This Bill makes provision for the creation and issue of further land bonds for the purpose of acquisition of untenanted land under the Land Acts 1923-1933, for the resumption of holdings and for the compulsory acquisition of land for playing fields, sports fields, playgrounds, etc., and for the acquisition of sporting rights in certain cases. The total issue of land bonds to be created and issued under the Act will be limited to £10,000,000. The land bonds will be created as and when required, from time to time, by order made by the Minister for Finance. Each order will prescribe the rate of interest to be borne on the bonds created under it, but the rate will not be less than 3 per cent., or more than 4 per cent. per annum. It is a fundamental principle of this Bill that the rate of interest on the bonds created by each order should be related to the rate of interest payable on the latest issue of the National Loan at the date of such order, having regard to the figure at which the Loan stands on the Dublin Stock Exchange. A small, fractional increase in the rate of interest payable on the land bonds above that earned on the National Loan might be regarded as permissible owing to the fact that there may be only a limited market in the land bonds of each series as compared with the market in the National Loan.
It is considered that an equitable price for land can be fixed on a proper basis if the rate of interest on land bonds, representing the purchase money, corresponds to the yield that might be secured from investments in the latest issue of National Loan current at the date of fixing the purchase price. Other things being equal, the rate of interest might be such as would enable the land bonds to be sold by the vendor for an amount equal to the cash that a purchaser, other than the Land Commission, would be willing to pay for the land. The interest on the land bonds should, therefore, be such that the prospective income to be derived from them if retained by the vendor would be about equivalent to the income that would be earned from trustee investments if the purchase money were to be paid in cash by a person other than the Land Commission and invested in such investments by the vendor. That is the principle upon which the Bill is based and the Bill contains provisions which, within limits, will give effect to that principle.
As to the text of the Bill, Section 2 provides that the purchase money payable to the vendor in future shall be payable in land bonds issued under the Act except in cases where the payment of the purchase money is governed by previous Acts—for instance, the Land Bond Act, 1933, which was intended to finance transactions in regard to which the price had been agreed to or fixed or in which negotiations for the purchase of estates had been opened prior to the passing of the Land Act of 1933. The land bonds are to be accepted by the vendor at their nominal value.
The section further provides that in cases where the purchase money is payable by means of an issue of land bonds created under the Act, the claims against the purchase money shall be discharged by payment in land bonds of the same series.
Section 3 provides that advances made to tenants and others for the purchase of holdings or allotments shall be made by an issue of land bonds created under this Act. Sub-section (2) applies the provisions of earlier Land Acts to the repayment of these advances. Under these provisions, as so applied, the advances will be repaid by means of purchase annuities or other annual sums until the whole of the advance is redeemed. But power is given to redeem advances in whole or in part during the currency of any annuity.
Sub-section (1) of Section 4 empowers the Minister for Finance, from time to time by order, to create a series of land bonds of such total amount and such denominations as he shall think proper. The rate of interest payable on each series of bonds will be specified in the Order, but it is not to be less than 3 or more than 4 per cent. per annum.
