Seanad Éireann debate -
Tuesday, 16 Apr 1935

Vol. 19 No. 23

Local Loans Fund Bill, 1935—Second Stage.

Question proposed: "That this Bill be now read a Second Time."

Minister for Finance (Mr. MacEntee)

This Bill is necessitated by the fact that up to the present what has been known as the Local Loans Fund has had no statutory basis. It has been merely an account in the Exchequer under the control of the Minister for Finance. The moneys in that account are available for advances to local authorities for housing, for the purposes of the Small Dwellings (Acquisition) Act, for sewerage and water supply schemes, for arterial drainage works and other analogous activities.

The moneys are also available, to a limited extent, for granting loans to farmers on holdings of small valuation for the purpose of improving their lands and erecting hay barns and other farm buildings. As I have already explained, the account, though perfectly legal, has had no statutory basis, and the sums which have been required as capital for the fund have been voted annually by the Oireachtas and placed to the credit of the account as an advance by way of a Grant-in-Aid. This procedure has occasioned, as I shall explain later, very grave administrative difficulties—difficulties which have been intensified as the sums to the credit of the account have grown in magnitude.

The existing account was initiated in 1922, as a temporary measure, to make issues on foot of loans sanctioned before 1st April of that year, where work had actually commenced before the issues from the old Local Loans Fund, set up under the National Debt and Local Loans Act, 1887, had ceased. Later, the account was opened up for one service of new loans after another until the present position was reached, in which the Fund is available for all purposes for which loans might have been made from the old pre-1922 Local Loans Fund as well as for a number of services peculiar to Saorstát legislation of recent years. The Fund, having grown up in this rather haphazard way, was never the subject of deliberate planning and its growth has been responsible for a number of serious difficulties in administration which, as I have already stated, were not so serious when the amount to the credit of the account was small, but which have been greatly intensified recently. Some of these difficulties I may briefly describe.

The voting of the annual provision for the additional capital for the Fund involves a theoretical, though not an actual charge on the Budget for large amounts. I might qualify that by pointing out that though the capital sum is not an actual charge on the Budget, nevertheless, provision must be made to meet the consequential charges for interest and sinking fund. In 1933-4, the amount which had to be provided in the Budget for the Local Loans Fund was £2,150,000 and, as originally contemplated in 1934-5, the amount was to have been £4,200,000. The Minister for Finance is thus placed under the objectionable necessity of having to defend the exclusion of this item from the charges against normal revenue, while the exclusion does not prevent attention being directed to apparent deficits in the revenue at the end of each financial year, since, under the present system, the money, even though not actually spent, must, in view of the fact that it is treated as a Grant-in-Aid, be classed as expenditure. Moreover, it is not possible, in the present circumstances, to provide in the Budget for the amount which may actually be required for the purposes of the Fund. As the Fund has no statutory basis, the sum voted each year must be sufficient to cover the amount of loans likely to be sanctioned in that year. Otherwise the Oireachtas would be committed to expenditure to an extent which it had not approved, and for which its approval ought not to be assumed, having regard to the magnitude of the sums involved. Again, I may refer to the experience of 1933-34 and 1934-35. In 1933-34 the amount which was sanctioned by the Oireachtas and ultimately placed to the credit of the account was £3,050,000, approximately, while the actual cash advances made during that year from the Fund amounted to less than £1,500,000. In 1934-35 the corresponding figures were £3,150,000, and somewhat less than £2,000,000, the latter being the sum which will be approximately required for loans sanctioned. It will be seen, therefore, that, under the existing system, the Fund must always possess sufficient reserves to enable it to discharge its commitments on foot of loans agreed to, even if the Oireachtas were to decide to close down the service as a whole as soon as possible. This practice, as I have already pointed out, results in a large and rapidly growing cash balance, which the Minister for Finance has no power to invest, which is drawn from the public either by way of borrowing or taxation and which, as the examples I have given indicate, is sometimes in excess of the requirements of the service.

Even if the total of the Local Loans Fund advances in any year is classed as capital and is not met out of capital, the Budget for the year must actually be loaded with the debt charges necessitated by borrowing for this purpose. There is no offset to this by way of additional revenue, as the Local Loans Fund pays no interest to the Exchequer. A further disadvantage of the present system arises from the fact that while the existing Local Loans Fund is managed on the principles laid down by statute to apply to the older Fund established under the National Debt and Local Loans Fund Act, 1877, the applicability of these statutory provisions to the existing Fund is very doubtful. As the rights of third parties are at times affected by these provisions, it is desirable that the position should be regularised.

There are a considerable number of other difficulties of relatively minor importance. Possibly the most important of these is in connection with the audit of the accounts of the Fund. These accounts, showing the total receipts and the balance available, are sent to the Comptroller and Auditor-General each year and he carries out the audit. But as the Fund is non-statutory, he presents no report to the Oireachtas and does not give the Accounting Officer a final clearance. In addition, his audit is limited in scope and he does not, for example, carry out any examination of the relevant mortgage deeds or of the loan securities or any analysis of the treatment of arrears. The accounts of the Fund are, of course, not published. In view of these difficulties, it is proposed to enact this Bill to put the Fund on a statutory basis. The main principle of the legislation will be that all loans made through the existing account will be treated as assets of the new statutory Fund and all repayments of these loans and the payment of interest thereon will be credited to the new statutory fund. In addition, all future moneys required for an issue of local loans will be obtained by borrowing on behalf of the Fund either from the Exchequer or from other Government funds or from the general public by the issue of securities charged on the funds. These securities will be guaranteed by the Exchequer as to principal and interest and will therefore be trustee securities.

The Bill also contains provisions regarding the treatment of surplus balances on capital or income account, the treatment of arrears, prior payments, audit, reports of accounts and procedure as to issuing and collecting local loans. It is also proposed to take advantage of the present Bill to clear up the position of the sums paid annually on foot of loans made prior to the 1st of April, 1922, out of the fund established under the National Debt and Local Loans Act of 1887. The present position of these annual collections is unsatisfactory. Under the terms of the Constitution, they have always been treated as miscellaneous revenue available to meet the current expenditure falling on the Exchequer. The loans are of two types—those repaid on the equal annuity system and those repaid on the principal and interest system. It will be appreciated that each repayment contains an element of capital which tends to grow either absolutely or relatively as the process of repayment continues. Up to the present all these capital repayments are treated as current revenue by the Exchequer. Formerly, that Exchequer receipt was offset by an Exchequer issue made under the terms of what is known as the Ultimate Financial Settlement. That position no longer obtains and, therefore, it is not proposed to continue to appropriate these capital assets in aid of the current revenue. Instead, it is intended, subject to suitable adjustments in the Exchequer, to transfer to the new statutory loans reserve the whole of these assets and to provide that the repayment, whether of capital or interest, will go to the new Fund. From what I have said, it will be appreciated that two groups of assets of the Exchequer are being transferred to the new Fund viz.:-(1) the unpaid balance of the loans of the new fund and (2) the unpaid balance of the fund prior to the 1st of April, 1922 —the old local loans fund. To these we should add such portion of the unissued balance of the voted grant as it may be necessary under Section 3 of the Bill to transfer to the new fund to meet its liabilities on the appointed day.

When the Fund has been set up, it is proposed that it should reimburse the Exchequer for the transfer of these assets by the creation of a debt on its books in favour of the Exchequer equivalent in value to the assets transferred. The debt will be deemed to be advanced and made by the Exchequer to the Fund. It will bear interest at a rate to be determined and will be repaid, as opportunity arises, out of the proceeds of the issue of Local Loans stock, or out of the surplus capital or income arising out of the Local Loans Fund. The Exchequer will treat as current income all interest paid to the Fund on its advances so long as they remain unpaid. But the repayment of the advance itself will not be brought into the Budget accounts and will not, therefore, be treated as current income but as a capital repayment available for the reduction of the debt or new capital expenditure or advances.

I should like to emphasise that the Bill is designed to deal with the very limited question of the finances and administration of the fund. It does not in any way extend the scope of the Fund by authorising the making of loans for purposes for which loans under existing legislation cannot be made by the state. If, at any time, it should be found desirable to extend the powers of the Fund to make loans, that will be a matter for separate legislation. Furthermore, the Bill does not alter in any material respect the normal procedure and practice relating to the granting and collection of local loans. Owing to the magnitude of the present operations of the Fund, and the serious administrative difficulties to which I have drawn attention, the Bill is an urgent one and it cannot be further deferred. It deals with machinery only and I think it should be largely non-contentious. It does not introduce any new or untried principles of finance or administration. The scheme which it outlines can be readily modified to bring it into line with any broad principles which may be adopted later in consequence of the Report of the Commission of Inquiry into Banking, Currency and Credit which is at present sitting. I may say, in conclusion, that the proposals of the Government in relation to local loans have been brought under the notice of the Commission.

Mr. Jameson

I wish I had the Minister's gift of putting things clearly on such an intricate Bill as this. The other day, when I suggested that this Bill might require some consideration or that we might want some time over it, I was told that we already had the Bill and knew something about it. As a matter of fact, I do not usually study a Bill until the Dáil has done with it, because very often it is on the very last stages of the Bill that important alterations are made, and the things about which you may be thinking are then of no use. I got a copy of this Bill, not the final one, but the Bill as amended in Committee on Saturday night. Therefore, I was given Saturday evening, Sunday and Monday to consider it. That time was totally inadequate. I did my best. I read the Bill. I went through the Minister's remarks in the Dáil which are, practically what he has stated here to-day. But there are quite a lot of things implied in the Bill which have not yet been explained. One does not know the lengths to which these things go; and I do not believe that we can get that all out in a short discussion here this afternoon if it is to be of any use whatever. As regards the Bill itself, its purpose is quite clear. The Minister has told us exactly what it is. Evidently, the Local Loans Fund, or rather the Local Loans Account, which it seems to have been really, is in a financial mess. That is quite easy to see, and the Minister has practically told us so. If you look at Section 6, where the Minister says that he is to prepare certain statements and certificates in regard to certain sums with which this Fund deals, you will see that he may have to send us first one Estimate, and then another, and then another, and that he cannot guarantee that any of them will be accurate. Take, for instance, paragraph (b) of sub-section (1), which says:—

"All moneys provided by the Oireachtas which were, before the appointed day (whether before or after the passing of this Act), issued from the Exchequer and placed at the disposal of the Minister for the purpose of local loans."

One would think that it would be possible to give us a statement of the whole of that in a very short time, but evidently there are difficulties in connection with paragraphs (a) and (c) which the Department cannot give us particulars of at the present time. Yet, we are going to proceed with the Bill and with the whole of Section 6 subject to all sorts of errors and everything else, and are going to pass it to-day blindfold.

The Bill is necessary. There is no question of that. The Minister has given us very good reasons as to why it is required to establish this statutory Local Loans Fund instead of what was merely a name for an account in the Government books. There is another thing I should like the Minister to tell us more about. Take sub-section (3) of Section 4, which says:

"During the period beginning on the appointed day and ending on such day as shall hereafter be appointed...."

That is to say, for an utterly unknown period.

"..... in this behalf by statute, there may be issued from the fund in respect of local loans all such moneys as shall be required for the purposes of such loans, but the aggregate amount of the moneys so issued during the said period shall not exceed the sum of £5,000,000."

Of course the Minister probably will be able to tell us the period he has in his mind, because, as it is worded, it might be a week or it might be five years. If we had some statement there as to how long this £5,000,000 is going to last, or some idea of how long, we would be able to form some idea of the amount of moneys which eventually are going to be dealt with under this Act.

As regards the next section, I have tried very hard to understand the whole of the implications and what can be done under Section 5. Take sub-section (4) of that section, which reads as follows:—

"Advances may be made to the fund out of any Government Fund or Government money as defined by Section 1 of the Approved Investments Act, 1933......"

When you read that section you will find that it does not help you very much.

"...... and for the purpose of making any such advance all or any investments forming part of or representing such Government Fund or Government money may be sold or otherwise converted into money."

Now, when you pass that you do not know what the investments are. You do not know for what purposes they are held and, really and truly, I do not know how anyone can see how they are to be spent merely under that clause. It would, however, to my mind, give the Government a very free hand for dealing with all sorts of investments which, undoubtedly, at the present moment, are held for specified purposes. Perhaps the Minister may explain what it means and what these sales are going to be, of what securities they are going to be and for what purposes they are at present held by the Government; but I cannot see it. There is nothing in the Bill before us. There is no question that in the Bill it is quite clear that all deficiencies that are not going to be made good out of the returns made by the borrowers, both of interest and capital, are to be made good by the State.

I do not think we should pass this Bill. I am rather inclined to disagree with some of the Minister's remarks, such as that the Bill does not deal with Budgetary income. In a great many cases, as far as I have heard of them, there are additions made to the loans that are to be repaid by the State. In connection with part of the loans for slum clearances and advances made for small holdings and things of that kind, there is a liability, for part of the amount granted, accepted by the State. Therefore, I think, especially as the Minister makes a great point-and I think he is quite right-that he will be able to issue loans in regard to this local loans fund in a way that will suit the finances better than if he had to make it part of a big loan and that the security will be very good, he will have to make a definite distinction as to how much will be borne by the State and how much borne by the borrowers. I cannot find any statement here which says that that information is to be given.

I have already referred to the difficulty in regard to sub-section (4) of Section 5, in connection with investments. The Bill, undoubtedly, makes the State liable for all deficiencies and that should be clearly recognised. It seems to me that in connection with loans made it ought to be mentioned. I do not think it is fair that the Minister should make the statement, which no doubt he will remember making, that the Local Loans Fund services are to be taken clean out of the Budget. I think that he will have to include in his Budget a certain amount, as far as he can foresee them, of the assistance the State is going to give in aid of these loans, and that he will have to Budget for them. There is another question I should like to ask the Minister. He refers to what is a most excellent thing, and that is the future interference and supervision of the Comptroller and Auditor-General, and that he is to examine mortgage deeds, treatment of arrears, and audit the accounts generally of this Local Loans Fund. It is rather strange to hear from the Minister of the way in which these accounts, involving many millions, have been audited and examined. The Minister told us that they have not been properly audited and that no auditor's certificate has been given. It has not been part of the Comptroller and Auditor-General's duty. I want an assurance that when this Fund is established all these accounts will be examined in that way; that the auditor's certificate will be published annually and also the accounts themselves. The Minister, I think, practically said that that will be done; but we ought to be certain that they will be published.

The Minister says that this Bill deals with machinery only. If we had time to examine this Bill, go through it section by section, and debate it and ask questions, I think it would be made quite clear that there is a great deal besides machinery in this Bill, judging by the section I have referred to and some of the things that the Minister has told us. One thing rather astonishes me: that the large balances in this account have arisen because there have been large sums voted which were not required. Why were such large sums voted? In the first year the amount sanctioned for issue out of the fund was a maximum of £3,050,000 and the actual cash advances were only £2,000,000. In the current year £3,150,000 was sanctioned, and only £2,000,000 was applied for. Therefore, £6,200,000 were voted and only £4,000,000 advanced, so that the Dáil was asked to vote at least two and a half millions of money that was not required. I wonder why that was.

Are we going under this Bill to be asked to vote large sums of money for this Fund and merely accumulate balances that will not be required? We have now had several years' experience of the Local Loans Fund and surely the Minister when calculating what is required in the current year should be able to say that as far as one can foresee from the way the loans are going he would want one or two millions, as the case may be. This is the third year in succession that large sums are asked for. Why should he ask for a million more than he wants and have the money lying in the Exchequer? It seems to me that a good deal more explanation than we have had is required as to how these large sums were asked for when they were not needed.

It is very difficult with the short notice we have had to deal with all the matters in this Bill. It is more from what the Minister said than what is in the Bill that we can gather some of the implications in it. Evidently the Minister thinks that it will be easier to borrow on the security of the Local Loans Fund. He even goes the length of saying that he thinks loans issued on the security of the Local Loans Fund will go better than an Exchequer loan. He gives that as one of the chief reasons for bringing in the Bill. I hope he has better ones, because we all know that no matter what you call a loan it is the credit in which the Government of the day, which is finally liable for the loan, is held that will settle the terms of the loan. He may, by management, be able to issue, say, £500,000 for the Local Loans Fund, that he would not want to include in a loan of six or eight million for the Exchequer. He might be able to hold over the big loan while he could get money for the Local Loans Fund. In that way I can see that this Fund may be quite useful. But that the terms on which he will be able to issue it are going to be anything better than the terms for an Exchequer loan is, I should think, extremely doubtful, because the final responsibility for the repayment of this loan will undoubtedly be held by the investors to be that of the Government of the day and not the funds which lie behind that loan. It would be impossible for any investor to get at individuals who were lent money from the Fund. In that respect, therefore, I cannot agree with the Minister.

I do not see why we should have these big sums of money lying in the Local Loans Fund or to the credit of the Exchequer. It seems to me that the Minister should be able to estimate a year ahead what money he requires to borrow for this Fund. There is, of course, the other big asset in this Fund that the repayments of capital and interest are coming into the Fund from the loans previously made. That means an accumulating balance. I should like to have more information as to how these available balances are going to be dealt with in the Exchequer. There are certain sections in the Bill which I have not had time to examine, which allow for the exchange of securities to allow the Exchequer to make use of certain funds lying there. I think it would be well worth while to examine the conditions under which the Government will deal with these sums.

I think they go far beyond the mere question of administration and machinery that the Minister seems to suggest. When we come to a discussion as to the settlement of the question, and whether this is all the talk we are going to have about this Bill or not, I should like the Minister to tell us definitely why it is that a Bill Senators only got last Saturday night must be passed on Tuesday afternoon. I am merely referring to things that, in the course of one or two hours' study, I have been able to get out of the Bill. If we had time to go through it clause by clause we would, undoubtedly, get a great deal of information from it. This is not a Money Bill. It is, undoubtedly, one where the Seanad might, in its wisdom, ask, what precautions it could take or what suggestions it could make. I expect Senators will pass the Bill with that clause in front of them, so that what I say is of no use. Then what I have been saying may be only rubbish but the Seanad, in its examination of Bills, where it could be of use, is practically showing itself to be a useless body. Senators should bear that in mind when settling this question this afternoon. I do not remember the Seanad ever holding up a Bill where the Minister gave a good, sound and adequate reason for haste. There has been no such statement with regard to this Bill. This Bill requires attention, and if we are to pass it this afternoon it will be the greatest derogation of the dignity and the use of the Seanad that ever happened in my time.

Mr. Comyn

When this Bill came up for consideration last week, Senator Jameson suggested that time should be taken for the purpose of looking into its provisions, and it was I who reminded the Seanad that about three weeks ago the terms of the Bill, in the form in which they now appear, as amended in Committee, were before members of this House. I said at the time that, having read the Bill and studied it as well as I could, with my limited experience, it seemed to me to be a Bill to co-ordinate the existing law and practice in reference to these local loans. I must say that I am very glad that the debate was adjourned for the purpose of hearing from Senator Jameson such a very close and good analysis. When the Senator says that the Bill indicates that the local loans are in a mess, I do not think that is in any way apparent from the terms of the Bill. But I will say this, that they have been in a mess for the last 30 or 40 years. As long as I know anything about local loans they have been in a mess. Of course, that was, to a certain extent, the intention of the legislature, or a result of the legislation in relation to these local loans. The Senator may know that from one side, from the side of the lender. I have experience of it from the other side, the side of the borrower, and I know that a great number of these loans were advanced under Acts of the Imperial Parliament with a dual object. A great many of these loans had as their object, first, the improvement of land and secondly, the giving of employment, or something in the nature of relief work. There were drainage loans, and loans for canals and for sanitary purposes which were given partly with the object of not being themselves remunerative, and partly with the indirect object of keeping the people quiet. Those being the objects with which some of these loans were advanced, it is only reasonable to suppose that they were not repaid on the day of payment. I think that accounts to a considerable extent for what Senator Jameson pointed out.

Section 6 (1) says:—

(1) As soon as conveniently may be after the appointed day, the Minister shall determine the amount which (subject to the provisions of this section) is equivalent to the aggregate value of the following sums, that is to say:—

(a) all sums owing and unpaid on the appointed day ...

(b) all moneys provided by the Oireachtas which were, before the appointed day (whether before or after the passing of this Act), issued from the Exchequer and placed at the disposal of the Minister for the purpose of local loans, and ...

I am sure it would be a long account, an account of all moneys owing under local loans, and unpaid on the appointed day. I know the fortunes of these loans individually and I know the various shifts to which the officials concerned had to resort in order to get payment even of portion of the loans. I have known cases of some of these loans being so long in arrear that an action was defended on the ground that they were statute-barred by nonpayment. In two or three of such cases—and it is, of course, by individual cases you understand the working of a policy—there had to be a new bargain and the debt had to be converted into a permanent payment. I am sure, in order to clear up the mess, there must be a considerable amount of spring cleaning. This Bill in its main purpose, notwithstanding what Senator Jameson said, is one to co-ordinate, to centralise, and to put on a proper business footing all local loans for local purposes. I remind the Senator that the machinery of this Bill seems to contemplate that loans will not be made in future unless they are reproductive, or unless there is a fair prospect that they will be repaid. That seems to be indicated.

Mr. Jameson

The future is going to be better than the past.

Mr. Comyn

"Hope springs external in the human breast." In any case this Bill contemplates that future accounting and future collection are going to be better than in the past.

Mr. Jameson

That is quite right.

Mr. Comyn

A perusal of Section 15 will show that provision is made for the payment of interest in the case of loans not repaid at the proper time.

Mr. Johnson

All the time?

Mr. Comyn

Not always. I have personal experience of this. It is not a fact that interest was payable always on the arrears of local loans. The Minister will correct me with his greater experience, if he thinks I am wrong, but I can go back perhaps a little further prior to the coming into being of the Free State. I think that is right. Senator Jameson implies that, under this measure, the State is to be asked to bear liabilities without the sanction of Parliament.

Mr. Jameson

Oh, no; I do not.

Mr. Comyn

Without the sanction of Parliament in the particular case.

Mr. Jameson

If I said so, I did not mean it. I never suggested that the Minister was going to act without the sanction of Parliament.

Mr. Comyn

Of course it is true that all deficiencies are to be made good by the State. That was always true. The money was advanced, and if the person who received the money did not pay, the Treasury had to make good the item in the accounts. That was always the case, but I am surprised to hear Senator Jameson say there is no advantage in aggregating all these accounts and in issuing the money on the authority and on the credit of the Treasury. I was still further surprised by the argument he used because he said that the investor knows that the credit of the State is involved whatever the form of the loan, and that, therefore, the rate of interest is sure to be the same. The Senator said that, and he is, I suppose, the greatest financial authority in this Parliament. The younger men will allow me to say that. See, now, how that argument is exploded by one little example. We had the case of advances by the British Treasury for the purchase of Irish land. Originally, the money provided for the purchase of Irish land could be provided either by the creation of consols or by the creation of land stock, and after a certain number of years of experience of that system, some of the English members of Parliament said: "It is quite wrong that our consols should be mixed up with land bonds or land stock"——

Mr. Jameson

Quite right.

Mr. Comyn

—and the land stock was made a separate stock on the security of the British Treasury. It had just as good security, so far as the investor was concerned, as consols, but did it carry the same price? Now, will the Senator say that a small fund is as good as a big fund in a case of that kind? Senator Jameson knows thoroughly well that the stock was 3, 4, 5 and 6 points lower than consols at the same rate of interest.

Mr. Jameson

I think I am absolutely with the Senator.

Mr. Comyn

The Senator abandons his entire argument.

Mr. Jameson

I beg the Senator's pardon, I do not. The Senator is restating my argument.

Mr. Comyn

There was another objection raised by the Senator to this measure. When he puts an argument like this, he always puts it in the form of a query—a very embarrassing thing to do. On one point only do I agree with the argument he has put forward here. He referred to Section 4, sub-section (3). I went through this Bill and, whether from want of experience in financial matters or not, I thought that in all its provisions the Bill was very good and I so stated to the House. The only provision which gave me any difficulty, in my inexperience, was sub-section (3) of Section 4 to which Senator Jameson has referred. It sets out:—

"During the period beginning on the appointed day and ending on such day as shall hereafter be appointed in this behalf by statute, there may be issued from the fund in respect of local loans all such moneys as shall be required for the purpose of such loans, but the aggregate amount of the moneys so issued during the said period shall not exceed the sum of £5,000,000."

It is, I think, rather unusual in legislation to leave one of the termini indefinite. It is unusual, I admit, but still, we have it that the ending day shall be a day to be appointed by statute. It is by Parliament that it is to be fixed and not at the discretion of the Minister. I take that to be the meaning of the sub-section and, therefore, it is not altogether so bad as one would think from listening to what Senator Johnson has said.

I think these are all the matters that occurred to me as having been raised by Senator Jameson. If I had to deal with that speech as a Minister I would find that it was an extraordinarily clever statement on the measure, and I should find it rather hard in some ways to answer it. There is one matter to which he has not adverted. He referred to the large sums of money which are budgeted for each year and not spent within the year. That is an argument applying not to local loans alone. It is an argument of general application. For the last eight or nine years—Senator Blythe will have something to say on this, I hope—there has been a budgeting greatly in excess of requirements. That is a matter which the Minister and the former Minister may have had good reasons for doing. They have the authority, and perhaps they did not know what requirements might be necessary in the course of the year, but certainly for several years past they have had Parliamentary authority for large sums of money which they did not use within the year. I do not see that that can be regarded in any way as being a special argument against the passing of this Bill or for delaying its passage.

Mr. Johnson

It avoids the necessity.

Mr. Comyn

As my friend Senator Johnson says, it avoids the necessity for delaying the passage of this Bill.

Mr. Johnson

No, no.

Mr. Comyn

I cannot follow the Senator, then.

Mr. Johnson

It avoids the necessity for voting moneys annually.

Mr. Comyn

Will the Senator state his objection?

Cathaoirleach

If the Senator wishes to finish his speech, he had better continue.

Mr. Comyn

Why should an interjection of this kind be made in the course of a speech? I would say that this measure has been very much wanted for many years. I would say that it is a necessary measure, and that anything that will lead to co-ordination of accounts is a good thing in this State. As I said on the last occasion, I think this measure is one which Senator Jameson ought to welcome.

Mr. Blythe

I find this measure to be of considerable interest and I find that not the least interesting fact about it is that it should be introduced by the present Minister for Finance because, when he was in opposition, one of his favourite theories was that there should be no borrowing for the purposes of local loans, and that the entire capital should be provided out of taxation. I do not remember at the moment the particular arguments by which he supported that theory. I know they all seem to be forgotten and I suppose he himself has completely forgotten them because he has come round entirely in that matter. Perhaps it is owing to the fact that last year in his Budget speech he raised a beautiful smoke screen in reference to the position of the unemployed. He referred to his former idea that the fund should be supplied out of taxation, and he also said that we ought not to camouflage and plant beautiful wild flowers by the roadside without the hope of getting any return. As it did not seem a practical thing to work in that way, he is now prepared to borrow for the Local Loans Fund. He has now produced a Bill which prevents any possibility of the capital of the Local Loans Fund being found out of taxation. I agree that the time is being reached when this Bill is necessary. I think the Minister's argument is sound when he says that there was a reasonable method of managing the fund as long as the amounts were small, but that that method is not so satisfactory now when the amounts are larger.

It is true that a good many of the difficulties the Minister suggested could possibly be got over without the introduction of legislation. This question of excess sums lying in the fund might possibly have been avoided. It was really, perhaps, excessive deference to parliamentary correctitude that caused the procedure which had been adopted to be continued so long. What was really done was that sufficient money was always kept in the fund to meet promises that had been made. Even promises were made in excess of issue. It was agreed that to Tralee or Ennis or some other urban council certain sums should be issued but the issue did not take place until some time after the promise was made. The normal thing was that we had promises in excess of issue. It might be possible after a time to vote the necessary sums when they became due. However, I think it is better that the matter should be met by the passage of this legislation.

The Minister has referred to the fact that interest has not been paid to the Exchequer on the amounts advanced for local loans. In the early years the amounts were so small that whether the interest was paid to the Exchequer or not was a matter of little consequence. Later on the matter was not entirely overlooked but it was felt that if the charge was to be made there was a means of paying back a little money to the Exchequer in a bad year. I do not know whether the Minister feels that this is a good or bad year and that interest will be paid to the Exchequer henceforth.

I do not regard the Bill as revolutionary. It seems to me personally that the principle of the Bill is satisfactory. There might be points to be raised on detail and I think it might be well for the Seanad to have an opportunity of examining them seriatim, if that is necessary, as Senator Jameson desires to have them examined. I really do not know what need there is for such haste as would make it impossible for the Minister to allow the Committee Stage to stand over until the 1st May. There is no Local Loans Fund provision in this year's Estimates——

Mr. Johnson

There is an amount provided.

Mr. Blythe

Well, if there is an amount, I do not think there is any need for haste at all. I do not think that any inconvenience would be caused by a little delay and if that is so I think the Minister would be well advised not to press for the completion of the Bill to-day but to let it stand over, thereby giving a better opportunity to Senators, who wish to do so, to put down amendments. I think when the matter comes up for discussion most of the provisions of the Bill can be very well defended, but I do not think that is any reason why it should be rushed unless there is some definite ground of public policy for hurrying. The Minister may think that the 1st May is a date that will be very close up to his Budget. I suggest that the Minister should not press the remaining stages of the Bill to-day.

Mr. Johnson

I am in agreement with the claims put forward regarding the desirability of giving the House an opportunity of examining the sections of the Bill seriatim. I was strengthened in that belief by listening to the speech of Senator Jameson. With all the Senator's authority, when he makes such a speech as he has made on this matter, it tends to raise doubts as to what the purpose and merits of the Bill are and it tends to throw some suspicion upon the general scheme. Senator Comyn made one remark, at least, with which I agree when he said that this is a Bill that was required for a number of years. I think it was in 1924, at a meeting of the first Committee of Public Accounts, set up by the Dáil, that this question of the Local Loans Fund was raised, and was explained by the then Secretary to the Ministry of Finance. It was explained to that committee in that year, and on several occasions since, that the position was temporary, that it would be followed at some time by regularisation, and that the Local Loans Fund would be put on a statutory basis. I think it was explained that even the British Local Loans Fund, in its origin, was financed out of voted moneys and that in a few years a separate fund was financed by separate issue of stock for the purpose. The procedure in this Bill is exactly what was done by the British Parliament in putting the fund on a separate, definite basis.

I think that all the defects that were suggested by Senator Jameson, and not by any means answered by Senator Comyn, are really being met by this Bill. The defects that he hinted at, so far as I can recall, are defects of the present system which are to be remedied by this Bill and, if it is only to make clear to the Senator's mind that fact, it would be desirable to have the details of the Bill examined in Committee. For one reason I am glad to think that the Bill is likely to become law, and that is that there will be a complete disclosure annually of the accounts of the Local Loans Fund. I have been looking for light upon this matter since the last sitting of the Seanad trying to find out exactly what was the position of the Local Loans Fund. I thought that surely it must be found somewhere in the variety of accounts published from time to time under different heads by different Departments and that if somebody were able to disentangle them he would be able to find out the information he required. I may confess that I have not been able to find it out. When the Minister said that the accounts of the fund are not published, then I saw the light. The fact is they cannot be found. Before this I thought that probably someone would be able to find them if he knew how, but now the Minister says that "of course the accounts are not published."

I have obtained a good deal of information that presumably Senator Comyn had not at hand. I got the report of the Commissioners of Public Works. By the way, perhaps the Minister would be interested to know that the report for the year ending March, 1932, was published in October, 1934, and that we know nothing about these accounts later than March 31st, 1932. Up to that date we have disclosed the fact that the total sum advanced was £52,000,000 and the balance outstanding at that date by way of arrears—whatever might have been done from time to time—was £117,000. Out of the £52,000,000 advanced, that is not a very considerable amount. The amount not yet due comes to £3,877,000. The securities are pretty substantial. I do not think there is much risk about any of the advances when one thinks how well they are secured on the local rates. The sums that were advanced year by year, it is quite clear, were not repayable into the Exchequer in case they were not spent. Sometimes the amount spent was greater than the sums voted for that particular year. I think it would be necessary that the Oireachtas should know exactly what is the position of the fund as a fund, how much still lies to the credit of that fund in the Exchequer, and I think it would be desirable if we knew in a little more detail year by year, in a shorter period than 18 months or a year after the end of the financial year, what had been done with the moneys. I hope the new situation will mean possibly some acceleration in the publication of the accounts.

One statement of the Minister is, I think, apt to be a little misleading. The Bill provides clearly that under the new system the Comptroller and Auditor-General will audit the accounts and present them to the Oireachtas. That is very desirable. But the Minister suggested, or allowed us to think, that inasmuch as the Comptroller and Auditor-General issues no certificate, no audit was made.

Mr. MacEntee

He makes an audit.

Mr. Johnson

Though he issues no certificate, not being statutorily required to do so, he nevertheless makes an audit. By one means or another there would be publication of the fact, if there was anything unsatisfactory in the account. So we must not run away with the assumption that because a formal certificate, which is required by statute in all other matters, is not issued by the Comptroller and Auditor-General the accounts are not properly audited by him.

Mr. Jameson

Read the Minister's remarks.

Mr. Johnson

I am not doubting that. I merely want to make it clear that if my interpretation of the facts that are presented from time to time is the correct one, the accounts are nevertheless thoroughly audited, apart from the details of how the money is spent by the local authorities. So far as the account is concerned, it is thoroughly audited, but the Comptroller and Auditor-General is not required by law to issue a certificate and therefore a formal certificate is not issued. So far as I can understand the position, the Bill really aims at remedying all the defects that Senator Jameson indicated existed. He appeared to think that they were being created by the Bill.

Mr. Jameson

No.

Mr. Johnson

I suggest they are defects that are being remedied by the Bill.

Mr. Jameson

Quite right.

Mr. Johnson

Whether I understood the Senator correctly or not I do not know, but the various points he raised in criticism of the Bill I took to be criticisms of the existing system and, I think, if applied to the existing system, some of them are legitimate criticisms, but the Bill aims at remedying those defects. I think, nevertheless, it would be desirable that the House should have an opportunity of dealing with the Bill section by section and having a thorough examination of it for the purpose of removing doubts as to the machinery for conserving the financial interests of the State that Senator Jameson referred to.

Mr. Douglas

Before the Minister replies, there are one or two questions which I would like to address to him. Before doing so, I would like to say that I think there has been misapprehension, certainly on the part of Senator Comyn and to some extent on the part of Senator Johnson, as to the attitude towards the Bill. Possibly, because I knew his views beforehand, I read into Senator Jameson's speech an approval of the Bill but a strong objection towards pushing the measure through without a fuller examination in Committee. I take it that his remarks, uttered by way of criticism, were meant to show the important matters that are dealt with under this Bill—that they are of such a character that it might be well to allow the Bill to go through the Committee Stage, if only for the purpose of having that detailed examination that one does get in the Committee Stage.

The first question I would like to address to the Minister is as to what there is in this Bill that we were able to do without last month that we cannot possibly do without next month. That is the only question before us when we come to the motion down in the name of Senator Robinson. It is perhaps the function of an Opposition to oppose. Some of us generally oppose taking Bills of this size on any one day virtually on only one stage. We were generally supported by the Labour Party. When the Fianna Fáil Party came into the Seanad they were more vigorous than any of us and now that they are in power they do exactly as the previous Government did. Some of us think that unless a very great reason is given, the usual procedure ought to be followed with this Bill. I understood Senator Jameson's remarks to mean that there are rather important matters dealt with in this Bill and points may come out on the Committee Stage which might certainly lead to its improvement. I did not understand the Senator's attitude to be that he was opposed to the creation of the fund proposed in this Bill. I gathered rather that he entirely approves of that. His remarks on the question of the audit were due entirely I think to the Minister's statement which caused the impression that the audit is not a complete one. In the Dáil the Minister used practically the same words that he used here to-day. He is reported to have said in the Dáil, in relation to the statement that the accounts are sent to the Comptroller and Auditor-General:—

"As the fund is non-statutory, he presents no report and does not give the accounting officer a final clearance."

Senator Johnson agrees with that. The Minister went on to say:—

"In addition, his audit is limited in scope. He does not, for example, carry out any examination of the relative mortgage deeds by which loans are secured."

That is an important matter if there is any security other than the State guarantee.

"Nor does he analyse the treatment of arrears, while, of course, the accounts of the fund are not published."

It was the Minister, and not anybody else, who stated that, as at present, the audit is not a complete one. He clearly implied, and I take it to be the case, that after this Bill is passed the audit will be complete. Otherwise, his remarks mean nothing. Anything that was said on that was not said by way of criticism, but arose out of the matters which the Minister thought fit to disclose when arguing in support of the Bill in the Dáil. Some of the passages between Senator Jameson and Senator Comyn were rather bewildering to many of us. They certainly were to me. Senator Comyn seemed desirous of repeating, in his own way, what I understood Senator Jameson to say, and then to say "you did say it." Now what the Minister exactly thinks of some of Senator Comyn's arguments in relation to this Bill I imagine he will possibly tell him privately. I would very much like to be there too, to hear. If I understood Senator Jameson's remarks with regard to the price at which the loan would stand, they were only meant to be a friendly warning to the Minister: that the optimistic statement he made in the Dáil on the question of price might not be realised. The Minister's staunch supporter, Senator Comyn, made a terribly bad case of these particular securities. He mixed them up and put them in a much worse mess that was ever suggested by Senator Jameson, and a much worse mess than there actually is. Even if there is additional security, I do not know that the State can hope to get any better rate than that which is to be obtained on loans carrying the ordinary Government security.

I would like to know from the Minister whether there is at the present time any possible mix up with regard to the amount of assistance given directly to local authorities by way of free grants. Are any of these included in local loan transactions at the present time? If they are, I presume they will be definitely kept out of it in the future. The other question that I want to put to the Minister arises out of his own statement already referred to by Senator Blythe. If I understood the Minister correctly he said that the Local Loans Fund paid no interest to the Exchequer. I have looked up the Finance Act of 1931 which deals with this Local Loans Fund, and I find that sub-section (1) of Section 33 provides:—

On every advance issued (whether before or after the passing of this Act) under statutory authority to provide capital for the Local Loans Fund and for the time being outstanding, interest calculated with half-yearly rests shall be payable out of the Local Loans Fund to the Exchequer as from the issue of such advance at such rate and at such times as the Minister for Finance shall from time to time direct.

Mr. MacEntee

The point about that is that the unissued balance does not earn any interest.

Mr. Douglas

I understood the Minister to say that there was none paid to the Exchequer. At any rate, I am glad to have the matter cleared up. I hope the Minister is not going to press to have all stages of this Bill taken to-day. I say that, not because I think there is going to be any substantial change made in the Bill, but because most of us—there are, of course, exceptions, such as Senator Jameson, Senator Johnson and Senator Blythe—know only too little about the working of the Finance Department. Bills of this kind afford us the opportunity of getting information by way of question that will be of help, not only to ourselves, but to the public, and will enable us to understand the care with which finance is administered here. It is desirable that we should be so informed. It will be all to the good. The pushing of a Bill of this kind through all its stages hastily is liable to leave the impression on people, not very well informed, that there is something the Government are trying to hush up. I know, of course, that that is not the case, but the rushing of a Bill of this character is liable to give such an impression. So far the Minister has not given any reason why the Committee Stage should not be deferred until the 1st of May, when, probably, all stages could be completed. Therefore, I hope that Senator Robinson will not move his motion to have all stages of the Bill taken to-day unless there is some better reason than has been given up to the present for taking such a course.

Mr. Wilson

There are just a few matters on which I would like to have some information from the Minister. Up to the year 1922 the Local Loans Fund had a statutory existence. It was a British fund. Some time later our Minister for Finance made a bargain with the British by which he agreed to pay £12,000,000, spread over a period of 20 years, in respect of amounts already advanced. These were really assets of the British Local Loans Fund up to the year 1922. It is to be assumed that when our Minister for Finance made such a bargain that not alone were the assets there, but that there would be something more than £12,000,000. Otherwise, why should there be an agreement to pay such a large sum of money if he was not satisfied that the assets were there? I cannot understand the Minister's reluctance to tell the Seanad how much of that old balance of assets is now in existence, and what he thinks is the value of the sums due to the State up to the year 1922. It should not be a very difficult matter to find out what the amount of the advances was from that date. The last Government did not make as large advances as the present Government. There used to be, I think, a payment to Britain of probably £600,000 or £700,000 to feed the Local Loans Fund. But in the accounts in the last two years there has been an over-estimation of £2,000,000. Why does not the Minister tell us in round figures how much really is there in the way of assets in this account? On the general principle I think the Bill is quite good. It is a Bill that is necessary. Everybody who has gone into this matter is agreed that there is here hidden an asset the amount of which we do not know. It ought to be possible to let us have an estimate of how much that would be. The object of my remarks is to ascertain from the Minister the value which he places on the assets of the fund.

Mr. MacEntee

Perhaps I should advert, in the first place, to the remarks made by my predecessor in office and admit the soft impeachment which he levelled against me. It is quite true that, at one time, when the services to be financed out of the Local Loans Fund were moderate in size and when demands on the Exchequer were not undue, it seemed to me that a large part of the money required for the fund might be raised by way of taxation. I always regarded the fund as a very handy money box for the State and the people as a whole. Since the ambit of the fund's activities has been greatly enlarged, I think it would be a counsel of perfection to tell the taxpayers of the present day that they should bear the whole of the burden. One of the reasons the Bill is before the House is to facilitate the operations which are necessary to the carrying out of the housing schemes and public health and other development works which are in contemplation.

If anything I said led Senator Jameson to believe that the Local Loans Fund account is in a financial mess, I should have to correct my remarks and remove that impression. The fund is under the control of the Accounting Officer of the Department of Finance, and Senators may be perfectly satisfied that its accounts are regularly kept and that every penny piece in the fund can be accounted for. A great deal of administrative inconvenience is caused by the fact that the fund is only an account in the Exchequer and is financed by way of Grant-in-Aid. It was to that that I referred. That brings me to the question of the audit of the fund. There is 100 per cent. audit of the fund as a cash account, but the Comptroller and Auditor-General, in dealing with statutory Government accounts, goes into them much more deeply than that. He will examine the administration of the fund; he will question the rate at which repayments are being made, and he will examine the general securities of the fund. At present, he has no statutory function in that regard and, as an officer appointed under statute, naturally he does not exceed his functions. One of the desirable things which will be achieved by placing the fund on a statutory basis will be the enabling power given to the Comptroller and Auditor-General to examine the securities on which grants are made, the general administration of the fund, and the manner in which advances from the fund are being repaid by the borrowers. All that will be incorporated in a report which, as will be seen by reference to Section 8 (4), will be laid on the Table of both Houses as soon as is conveniently possible after the audit shall have been completed. For the first time since the establishment of the State we shall then have a comprehensive statement as to the position of the Local Loans Fund.

I referred to the manner in which advances are being repaid by borrowers and, in that connection, I ought to emphasise that, in general, repayments have been fully satisfactory. In his remarks I think Senator Comyn had in mind the fact that the fund was originally established about 1835, and that, before it reached its final form, it was at various times considered by the House of Commons and advances made from the fund during the famine years here and during periods of depression in Great Britain which were found not to be readily collectable, were written down very considerably. That was prior to the Act of 1887. Since then, I do not think there has been any writing down of the assets, nor, so far as I know, has there been any reason to write down the assets. Should it become necessary at any time to write off any of the assets of the fund, it is provided by sub-section (1) of Section 14 that

"no part of the principal of or the interest on any local loans shall be written off the assets of the fund, save in pursuance of an express direction in that behalf contained in an Act of the Oireachtas passed after this Act."

The Oireachtas and the State generally are amply safeguarded against undue writing down of the assets or the giving of undue relief to borrowers who are in a position fully to meet their liabilities. Before I leave this question of the assets I should like to answer the point raised by Senator Wilson. I was not pressed in the Seanad or in the Dáil to state the amount of the assets which we estimate will be eventually transferred to the fund. Therefore, I did not give the figures. I can give provisional figures now. The total value of the assets to be transferred to the fund will be of the order of £11,250,000, of which £5,000,000 represents pre-1922 loans. That is the present value, computed at 3½ per cent.

That brings me to the point which was raised by Senator Jameson in connection with sub-section (3) of Section 4. The purpose of that sub-section is to give the Oireachtas control over the borrowing powers of the fund. It is provided in that sub-section in a rather indeterminate way as regards date, that the aggregate amount of the moneys issued from the fund shall not exceed £5,000,000. That is to say, we transfer to this fund assets to the value of £11,250,000, and we limit the power of the fund to make issues therefrom to the sum of £5,000,000. The reason why a future date is not inserted there is because we do not know when it will be necessary to come to the Oireachtas again and ask for power to make further issues.

At the present rate of issue we may calculate that between now and two years from the present date a sum not in excess of £5,000,000 will be required. But at the moment no matter what it may be, in the future the total issues from the fund cannot exceed £5,000,000, unless further sums are sanctioned by the Oireachtas.

Mr. Douglas

Does that really mean that there will be roughly £11,250,000 transferred and that the Minister will only be able to deal with £5,000,000— that there will be no limit to that £5,000,000 but that the Government of the day could go beyond that by coming to the House again?

Mr. MacEntee

We may presume that having made up their mind that the £5,000,000 will suffice they will not come again until the £5,000,000 is within reasonable period of exhaustion.

Mr. Douglas

The balance of the assets cannot be touched without further legislation?

Mr. MacEntee

Yes, if you increase your advances beyond these £5,000,000 you have to have further legislation. I have mentioned here what we think is the provisional value of the assets to be added to the fund. In that regard we will have on the appointed day to issue a provisional certificate. Senator Jameson raised a point in that connection also. The Senator presumed that we were to issue a whole series of certificates in respect of the assets transferred to the fund. In fact I am advised that we have only the power to issue two certificates—first the provisional certificate to be issued on the appointed day and the other certificate which I think will be issued before the 31st October, 1936, finally determining the value of the assets transferred to the fund. The necessity for that arises owing to the gale days being the 1st May and the 1st October. We would not be able to compute accurately the value of the assets until some time after the 1st May. We propose to make the appointed day the 1st May and that is really the urgency for the Bill now.

Mr. Jameson

I only spoke on your words, just interpreting what you said.

Mr. MacEntee

As I have already said we are only issuing two certificates, one on the 1st May and another later amplifying in any way necessary the original certificate. The Senator referred also to a statement which I made that the local loans will be taken completely out of the Budget. It will, in this way: that whereas previously we had to include them in the Estimates for Supply Services and they had to be provided for in the Budget by way of borrowing or otherwise, they are now coming below the line in the Exchequer Account and will not appear in the ordinary Budget statement though probably we shall make some references to the provision to be made for loans from the fund in consequence of the Government's general policy of housing, public health services and other matters of that kind. It is to be remembered that there will appear in the Supply Services in connection with the 1932 Housing Acts a sub-head providing for the Government's contribution to the loan charges which will be payable by the local authorities in respect of the local loans. These contributions to loan charges are to be differentiated from the lump sum grants which will be paid direct out of the Exchequer and which will be provided out of taxation.

Mr. Jameson

That will be budgeted for.

Mr. MacEntee

Yes. It will not come out of the Local Loans but out of the ordinary Central Fund of the exchequer. The Central Fund will also provide the local authorities with certain assistance to which they are entitled under the slum clearance and other provisions of the Housing Acts to enable them to meet charges upon money borrowed from the fund. It may be that strictly from the point of view of public finances it is undesirable that this should be done, but there is no other way under which this assistance can be conveniently afforded to the local authorities and at the same time the necessary finances provided from the fund. We can meet to some extent the objection and keep the public informed by inserting a footnote in the Comptroller and Auditor-General's report pointing out the amount for repayment of interest and sinking fund which is provided by the Central Fund exchequer and does not come directly from the finances of the local authorities.

The Senator also raised a point why it was we had sums voted when they were not required. I think Senator Blythe has dealt with that point and answered it clearly. The reason is that we are not in the same happy position as Senator Jameson as a banker would be. He would generally relate his loan policy to his cash balance. Here the boot is on the other foot. We have to relate our cash balance to our loan policy. When the loan has been agreed on, even though we may not be called upon to make the issue during the financial year, the custom is that the Oireachtas must immediately make provision to meet the commitment into which it has entered. Accordingly, as Senator Blythe has stated, we have had to provide in the Local Loans Fund account for the commitments which the various Departments of the Government have to meet in respect of issues from it. Very often these commitments do not materialise in actual cash issues during that particular year. But we have to raise the money. We have to put it to the credit of the Paymaster-General's account where it earns no interest. It is quite true that Senator Douglas pointed out that under Section 33 of the Act of 1931 we could have charged the Local Loans Fund with interest. But we could only charge it with the interest which it would earn. At least that would be the only equitable course. It would be a charge which the Minister for Finance would direct to be made and in fixing the rate of interest he would have to bear in mind the situation in which these large unemployed balances arose, and he could not penalise the fund on that account.

Mr. Douglas

The Minister who put in that section was an optimist.

Mr. MacEntee

I disagree. So long as the cash balances were moderate and so long as they were reasonably certain of being employed or more precisely so long as they were employed, the section would enable the Exchequer to recoup itself for the expense of providing the funds which were being used. I think on the whole now that the fund has very largely outgrown the circumstances in which the section was first introduced, I think it is better that we should do the thing in the way proposed in the Bill. I may say that so far as any easing of the Budget position is concerned it would possibly be more convenient to employ the section than to undertake the task of getting a Bill through the Oireachtas.

Mr. Jameson

Had they no power to invest?

Mr. MacEntee

No, when the money was put in the Paymaster-General's account he could make short term advances at an infinitesimal rate of interest but otherwise there is no interest earned by the Postmaster-General's account. Senator Jameson questioned the optimism of the Minister for Finance in thinking that possibly—I do not say immediately, but possibly—local loans may carry a lower rate of interest than ordinary Exchequer issues might carry. I gave reasons in the Dáil why I thought that was so, and one of the things which make me think there is a certain amount of advantage in the course we are pursuing here is that our friends on the other side of the water have found it advantageous. I notice that one of the things Mr. Chamberlain indicated in his Budget speech last night was that the Finance Bill of the year would contain a clause to permit the issue of Local Loans Stock in a more modern form and the conversion of the existing stock if the opportunity arose. So that, after 100 years of experience in regard to this matter, they have re-affirmed their belief that it is advantageous, from the general point of view of the tax-payer and of the borrower, to keep the local loans issues separate from the ordinary Consolidated Fund issues.

On the question of the urgency of the Bill, of course I place myself in the hands of the Seanad in that matter. I should like, however, to stress the difficulty from our point of view. I admit that the Bill is rather belated at this stage of the session, but the gale days for the local loans repayments are the 1st May and the 1st October. The Budget statement is to be made on the 8th May and I should like to be able to proceed in that statement on one basis or the other. If the Bill does not become law before the 1st May, I may not be able to fix 1st May as the appointed day and, accordingly, we shall be in the position, so far as the pre-1922 local loans are concerned, that they will be thrown into the Exchequer and can be appropriated to the general purposes of the Exchequer. I admit that course would be more profitable to me from the Budget point of view. So far also as the capital issues from the fund are concerned, I shall be in the same position. In the earlier part of the year they will have to be provided from the Grant-in-Aid and, so far as the latter part of the year is concerned, they would then be raised on the security of the Local Loans Fund, backed up, of course, by the Government guarantee. Therefore, from our point of view—mine particularly—it is desirable that the Bill should become law before 1st May so that we may make that the appointed day. That explains the urgency from our point of view.

There is another aspect I would ask the Seanad to take into consideration, and it is this. As I indicated in the Dáil, this will not be the final form of the Local Loans Fund in this country. There is a considerable number of other accounts, which have to be considered, and which may be brought into the Local Loans Fund. The fund, as it stands here, is controlled by the Minister for Finance. In view of the magnitude of the present operations of the fund, we may have to make other arrangements for the exercise of control and, apart from that altogether, we shall have to give most serious consideration to any recommendations which the Commission of Inquiry into Banking, Currency, and Credit may make in regard to the position of the Local Loans Fund and the services which are being financed from them. Therefore, while, if we were coming with the Bill here in its final form, I should certainly defer to everything that has been said here in regard to the necessity for examining the Bill, I do say that the Bill, in its present form, is only provisional and that experience in its operation will not be any disadvantage when we come to frame our final proposals. For these reasons I would appreciate very much if the Seanad would see its way to give me all the stages of the Bill to-day. In my opinion, the Bill conforms to the best principles of public finance. I may say, however, that it is of no advantage to me in dealing with the Budget of this year. In fact, it will put us in a slightly worse position than if the present system of appropriating the local loans annuities to the ordinary purposes of the Exchequer were to be allowed to continue for another year.

Mr. Jameson

Before we proceed to a vote, there is one question I should like to ask. The Minister has gone very fully into his reasons for asking that all stages of the Bill be given to him to-day, and I should like to know whether we are to carry on the debate now on what the Minister said or whether we are to close the debate now and take the vote.

Cathaoirleach

We will debate it when the motion is moved, Senator.

Question put and agreed to.