born before the partitioning of the country and who happened, through no fault of their own, to be born in the Six Counties. I think there is a principle of very considerable importance involved. I want people born in Northern Ireland, particularly the people who may not have much interest here, to be encouraged to put money into industries in the Saorstát. I believe it is to our interest to get them financially interested here. If every one of them was so interested, we probably would not have to talk about Partition at all. I am proposing that we should include persons born inside the whole of Ireland and I am suggesting a provision where a mother might be temporarily absent from Ireland, but was yet an Irish resident. I suggest that that should be sufficient to qualify a person under the provisions of this Bill.
I think it must be realised that however regrettable it is, and it is more regrettable to me, perhaps, even than to Senator Douglas, to find the people of the Six Counties excluded from citizenship here, that position has not been of our creation. The Senator has instanced the Minister for Industry and Commerce in the last Executive and myself, and quite a number of others might be instanced too. I am sure the late Minister for Industry and Commerce feels equally with me the undesirable position that we have been placed in, and that our fellow-citizens in the Six Counties have been placed in, but we have to realise what occurred and how it occurred and the conditions that now prevail. One has to admit, whether one likes it or not, that a series of political events caused the partitioning of this country. We know, without going into political issues of that nature at the moment, where the responsibility for that position lies. I submit the case is not parallel with any of the people mentioned by Senator Douglas because of their long residence here. To eliminate any residence test, to leave it possible for a person born of an Irish mother, widens the scope of this measure until its citizenship clause would cease to have any effect whatever.
I do not propose that.
The Senator's amendment sets out:—
(a) a person born in Ireland or a person born outside Ireland whose mother was a resident in Ireland but temporarily absent from Ireland at the time of his birth.
In the event of an unexpected birth, where a person would be on holidays or away for a period of twelve months or so in the United States or on a visit to relatives, I do not think there would be any impediment placed in the way of citizenship.
We are not dealing with citizenship now; we are dealing with the actual provisions of the Bill. I only put in the second portion of my amendment in order to show there was a difficulty there and in the hope that the Minister would find a better way of dealing with it.
As I have indicated already, the whole issue of citizenship has been neglected for the last ten years. We propose to have citizenship defined. At the moment this is the nearest approach that we can make to what would suit this measure pending a definite definition of citizenship. In all the circumstances we could not possibly accept this amendment because it would widen the scope, and the whole purpose as regards conserving possibilities for manufacturers here could be evaded entirely. We certainly would be glad to have the people of the thirty-two counties in a position to come here to start factories — invest money in factories, operate them and everything else, but the political position must be recognised at the moment. Certain politicians and alleged statesmen in the North of Ireland decided that the Six Counties would have nothing to do with the Twenty-six Counties. I spent a good portion of my life resisting that. We were beaten at it. These people cannot have it both ways. You might as well say, "We are all citizens of the British Empire" and have people from England coming in. The principle is the same. These people in the Six Counties are more affiliated with the whole political life of Britain than with us. They claim that they are British, that is to say, a small majority in the North of Ireland claim that they are British and that they have succeeded in establishing that political position. For these reasons, I do not see that there is any justification for the case that Senator Douglas has made and we could not accept it in the terms of this Bill. It would be fundamentally in opposition to the whole idea of it.
Surely it is very inconsistent for Senator Connolly and his Party to go on protesting against the Partition of Ireland while they bring in Bills like this which are rising the barriers every day? I do submit that it is due to their policy for the past ten years that we have Partition to-day.
I protest against that statement of Senator Miss Browne. We are not responsible for the Boundary Commission. We are not responsible for the Feetham Commission. We are not responsible for having the Boundary there. But Partition is there and the people responsible for Partition cannot have it both ways, and so far as we are concerned they will not.
The speech made by Senator Connolly is getting away from the issue entirely. The vast majority of the people for whom I speak neither approved of Partition nor resisted it. These people come under this Bill because they have been born in the Six Counties. The Constitution provides for a Bill dealing with citizenship and it is time a Bill were introduced to deal with it. A considerable inconvenience has been caused to a great many people through the absence of this Citizenship Bill. The Constitution sets out the principles on which such a Citizenship Bill must apply. If you read Article III of the Constitution you will find it stated, "Every person without distinction of sex, domiciled in the area of the jurisdiction of the Irish Free State (Saorstát Eireann) at the time of the coming into operation of this Constitution, who was born in Ireland or either of whose parents was born in Ireland..." A person born in the Six Counties if he happened to be a shareholder in a business here would be disqualified under this Bill. The Minister knows I have a great respect for his point of view, but he must admit that the wording of this section is not right and unless he can produce a better wording I must press my amendment.
I am sorry that accommodation cannot be found. I am not responsible for the Boundary. I voted against it. There are people in the North who are not in favour of the Boundary either, people who are good Irishmen and Irishwomen, and I think it is wrong to cut them completely out, if they want to come in. Even yet I hope that the Minister will find some way of allowing the people to come under this Bill, and I hope that some accommodation will be found.
I need not explain again that as a Six Counties man, born and reared there and spending most of my business life in Belfast, there is no person more anxious to see how it can be done than I am. I cannot see how the principle can be accepted, the political situation being as it is. I hold that we are the victims of an inheritance, and if anybody can suggest a way by which it can be got round I will welcome such a suggestion. I would welcome a Citizenship Bill to define this. But the situation is that there is a political entity of the Twenty-six Counties and another political entity of the Six Counties. Obviously in a Bill of this kind where we want to protect manufacturers within our own State, the solution of the problem is the abolition of the Boundary.
That is not the solution.
There are people resident in the Free State now who have not at the moment resided there for seven years. In the case of the Minister himself who happened to have service abroad, if this Bill had been introduced three or four years ago he would not be entitled to hold shares in one of these firms although residing here for he had not seven years' residence. I am saying that in a friendly way to show that there is something here that must be dealt with. This Bill as it stands cuts people like that out. I am of opinion that a man who is prepared to put money into a firm here, and who happens to have been born in the Northern area is far more likely to come to live here if this section is omitted. Many people have come to live here because they happened to have money invested here.
Nothing would relieve me more than to find that I was not a Saorstát citizen at the moment and that I was not entitled to be in this House. The fact is as Senator Douglas states it and the only thing I could do would be possibly to reduce the term from seven years to five years.
That would be of no use. That does not deal with the principle at all.
Senator Staines has an amendment somewhat on the same lines.
Cathaoirleach
We will come to that later.
Amendment put.
The Committee divided: Tá, 22; Níl, 11.
Tá.
- Bellingham, Sir Edward.
- Bigger, Sir Edward Coey.
- Browne, Miss Kathleen.
- Costello, Mrs.
- Counihan, John C.
- Crosbie, George.
- Desart, The Countess of.
- Douglas, James G.
- Garahan, Hugh.
- Guinness, Henry S.
- Jameson, Right Hon. Andrew.
- Keane, Sir John.
- Kennedy, Cornelius.
- MacKean, James.
- Moran, James.
- O'Hanlon, M.F.
- O'Neill, L.
- O'Rourke, Brian.
- Phaoraigh, Siobhán Bean an.
- Staines, Michael.
- Vincent, A.R.
- Wilson, Richard.
Níl.
- Chléirigh, Caitlín Bean Uí.
- Comyn, K.C., Michael.
- Connolly, Joseph.
- Cummins, William.
- Farren, Thomas.
- MacEllin, Seán E.
- O'Doherty, Joseph.
- Quirke, William.
- Robinson, David L.
- Robinson, Séumas.
- Ryan, Séumas.
Tellers: Tá: Senators Douglas and Staines; Níl: Senators Séamus Robinson and O'Doherty.
Amendment declared carried.
Amendment 4 not moved.
I move amendment 5:
Section 1, sub-section (2). To delete in line 29 the word "seven" and to substitute therefor the word "three."
If the Minister's previous offer still holds good, I would be prepared to accept "5." I think "7" is rather long. This deals with the question of length of residence. This "residence" means that any person, whether born in Hong Kong or Jamaica, can become, I will not say a citizen but a national under this Bill, if he lives here seven years. I am in this difficulty that I feel that seven years, that is for people starting now, is not unreasonable having regard to the idea of the Bill. I think that for people with money in the country and who are in here at the present moment three years is ample. What I would like to suggest to the Minister, if he would consider it, is that people who are actually residing here at the present moment having put money in the country that three years' residence is ample, but as regards other people who may come in now and want to get the qualification, I do not object to the longer residence. I confess also that the carrying of the other amendment, if it remains in the Bill, makes this amendment not nearly so important from my point of view.
I am prepared to accept a compromise on this, namely, five years. On the question of people who are already in here and engaged in carrying on a certain business, if we assume that they are not going to engage in other manufacturing business, then this Bill will hardly affect them at all. It may, of course, affect them as shareholders or as interested parties, but in all the circumstances I am prepared to agree to the seven years being amended to five. It has to be remembered in all these discussions, both as regards citizenship and everything else, that my attitude and the attitude of the Ministry is entirely based on the effective use of this particular Bill. It has nothing to do with our fundamental attitude to citizenship. One has to realise the circumstances and the application of those principles to a Bill of this type which is rather vital to various manufacturing interests already established in the State which might allow very undesirable elements to come in and exploit the possibilities even under this Bill.
Cathaoirleach
Is the Minister's proposal to amend the amendment by substituting the word "five" for the word "seven" agreed to?
Yes, so far as I am concerned. Senator Staines is also interested in this.
I agree to the amendment suggested by the Minister.
Amendment, as amended, put and agreed to.
I move amendment 6:—
Section 1, sub-section (2). To delete in line 30 the words "Saorstát Eireann" and to substitute therefor the words "any country comprised within the British Commonwealth".
The Minister may not take this amendment seriously, but I assure him that such is my intention in moving it. I cannot accept, for one moment, and I hope the House will not accept, this political division as in any way regulating business or economic activity. One would have thought — I do not want to make a second reading speech — that the tariff policy would have been sufficient; that when you have got manufacturers protected by tariffs that you had done with it. Not a bit of it. You go further now and you limit the control of business to nationals. I regard it as an indictment of the capacity of our own nationals to do business and face the ordinary competition that they may come up against.
I think the whole principle is thoroughly enervating. To come more closely to the amendment, the provision is against the whole of our Commonwealth spirit. Of course, it will be said: "The Commonwealth spirit leaves us cold; we are not in any way concerned about the Commonwealth; we want to be a separate, isolated Republic doing our business in our own way, be that way good or bad." If Ireland's idea is to stimulate trade, we must increase our exports. We must have exports to buy a large amount of the raw material that we cannot produce ourselves. That seems never to enter into the consideration of the Government. To carry on, we must obtain the raw material of industry. We can only pay for that by our exports and we can only build up an export trade by efficiency and by providing goods at a competitive price. That is the fallacy underlying this whole policy of economic isolation. In our own interests and in the interests of cooperation, we should recognise this Empire association and let business in this country be carried on freely by any citizens of the British Commonwealth. The restriction is quite capricious. A person who does not happen to be born in the country may find himself handicapped under this Bill. On the other hand, a person born here of British parents — if you like, the child of a member of the British garrison stationed here in former times — who has no connection with Ireland and no sympathy with the country whatever, by reason of being born here, can qualify as a national. The whole thing seems to be ridiculous.
The Seanad adjourned at 7.30 p.m. and resumed at 8.30 p.m., the Cathaoirleach in the Chair.
I desire to say on behalf of Sir John Keane, who is not able to be present, that he wishes to withdraw the amendment he moved.
As Senator Sir John Keane is not here, I do not think there would be much purpose in replying to his remarks. I have dealt on various occasions with the matters he dealt with — the question of efficiency, the Commonwealth and so on. I do not propose to deal with them now.
Amendment, by leave, withdrawn.
I move amendment 7:
Section 1. To add at the end of the section a new sub-section as follows:—
"(3) A person shall be deemed for the purposes of this Act to be resident in Saorstát Eireann if he has spent the greater portion of each year in Saorstát Eireann or if he is resident outside Saorstát Eireann in the employment of a person or corporate body carrying on business in Saorstát Eireann or if he is resident outside Saorstát Eireann in the service of the State."
This amendment is intended to supply a defect in the Bill. I do not profess for a moment to have been successful in that intention. If this Bill is going to be workable and if it is to be possible for a company secretary to find out whether or not his shareholders are Saorstát nationals within the meaning of the Bill, there will have to be some definition of "residence." I am not a lawyer but I am informed that we cannot, by referring to any other Act, find out the meaning of the word "residence." The meaning I have put down does not purport to be satisfactory. It is merely put down to raise the question, in the hope that the Minister or his Department will see the necessity of having a definition brought in in a properly drafted amendment. In this amendment, I have suggested that if a man has lived here the greater part of the year he should be regarded as a resident. I have also tried to draft another provision which, I think, is necessary. Probably, the Minister will appreciate that I had him in view when framing the last portion of this amendment.
The Minister spent a certain portion of his life in useful work for this country abroad. I think it would be quite wrong if that could not be counted as residence here. I think that any person in the service of the State should be regarded as resident here. I also think — I see a difficulty here as regards the wording — that a person bona fide in the service of a company here who has to reside abroad because of his service in that company should not lose his residence qualification here. I want to get a definition of “residence” which will include people who are in the service of the State or who are in the service of bona fide Irish companies and who may have to live abroad.
I have discussed this question at considerable length with our legal advisers. We think the position as stipulated in the Bill is really better, even from Senator Douglas's point of view, than the suggested amendment. It is true that in no legislation passed here has "residence" been defined. That omission is not accidental. The matter is judged by the court when it comes up for legal decision. I understand that the court practice is to have regard to all the circumstances, including such circumstances as Senator Douglas mentioned. In the case of a citizen sent out of the country as a foreign representative and detained there for nine months, twelve months or two or three years, it would not, I think, be contended, nor do I think that it would be held by the Court, that residence was broken. It is for that reason, as I understand, that the definition of "residence" is left out — so that the Court may decide in all the circumstances, from the point of view of equity, whether or not residence has been interfered with. With that in my mind, I think it would be unwise for Senator Douglas to press his amendment. If he decides to go on with it, we may meet him with a suggestion, but I submit that anything we do here would not be as equitably done as it would be done if left to Court interpretation. On the other hand, it may be argued that the discretionary power vested in the Minister will not have the same sanction as a Court decision. But we assume that the same set of circumstances would apply, that the Minister, in deciding such a question, would take into consideration all the factors and circumstances under which it might be argued residence had been broken. I feel that the present position is the more happy one, even from Senator Douglas's point of view, and that it would be better in all the circumstances to leave it as it is.
I should like the Minister to answer a question which will set out my real difficulty. I am not at all concerned with the difficulties of the Court. I am not concerned in this case with the difficulties of the Minister, but if you go through this Bill, you will find a series of questions which can be addressed to individuals in a partnership or to secretaries of companies. They are asked, under certain conditions, to state whether persons are nationals or not within the meaning of this measure. They cannot afford to go to Court. I do not know exactly how they could bring a test case before the Court. They may have a company with 500 or 1,000 shareholders and the secretary has to ask each of these whether or not he is a national within the meaning of this Act. If he was born in the Saorstát it would be simple enough. But if he asks a shareholder "were you resident here for seven years?" what will inevitably happen will be — I am assuming for the sake of argument that I am a company secretary and that I have sent out this question to shareholders — an answer will come back somewhat like this: "During the first year, I spent five months here; during the second year, I spent seven months; the next year I was not in Ireland at all and the year after I was the whole time in Ireland; will you please tell me whether I am a resident or not within the meaning of the Act." I am not trying to argue an absurdity. Unless you give a definition here, you are putting a question to a company secretary or a man in a partnership which he is not able to answer, because the Act will not tell him the meaning of "residence." Until there has been a number of test cases in the Courts, he will not know what the meaning is.
It is not a matter for the Minister to decide. There is no provision by which the Minister is to decide it. It is a matter for the person replying to state — incidentally, he is subject to very heavy penalties for giving false information — whether the person concerned is a national or not. I hold that you ought to give him some kind of guiding line as to the meaning of "residence." It is for the purpose of getting the Act to work that I put this amendment down. If it was not a matter for the individual, I would be satisfied to leave it to the Court. I am sure the Court would give a perfectly equitable decision and that, at the end of some time, we would arrive at some general understanding as to the meaning of "residence." But I do not visualise this sort of question going to Court for a long time, at all events, and I think there will be very few prosecutions from the point of view of false information. It will not be in anybody's interests to give false information, but I want to make it easy for the people concerned to give accurate information.
I do not visualise the difficulties that Senator Douglas has raised at all. I imagine that this matter will be carried through by an intelligent secretary, taking what he considers to be the ordinary residence of the shareholder. I do not anticipate that the matter will go to Court and I do not anticipate any of the difficulties which Senator Douglas foresees. The secretary will in this, as in most other cases, simply give an intelligent analysis of the position truthfully and to the best of his ability. There is no intention of putting up Star Chamber standards with which he will have to comply and there is no intention of making him feel that he is expected to do something unreasonable in specifying to the day, hour or month what constitutes "residence." I do not want to labour the question any more. If this suggestion meets with Senator Douglas's approval, I am quite willing to accept it, not that I believe that it will improve the Bill or that there is any necessity to meet the objection which he has raised, but merely to satisfy him that we are trying to meet the point. With that in mind and with the approval of the House, I would suggest that we add a new sub-section at the end of Section 1 as follows:—
For the purpose of the next preceding sub-section of this section a person shall be deemed to be resident in Saorstát Eireann during the whole of any year if he has resided continuously in Saorstát Eireann during more than two-thirds of that year.
That means that for four months of the year he may live out of the country. I do not know what other step we can take to meet the point raised by Senator Douglas. I think the Bill is better as it is, but if the Senator feels that he wants a definition as regards the period of any year which will constitute residence that is the nearest provision to what he desires that I can offer.
I recommend Senator Douglas to consider this matter between now and the Report Stage. In my opinion, both the Senator's amendment and the suggestion of the Minister would limit the law as to residence to a very considerable degree. The question of residence has been the subject of numerous decisions in connection with the Representation of the People Acts and it has been defined in a very liberal way. I would ask Senator Douglas to consider that before he presses his amendment or requires the Minister to substitute the other amendment for it.
We have been arguing this question on the basis of seven years. There has been an amendment accepted by which that period has been reduced to five years.
Cathaoirleach
That is so.
Would it help if the word "consecutive" were deleted?
That does not arise in this particular case.
It might.
To be quite frank, my own amendment is not satisfactory. I have no intention of pressing an amendment which, I know, would not work as it stands. I am not quite satisfied that the matter is so simple as the Minister represents. I would ask the leave of the House to withdraw my amendment and I would ask the Minister to be good enough to send me a copy of the draft he has read, leaving it for me to put down an amendment on Report Stage if I think well, having meantime had an opportunity of going into the matter further. I am not dealing with this question purely on my own. A number of business men have approached me and I think the Chamber of Commerce also raised a question as to the necessity for a definition of "residence." It is a question which is exercising the minds of business men at present and I should like to consult some of these before coming to a conclusion.
Amendment, by leave, withdrawn.
Section 1 ordered to stand part of the Bill.
Amendments 8, 9, and 10 ruled out of order.
SECTION 2.
(1) It shall not be lawful for any person who carries on a business by way of trade or for the purposes of gain to do any of the following things in the course or as part of such business, that is to say, to make, alter, repair, ornament, finish, or to adapt for sale any article, material, or substance or any part of any article, material, or substance, unless either —
(a) such business is, at the time such thing is done, in the beneficial ownership of an individual who is at that time a national of Saorstát Eireann; or
(b) such business is at the time such thing is done owned by two or more individuals and more than half the capital invested at that time in such business is beneficially owned by an individual who is or two or more individuals each of whom is at that time a national of Saorstát Eireann; or
(c) such business is, at the time such thing is done, owned by a body corporate the issued shares of which are at that time to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of a person who is or of two or more persons each of whom is at that time either a national of Saorstát Eireann or a body corporate the issued shares of which are at that time to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of nationals of Saorstát Eireann; or
(d) such business was carried on in Saorstát Eireann on the 1st day of June, 1932, and such business is, at the time such thing is done, owned by the body corporate by which it was owned on the said 1st day of June, 1932, and the doing of such thing would, if it had been done on the said 1st day of June, 1932, have been in the ordinary course or formed part of such business as then carried on in Saorstát Eireann; or
(e) such business was carried on in Saorstát Eireann on the 1st day of June, 1932, and such business is, at the time such thing is done, beneficially owned by the individual or all, some, or one of the individuals by whom it was beneficially owned on the 1st day of June, 1932, and the doing of such thing would, if it had been done on the said 1st day of June, 1932, have been in the ordinary course or formed part of such business as then carried on in Saorstát Eireann; or
(f) such person is the holder of a new manufacture licence and such thing is done under such licence; or
(g) such business is carried on in direct succession to a deceased person who would, if such thing had been done immediately before his death, have been lawfully entitled, under the foregoing provisions of this sub-section, to do such thing in the course or as part of such business, and such thing is done in the course or as part of such business between the date of the death of such person and the grant of probate of his will or letters of administration of his personal estate or is so done by the personal representative of such person while carrying on such business in due course of administration; or
(h) such thing is done in the course or as part of a business carried on by an assignee in bankruptcy, a trustee of an arranging debtor, or a receiver or manager appointed by a court in continuation of the business of a person who would, if such thing had been done immediately before such assignee, trustee, receiver, or manager commenced to carry on such business, have been lawfully entitled under the foregoing provisions of this sub-section to do such thing in the course or as part of such business.
(3) Every person who does any act which is a contravention of this section shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding fifty pounds together with, in the case of a continuing offence, a further fine not exceeding ten pounds for every day during which such offence is continued.
(4) Where a person is charged with having committed an offence under this section, the onus of proving the matters or any of the matters mentioned in paragraphs (a), (b), (c), (d), (e), (f), (g) and (h) respectively of sub-section (1) of this section shall lie on the person so charged, and until the contrary is proved it shall be presumed that none of those matters is applicable in relation to the act alleged to constitute such offence.
I have been asked by Senator Sir John Keane to move amendment 11:
Section 2, sub-section (1). To delete in line 32, page 2, the words "or for the purposes of gain" and to substitute therefor the words "other than agriculture."
The object of this amendment is to ascertain whether agriculture will be considered a trade in itself. I know from my own personal experience that many foreigners engage in agriculture here not for gain, but for sport. They are rather an asset to the country. If agriculture is excluded from the Bill, there is no more to be said.
If the Senator will refer to Section 14 I think we will get over this difficulty once and for all. The section states:
This Act shall not apply to the process of milling wheat or to the adapting for sale at a mill any product of wheat milled at such mill.
We propose to add at the end of the section:
or to agriculture or to the altering or repairing by a retailer of any article intended to be sold retail by him.
That is more or less a blanketing clause, but it shows that it will not apply to agriculture.
We did not know that was to be put in.
As a matter of fact it was following the amendment that we took this course.
Amendment, by leave, withdrawn.
I move amendment No. 12:
Section 2, sub-section (1). After the word "corporate" in line 52 to insert the words "which was carrying on business in Saorstát Eireann on the 1st day of June, 1932 or a body corporate."
Perhaps I ought to explain that we are now coming to a number of amendments which are designed for the purpose of carrying out the intentions of the Government, as far as leaving existing companies in the position in which they are at present. I take it, judging by speeches in the Dáil, and by the speech of the Minister, that, as far as possible, it is not the intention of the Government to interfere in this Bill with the present powers of existing companies. The effect of the amendment would be that a body corporate carrying on business, at the date the Bill is to come into effective operation, will be entitled to hold shares in another company. That would give them power to extend their business if they thought fit, but would not allow any person outside to do so. There are cases at the moment where existing companies hold shares and in finding out whether the companies in which they hold shares are free to do whatever they like, by having 51 per cent. held by nationals, you have to define whether the holders of the shares are Saorstát nationals or not. Where a company at present works a subsidiary company, it should be, to my mind, in the position it was before, and should be allowed to do exactly what any national company would do, without further examination into the exact ownership of its own shares. The object of the amendment is to try to meet that position.
This amendment is not quite so innocuous as one would think from the remarks of Senator Douglas. Let me make it clear that as from 1st June any company carrying on activities here cannot be interfered with. There will be no question of having to apply for a new licence. There will be no question of objection to any extension within their own business. But the proposal embodied in the amendment raises the possibility of a very wide extension of the activities of the holding company and the creation of subsidiaries.
Perhaps Senator Douglas knows better than anyone in the House, other than myself, the danger of subsidiaries. He knows what happened in other countries, particularly in the United States. He knows that the subsidiary company would, by its very workings, by its very nature and by the manipulative operations of those who control it, be one of the greatest dangers that could be introduced into this country. I am not suggesting that all controlling companies having power over subsidiaries are wrong, but I say that it has worked out in practice that most of them are. I certainly would fight against anything of the kind suggested in the way of an amendment to this Bill, because it does inherently allow the development of the controlling companies with subsidiaries. I suggest that the extension of a legitimate business cannot be prevented under the Bill. I suggest that a legitimate case made to the Minister for a desirable industry, in the terms of the Bill, and consideration by the Minister of all the circumstances, gives ample protection for desirable development. This would open the door to what I look upon as a most undesirable type of development. It has to be remembered —and it was pointed out by a Senator last week—that Articles of Association drawn up for a company are drawn up in the widest possible manner. Occasionally you will find clauses empowering the company to do practically anything covered by a blanketing clause, to buy, to sell or to make. That is our fundamental point of view and we will resist any attempt to let the controlling company operate without the full cognisance of the Department and Executive. The whole purpose of the Bill would be defeated by opening doors in that way. It would be foolish to consider the whole question of controlling manufactures at all if we gave away the principle which is involved in this.
As far as I understand it two points have been raised by the Minister. One has relation to investments in a company and the other to the extension of the business of a company. I take it that it is not intended that any company that has reserves—a good many companies have, and it is so much to the good that they have—will be permitted to hold them possibly in securities of other companies or in securities of the State. The majority of companies that are well worked have reserve funds, possibly in Government and other similar securities. Is it to be understood that that would be contrary to the intentions of the Bill? If that were so it would create a state of affairs that would be extremely unusual, to say nothing else. On that point I would like the Minister to tell us what exactly is the position to-day with regard to shares or investments of a company operating in this country.
In connection with the extension of a company's own business the Minister told us that there would be no objection, and that no additional licence would be required. Exactly what is its own business is a rather difficult thing to define. May I take it that a company that went in for a tobacco business—pipe tobacco—might possibly like to develop the cigar business and also to manufacture pipes and accessories to pipe smoking? I could not say if that would be considered within the company's own business. The Ford Company, of Cork, was mentioned at a recent meeting of the Seanad. I believe it was suggested that they might develop other business besides the motor business, such as the manufacture of cast iron piping and articles of that description. I can also visualise a brewery being anxious to make soda water. The ingredients are on the spot. Whether that would be an extension of the business I cannot say. I think it would be well if we had definite information from the Minister on these points, as we would then not be so much in the dark about what some of these amendments are intended to cover.
I made an appeal to the Minister last Friday, which he did not accept, that this Bill should be sent to a committee of business men. This amendment is a case in point. He sees in this amendment a possibility of an extension beyond the point I was trying to deal with. I confess quite frankly, after listening to his argument, that this amendment, as worded, could be extended. He does not meet the real difficulty I am up against and out of which I am perfectly satisfied a way could be found in a committee of half a dozen, although I do not see how we can get out of it across the floor of the House. One of the reasons why the Minister was so anxious to get this Bill through was that certain licences would be issued under it. The reason I wanted to deal with this is that I know the question of the formation of a company is hanging on the Bill and that a certain set of circumstances is going to prevent its happening. I dare not say more than that.
There is an additional difficulty that the Government do not want to extend this to provide for an unlimited extension of business beyond the point which we have here at the moment. On the other hand the position is that companies who are doing a legitimate business at the moment and who want to extend to form a 51 per cent. company, may find themselves in a difficulty because of a rigid interpretation of the Bill. I want, subject to some safeguards which I recognise have to go in and which, not having a fully technical mind I was not able to deal with—they would probably mean a new section—to provide that that can be carried on by existing companies. I see the force of what the Minister has said, that some limits would be required and I believe we could get a solution by discussing the matter in a round table way. A way out would be found there which you cannot get here. I think the only thing I can do for the moment is to withdraw this amendment and to reserve my right to put it again on the Report Stage unless the Minister can find some other way of dealing with it. Possibly we may be able to find some way out in conversation in the meantime.
There is one aspect of the matter on which I think the Minister and I will never agree. He feels, and very naturally feels, that if a company is in a difficulty all it has got to do is to ask for a permit and that a reasonable Government will give it to them. I know that, reasonably or unreasonably, there are many existing companies which will not ask for that permit and which will wind up in preference to doing it. That may be silly but it will happen in certain cases. After this Act comes into operation and after some years have elapsed and when there is a general principle adopted, quite possibly we will not have that hostility, but the fact remains that it is there. If the Minister, and I do not question his sincerity for a second, is most anxious to get the Bill through in a hurry in order that there may be some development, I am equally anxious to see that the Bill is not passed in a way that will prevent development. I doubt if in the manner in which the Bill is now being dealt with a way out will be found.
I cannot see that the inclusion of an amendment such as this or even any amendment in this Bill would meet the difficulties presented by a firm that, so to speak, is not prepared to recognise the court. If they are going to trade here they will have to recognise the Act and will have to comply with certain conditions. I cannot see if they have to meet certain difficulties under the Act or certain obligations under the Act why they should raise any particular difficulty about this point. I admit it is difficult and it is really one of the outstanding instances in this Bill which make it almost impossible to draft all the covering points that you would need in a Bill of this type, to eliminate the discretion of the Minister. Let us look at it from the practical point of view. A concern wants a permit or a licence to manufacture. A proposition is put up. The Minister for Industry and Commerce at the time naturally is anxious to see development. If all the other conditions that are desirable from the point of view of manufacturing in this State are complied with, does anyone believe, in the light of the development of industry which obviously concerns the whole country and for which he is primarily responsible, that he is going to stand in the way of this development? It is the one case where the discretionary power of the Minister is exemplified to the fullest. The discussion of all the points you may imagine you are covering now will not be covered when you are done with it.
The same answer really applies to the question raised by Senator Guinness.
An extension can be intelligently understood when that particular extension is defined by the manufacturer who wants to extend. You may raise all sorts of hypothetical situations in a debate, but it is difficult to conceive that you will have then covered them all. What we assume is that in an ordinary, normal, intelligent administration all these factors will be taken into account. I cannot conceive any responsible Minister holding up any legitimate trade development. Let us take the hypothetical case that a firm already engaged in making sugar had decided to branch into the manufacture of chocolate and assume for a moment that, six months before, a licence had been issued to half-a-dozen firms for the making of chocolate. The Minister knew that although sugar was a fundamental ingredient in chocolate that this company had accummulated reserves of say half a million and they were going to branch out into the manufacture of chocolate under conditions which would give them practically a monopoly. I can conceive the Minister saying that the existing half-dozen manufacturers could not be broken on the wheel of the sheer power of capital. I am giving that as an illustration of how almost impossible it is to have anything but the discretion of the Minister to guide the intelligent administration of a Bill such as this.
I submit that the arguments I have made exemplify completely the absolute necessity of the discretionary powers of the Minister in a matter like this. I think that Senator Douglas has very wisely withdrawn this amendment. I would be willing to consider anything else he likes to put up and I am most anxious to have the Bill as perfect as it can be made but I would like to emphasise that the question of the discretionary power of the Minister is something that cannot be got over.
The Minister has not answered the question I raised with reference to a company which has large reserves in investments. Are they going to be precluded from holding these investments because they do not happen to be Irish investments?
Cathaoirleach
That matter does not arise on this section.
I am withdrawing this amendment on the understanding that you will permit me to move it again on the Report Stage should I think fit to do so.
Amendment, by leave, withdrawn.
I move amendment 13:
Section 2, sub-section (1). To delete in line 4 the words and figures "1st day of June, 1932," and to substitute therefor the words "day on which this Act comes into operation."
This amendment is in a different category altogether. I foresaw what you yourself, a Chathaoirligh, pointed out this morning, that inevitably there would be a certain amount of delay. Either the House may postpone the Final Stage to a later date or it will have to be taken next week or in ten days' time and then go to the Dáil. I can see two or three things on which there may have to be conferences between the two Houses to reach agreement. In the meantime I am very anxious that there should be nothing held up during that period. If you look at the end of the Bill you will find that, although June is mentioned, this Act does not come into operation after it is passed. For some reason that is not quite clear, but to which I do not object, the Minister shall fix the date on which the Act shall come into operation.
My suggestion is, so that no company which may wish to start now will be unduly prevented through the delay of possibly a month or three weeks, that we should change all through the Act the "1st June" to "the day on which the Act comes into operation." I meant, as a matter of fact, to have sent a note to the Minister to tell him my reasons, so as to give him time for more consideration. I would ask him to consider it carefully, because it might have that effect. The law cannot take real effect until the Act comes into operation and it might avoid difficulties if this were done. There will be inevitably a certain amount of discussion. It is a difficult Act and I agree with him that even to-day snags will be found. It is the kind of Bill which this House has thought it necessary in the past to spend time over and it can get more careful consideration here than ever it could get in the Dáil. A certain amount of delay would be inevitable and this might meet the danger. There cannot be more than one or two companies affected.
In face of what has happened, we could not accept this amendment. Suppose that this Act does not come into operation, by the terms of the Act itself, until the 1st September. We have to realise what could and what would happen in the meantime. A company could be in here, get a footing here, get itself sufficiently established here, comply with the company laws, be in a position to operate, and you would have no power then under the Bill to interfere with them. I have a very specific case in mind. I cannot mention the name nor can I mention the type of industry, but it is one of the companies to which I was referring when I said I was anxious to have this Bill put through. Assuming that we did what Senator Douglas wants us to do, or proposes that we should do, we would be handicapped. Certain companies, knowing that this June 1st date was fixed in the Bill, have been precluded from coming in as free lances into this country. If the proposal made were accepted it would permit a firm to come in here which would smash every other industrial enterprise in that particular business overnight. There is nothing in this country which would be able to stand up to them in their particular line. In this market at the moment we are able to produce almost all of the goods we want. Tariffs have gone on, and the reason June 1st was mentioned was because tariffs had gone on, and immediately it became obvious to certain big manufacturers that there was a golden harvest to be reaped here if they could get in.
I think we owe a duty to those manufacturers who have struggled here during the lean years, and who are still struggling here, and endeavouring to produce here with Irish workers, on Irish lines for Irish consumption. I think it would be an outrage to allow a period during which manufacturers could come in here and be in a position in spite of the Act to come in and smash up our native firms. I think the position will be obvious to anybody who realises just what I have said.
I feel a very great difficulty in speaking in regard to this measure, because it has rather cut across all my former activities. I have devoted a good deal of time in trying to induce people to come in and manufacture here. I do not say for a moment that I disapprove of this measure, but I think that from everything the Minister has said it is obvious that it should not be dealt with here where we can only give a very cursory examination into the various things. I suggest that it might be referred to a Select Committee of the House.
I will give you a little experience I have had. It just happened accidentally that I was Chairman of the Industrial Association in Cork. In my capacity as Chairman of that Association, I actually negotiated the purchase for Ford from the Cork Corporation of the land on which Ford's factory now stands. I also negotiated the purchase of the Rushbrooke Docks for the Furness-Withy people. I thought I was doing a good and worthy work, but apparently now what we have got to preserve for this country is not so much the wages of the workmen as the profits of the capitalists. I am not against capital, but I do think that the coming in here of foreign companies is likely to give more employment and that the probabilities are that from these companies subsidiary companies may spring, not run by these people themselves, but run by nationals. When Ford's came first to look into this matter, they undertook to employ ten thousand people at one shilling an hour. The current wage then in Cork was fivepence per hour. They reduced the offer to 2,000, and even that was a very great boon. They had intended to extend in Cork—as they have since done in Dagenham— and they believed that, directly or indirectly, they would have created employment for 60,000 hands. The tariffs on motor cars between the two countries spoiled that. Whether that was a good thing or not, I am not prepared to say.
With reference to the Furness-Withy people, it was pure accident or bad luck that they are not employing a great number of people here, because there were negotiations going on between various shipping companies which had intended to make Rushbrooke the headquarters for all of their ships going West. These, unfortunately, broke down. Out of this would have grown a tremendous number of subsidiary companies. I cannot see the Minister's point that keeping out these foreign companies is really going to develop the country here. I differ with him there, because I do not believe we have in the country the skilled labour or the educated management that is capable of setting up successful industries here, even with the tariff. We all know that no industry has ever been successfully established here up to this by a public company. We hope, sincerely, that that will not happen in the future, but it is very questionable to me if, even with the advantage of the tariff, taking into account the tremendous drawback which it is for anybody who has to go into a new business with no experience and with the knowledge that they cannot get, locally, skilled labour, they can make these companies successful. I quite sympathise with and understand the position that the Minister takes. He, naturally, is anxious that profits made in Ireland should remain in Ireland.
Cathaoirleach
Are we not getting a little wide of the scope of the Bill?
I am trying to induce the Minister to defer this.
As far as this particular amendment is concerned, I am rather nonplussed, in some ways, by the speech of the Minister. He accused me of creating difficulty and delay. I think he very much exaggerated the possibility of what would happen in the next month if the date were put back. I thought the amendment was a way out of the difficulty, but if the Minister does not want it, and as there is no principle involved so far as I am concerned, I do not think I shall press it. His last statement makes one uncomfortable, when he says that this particular date this Bill may be holding people up and frightening people who would come in, and that being so I do not press it.
Amendment, by leave, withdrawn.
Amendments 14 and 15 not moved.
I move amendment 16:
Section 2, sub-section (1). After the figures "1932" in line 6 to insert the words and figures "or by a body corporate formed as the result of a reconstruction without change of control of the body corporate by which it was owned on the 1st day of June, 1932."
There is a point in this amendment that I think ought to be met, although there again my draftsmanship may not be perfectly satisfactory. We all know of cases, from time to time, where reconstruction of a company is necessary, sometimes through unfortunate reasons, sometimes for fortunate reasons. Where the control of the body does not change I do not think it should be necessary to get a permit as a result of reconstruction. My amendment provides that a body corporate formed after reconstruction without change of control should be exempt.
In answer to that I think we may take it that if the company remained the same legal entity no licence would be required.
It will not be the same entity after reconstruction.
Companies are often reconstructed with the same personnel and very often the same interests and the same control for various reasons.
That is exactly what I am trying to exempt.
I think the Senator can accept it that in the event of that only happening there would be no need for a licence.
With great respect I cannot see that that is the case, having regard to the wording of the Bill, and a lawyer whom I consulted told me that, in his opinion, it would not be the case. My only object is to cover a case such as the Minister referred to. I provide that there is to be no change of control. It is not the personnel of the shareholders but it is the control of the business, and here I think there is something that is not met in the Bill and I have been so advised.
When I spoke of reconstruction I assumed that, in the main, the control in personnel and the personnel itself would be the same as it was. If there was a substantial transfer of interests from certain groups of owners to other groups of owners, or shareholders, it would mean that the majority of the shareholding would have passed from the original shareholders and an entirely different situation would have arisen.
You have here a body corporate which was owned by somebody. The reconstructed company is not the body corporate by which it was owned. It may be exactly the same people. If it is under the same control I want to cover that, though the body corporate is not the same body corporate but it is the same control by which it shall be governed. A lawyer friend told me that the wording of the Bill does not cover that. Senator Comyn is the only lawyer here at the moment. Perhaps he would tell us what his view is.
As I am referred to, I am perfectly certain it would not be the same body corporate.
The Minister is mainly concerned with the business the body corporate carries on in case of reconstruction. There is no doubt reconstruction must alter probably some of the individuals connected with the management. It frequently means change of directors. Probably there would have been trouble with the old board. It would be a difficult thing to say that they are absolutely the same people and everything is the same that controls the business after reconstruction. What the Minister wants is that the body corporate carries on the same business as before. I judge him to say that he does not think this amendment is required, that what it seeks to do is already in the Bill. If it is not required in his opinion I should say that it would be better for the Minister to put it in. He says it is there already. Well, I say, put it in here again.
When I say the company remains the same legal entity, and in that event would not require a licence, we still have to be satisfied that what we look upon as control, namely the voting of shareholders in a company, complies with the terms of the Act.
That is my proposal. Senator Comyn bears me out when he says that it would not be the same body corporate and, therefore, it would not be the same legal entity although it was the same business. I ask the Committee to accept this amendment and if it is found necessary to do so we can redraft it on Report Stage if the Minister's officials are able to draft it better than I have drafted it.
Question put.
The Committee divided: Tá, 20; Níl, 12.
Tá.
- Bellingham, Sir Edward.
- Bigger, Sir Edward Coey.
- Browne, Miss Kathleen.
- Costello, Mrs.
- Counihan, John C.
- Crosbie, George.
- Desart, The Countess of.
- Douglas, James G.
- Fanning, Michael.
- Garahan, Hugh.
- Guinness, Henry S.
- Jameson, Right Hon. Andrew.
- Keane, Sir John.
- Kennedy, Cornelius.
- Moran, James.
- O'Hanlon, M.F.
- O'Rourke, Brian.
- Staines, Michael.
- Vincent, A.R.
- Wilson, Richard.
Níl.
- Chléirigh, Caitlín Bean Uí.
- Comyn, K.C., Michael.
- Connolly, Joseph.
- Cummins, William.
- Farren, Thomas.
- MacKean, James.
- O'Doherty, Joseph.
- O'Neill, L.
- Quirke, William.
- Robinson, David L.
- Robinson, Séumas.
- Ryan, Séumas.
Tellers:— Tá: Senators Douglas and Staines; Níl: Senators S. Robinson and O'Doherty.
Amendment declared carried.
Amendment 17 withdrawn.
I move amendment 18:
Section 2, sub-section (1). After the word "Eireann" in line 10 to insert the words "or at the relevant time is in the ordinary course or forms part of an extension of such business as previously carried on."
The idea of this amendment is to cover the case of a firm like Ford's, of Cork, if they wanted to make, for instance, typewriters, or Gallaher's, if they wanted to make cigars instead of cigarettes. I think the Minister more or less agreed on Second Reading that anything in an allied trade would be allowed to be carried on and I do not think I need say more on it.
I think that this amendment is unnecessary, and, I think, also, that it might lead to a considerable amount of trouble in the interpretation of the Act and, consequently, trouble in the administering of the Act. The amendment says "is in the ordinary course or forms part of an extension of such business as previously carried on," and it might seem as though there was really no objection to that, but it is a question of possibly making the section difficult to administer and it might seem as if intended to increase the allowable extensions. Frankly, I do not see any objection being raised, and I do not think the issue will arise, provided that firms were extending in their own line of activities or anything that would be intelligently looked upon as allied branches of their existing trade. I do not think the Senator ought to pursue it, in view of the fact that, in the opinion of our legal people, it might lead to trouble in the interpretation of the Act. I would ask the Senator to reconsider it as we do not feel that we can accept it.
This raises a rather large question. There is quite a lot involved in the interpretation here. I have discussed this matter with some people since the Second Reading and I am reasonably satisfied that the wording here is going definitely to restrict extension, perfectly legitimate extension of which even I know the Minister would approve; it will restrict such extension in the case of certain businesses. The Minister says this amendment would cause difficulty in interpretation. I say the wording of the Bill will cause very great difficulty. I think the Minister should be prepared to go the whole hog. I think a company which exists here, which came in here bona fide, should be allowed to operate within the terms of its Articles of Association; that is, assuming the company is bona fide here at the moment. If the Minister will not go that far, he should make it clear that an extension which is reasonably allied to an existing business should be allowed.
It is very probable that if this economic war, as we call it, goes on, our existing companies, those that depend to any extent on trade across the water, will have to adapt their machinery to other lines of business. Do not make it difficult for them to do so. Do not make it necessary for them to have legal advice. If you do you will add to their difficulties at a time when you ought not. You have here in the amendment "or forms part of an extension of such business." In the case of business of which I have personal experience I can think of a number of perfectly legitimate extensions quite within the line of business now carried on, but which would not be in the ordinary course of such business on 1st June. In one case goods were manufactured years ago, but the trade was small and they ceased to manufacture. If they were depending entirely on an Irish market they would probably start to manufacture again, but that would not be in the ordinary course of business on 1st June and there is, in that case, that definite restriction.
Senator Staines's amendment tries to some extent to help, but I do not think it goes far enough. I am disappointed that the Minister did not submit a proposal which would to some extent meet the points raised here. The Bill, such as it is, is restrictive and it would be risky for a company, without seeking for a permit, to go ahead with any extension. I need not deal now with the reluctance of certain companies to seek a permit. We must deal with the facts. We are not always dealing with reasonable people and in the next three to six months it is going to be difficult enough to get companies to carry on at all. It may be difficult enough to get them to extend business on other lines. This restriction in the Bill will not carry out what the Minister stated was his intention. Companies free to make extensions within the general line of their own business at present will not be free unless the extension is in the ordinary course of their business on a particular day, which is 1st June. The extension must form part of their business on that particular day. It may have been part of their business a year or two ago, but if it is not in the ordinary course of their business on 1st June it will not be permitted.
I urge the Minister to reconsider this and try to bring forward on Report something which will cover a reasonable extension. I am not asking, for instance, that a firm that brews beer should be allowed to manufacture bicycles. I am suggesting, however, that you would have plenty of closely allied extensions which would come in the ordinary way but which might not be in the ordinary course of business on 1st June. The Bill, I think, is far too restrictive.
I agree with everything Senator Douglas has said. I jotted down, for my own information, what I believe would cover the point. I do not put it forward as an amendment, but I am merely suggesting that it might meet the point. Here is what I have written: "Corporate bodies which, prior to 1st June, 1932, have been engaged in the manufacture of commodities in Saorstát Eireann and which may in the interests of their trade desire to extend or modify the production of the particular goods or by-products associated with their respective manufactures, shall be entitled to undertake such extension or modification without being required to comply with the provisions of this Act." Something of that nature would tend to clarify the situation. It would help to allow possible extensions within the scope of what the Minister desires to accomplish. Extensions associated with a business are all that are asked for. It is not suggested, as Senator Douglas has pointed out, that a brewer should be allowed to make a bicycle. That is not intended.
It is not quite so simple as all that. I am assuming that a situation may arise here such as arose in America. This country might go dry. In such circumstances would Messrs. Guinness be allowed to make soft drinks? Is it necessary that they should have to seek a Government permit in order to make soft drinks?
That sounds like heresy.
One can scarcely contain one's patience when dealing with the type of legislation with which we now have to deal. One has practically to throw aside everything one is brought up to understand and one has completely to re-orientate one's mentality in order to deal with these things.
I am willing to accept this amendment if Senator Staines will agree to the inclusion of the words "in the opinion of the Minister"; that is what would, in the opinion of the Minister, form an extension. I realise the difficulty some Senators have with regard to this matter, but frankly, I think an intelligent analysis of the position should be very easily achieved. With regard to the point raised by Senator Sir John Keane, I take it that if this country went dry— which, I suppose, would mean going on soft drinks, though it is rather a paradox—Guinness's would be quite entitled to go in for soft drinks. I do not know whether the family escutcheon would stand the strain. If Senator Staines would agree to my suggestion, I would be willing to accept his amendment.
I would not agree to that suggestion because it seems to me that that would make the case a thousand times worse. At the present moment if a company went on with an extension and then were challenged in the court they could at any rate argue that it was reasonable under the Act. If you put in the words "in the opinion of the Minister," the court has no say at all. The Minister says "That is my opinion," and that is the finish. It may be the most unreasonable opinion on earth. You may have the stupidest Minister possible.
Very possibly.
What Senator Connolly is getting at, I presume, is that a company might write to the Minister to know what his opinion is.
No.
The position might be that the court would have to decide what was the opinion of the Minister before it decided whether a company had broken the law or not. I would not approve of that. It would not be workable. I urge the Minister to look carefully into the amendment proposed by Senator Staines. All you have to prove is that it is an extension of the business then carried on or previously carried on by the same company. That is reasonable. In the case of a prosecution—and it is the Minister who will have to prosecute—I am quite satisfied a court will be able to decide on the arguments as to whether an extension was reasonable, was an extension of the business then carried on, or whether it had been previously carried on. As the Bill stands, a company which had previously carried on business, but which was not carrying it on on a certain day, will not be able to operate without getting a permit.
Most of my amendments were directed towards taking the power out of the hands of the Minister and I do not think the Minister for Posts and Telegraphs can expect me to agree to his suggestion.
Amendment declared carried.
Amendments 19, 20, and 21.
Amendments 19, 20 and 21 are consequential on an amendment that was withdrawn.
Amendments, by leave, withdrawn.
I move amendment 22:
Section 2, sub-section (3). To insert before the sub-section a new sub-section as follows:—
"(3) For the purposes of paragraph (c) of the immediately preceding sub-section, but not further or otherwise, the following provisions shall have effect—
(a) where the shares of a body corporate are registered in the name of a bank carrying on business in Saorstát Eireann, such shares shall be deemed to be in the beneficial ownership of a national of Saorstát Eireann;
(b) where shares in a body corporate which is a public company are transferred to a person who is not a national of Saorstát Eireann and as a result of such transfer the issued shares of such body corporate cease to be to an extent exceeding one half thereof in the beneficial ownership of nationals of Saorstát Eireann, such body corporate shall nevertheless be entitled to continue its business without holding a new manufacturer's licence for a period of six months or such longer period as may be specified by the Minister in writing."
This is another amendment which endeavours to deal with two problems that I raised in speaking on the Second Stage of the Bill. They are two quite distinct problems and I was very much puzzled as to the way they might be dealt with. When I looked at the Bill I found what seems to me to be a good way of dealing with this matter. If the Minister finds another way I am not wedded to my amendment. I want to get over this difficulty which is a real difficulty to the holding of shares in the name of a bank. It is well known that a considerable number of us are unfortunate enough to have at a bank overdrafts and the holding of our shares by the bank is a good way of giving collateral security.
The Minister, I suppose, does not want us to go into banking secrecy. I do not think any harm will be done in the way of the bank's secrets if it is confined to the banks here. But it is possible that the Minister might want to make some proviso to deal with possible evasions that may arise. But if you had to pass a Bill without making some provision such as I have here you are going to have the people who have overdrafts at present and who hold Irish investments becoming quite frightened because questions will arise as to ownership of the company. A bank will say: "We are not going to the trouble of proving this; we, as a bank, are not writing to our shareholders to ascertain their nationality and consequently we will not hold these shares as collateral security any longer." What would happen would be that it would be found that a number of Irish shares would be put on the market because they were no longer good security with the bank. That is the first part of the amendment, (a); (b) deals with another problem altogether, one which I feel sure the Minister will agree himself must be met whether he meets it my way or not. I am assuming in this case that the company is formed after the passing of this Bill, and that it is an Irish company within the meaning of the Act, that is, that 51 per cent. or more of its shares are held by Saorstát nationals. But by the selling or the transferring of a certain number of shares to a person who happens not to be a national, if this Bill stood as it was a few hours ago the company ceases to be a Saorstát company; if the shares happen to be transferred by a person living in the Saorstát to his son who happens to be domiciled in Northern Ireland it would mean that suddenly the company would cease to function here. By my amendment, if the company found that the ownership went below 51 per cent. of Saorstát nationals, the company would not be breaking the law by operating for six months, and in the meantime it could arrange first, to sell some of its shares to some other person living in the Saorstát or to come to the Government for a permit. If not, it would be found the company would have to stop business. This will happen in the case of a private company by the death of one of its shareholders who leaves his share to somebody outside this State. Over a thing like that, you would have the business of the company held up and the people thrown out of employment. No serious harm can be done during that six months' time that my amendment would give. In that time, the company must either get a permit from the Minister or arrange for the shares to be bought and transferred to somebody who comes under the Act.
I am afraid I cannot accept paragraph (a) of the proposed amendment. The position is that any person or group of persons or corporate body out to defeat the purpose of the Act could, by this amendment and operating through a bank, defeat the purpose of the Bill. That is quite possible in my judgment if we accepted this amendment. The second section, paragraph (b) of the proposed amendment, is one I am willing to accept provided the following meets with Senator Douglas's views: "Whenever the issued shares of a body corporate cease to be held in the manner stated in the said paragraph such shares might be deemed to be held in accordance with that paragraph for a period of six months after they have ceased to be so held." That is a draft that we would like to have and it covers all that Senator Douglas wants by his amendment. I suggest that, if that meets with his approval, we accept it.
As regards paragraph (a) of the amendment, which the Minister says he cannot accept, I am afraid this is another case that we have seen where the Government say "Well, accidents must happen. We will carry on our policy; the people who will suffer from our policy are people that we are sorry to see suffer, but they will have to suffer." There is not a shadow of doubt that what Senator Douglas said is correct. There are plenty of shares, personally held in the names of banks as security in an Irish business. It is the banks who are carrying on their business in Ireland and undoubtedly the Bill as it is without this amendment throws a great disqualification on these shares. I really believe that the Minister is resolved on this. He is putting this disqualification on shares not knowing what the effect will be at all. I am a bank director and I carry a lot of overdrafts and securities in my head and if you ask me to-day what is the effect of the Bill on the lending power of the bank and what arrangements would a bank have to make by reason of this Bill I could not tell you and I do not suppose anybody could tell you. The danger is there, and a good many Irish people with money in Irish businesses will find themselves in a difficulty. I suppose this Bill only applies to new businesses.
Exactly.
I recognise that. If you have a Bill with a blot of that nature, and if you want new businesses to be supported by the banks, surely you should make the shares a first-class security to the banks to any extent? If this section is a disqualification of the shares of a new company that should be accepted by the banks, you are doing a real harm to the new industries. The banks want to see new industries as well as the Minister, and for that reason I think he should seriously consider the question. It is only because he wants to go along a certain line that he will not deal with the danger.
That is not so.
Undoubtedly what would happen with new businesses would be that they would have the worst chance of getting banking accommodation because of the nonacceptance of the amendment, and holders of shares will probably not be able to borrow on them as easily as they should be. It is a distinct disqualification. I strongly support the amendment because it will make the business of promoting new companies better, so far as they are likely to get the accommodation they need.
My feeling about this is that the points we see now are only trivial ones and that others will emerge with experience. No a priori will ever reveal the snags in legislation at the moment. I believe the Bill will only work by being unworkable, in the sense that things will be allowed to drift, and it is only when some political pressure or pull is in operation——
On a point of order, I resent mention of "pull" and the whole attitude of Senator Sir John Keane on this Bill. As in most other things, undoubtedly what he suggests is that it is a Government of politics and pull. I have stood about as much of that as I am going to stand.
Cathaoirleach
I think it would be better if we kept to the section.
I think there is no necessity for being continually offensive
I withdraw. I believe this Bill is capable of being used by certain people for putting pressure on the Government.
Cathaoirleach
We are dealing with the section now.
I am keeping to the section and my remarks are germane to it. I think the Minister understands how the danger of shares being held by banks will really arise. I suppose he means people who wish to disguise their nationality, shareholders who will get their shares held by the banks as their nominees. I can see a much easier process which would be perfectly within their power, and that is to get a person born in what is Saorstát Eireann, who lives in England, and who has got no affiliation here, to hold these shares. As far as I can see he will be able to do so. I would like the Minister to deal with that point of view.
The point is that we want to know who are the real owners of businesses here. The suggestion that the operation could be carried through by banks on the lines suggested would defeat us in knowing the ownership. Senator Douglas knows that. Senator Sir John Keane and Senator Jameson know that the purpose of the Bill could be torpedoed by such a proceeding. We want to know who owns the shares. If, say, the Bank of Ireland, the National Bank or the Hibernian Bank want to buy fifty thousand shares in an Irish company they can buy them and there will be no objection. They will not have to be licensed. If a bunch of Frenchmen, Italians or anyone else go to the Bank of Ireland to buy fifty thousand pounds' worth of stock in an Irish company in order to get control in the name of the bank, how are we to find the ownership? The secrecy of the banks is well known. We are facing up to realities. If the Seanad does not want the Bill they should have thrown it out. I submit that it is indecent to go on with an amendment like this after passing the Second Reading. I again protest against the attitude exhibited continuously by Senator Sir John Keane. I resent it. I feel that I have as much credit and honour in this country as regards resentment to political pull and to the suggestion of jobbery as anyone. I have been in politics since I was 17 years of age and no one could ever point a finger at me for any political job. I hope Senator Sir John Keane's record is equally clean.
I am sorry that the Minister has allowed resentment at some other remarks to be an opportunity to make the charge that this amendment should not be put down unless I wanted to defeat the purpose of the Bill. That statement is neither accurate nor fair. The position is that this amendment is put down because of a real problem, one which may seriously hurt subscribers for shares, or the possibility of getting subscribers for shares in Irish industries in the future. This is another case of an amendment where it is almost impossible in the open House to get down to brass tacks and to find whether you can get a way out to deal with it. The Minister says there is a possibility of evasion in the section. He thinks the banks here would allow some foreigner to come in and borrow money from them, saying "Will you put these in your name?" I agree that that could happen. I do not agree that it is likely to happen. I say that a way could be found to prevent that happening without exactly accepting the amendment in my name. A way could be found if we could get together.
I am sorry the Minister did not find some proviso that would prevent anything outside the number of shares that a bank could hold. He ignored that entirely and accused me of putting down something that I should not put down after agreeing to the Second Reading. The Minister has not dealt with the real problem. There are not many wealthy people in this country, unfortunately. Most of us put our money into Irish businesses. We cannot do business unless it is possible from time to time to be able to use such securities. If individuals here are to be placed in the position of putting their money in British securities that is all right. The banks will be able to take them. If you put your money into Irish industries there must be an examination of the holding of the shares and the banks will not facilitate you. It is putting the banks in an unfair position. It means that when anyone goes to the Irish market to try to get people to take shares they will be put in an unfair position. There is a way out, but not by my accusing the Minister or by ignoring something. It has to be carefully considered to see if there is not another way. I put down the amendment acting on my own initiative. I sat down during the week-end to try— and it was not an easy task—to draft amendments in the short time that was available. I do not pretend that I found a way out. I put down the amendment because I believe there is a difficulty, and in order that members of the House might find a way out if the Bill is to become law. If we got together, a way would be found. To simply reject the amendment and to leave shareholders in the position that they will not be able to go to the banks and to use shares collaterally the same as English shares are used, is the point the Minister has not dealt with.
What is to prevent ownership of the shares being cloaked and lost in the name of some person who was merely born in Ireland but who does not live here at all? A person who may live in Italy or Timbuctoo can be made the nominee of shares of any syndicate or group who want to disguise their identity. Would the Minister deal with that?
I shall deal with that. The fact of the matter is that there is nothing in an Act of Parliament that cannot be got round by a crook. He may be a crook, grade A, or he may be a guttersnipe, but it takes a crook to get round an Act of Parliament. You can have dummy directors——
Does the Minister suggest that legal evasion is crookery because it goes on every day?
To me it is crookery.
It goes on every day in relation to income tax.
My standards are different from those of Sir John Keane, evidently. The point is this: are we going to accept it as a fact that because a bank is operating here as an Irish bank, they can operate shares in any way for any person who is a national or otherwise? Does this open a way for non-nationals, people whom we do not want in manufacturing industry here to operate through a bank? Senator Douglas raised two points on that issue. He raised the point that the banks would not do that. Senator Douglas trusts the banks. So do I. I believe we have probably in our banking system here men according to their standing of supreme integrity, perhaps unequalled in any other country in the world; but how are they going to operate if some group outside tries to purchase through them £50,000 worth of shares in a company here? We have been told that the Minister is not the person to show discretion, that a Commission must do all this. I hold that this Bill has got to be applied like every other Act, from a human point of view, intelligently, honestly and with discretion. I hold there is no alternative. Senator Douglas also raised the question of security. I assume these shares will rank as security just as the shares show security to the bank. The shareholders can raise loans in the bank if their shares as collateral show value to the bank and in no other way. I cannot see the point that the Senator pursues so ruthlessly, this question of having the banks in a confidential position to defeat the object of the Bill. I cannot see that it can be argued that they could not defeat the object of the Bill if they wished. I admit that in many ways a Bill admits of evasion, but I have stated that people who evade Acts of Parliament deliberately for profit are crooks, and I stand over that. That is why I cannot accept paragraph (a).
I heard Senator Douglas say that this will handicap people who wish to deposit their shares in the banks for the purpose of getting assistance from the banks for a period. If I follow his argument, it means exactly this: that persons, nationals of this country, will hold shares in a company, and when they want to get shares in another company they deposit their existing shares with the bank——
No.
What is the object of depositing the shares in the bank?
As security to borrow money.
Supposing they deposited their shares in the bank for the purpose of borrowing money, does the bank become the shareholder?
That is the point. I am very glad Senator Farren raised this, because that is the difficulty. I do not think that the Minister appreciates the difficulty that I see, and in his last reply I do not think he saw it.
I fully appreciate the difficulty.
He says these shares will be just as good and that they will be full value as security. I am assuming that they will be value for a reasonable amount. Assume that I hold shares in a company which is brought under the Bill and in which 51 per cent. or 52 per cent. of its capital is held by people who are Saorstát nationals under the terms of the Bill. For the sake of argument, let us assume that 2 per cent. or 3 per cent. of these shares are mine and I want to borrow money on them for any purpose. I take those to the bank and I transfer them into the name, we will say for the sake of argument, of the Bank of Ireland. When I do so, if I am challenged as to whether my company is a Saorstát company or not, I have to prove that the majority of the shareholders of the Bank of Ireland, 51 per cent. of the shareholders of the Bank of Ireland, which then becomes a holding company under this Act, are Saorstát nationals. I say that the bank would decline to go to all that expense for the sake of the £200 or £300 which I required as a loan. They would have to do it at the time I was challenged, and in two months' time the position might change. That is what I want to avoid. That would definitely make it harder for people like myself to subscribe for shares of companies that are started here, because I would not be able to borrow money on those shares. I believe there is a way out of this difficulty.
I propose to have this amendment inserted now, but I do not want to insist on the amendment further than the Report Stage if we can get some other way of dealing with it. I think there are ways which would avoid serious abuses, such as providing that a certain percentage of shares might be held in the name of a bank or some other method which would meet my objection and avoid what the Minister is afraid of. It is suggested that we cannot do this as the Minister fears that the banks might be given power to evade the Act by holding shares for somebody else. I think he would find that it would be a long time before you will get the banks to do anything of the kind. Even if they were approached by some other company to do so, I feel the company would be turned down ruthlessly. As to the argument that there is a big risk involved, I say the risk is less harmful than would be occasioned by the loss of borrowing facilities to the shareholders. If it were a question as between the two, I would prefer to run the other risk. At the same time, I think a way can be found out of this difficulty which will meet my point without running the risk which the Minister says is involved. The Minister has got his legal draftsman and I think he could find some way out of the difficulty. With regard to paragraph (b) I am satisfied with the alteration which the Minister proposes. It goes further than I asked.
May I ask a question in regard to paragraph (a)? A person goes to the bank to borrow money on his shares. The shares are transferred to the name of the bank. Is that not selling the shares to the bank?
I think so.
The position with regard to that is that it is in law a transfer to the bank, but the bank merely holds them as collateral. As long as there is proper security the bank will hold these shares. While in a legal sense you have sold to the bank, you have not parted with them entirely. Unless something happens affecting the value of the shares and that you have not got better security, the bank will not decide to sell them. The bank would not sell them to anybody else. If the bank gets a notice with regard to a shareholders' meeting, it sends it on to you. It sends any papers which it gets, and the dividends, on to you.
If I transfer shares to the bank, for the purpose of getting a loan, does not the bank, in law, own these shares?
They have the right to sell them if you do not pay off your debts.
What I want to know is, supposing I have shares and I come to a bank and want an advance on these shares and transfer them to the name of the bank, is the bank the legal owner of these shares?
Not unless they are transferred in the books of the company.
They become legally the property of the bank. That is why it is necessary to do this to give the bank the security. Actually, banks do not sell these shares except they are obliged to realise their securities and they pay you your dividend. They do not want to hold on to the shares themselves.
I should like to make this point. Where does the danger lie if these shares are transferred to the bank? The voting power then lies with the bank. They have got their voting power and there is no danger.
Is it not the fact that the actual transfer of the shares does not take place in the books of the company and therefore the beneficial ownership of the shares in that particular company still rests in the person who is on the books of the company as the owner of the shares? The actual ownership of the shares, from the company's point of view, rests in the holders of the shares. The transfer is a potential transfer——
No, no.
—capable of being executed by way of the shares as collateral on credit issued by them and is not collectable until they come to collect the debt.
The shares must be transferred in the books of the company into the name of the bank.
If they are not transferred into the name of the bank my amendment will not operate. That is why I put this down. If they are not transferred for any reason, then it may not arise at all. It is only where they are transferred that the difficulty arises.
The bank appears as the owner in the company's books.
The Minister is seeing something wrong in this amendment that does not really lie there. The bank will be dealing with a customer —an Irishman—and they will have to satisfy themselves that he is an Irish holder of Irish shares. I cannot see how the bank will deal with anybody else. If he is not an Irishman, the bank will look upon the matter as suspect, and surely the first question they would ask is: "Are these shares in your name, and are you an Irish citizen, and are you one of the people who own these fifty-one or fifty-two of a balance of shares?" He will have to satisfy the bank that he fulfils all these requirements. Otherwise the bank would know that there was a danger. I really think the Minister has not looked into this enough. I am afraid that he thinks we are up to some mischief or another.
Oh, no.
We are not really at all. What we are trying to do really is to see that banking accommodation can be given to holders of shares in these new Irish companies that he is trying to establish, and to make it easy for the banks to give that accommodation.
Cathaoirleach
Supposing a big English bank, such as the Midland, or some of the other large English banks, were to operate in the Saorstát, might not something be effected there?
What we really want to know is this: We feel that we want to know who are the beneficial owners of the shares of any company operating here. This amendment would prevent our knowing that, and I therefore must oppose it.
Cathaoirleach
Shall I put the amendment in toto, or what does the House suggest we should do?
It is in two sections.
It is a matter for the House to decide. With regard to (b) I am quite satisfied with the wording proposed by the Minister, and if the House will allow it I am prepared to take that separately.
Cathaoirleach
I will put the substituted section, as read by the Minister, which is to add a new paragraph as follows:
(b) Whenever the issued shares of a corporate body cease to be held in the manner stated in the said paragraph such shares might be deemed to be held in accordance with that paragraph for a period of six months when they have ceased to be so held.
With regard to paragraph (a), I think it would be better to put it. Since the Minister takes the attitude that nothing can be done, I have no other course.
Cathaoirleach
The position then is that the second portion of the amendment is as substituted by the Minister and that the first portion of it will stand as on the amendment list?
A point has just occurred to me. On reading this over again, I think I can see a possible way out. I have got here in the amendment "that such shares shall be deemed to be in the beneficial ownership of a national of Saorstát Eireann." Perhaps wording could be arranged to the effect that such shares shall be deemed to be so, provided a certificate is obtained from the bank that they are in the ownership of a national of Saorstát Eireann. All a person would have to do then would be to get a certificate from the bank that he was, in the bank's opinion, a national. That would meet what I want and I suggest that it might be a way of dealing with it. This attitude, however, of the Minister, that he cannot have it at all, leaves me no option but to insist on the amendment in its original form.
I am prepared to accept the amended form as suggested by Senator Douglas, that is that a certificate from the bank should be obtained.
Cathaoirleach
We will leave it over then for redrafting until a later stage?
I accept it in principle.
I will withdraw that portion of the amendment then.
Cathaoirleach
I think it would be better to allow the whole amendment to stand over till the Report Stage.
Agreed.
I move amendment 23:
Section 2, sub-section (3). After the word "who" in line 18 to insert the word "knowingly."
There are several amendments of a similar character. This is an amendment which I think is reasonable. If you look back over a number of similar Acts where regulations had to be carried out and returns to be made, perhaps you will remember that the word "knowingly" had to be inserted by this House on a number of occasions, and generally it was accepted.
I believe there was an amendment in the Dáil to put in the word "wilfully," but I understood that the Government were unwilling to introduce the word "wilfully" because it was difficult to prove that a person wilfully made a false statement. I want to provide something that will enable the court to acquit somebody who may quite inadvertently have made a return which was inaccurate. I think there will be no difficulty in distinguishing between people trying to evade the Act, and those trying to carry it out but who find some difficulty. The very difficulty we find about fixing responsibility and things of that kind is all the more reason for inserting a word like "knowingly."
It strikes me that if this amendment were accepted it would enable any person who wanted to fight a claim to plead that he did not know the regulations. Who is to prove that he did?
This is a matter of a prosecution before a court, and it is entirely for the court to be satisfied whether he knew or not. We had a good many cases here before and they were discussed. If it was a case of the Minister expressing an opinion it would be a different matter, but judges are not in the habit of accepting a man's statement that he did not know. All the circumstances of the case would be taken into consideration. What I want to avoid is the rigid obligation to fix a fine in a perfectly genuine case. If anyone acted as a company secretary or had to make returns he would soon find out how difficult it is. Many of us have to make income tax returns and the officials always make a clear distinction between putting in a false statement and putting in such a statement inadvertently.
I am advised by our legal adviser that there is no necessity for the word "knowingly." If the case goes to the court and these words of the Senator are put in, criminal intent may have to be proven. I understand that that is the legal position so far as the court procedure is concerned. Therefore they object to the word "knowingly" being put in, as it would give a considerable amount of trouble.
If my recollection serves me right this Government is in the same position as the old one was when we were dealing with the same thing. We were told it would not do any harm and we put it in. Nothing happened. If the Minister tells me that this would do harm I will not press it.
It would raise legal difficulties.
Reserving to myself the right to bring the amendment up again on the Report Stage I ask leave to withdraw it now.
Amendment, by leave, withdrawn.
Cathaoirleach
We have now completed half the amendments to be dealt with at this stage. It is twentyfive minutes to eleven o'clock and if we propose to finish to-night we will have to go on until 12.30 or 1 a.m. I think this might be a suitable time to adjourn until to-morrow.
I want to move that we adjourn now.
Cathaoirleach
If we are to finish we would have to sit, as I say, until 12.30 or 1 o'clock. If we do not intend to finish to-night it would be better to adjourn now and take the rest of the amendments in Committee to-morrow.
I have been the slave of this Bill this week working until past 12 and 1 o'clock each day. If the House decides to adjourn till 11.30 a.m. to-morrow I should like to make an appeal that we should finish the Bill to-morrow.
Cathaoirleach
Not finish the Bill?
Finish the Committee Stage.
Cathaoirleach
Yes, but I do not think that we could take any further stages to-morrow in the circumstances.
Could we not continue and finish the Committee Stage now and take the Report Stage to-morrow?
Cathaoirleach
There are 25 or 26 more amendments.
Let us continue until 11 o'clock.
Can we have no understanding as to what the Seanad really intends to do about this Bill, because I think we have only been playing with the matter?
Cathaoirleach
I should like to know what the House intends. My own feeling is that we have made some very important amendments already. There is a number of amendments that Senator Staines wants to consider and to make changes in, so that he can bring them up on Report Stage. I think if we go on to-morrow and finish the Committee Stage it would be unfair to take the Report Stage to-morrow.
Can we get any idea when the Seanad, in its wisdom, will consider the advisability of putting the Bill through?
Cathaoirleach
I suggested, at the beginning of the morning session, that in the event of the Committee Stage being carried we would probably have to put off the Report Stage till next Wednesday. That is what I suggested, but, of course, it is for the House to decide.
As far as I, personally, am concerned I am not prepared to rush these amendments to-morrow. I shall come here on Wednesday and give all the time I can. I do not claim to be the slave of the Bill, but I do want to do what I can to secure its necessary amendment.
Cathaoirleach
The Minister has given a great deal of his time and attention to this measure, but to take the Report Stage to-morrow when there are so many amendments would be quite unreasonable.
I hope the House realises that the Dáil has to meet next Wednesday to ensure the passage of the Finance Bill. It costs a very considerable amount of money to bring the Dáil back. Then the amendments to this Bill will have to be dealt with, which will mean a further meeting of the Dáil.
Cathaoirleach
I pointed out all these difficulties this morning.
If it is the opinion of the House that we cannot take the Report Stage to-morrow I suggest that we meet on Monday.
Monday is a bank holiday.
Could we not meet on Saturday?
I suggest this House meets to-morrow at 11.30, completes the Committee Stage and adjourns until next Tuesday, to take the Report Stage.
I am in this difficulty. I withdrew certain amendments and want to get some legal opinion on them. The Minister has his staff and his legal opinion. I would have to put these amendments down again and I may not be able to have the necessary opinion by Tuesday. I could not arrange to have them by to-morrow in any event. The best I can do is to have them by Tuesday.
Cathaoirleach
We will go on now until 11 o'clock and then we can start talking about this matter again.
I move amendment 24:—
Section 2, sub-section (3). To delete all after the word "exceeding" in line 21 down to the end of the sub-section and to substitute therefor the words "twenty pounds in the case of a first offence and fifty pounds in the case of a second or subsequent offence."
I think the object of this amendment will be pretty clear without very much discussion. I think that £50 is too much for a first offence and £10 for every day of a continuous offence is far too much. There are many people who may have been born outside the country who will find themselves coming under this Act, who did not realise that they did come under it, and who will inadvertently change their method of business or alter their business, and they may commit quite trivial offences. My suggestion is that there should be a fine of £20 for the offence and £50 for the second.
We accept this amendment. Of course, it is perfectly obvious that fines are placed at a maximum amount but that often 10/- and 25/- fines are imposed where there are £20 and £50 penalties.
Amendment agreed to.
I move amendment 25:
Section 2, sub-section (4). After the word "section" in line 25 to insert the words "and prima facie evidence of such offence has been given.”
It is quite evident from the discussion on this Bill that there are many pitfalls in it. The sub-section sets out:—
Where a person is charged with having committed an offence under this section, the onus of proving the matters or any of the matters mentioned in paragraphs (a), (b), (c), (d), (e), (f), (g) and (h) respectively of sub-section (1) of this section shall lie on the person so charged, and until the contrary is proved it shall be assumed that none of those matters is applicable in relation to the act alleged to constitute such offence.
I think that very unfair, and the object of the amendment is to insert the words "and prima facie evidence of such offence has been given.” That will ensure that there shall be prima facie evidence, at least, before a man is charged, and that the onus should not be placed on him of proving his innocence. Amendment No. 26 works in with it:
Section 2, sub-section (4). To delete all after the word "charged" in line 28 down to the end of the sub-section.
And I think the Minister ought to accept both amendments.
Cathaoirleach
Sufficient for the day is the evil thereof. No. 25 will be enough for the moment.
I think the amendment is unnecessary, because the Minister would have to prove that the person had committed an offence. With regard to the second one, it merely amplifies and explains the earlier words throwing the onus of proof on the person charged. I am not very much wedded to it, one way or the other, but I think the drafting of the section as it is is quite all right and will meet the purpose.
Nevertheless, I would urge the Minister to accept the first one, because there are people who, reading this, have been rather worried about the position and it would make it much clearer. Probably the Minister's advice is right, but I am inclined to think that the strict reading of this means that, if a person is charged, it is sufficient for him to be charged with an offence under the Act, and the onus of proving that he is exempt is thrown on the person charged and it might mean in some cases a considerable amount. I am perfectly certain that it will be the intention of any reasonable Government to give prima facie evidence, but there is nothing fundamental in it. It would, however, clarify the position and I do not see any harm in it.
I do not see how the Minister could give prima facie evidence. I am not a lawyer, but I think there is considerable difficulty in the Minister giving evidence.
It is not the Minister; it is the State Solicitor or whoever brings the charge.
Yes, but the Minister would really be expected, according to the strict terms of the Act, to do it. I am advised legally that it is not necessary, but if the House insists on it, of course, the House will insist upon it.
Senator Brown is not well and I am sorry he is not able to be here. He was the only person with whom I discussed this, but I gathered that the procedure, in effect, would be that a charge would be made, not by the Minister personally, or even by his Department, but through the ordinary operation of the law, at the instance of the Minister for Industry and Commerce, and, if you put in the words "and prima facie evidence is given,” it means that the judge, before asking the defendant to accept the onus of proof provided in the Act, will simply satisfy himself that a prima facie case has been made. The onus of proof will then be on the person charged. If you do not put them in, they would have to come down with full evidence prepared immediately. That might mean a considerable amount of expense and, for that reason, I think we should put these words in.
Amendment put.
The Committee divided: Tá, 15; Níl, 11.
Tá.
- Bellingham, Sir Edward.
- Costello, Mrs.
- Counihan, John C.
- Crosbie, George.
- Desart, The Countess of.
- Douglas, James G.
- Fanning, Michael.
- Garahan, Hugh.
- Jameson, Right Hon. Andrew.
- Keane, Sir John.
- Kennedy, Cornelius.
- O'Hanlon, M.F.
- Staines, Michael.
- Vincent, A.R.
- Wilson, Richard.
Níl.
- Chléirigh, Caitlín Bean Uí.
- Comyn, K.C., Michael.
- Connolly, Joseph.
- Cummins, William.
- Farren, Thomas.
- MacKean, James.
- O'Doherty, Joseph.
- Quirke, William.
- Robinson, David L.
- Robinson, Séumas.
- Ryan, Séumas.
Tellers:—Tá: Senators Douglas and Staines; Níl: Senators Robinson and O'Doherty.
Amendment declared carried.
I beg to move amendment 26:—
Section 2, sub-section (4). To delete all after the word "charged" in line 28 down to the end of the sub-section.
I do not know whether Senator Staines really understands the meaning of the amendment. It does not alter the effect of the sub-section; the effect is just the same. If the Senator is very keen on having the words deleted, well and good. They merely amplify and explain earlier words.
I think the Senator would be well advised not to press the amendment.
In the circumstances perhaps it is as well to withdraw it.
We are not worried whether the amendment is pressed or not.
Amendment, by leave, withdrawn.
I beg to move amendment 27:—
Section 2. To add at the end of the section a new sub-section as follows:—
(5) Where a body corporate is charged with having committed an offence under this section, it shall be sufficient for such body corporate to prove that it has received statements from the requisite number of its shareholders that they are nationals of Saorstát Eireann within the meaning of this Act and no body corporate shall be held responsible for any inaccurate information supplied by its shareholders.
I do not know that this amendment is satisfactorily worded. It tries to meet a possible difficulty. As the Bill stands, the person who makes a return could be held responsible. I do not know whether such a person should be held responsible for the information which he gives. I want to provide that if a body corporate gives the information it should be quite sufficient for them to prove that they got that information direct from their shareholders and they should not be held liable for any possible mis-statement as to the place of birth of their shareholders.
We feel that our hands should not be tied if any question were raised as to whether replies of shareholders could be accepted as complete proof in all cases of whether or not a business was owned by nationals. For that reason we feel that this amendment might, on occassions, perhaps not very frequently, tie our hands in getting the information desired and, in the circumstances, it cannot be accepted.
Has the Minister no other suggestion that would meet the difficulty? This affects existing companies. If you look at the Bill you will find that questions can be addressed to existing companies and they may be obliged to supply information. You are putting a very big charge indeed on some of the larger companies here and their secretaries when you ask them to supply information with regard to the nationality, the place of residence or the place of birth of their shareholders. Take Messrs. Guinness as an example. Such a question might be addressed to them. They are a public company and it is well known that their shares are held all over the world; there are large numbers of shareholders in Ireland and in other places. The Minister possibly will want to know the position with regard to Messrs. Guinness.
I cannot help the feeling that you are almost putting them in an intolerable position in making them responsible. I cannot think of a way out of it at the moment but there is probably some way. I see now that the Minister is afraid that some dishonest people may take advantage of it and have an arrangement to give a false statement. But is the safeguard any good? Because if he will go on to a section later on he will find that the Minister has power to address any shareholder in a company direct and to ask him his nationality. All I am wanting to do is to safeguard the secretary of the company. The secretary must give the address and the names. If he does not give them the Minister can get them anyway in the office. If there is a suspicion in the mind of the Minister that evasion has taken place he can address a question to the persons concerned and if he doubts the answer he can challenge that person in the courts with regard to the information.
Frankly, I cannot see how Senator Douglas argues that I can take up with any company such as Messrs. Guinness. Everything in this Bill applies to the licensing.
What about section 10?
On the question of licensing the sections of the Bill are in the main referring entirely to those companies that are going to come on in the future.
Not at all. The position is that Section 10 provides for putting the question to the manufacturers. My point is that this is in relation to companies now existing or afterwards. A large number of the questions apply to existing companies and fairly large companies may have these questions addressed to them.
In the absence of fraud, this section is unnecessary, but the amendment of the section proposed by Senator Douglas would facilitate fraud on the part of the Secretary of the company. I am sure Senator Douglas does not intend that. It would be quite possible for a fraudulent secretary to say that he had received information from the shareholders although the reception of that information may be in pursuance of a pre-arranged plan. That is the reason why I think Senator Douglas's amendment is not reasonable and does not carry out the intention he has in his mind. If there is any fraud the secretary is protected by the Bill as it is.
Am I to take it as Senator Comyn's opinion that, suppose a secretary sends in a false statement or an inaccurate statement with regard to the nationality of a person, and then if he goes to the courts and says that that was the information given, the court will hold that he has not committed a technical offence under the Bill?
I would say not.
Well I have the greatest respect for Senator Comyn's opinion but I have the greatest doubt that what he says is the case. I should like to draw attention to Section 10, paragraph 4, with regard to fraud. Senators will find there that "the Minister may, from time to time, serve a notice in writing on any persons who hold any shares in a body corporate carrying on a business to which this section applies requiring such persons within twenty-eight days after the service of such notice to send to the Minister a return...." I suggest that that is a safeguard to the Minister against fraud. If the company sends in the names, these names can be checked at the company's office, and if the Minister has any doubt about the accuracy of that information he can take steps in court and he can prosecute them for giving wrong information.
I submit again that whilst the companies can be asked for information under the Bill just as they are asked for a good deal of information to-day there is no intention in this Bill to interfere with any company operating before June 1st, 1932.
They can be asked?
They can, but they do not require a licence at all so long as they are operating before the 1st June, 1932. The circumstances that Senator Douglas suggests could happen should not in fact happen.
May I put a problematical case? A company is in existence on June 1st and it decides to go into another line of business, a very probable thing to happen. The Ministry is to find out whether they are entitled to do that under permit or not and questions are sent to the company. The company must give that information. If that company happens to hold any shares in any subsidiary company, another matter may arise at any moment. The question will arise whether the company is a national company. The company would have to get information that it is; they would have to get a statement, if you like, in writing. What will happen in the larger companies is that the secretary will send out a questionnaire to each shareholder as to whether the person was born in the Saorstát. I do not want to have fraud in any way but here is a difficulty that must be faced.
It raises the same question as the amendment dealing with "knowingly."
I would suggest that if Senator Douglas withdraws this we might meet it by a sub-section of Section 10 or we might consider that we might accept it up to a certain point. I should like in the morning to go into it as regards whether we can accept it in that form or whether it can be appropriately met under a sub-section of Section 10.
Cathaoirleach
That amendment is adjourned to the Report Stage.
Amendment, by leave, withdrawn.
Section 2, as amended, and Sections 3 and 4 agreed to.
The Seanad adjourned at 11.10 p.m. until 11.30 a.m. on Friday, the 29th July.