For some time past—perhaps, the last four or five years—there has been a Co-operative Bill in preparation by my Department. It is rather an elaborate Bill and, when it does appear, will be one of the most massive documents that ever was presented to the Oireachtas. There are, however, a few matters that are very urgent in connection with co-operative legislation and we have thought it advisable to take these few matters out of that Bill and to have them hurried along before the big Bill comes before the Oireachtas, possibly about Christmas time.
There are two matters dealt with in this Bill. The position in some co-operative societies is that they need money. The co-operative societies registered under the Industrial and Provident Societies Act of 1893 are not entitled to take benefit under the present law. The second point we think urgent is the matter of loans issued by the Agricultural Credit Organisation in regard to these societies. First as regards debentures. These co-operative societies cannot give debentures. The result is that when a co-operative society is in difficulties the committee is compelled to go to a bank and the bank, in providing a loan for the society, asks for the personal guarantee of members of the committee. That has certain reactions. In the first place men cannot be members of the committee unless they are men of standing. Therefore the smaller suppliers are no use to the committee because they would be no use to the bank. So that the first reaction is that in the ordinary way the bigger men in the district are put on the committee because they are good marks in the eyes of the bank and having once given their names to the bank they must be left on the committee. So that the whole spirit of co-operation is destroyed. You have the same men reelected on the committee: they must be re-elected because they have given their names to the banks.
In the past, when many co-operative societies have gone down, the banks have come forward to claim what was due to them, and, not getting enough through the liquidation of the society, they have claimed from the individual members of the committee. We have cases of where good, public-spirited men in a district have been absolutely ruined because they were guarantors for such co-operative societies. There you find the best type of men in the district willing to come in and sign their names on behalf of the co-operative society. The cute, selfish type do not do so. They get all they can out of the society, but take care that if it goes down they lose nothing; it is the decent man that loses all. It is only fair that if there is loss, the society, as a whole, should suffer in such a case. That is why it became rather urgent to allow that some societies—fairly big societies—should be allowed to offer debentures for loans. It is stated in this Bill that they can only get debentures from certain institutions, such as the ordinary banks, the Agricultural Corporation, the Industrial Credit Corporation, and the Dairy Disposals Board. The people from whom they can get credit are limited. There is also the precaution here that the Minister for Agriculture must certify that the society is eligible, and, secondly, the Minister must sanction the loan.
These precautions are put in to prevent societies going into large expenditure at the present moment that perhaps is really not needed nor justified. When the main Bill comes into force there will be a Registrar, but the difficulty here is to get somebody to act as Registrar until the main Bill comes on. The Registrar of the Industrial and Provident Society was not willing to undertake that duty, and the Minister for Agriculture is named more or less to fulfil the function until the main Bill is brought before the Oireachtas.
The second point is as to loans issued by the Agricultural Credit Corporation to certain creameries. About 1929 I think a number of new creameries were built, particularly in the midlands, and the way they were financed was particularly favourable to the shareholders. The shareholders paid in about half-crown per £1 share, and on the uncalled portion of the share— 17/6—the Agricultural Credit Corporation gave a loan to the society to build and equip the creamery, and to provide a sum to carry on. A large number of farmers in a district, by putting down a comparatively small deposit, were in the position to start a creamery, and become absolute owners of it, because the Agricultural Credit Corporation could not call in its loan quicker than a stated period—that is, at the rate of 2/6 per annum for seven years, so that it would take seven years to pay that off. But at the time it was stated that the Agricultural Credit Corporation were not sure that the society was legally entitled to give the Credit Corporation the necessary loan. The Credit Corporation was assured by my predecessor, or by the officials working under him, that that matter would be made right in the Co-operative Bill which was to be introduced. It was to deal with that particular matter, and make it right. When made a legal charge upon the uncalled capital, the Agricultural Credit Corporation will be entitled to collect its outstanding shares so far as the law is concerned.
It is quite possible, though there is some doubt about it, that if the Credit Corporation proceeded to collect without this Bill they would be entitled to do so. But as there is a doubt, it was felt to be only fair that we should take this opportunity to redeem the promise made by my predecessor in 1929. These are the only two points dealt with in this Bill. There is just one other matter I should mention. We are only dealing here with agricultural co-operative Societies. The Agricultural Co-operative Society is more or less correctly defined in sub-section (4) of Section 3. That is, it must be, first of all, a co-operative society under the Industrial and Provident Societies Act. Secondly, it must be mainly agricultural; and, thirdly, it is in want of funds. If the society can make its case, then the Minister for Agriculture may certify that it is an agricultural co-operative society under this Act. Once certified that it is so, then that society may go out and look for debentures and make its arrangements. But having made its arrangements, then the transaction must be sanctioned by the Minister for Agriculture before that particular transaction becomes legal.
In reading through the sections that come afterwards, it might appear to Senators that we were taking rather drastic powers to control co-operative societies, but Senators must remember we are only taking powers to watch very closely agricultural co-operative societies; that is, societies that have come under this Act and have got a loan under this Act or are seeking a loan. Once they become agricultural co-operative societies and come under this Act, I have very definite powers controlling them with regard to their change of rules and so on. These are the two main points dealt with in this Bill and, as I said in commencing, I hope that the main co-operative Bill, which is very badly needed from other points of view, will be brought forward as soon as possible. There is a very great need of a general co-operative agricultural Bill. That Bill has been in preparation by the Department for the last five or six years and has now gone to the draughtsman, but it will take a long time to draft because on many points on which the draughtsman raises a difficulty we have, in turn, in my department to consult various interests affected by that Bill. I hope, however, to have it before the Oireachtas, perhaps, between Christmas and Easter.