Seanad Éireann debate -
Thursday, 13 Dec 1945

Vol. 30 No. 14

Finance (Miscellaneous Provisions) Bill, 1945—Second and Subsequent Stages.

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

Minister for Finance (Mr. Aiken)

The objects of this Bill are to permit the funds of the Post Office Savings Bank to be invested in stocks of local authorities having trustee status and to assist local authorities, out of the Local Loans Fund, in exercising an option to pay off a stock issue on or after the beginning of the redemption period.

Under the law at present, investment of the bank's funds is restricted to Irish and British Government stocks and funds and to securities guaranteed as to principal and interest by the State. It is considered desirable that there should also be power to avail of stock issues of local authorities for investment of moneys of the bank and provision to this end is made in Section 2 of the Bill, the additional power of investment being confined by sub-section (2) to such local stocks as enjoy trustee status.

The object of Section 3 is to facilitate a local authority by the provision of accommodation out of the Local Loans Fund in connection with the redemption of a stock issue on or after the first date at which the stock falls to be redeemed. The general intention is that such accommodation should be on a short-term basis pending flotation of a new stock issue, when conditions are favourable, by the local authority concerned.

While it is reasonable that the Local Loans Fund should not, ordinarily, be available to local authorities as a source of borrowing for the repayment of existing loans, I consider that, where a funding operation in respect of a stock issue is involved, there should be power to assist the local authority in carrying through such an operation, if the necessity arises. This section will permit the Local Loans Fund to be utilised for the purpose. The terms attaching to any loans made will be settled under the general statutory powers applicable to issues out of the fund.

As many Senators are aware, particularly those from Dublin, the Dublin Corporation gave due notice to the holders of nearly £800,000 worth of 5 per cent. stock due for redemption that they intend to redeem it on the 1st of next month. This Bill will enable me to come to the assistance of the corporation in redeeming this stock. The Finance Committee of the corporation have been considering for some time the issue of a new stock to enable them to convert this 5 per cent. stock into one carrying a much smaller rate of interest. The negotiations in connection with the matter were somewhat drawn out owing to the anxiety of the Minister for Local Government and myself that the terms of issue of the new stock would be in line with current interest yields and in keeping with the corporation's strong financial position.

It would be inconvenient for the corporation to float a new long-term loan before the beginning of January but, if this Bill is enacted, I will be in a position, assuming the corporation has not raised the necessary finance from any other source, to have a short-term loan made to them out of the Local Loans Fund on the 1st January, to be utilised for the redemption of the 5 per cent. stock on that date, thus enabling the flotation of a long-term loan to be postponed for a while. When the Bill has been enacted, it will, of course, be permissible for me under Section 2 to invest part of the funds of the Post Office Savings Bank in the long-term loan on its flotation if this is deemed to be desirable.

I would ask the Seanad to support the amendment in the law proposed in this Bill. I ask them to do it so that I will be able to come to the assistance of Dublin Corporation on the 1st January next and in order to enable me to do that it would be necessary and desirable for the Seanad to pass the Bill through all stages in its present session.

Sir John Keane

I would like to make most of my arguments on the Committee Stage but I do wish to protest against the bringing in of this Bill at the end of the session in such a manner that it has to be rushed through all its stages in one sitting. There is no necessity in my opinion for this haste. There are important principles embodied in this Bill and it should receive much more deliberate consideration than it is possible to give it in one sitting. The whole question of this investment of Post Office funds in local authorities' securities was the subject of comment by the Banking Commission and the legislative process regarding it should be much more deliberate than it is. That is all I wish to say on the Second Reading, because I can argue the principle more concisely and satisfactorily on the amendments which I have set down for the Committee Stage.

Mr. Quirke

If the Senator wants to come back next week to finish this Bill, I am sure the House will agree. Will he propose that? There is nobody rushing through this Bill and I do not think there is any other suggestion of it.

Sir John Keane

I cannot hear the Senator.

Mr. Douglas

Senator Quirke as usual suggests the threat that if we do not finish the Bill to-day, the House will have to be brought back next week at the usual expense. That is not really the criticism made by Sir John Keane. I agree with him that substantial changes in the law of this kind should not be brought in at the end of the year in another House and taken here to be passed through quickly. So far as passing the Bill through this House quickly is concerned, we may as well be realists. This House does not approve of the Finance Bill; the most it can do is to make recommendations or suggestions. It has no other powers under the Constitution. I have always advocated in connection with Finance Bills that there should be a Committee and Report Stage and no First or Fifth Stages because both are misleading.

So far as I am concerned, I do not see that anything would be gained by coming back next week, because this, I take it, is a Certified Money Bill.

An Cathaoirleach

It is not certified, Senator.

Mr. Douglas

I am sorry—I was under the impression that it was. I got the Order Paper only before coming into the House. The argument made by the Minister is that he wants to give facilities to the Dublin Corporation for the redemption of a loan which becomes redeemable on 1st January next, and that is a matter of urgency. I do not think we could gain anything by postponing the Bill until next year. I think that much the best thing to do is to face the situation as it is and to take the Committee Stage now or later on. It is not a Bill which can be discussed adequately on the Second Reading.

Question—"That the Bill be now read a Second Time"—put and agreed to.

An Cathaoirleach

Next stage?

Mr. Quirke

Now.

Sir John Keane

I object to the Committee Stage being taken now.

An Cathaoirleach

Is it agreed that the Committee Stage be taken now?

Sir John Keane

I object.

An Cathaoirleach

Or later to-day?

Mr. Seán O'Donovan

There is only one objection so far.

Mr. Douglas

I do not think we can take it, if there is even one objection.

Liam O Buachalla

Perhaps it would be possible to arrange to take the Committee Stage later in the day?

An Cathaoirleach

That is for the House to decide.

Sir John Keane

Can the majority of the House decide it?

Mr. Quirke

Yes.

An Cathaoirleach

The question is whether the Bill be taken now.

Sir John Keane

I have the same objection to that course. I should like to take it next week.

Question—"That the Committee Stage be taken now"—put and agreed to.

Section 1 agreed to.

Amendment No. 1 not moved.

Section 2 agreed to.

Sir John Keane

I move amendment No. 2:—

Before Section 3 to insert a new section as follows:—

This Act shall continue in force until the expiration of twelve months from the date of the passing thereof, and, unless the Oireachtas otherwise determines, shall then expire.

I put down this amendment to limit the duration of the Bill to one year. The Bill has been introduced in such a hurry that we are starting hastily on a new and untried sphere in legislation. I think we should at least have an opportunity of reviewing this matter at the end of one year. We then shall have experience of this Bill and there will be no harm done. I think it is only wise to approach this matter with caution and deliberation.

Mr. Aiken

The Bill does two things which are easily understood from a simple perusal of the Bill as circulated to the House. It proposes to modernise in some little degree the position of the Post Office Savings Bank fund by enabling the Minister for Finance to invest the small savings which are collected in the Post Office Savings Bank in the trustee stocks of public authorities. As Senators are aware, there is presented to both Houses every year a list of the investments in which moneys from the Post Office Savings Bank fund have been placed in the previous years. Surely we ought to have elbow room in the present day which would enable us to invest these funds at home? As the law stands, we are limited to investing the funds either in the funds of our own Government or funds guaranteed by them. The only alternative is British Government funds. The issue of home stocks was so limited in recent years that they were not sufficient to enable us to invest all the Savings Bank funds. We were compelled, therefore, to invest them in British Government securities. I think it is preferable, from that point of view, that these small savings should be at least open for investment in stock issued by local authorities which has a trustee status. I think that is a reasonable proposition not only for 12 months but that it should continue. Unless the Oireachtas otherwise deliberately decides, if we pass this Bill, the publication of the list of investments will continue, and if at any time Senators desire that the law should be changed, the matter can be raised and debated.

I see no reason at all for limiting the powers granted under this Bill for 12 months. The powers are good in themselves not only for dealing with the situation which will arise in relation to the redemption of the Dublin Corporation Stock on the 1st January but also for any such other transaction in the future if they are required. I think it is a good thing to extend, as we propose to do in this Bill, the type of advance which can be made out of the Local Loans Fund. Our powers are curtailed in that regard so much that we could not advance out of the Local Loans Fund a sum which would enable the Dublin Corporation, in addition to any other sums it might itself raise otherwise, to redeem the stock which they have given notice to redeem on the 1st January. The delay in the flotation by the Dublin Corporation of their new loan was due to existing circumstances but even though exactly similar circumstances might not arise in future, other circumstances might arise in which a local authority, proposing to reedem an existing loan, might think it well to postpone the flotation of a long-term issue until more favourable circumstances arose.

The fact of the matter is that the burden of interest on the ratepayers of Dublin and of this State is very considerable. If the ratepayers of Dublin City, or of any other county or city which might be affected by this Bill, want our help to enable them to raise loans at a reasonable rate of interest, in relation to the conditions that prevail at the time, the Minister for Finance should be in a position to help them. Although the immediate reason for introducing this Bill at this time is the situation relating to the redemption of the 5 per cent. interest stock by the Dublin Corporation on the 1st January, the Bill is a good one in itself, apart altogether from that situation. It is like a lot of other things in life. There are many good things that should be done but they are not brought forward until there is some pressing or immediate need for them. That is the case in relation to these Post Office Savings Bank funds; the steps which we propose to take are altogether reasonable and very desirable not only in the interests of the ratepayers of the city but of the taxpayers of the State as a whole.

Mr. Sweetman

What is the rate at present charged by the Local Loans Fund?

Mr. Aiken

The latest issue was at 4½ per cent.

Mr. Foran

I do not think the Bill will be worsened in any way by agreeing to the amendment suggested by Sir John Keane. The case he has made is a good one. The Bill is a timely one, but the House is not being treated fairly. I think it is hardly fair to ask the House to pass a measure of this importance at one sitting. The Minister has certainly made a very good case for the Bill, but he has not made a case which would justify asking us to rush it through at one sitting. Nobody will deny that it is a good thing to utilise the Post Office Savings Bank funds to save the ratepayers of Dublin from the exorbitant interest they are paying on present loans. That is a laudable thing, and would certainly get the support of this House, but again I say that it is not fair to the House to come in with a measure of this kind and ask us to pass it right away. Senator Sir John Keane suggests that the measure should operate for one year only. The principle contained in the Bill is new; it is an experiment; at the end of a year we would all be much wiser on the subject. The case made for rushing the Bill is based on the position of the Dublin Corporation. Well, that would be met by passing the Bill and giving it a life of one year. After a year we would be in a much better position to judge the matter, and I certainly hope that we would get more time to consider it at the end of the year. I think the amendment proposed by Senator Sir John Keane is a reasonable one.

Liam O Buachalla

The question of facilitating the Dublin Corporation in this matter is an important one, but in my opinion it is not the all-important one. The position of the funds of the Post Office Savings Bank has been somewhat of a burning question for many years. Long before the Banking Commission was established many people argued that it was unreasonable that those funds should be restricted to such a limited number of openings. During the Banking Commission's proceedings the question was fairly thrashed out, and following the issue of the commission's report very many people still raised the question as to why a wider field was not opened up for the investment of those securities. I can see quite clearly that Senator Sir John Keane, speaking for the bankers, would be somewhat uneasy. Naturally, they do not like to see anybody entering into their field.

Sir John Keane

On a point of order, surely my amendment is confined merely to limiting this Bill to one year?

Liam O Buachalla

I quite agree that the aim of the amendment is to restrict the Bill to one year, but I am arguing that the principle is so sound that there is no reason why it should be limited to one year. The purpose of the Bill is to widen the field for the investment of those securities—to enable the securities of certain well secured authorities to be available for the investment of those funds. That is a simple issue. Whether or not people are capable of appreciating that issue within a few hours, or within the time since this Bill was introduced in the Dáil, is not the question. As far as I am concerned, I have thought of it long enough, and I am convinced that it is quite time that this arrangement was come to. In effect, in this country certain institutions have dominated the monetary field. I am not saying that they have had a monopoly. I am not attacking the banks. Even here, I suppose nobody has been more generous in paying tribute to the work of the banks, and to the way they were conducted, but the authorities controlling those funds have had, in effect, one of their hands tied behind their backs. I think that is unfair to the fund, and unfair to the country.

Again, if the operation of this Bill —and I believe this is what is at the back of Senator Sir John Keane's mind—is likely to affect interest rates in the country, then as far as I am concerned I have no objection, because I do think that interest rates need some kind of overhauling. If this Bill acts in such a way as to bring certain authorities to their senses, and to cause them to bring their rates to something within reason, I think that is a further very strong reason why we should accept the Bill as it stands. The issue in the amendment is whether or not the Bill is to operate for 12 months only. The only argument which has been brought forward in favour of the amendment is that the Bill is one of short notice. Well, I think anybody who is interested in the matter must have been following the proceedings in the Dáil, and that is as good a preparation for consideration of the Bill as one could get. To that extent, it cannot be argued that the Bill is being suddenly forced upon us without reasonable notice. I should like to say much more on this question, but I quite understand that I would be raising issues which perhaps should not be raised on the Bill. I think I have said enough to indicate that it is unreasonable to ask the House, in view of the aim of the Bill, to restrict it to 12 months. The principle is so sound that it ought to be accepted without question.

Mr. Douglas

I am inclined to support the amendment, but only on the grounds that the Bill is being rushed. It would not solve the problem if we had another Bill in 12 months. It would be necessary to bring in a permanent Bill very much earlier. I am not altogether out of sympathy with what Senator O Buachalla has said. I certainly do not want to oppose the principle of utilising those funds for the benefit of the country. I certainly think it would be undesirable that they should be left solely to be invested in British funds. The only point on which I do not agree with him is that because the principle of the Bill is right it is not necessary that adequate time be given to consider it. On the contrary, it seems to me that that is the kind of Bill on which full time should be taken. The Senator also said that those who are interested in the Bill would have been following the proceedings in the Dáil. As far as I am concerned, something went wrong with the postal arrangements yesterday; I did not get my copy of the Dáil Report until this morning, after I had started a series of engagements. Consequently, I could not even look at it until lunch time, and I have not been able to follow the proceedings. I do not think that is a sound reason why the Bill should be made a Bill for a year, but I think when the Government finds it necessary to bring in a new principle in a hurry—because this Bill was rushed in the Dáil as well as in this House—it would be a good thing to limit the operation of the Bill in order to allow for adequate discussion. To my mind, that is the whole case for the amendment.

Mr. S.T. Ruane

Personally, I know very little about this business, but I really think there is nothing unreasonable in the amendment proposed by Senator Sir John Keane. If the acceptance of that amendment would in any way tie the hands of the Government, as Senator O Buachalla suggested, I should like to know in what way. I think, to use Senator Foran's argument, that after a year we will all know more about this matter. I do not think the acceptance of the amendment would in any way impair the efficacy of the Bill or interfere with the purpose for which it has been drafted and introduced. Personally, until I hear a stronger argument than that advanced by Senator O Buachalla, I would support the amendment.

Mr. Aiken

I wonder what the legal position would be if the Seanad passed this Bill for a year, and if in the meantime it was thought advisable to invest some of the Post Office Savings Bank funds in new stock issued by the Dublin Corporation?

Mr. O'Dea

That is the trouble.

Mr. Hayes

Would not the legal position be that the matter had been properly done and that the loan would be legal? Does the Minister suggest that there would be something wrong about that? Surely not.

Mr. Douglas

Surely, we have that again and again when an Act is repealed. The repealing of an Act does not make wrong or illegal the things done under that Act.

Mr. Quirke

This Bill has been under discussion for a considerable time in the other House, and no reasonable argument has been put up here as to why the Bill should not be passed. The only argument that was put up here to-day was that it should not be rushed through. If there is anything wrong with the Bill, then we should not pass it at all, but if there is nothing wrong with it, the question of rushing it through does not hold water. The suggestion made by somebody was that it should be held over for another year, and the proposal in the amendment is that the Act shall continue in force for another 12 months and shall then expire, but I do not think it is fair to the Minister to ask him to do so, if there is nothing wrong with the Bill.

Mr. Hayes

May I say, Sir, that if we are to adopt Senator Quirke's principle, that because a Bill has been under discussion for a considerable time in the other House it should be passed by us, it means that whenever it comes to our turn to debate a Bill we should pass it through without discussion? I do not think that the Senator means that, but that is what is implied by what he has just said.

Mr. Quirke

No.

Mr. Hayes

Senator O Buachalla, Senator Quirke, and Senator Douglas agree with the principle of the Bill, and so do I—I do not know about Senator Sir John Keane—but it is not true to say that the Bill has been under discussion for a very considerable time, because it has not. It was discussed at great length in the Dáil on Second Reading. The Minister then asked to be given the further stages, but did not get them because it was suggested by a member of the Front Opposition Benches that they might want to put down amendments, and therefore he wanted the later stages to be postponed. The Minister, to give him his due, agreed to that procedure, but the result was that it was not until yesterday that I could get a copy of the debates. As Senator Douglas has pointed out, something went wrong in the post, and the report of the Second Stage only reached me last night. As a matter of fact, whatever may be thought of it, I read some of it in bed last night; but it seems to me that we should be given more opportunity to discuss it. There was a very wide range of discussion in the other House, whereas, so far as we are concerned, we only get the Bill to-day.

Now, because of the nature of the Bill and the anxiety of everybody here, irrespective of Party, to facilitate the Minister to get the Bill through before the 1st January, we are anxious to pass it. We do not want to hold it up and I, personally, would have voted for the Committee Stage to be taken to-day in order to facilitate the Minister. The only thing that we do think necessary is that the principle involved, as well as other things that may be involved, should come up for discussion here, and the only method by which we can do that is, unfortunately, by restricting the operation of this measure to one year. I do not know of any other method by which we could do so. If I knew of any other method, I should be glad to avail of it, and it is only for that reason that we advocate the acceptance of this amendment.

It must be remembered that the Bill was brought in in the Dáil on the 5th December and discussed there for two days on Second Reading, and that the remaining stages were taken a week later, and now it is brought in here and we are asked to pass it, practically without discussion. Now, since 1922 I have been in the habit of seeing Ministers of various Parties bringing in Bills, to this House or the other House, and invariably the Bill is always an urgent Bill. I do not want to be offensive, but it would seem that Ministers, irrespective of Parties, always happen to bring in Bills which, somehow or other, for excellent reasons, they must have to-day. Apparently, the moment you become a Minister you have this marvellous case: that here is a Bill, that it is a good Bill, and that you must have it to-day. All that is suggested here is that the matter must be discussed again before the expiration of 12 months. I do not think that what the Minister suggests would happen: that the Bill would not be passed in 12 months' time. I think that it would certainly be passed, but one would be given an opportunity of discussing its implications, and I think it would be a good thing if this House could be afforded the opportunity of discussing the Bill with the same width and scope as was afforded in the Dáil. I am not anxious to have it held for 12 months, but with all the considerations involved I do not see any other way of doing it, nor do I see, except for whatever extra printing might be involved, that there would be any particular difficulty in doing so. I admit that this amendment is not a very satisfactory one but, in all the circumstances, it would help us to do our job. I should like to conclude, Sir, as I began, by saying that it would be a very bad thing for this House and the Legislature of this country if we were to accept the suggestion of Senator Quirke that when a Bill is brought in here, after it has been discussed at some length in the other House, we should pass it without discussion.

Mr. Aiken

May I say, Sir, that I do not want this Bill until the 1st January? I tried to suggest to the Dáil that we should be given all stages of the Bill earlier in order that the Seanad should have a better opportunity of discussing it, but some members of the Dáil asked that the Committee Stage should be postponed for a week in order that they might have an opportunity of putting in amendments, and I could not see how I could ask the Dáil to deny themselves the right of having it postponed for a week. That is the reason for the delay in bringing it in here. As far as I am concerned, if the Seanad wants me to consider or discuss the Committee Stage later on, I would be quite happy to come along and discuss it, but I understand that the Dáil is adjourning to-day, and that means that if we pass any amendments here to-day, I do not know where we would be in the matter. As members of the Seanad know, if amendments to the Bill are passed in this House, I shall have to go back to the Dáil and ask them to consider these amendments. I should like to examine carefully the question, and see whether or not this would continue or affect legal investments that are made in the coming year. I am not a lawyer, but my recollection is that in Bills of a temporary nature sections are often included which provide that whatever is done will continue afterwards. I do not know whether Senator Sir John Keane's amendment fulfils that or not. I am not sure.

Liam O Buachalla

If the point at issue is that certain Senators would like more time to consider the implications of the Bill, there does not seem to be any reason why the Bill should not be allowed to go through as it is, and then, during the coming year, those interested in the matter could watch its operation and its remifications. If, after such study, it occurs to them that this Bill requires amendment, why could not such amendment be sought for by means of a motion tabled here and discussed? In that way, these people would achieve what they want to achieve, instead of by now inserting this amendment limiting the operation of the Bill to 12 months.

Mr. Foran

There is one reason why I should like to see this Bill limited to a period of 12 months. It might be possible, as a result of the experience of 12 months' operation of the Bill, to enlarge and widen the scope of this matter of interest on loans for public bodies throughout the country. I have in mind the funds of certain Irish trade unions. They are restricted in the field of investments, and from the experience of the working of this Bill over 12 months, it might be found that an opportunity would be afforded of availing of the provisions of the Bill to increase the field or scope for their investments. As Senators know, certain Irish trade unions are very restricted and very limited, in the words of the Minister, in this matter of investment, and are inclined to look outside the country for fields of investment. When I say "inclined" I do not mean that they do so as a rule, but they may still be forced to look for investments outside instead of putting their money into investments here that they would like to put them into. That is one reason why I think that we ought to give this Bill an opportunity of operating for one year. Other causes for extending the operations of the Bill might then be found. I am aware that one union gave the use of £50,000 to the Government during the emergency free of interest. I think that spirit is there of investing funds at home so long as the object is for the common good of the country. That is the motive that inspires me to object to the amendment.

Mr. Ryan

I do not know the reason why Senator Sir John Keane requires 12 months to consider the implications of this Bill, but I say that it is most unsatisfactory and wrongful to introduce temporary legislation giving authority for the investing of public moneys. Section 2 of the Bill empowers the Post Office Savings Bank to invest money in any one or more of the stocks to which the section applies. The section says:—

"State moneys may be invested in any one or more of the stocks."

It may well be held that the words "may be invested" would mean "may continue to be invested", so that at the end of 12 months, if another Act should not be passed, these investments would no longer be authorised by law. Accordingly, I think whatever Bill should be passed should be of a permanent nature. I do not know of any Act of a temporary nature which has been passed, authorising the investment of moneys in trustee securities. Furthermore I think a temporary measure giving authority to invest funds would only produce insecurity and anxiety in the minds of local authorities, which might be called upon to repay these moneys to the Post Office at the end of 12 months. I may be wrong in all that, but the fundamental principle is, that legislation giving authority to invest funds in certain securities should not be of a temporary character. For these reasons, I oppose the amendment. It may be possible by some amendment to secure that the redemption of Dublin Corporation stock could be effected in other ways. If Section 2 were deleted, and if Section 3 were allowed to remain, the redemption of Dublin Corporation stock could be effected by this measure. The Minister mentioned another difficulty, that the Dáil intends to rise to-day, and if so it leaves this Bill on our hands, as it left several Bills last July. For that reason it might be difficult to amend the Bill if it is required on January 1st. On the question of passing temporary legislation on financial matters, I think it is improper and for all these reasons I oppose the amendment.

Sir John Keane

I am not a lawyer but I fail to see why anything done under this Bill during its currency will not be perfectly legal.

Mr. Ryan

I never said that, but spoke of when it expires.

Sir John Keane

When it expires the Government will bring it in again.

Mr. O'Dea

Senator Ryan said everything that I intended to say on this measure. I believe the position would be very insecure and that local authorities would hesitate before taking a loan under a Bill passed for 12 months. People invest money in the Post Office and there is a contract between them and the Government. There is a change and the change continues only for 12 months. What is to happen at the end of that period? Senator Sir John Keane says that another Bill could be brought in. That is so, but what guarantee have local authorities which are borrowing that the other Bill will be passed into law? Is the Senator entitled to assume that a new Bill will be passed making the law valid and continuing the loan for 35 years or whatever period is fixed? It would be most unsatisfactory to have that position. If legal advisers of local authorities had any doubts, they would advise local authorities not to go to the expense of taking a loan from these funds. It would be dangerous. With regard to what Senator Foran said, I think it is a Trustee Act we would have to pass to provide for loans.

Mr. Hayes

I wonder if a layman could intervene in this matter? Surely there is always the theoretical danger that an Act will be repealed. If this Bill became an Act to-day, if it were in operation, and if by some peculiar aberration those in office wanted to repeal it, they could do so without prejudicing what had been done.

Mr. O'Dea

A clause is always put in that everything done was rightly done.

Mr. Hayes

Not always. They could repeal this Bill when it becomes an Act and leave the loans to bear interest. That is a common procedure. Nobody suggests that any Government in its senses would repeal an Act of this kind and leave a loan floating in the air.

Mr. O'Dea

There is a wonderful difference. Every Act can be repealed but nobody is entitled to assume that it will be repealed. An Act is presumed to continue for all time. It is different where you have a Bill which is tied down in its operation to 12 months. Nobody is entitled to assume that a new Act will be passed.

Mr. Kingsmill Moore

Everybody knows that Parliament can do everything except to make a man a woman or a woman a man. It can readily provide that anything done shall remain good, and it can also provide that anything that has been done was completely bad. Whatever is enacted to-day will be reversed to-morrow or if wrongly enacted it can be made good to-morrow. In this matter we have gone into purely theoretical things. I have no views as to whether the amendment should be passed or not. I want to get rid of the air of unreality which crept into the discussion until it was brought down to earth by Senator Hayes. As a lawyer I should like to support his remarks as being those of a common-sense layman.

Mr. Ryan

I do not think that I made myself clear to Senator Kingsmill Moore. It is, undoubtedly, true that if something has been done and completed under an Act which has been repealed, then that act is good and valid, but if there is continuous operation under an Act and the Act is repealed, then that continuous operation comes to a sudden end. In this case, the authority to invest money in the stocks mentioned in Section 2 comes to an end. Therefore, the investment is no longer authorised in law. The authority to continue the investment will come to an end automatically in 12 months. By limiting the operation of the Act to 12 months, you merely give authority to invest and continue the investment for 12 months.

Sir John Keane

There is no harm in that.

Mr. Sweetman

I confess that I am still more confused by Senator Ryan's last explanation. However, I do not want to deal with the legal aspect at all. I want to put a few questions to the Minister. I should like to know what rate of interest it is proposed to charge, because that appears to me to be very relevant to the entire Bill. The reason I want to know that is because I think that the present Local Loans charge of 4¼ per cent. is much too high. If local authorities are to expand their activities in respect of housing and other matters, that rate must come down. If the Minister will give us an assurance that the rate will come down from the Local Loans figure, I shall support the Bill. I want to know, in the next place why, if this is the very good principle which he says it is, it was only discovered by him and the Government on the 5th December, 1945, that it was a good principle.

Mr. O'Dea

That is an argumentum ad hominem.

Mr. Sweetman

I agree.

Mrs. Concannon

Most of the Senators who have spoken said that this was a good Bill. Accordingly, we must consider the effect of passing this amendment. If this amendment be passed, what will people think? They will not have read the speeches of Senators who said that this was a good Bill. The impression which will be left upon them will, obviously, be that the House is very doubtful about the Bill and is only prepared to give it a trial for a year. In that event, a great sense of insecurity will develop. No public authority would be advised by a sensible lawyer—Senator O'Dea has practical experience in this connection—to invest their funds on the strength of an Act which will have only one year of certain life. We do not know what will happen after that year. It would be very regrettable if this amendment were to pass. I have more confidence in the good sense of the House than to assume that such a thing will happen.

Mr. Summerfield

After listening to the various speakers, I have the feeling that, if the ratepayers of the city were present at the debate, they would not be unduly impressed by the suggestion that all the good features of this Bill should be called into question in a year's time. We all agree that one of the most pressing social civils with which we have to contend is the shortage of houses and the appalling slum conditions which obtain. One of the arguments used by the Minister in furtherance of the Bill was that, provided he gets facilities from the Legislature, as from the 1st January money will be made available to Dublin Corporation at a lower rate of interest than that which they are paying.

Mr. Sweetman

Not for housing. He did not say that.

Mr. Summerfield

If the corporation get the money, they can use it for housing, if they wish. The city will have money for its purposes at a cheaper rate than it is paying and the ratepayers would be far more concerned with the fact that their burden will be lightened than by the specious arguments adduced for limiting the period of operation of this Bill to 12 months. The Minister has said—and I am impressed by his statement—that we would have had this Bill earlier if he could have had his way. As a practical business man, I join with Senator Kingsmill Moore—this is the first time I have found myself in agreement with him—in his plea that we come down from the clouds and deal with the realities. What are the realities of the case, as put before the House to-day? On the one hand, the Minister wants to be given power to do something within a certain time, his time being limited. On the other hand, the House is asked to give him that power for no more than one year. I am not impressed by the desire to limit the time and I hope the amendment will not be passed.

Mr. Aiken

In answer to Senator Sweetman, the rate of interest will not be 4¼ per cent.

Mr. Sweetman

It will not be as much as 4¼ per cent.?

Mr. Aiken

No. I am not a lawyer, but I know that, when a permanent Act is being repealed, care is always taken to insert a provision that nothing done under the Act would be capable of being called in question from the legal point of view after the repeal. In the case of a temporary Act such as is contemplated by this amendment, unless you inserted a clause declaring investment in long-term loans permissible, I should have doubt about the advisability of engaging in that form of investment. Apart from the question of law, the Minister for Finance is trustee for deposits placed in the Post Office Savings Bank. The depositors make their deposits under certain conditions and we publish a list of the investments in which the funds of the bank have been placed. I have been described as "Sir John Keane's slave" but if I were to accept this amendment I should be known as his "ticket-of-leave" man, because I might be called back at any time. There seems to be no reason for this alteration.

Amendment put and negatived.

Sir John Keane

I move amendment No. 3:—

Before Section 3 to insert a new section as follows:—

After the passing of this Act there shall be submitted to the Oireachtas each year formal accounts of the Post Office Savings Bank, including a balance sheet, made up as at the previous 31st December, and duly audited by the Comptroller and Auditor-General.

I hope the House will realise that I am under a very considerable handicap as regards these amendments. I trust that I shall not be held blameworthy for the amateurish character of the amendments but that the Minister will bear the blame. It reflects great discredit on the Legislature when we get this rushed legislation. I learned only this morning that we were to take all stages of this Bill to-day.

I do not profess to be competent to draft an amendment of a character which will stand legal scrutiny. In ordinary deliberate legislation we have a Committee Stage where the principle of amendments is discussed, and where, if the House and the Minister favour the legislation, it is referred to the Parliamentary draftsman. In due course legal amendments are brought forward, and ultimately embodied in the legislation. That is why I consider the whole thing most unsatisfactory, and I hope the Minister realises it is most unsatisfactory.

Here I have an amendment which I am prepared to justify up to the hilt. The principle in it is recommended by the Banking Commission. The Banking Commission examined the whole principle of these Savings Bank deposits, and it recommended that there should be a proper profit and loss account embodying the income and capital of these deposits. The Minister will tell you that the securities held against these deposits are set out. That is something, but I submit it is totally inadequate.

Look at it this way. There is an obligation to pay 2½ per cent. on post office deposits. What assurances have we now, especially with falling rates of interest, that these deposits are earning 2½ per cent? Interest rates are falling every day. Money is getting cheaper and cheaper. It is more than conceivable that we may drift into a position where these deposits fail to earn 2½ per cent., and where the State will be called upon to subsidise the Savings Bank deposits. Has not Parliament a right to know, and has not Parliament a right to demand that the Savings Bank rate of interest should then be reduced? As it is now, we do not know that, and, therefore, we should have a proper balance sheet and profit and loss account. That is the object of this amendment.

I admit that it may not be a fully legal amendment. If it is not, I think the Minister ought to take it away this afternoon, and refer it to the Parliamentary draftsman, and bring it back in a form which satisfies the draftsman. Then let it be put into this Act. It was partly because I had that in view that I wanted this matter held up for another year. I submit we should not calmly acquiesce in a position where we may be unconsciously subsidising out of revenue 2½ per cent. interest on post office deposits where they are not earning that amount on the investment of the deposits. Therefore, I move this amendment. I have the recommendation of the Banking Commission, and in all conscience it is common sense and financial prudence.

Mr. Aiken

At the moment, the Comptroller and Auditor-General examines the accounts of the Post Office, and if Senator Sir John Keane would look at the Appropriation Accounts he will find some reference to them. He will find for the year 1943-44 that the Comptroller and Auditor-General had a paragraph in his report stating that he had the accounts of the Post Office Savings Bank for the previous year submitted to a test examination, with satisfactory results.

Apart from that, the Post Office Savings Bank does something which the ordinary commercial banks do not do. That is, they publish a list of their investments and anybody who is interested in it can get that publication of the exact investments and the exact amount which is being invested from the Post Office Savings Bank Fund. That is available to the ordinary person for two pennies at the Stationery Office, and is circulated free to members of the Oireachtas in the Library. I do not think there is any necessity for this amendment. I had not time to go back to examine the arguments put forward by the Banking Commission, in the old days, in the far away days, before the recent war, but I certainly think there is no necessity for it at this moment.

Mr. Summerfield

If I thought this amendment could achieve the effect it is designed to achieve, I would support it as a business man. We all know that figures can be made to paint various pictures, but why should the examples suggested in the amendment not be followed in each of the various departments of the Post Office and other revenue-earning Departments? I do not impute any ulterior motives to the Department, but because of the way figures can be portrayed, I frankly do not think it will give us very much help.

While I am on my feet, I must say that I was intrigued by the very positive statement made by our esteemed banking Senator, that interest rates are falling every day. As a business man, I have not found any evidence that money is getting cheaper. I only wish Senator Sir John Keane could tell us where it is available at cheaper rates.

Mr. Quirke

And when.

Mr. Douglas

The Minister's speech puzzles me. He says that for twopence a member of the public—free to a member of the Oireachtas—can see the Report of the Comptroller and Auditor-General on the Post Office Savings Bank investments. He did not tell us why it would not be a good thing to have a balance sheet as well. I was almost surprised that Senator Quirke did not say at once that this is such a good principle that we can pass it without further examination. He suggested that about the Bill, but evidently, he did not apply it to the balance sheet. The plain truth of the matter is, as was hinted by Senator Ryan, this is a Bill we are presented with—take it or leave it, and if we are not prepared to pass it, defeat it. That is the old practice again, the practice which got our backs up when it was used in the past. We are not willing to try a 12 months' experiment. I would take complete exception to the veiled suggestion of Senator Summerfield that a balance sheet presented by the Auditor-General could easily mislead.

Mr. Foran

I do not think it would mislead. I think that Senator Summerfield mentioned a business man's balance sheet.

Mr. Douglas

I thought he was speaking to the amendment which asked for the presentation of a balance sheet audited by the Comptroller and Auditor-General. He may not have meant it, but he seemed to think that a balance sheet might be a misleading one. My opinion is that it would be a healthy thing if more of our Government accounts were made up in the form of balance sheets. Whether it would be in the form of a trade union balance sheet or a business man's balance sheet, it would be a good thing for democracy generally to be able to see whether there was a profit or a loss.

That is done to a certain extent in the Post Office—having been chairman of a Postal Commission I know it—but it does not give any figure showing that the Post Office as a business concern has made a profit or not. I am in favour of a balance sheet in all matters which involve trading. That applies to a certain extent to the Post Office Savings Bank. As I say, I am glad that Senator Sir John Keane has raised this question of publishing a balance sheet. I think the principle is a good one but our hands are really tied and there is no use in going further at the present stage.

Mr. Summerfield

May I say on a point of explanation that I was concerned only with the difficulties of apportioning the relative costs in any particular year? I did not intend to convey that that was done with any object of misleading anybody.

Liam O Buachalla

One of the difficulties arising in connection with the amendment would be whether the Post Office organisation could really be regarded as a trading organisation or not in the sense that the banks are trading organisations. Incidentally, I may remark that if an organisation like the Post Office Savings Bank or the trustee savings banks were to be compelled to publish detailed reports of their investments, one might equally argue with greater energy that the ordinary banks should be made to publish similar things. In this case it seems to me that a balance sheet can not be published—at least a balance sheet in the strict sense of the word. It would be something akin to those sinking funds or pension funds in relation to which the most one can expect is that every year or five years one would get a valuation and leave it at that. I do not think there is any point whatever in the amendment so far as this particular organisation is concerned.

Sir John Keane

We are all, of course, entitled to our opinions, but if ever there was a case where a proper bona fide balance sheet could be prepared this is one. Agreed that in cases of certain Government activities it may not be done but here we have a perfectly straightforward case. We have the accrued liabilities, and the depositors; we have the capital, we have the known investments and their valuation, so that a commercial balance sheet on all fours with the balance sheet one might get in any commercial undertaking or bank could be prepared. I put my opinion on that to any commercial auditor as against that of Senator O Buachalla, although I believe he is a professor of economics. I say that we as guardians of public money ought to ensure that we are not drifting into a position where we are allowing the State to subsidise Post Office depositors. That is what they are going to do unless we insist on proper commercial accounting and a balance sheet. This document costing two-pence—I do not know why the Minister stresses the twopence so much— is valueless for that purpose. The Banking Commission, who after all were experts, went into this matter and recommended commercial accounting. They also recommended—and the Minister might direct his attention to this matter—that the bank should be put into a statutory position and should get a recognised status. Perhaps now that the Minister is extending the activities of the bank, he might address himself to this question and give this bank something more than the name of a bank—give it a statutory position. Perhaps the Minister might also tell us is there any limit on the amount of the assets of a more or less fixed character that he proposes to invest in the funds of these local authorities. I take it that he is going to retain a fairly high percentage of liquidity in the funds of the Post Office Savings Bank. I think it is deplorable that the House does not realise the importance of having businesslike accounts where businesslike accounts are feasible and where they are recommended by experts who went into this whole question.

Mr. Aiken

Lest anybody might be led astray by Senator Sir John Keane's speech I want to say that the public have available, and there is presented to the Oireachtas every year, accounts of deposits received and paid during the year, together with a statement showing the aggregate amount of the liability of the Government to depositors in the Post Office Savings Bank and the amount of the securities held by the Minister for Finance to meet liabilities at that date——

Sir John Keane

And the valuation of the securities?

Mr. Aiken

——the account for the year showing the interest accrued and the securities standing to the credit of the Post Office Savings Bank fund, the interest paid and credited to depositors in pursuance of the Acts relating to the Post Office Savings Bank and the expenses incurred in the execution of these Acts. I do not know how much further Senator Sir John Keane and the members who signed the recommendation in the Banking Commission Report want us to go. I only say that people have, in relation to these funds, information which they could not get in relation to commercial banks. If we are going to go into that whole question I think we should not confine ourselves to the Post Office Savings Bank but that we should go into the whole matter of how far there should be publication of investments of one kind or another. The Post Office Savings Bank was set up under statute. It is an old statute of 1863 or thereabouts but it is still continuing and the bank has a legal status. It publishes a statement of its receipts and liabilities which is duly examined by the Comptroller and Auditor General. It is also certified by the Accounting Officer of the Department of Posts and Telegraphs and the Department of Finance comes into it too, because it is signed by the Secretary of the Department of Finance. In addition the accounts are subject to examination by the Comptroller and Auditor General.

Amendment put and declared lost.

SECTION 3.

Question proposed: "That Section 3 stand part of the Bill."

An Cathaoirleach

There is a notice by Senator Sir John Keane of intention to oppose the section. We will deal with that on the question: "That the section stand part of the Bill."

Sir John Keane

I move to delete the section. My approach to this amendment is of a different character. I move the amendment, if I may say so, more in sorrow than in anger. Since the State was formed, this is the first occasion, so far as my experience goes —and it is a pretty long one—in which the Government has deliberately invaded without any previous consultation, the accepted and legitimate province of the joint stock banks. Hitherto, this matter of short-term finance has always been recognised as the legitimate function of the commercial banks. I do not say that it should always be so accepted. If it could be proved that the banks have not been co-operative, if the banks have not recognised their responsibilities, if the banks, after due approach, have failed to appreciate their responsibilities, then other parties should perhaps do the work that the banks have hitherto done. But in this case there is no question of that kind. If we look back over the history of this State, it will be seen that there have been two deliberate and expert inquiries into the banking system. The banks have come through those inquiries with high commendation. I may be said to speak with bias, but I think any fair-minded man is bound to say that the banking system has served the State well. It is not in accordance with the traditional practice of our rulers that the first the banks should know of this invasion of the functions they have always hitherto enjoyed is the introduction of a measure of this kind. If the banks were to be treated according to traditional practice, they should have been told that the Government were not satisfied with the way they had behaved. This savours far more of the methods we have been seeing for years past in other countries—totalitarian countries. As I said, I moved this amendment more in sorrow than in anger. It does not make for true co-operation between all sections of the State that a measure of this kind should be suddenly introduced without notice.

I do not think there is any reason for me to elaborate. I have said all there is to be said. I feel that the banks have always done their work, and done it well, and that they are prepared to do it again and to do it as well as they did it in the past. The Minister made certain references, veiled references, and I am afraid I cannot follow him there. I know, of course, a good deal more than he referred to. I am not in a position to state all I do know, and I do not think he would expect me to state all I do know. I think what I have said is a fact, that there was no previous consultation either with the banks or—the Minister will correct me if I am wrong —with the monetary authority before such a drastic departure from tradition was made in this matter. I do not think I can usefully say any more at the present time.

Mr. Sweetman

I should like to get this subject quite clear. I do not know whether or not I am entirely misreading the section, but it appears to me that this section is to give the Minister power to make not short-term loans but long-term loans out of the Local Loans Fund. I think there might have been perhaps more justification for saying that the second section was more a transitory section, dealing with short-term investments. I should like the Minister to make clear beyond yea or nay what the section exactly means, because as I read it first—perhaps I am entirely wrong—I thought it referred to long-term loans from which the banks were not exactly prohibited but against which they were very strongly advised by the Banking Commission.

Mr. Aiken

In reply to Senator Sweetman, I should say that under Section 3, which is being discussed at the moment, the Minister for Finance may at his discretion lend money to a local authority for the purpose of redeeming stock. If you are going to lend money to a local authority for a long time, out of the Local Loans Fund, it would be by way of long-term local loan. This will enable us to make short-term advances. We have the power at the moment to make long-term advances, but not for the redemption of stock. Under Section 2, it is proposed that if we want to invest moneys directly in the trustee stocks of local authorities it would be done in stocks which were issued publicly by the local authority.

Mr. Sweetman

The Minister has not got the power at the moment to lend money to a local authority to pay off any stock?

Mr. Aiken

No.

Mr. Sweetman

Whether it is long or short-term?

Mr. Aiken

That is right, but under this we will have power——

Mr. Sweetman

To do both?

Mr. Aiken

——to make advances for the repayment of stock after the first repayment date, after they have given notice, in such a case as the 5 per cent. loan of the Dublin Corporation. In regard to Senator Sir John Keane, I do not want to follow him into this whole question. I am quite prepared to co-operate with anyone in the country, no matter who it is, so long as he will co-operate with me for the general interest, and I am hoping that we will be able to get co-operation between Senator Sir John Keane and myself for the general good of the country.

My general attitude in regard to the interest rates, as the Senator has raised the matter, is that our people are entitled to get money on no worse terms than neighbouring countries which are not in as sound a situation. We have here a country which, under the grace of God and the good sense of our own people, kept out of the disaster which has occurred. We have a very small dead-weight debt in comparison to our national income. It is only a fraction of it. In other countries not so far away their dead-weight debt is many times their national income, and my belief is that we should be able, for the purposes of building up this country, to get money at the same rates as neighbouring countries are getting it. I believe that the Dublin Corporation, for the purpose of building the houses which are so very badly required, should get money at reasonable rates of interest. I hope I get the co-operation of all concerned in achieving those things. I am too old to go looking for rows, but the long-term interests of this country depend upon our building it up quickly and building it up on a satisfactory basis. If we were to build it up, or to attempt to build it up, on an interest structure or interest rates that are very unfavourable as compared with those of neighbouring countries, the net result would be that our people would be attracted to help in the building up of other countries instead of this country. We want to provide opportunities for our people to use their energies to build up this country, and I hope that we shall have the co-operation of all concerned in seeing that the local authorities will be facilitated in offering remunerative employment to our people so that they may stay at home. That depends in some measure on the interest rates involved.

There are, of course, other factors that we must not overlook. There is also the factor of what the employers and the workers are prepared to do. There is no use in getting very cheap money for houses if either the master builders or the employees decide that they are going to take a very much bigger slice of the cake than they have been contented with heretofore. I hope to get the co-operation, not only of people with money, the commercial banks and others, in getting money at the right rate, but also the co-operation of the trade unions and the master builders, with a view to providing houses and seeing that everybody will chip in and do his share of the work to provide our people with houses at a reasonable cost. If we do not provide houses at a reasonable cost, somebody has to bear the burden. We may, by means of subsidy, take the burden off the actual incoming tenant, but by doing so we distribute it over the rest of the community. We must face that, and if we want the community, as a whole, to prosper, the less of such burdens we put on their backs, the better.

The Minister for Finance has many demands for the development of social services, but the fundamental and true basis on which the country can distribute more in the line of social services is by getting more produced. You cannot distribute things that are not there, and all our energies should be devoted to seeing that everything that the nation requires for a higher standard of life is produced at the cheapest possible rate. Again, I want to say on that, that it depends on three things: that there are at least three factors in it, one of which is the rate at which capital is forthcoming, and, equally important, the rate at which people employed upon this matter are prepared to work, both the master and the employee, and I hope that, as materials become available, they will all cooperate to build up our country and give the people of our country public health facilities, and produce more from their factories and from their farms so that, as time goes on, we can raise the general standard of life of our people as a whole, and, if it is necessary, guarantee a higher standard of life for everybody.

Sir John Keane

I do not propose to embark upon a very wide discussion on this question of rates of interest, but I feel that I must say something in reply to the Minister. It seems to me that the Minister rather suggested that the banks should be the source of credit, but I think that if he goes to any accepted authority he will be told that that is wrong and unsound finance. Borrowing from the banks is the most dangerous and the readiest source of inflation. The sound method of borrowing is borrowing from the savings of the people, and at what rate does the Minister think he can borrow from the people? That, I think, is a fairly good test, and it is afforded by the price of existing securities. Whether that price is good or not is a matter of opinion; but it is doubtful if the Minister could make a long-term issue at less than 3 per cent., and that is about the same rate as prevails across the water. I think that the long-term rates are pretty much the same in the two countries, but when you come to short-term rates, it is a very different matter, and that is where the banks come in. Now, let me develop that. I think that the Minister saw the other day where certain short-term borrowings were effected across the water at a very big reduction. I think I am correct in saying that the Chancellor of the Exchequer made certain short-term borrowings at five-eights per cent., but mark what happened; the deposit rates in the bank dropped immediately by ½ per cent., and all deposits in current accounts stopped straightway. Now, there are certain difficulties in applying a remedy here that would apply across the water. After all, the banks must be allowed to manage their own business. If it were suggested that such a rate as applied in England should be applied here, I feel, speaking as an individual, that the banks here would not be able to apply the same remedies as were applied on the other side. There are certain difficulties in reducing the deposit rates in this country, and the banks must be left free to deal with them. I shall not go further into that matter, but I say that that is why the banks here should not be held to the same short-term rates as apply across the water.

Mr. Aiken

I do not want to go into this matter again at any length, but the people in this country will certainly want to know why they cannot get short-term loans at the same rates as they can be got in England. I could not explain that, if I were asked, and there would be no excuse for it. Financially, our resources are as sound as those of the British State or any other State, and we are entitled to get as good a service from our bankers as the British people got from theirs. We are entitled to get short-term rates, if we want them, at the same terms as they can get them. There are very many more expedients, if we want to go into them, that the banks could adopt here for cutting down expenses rather than the deposit rate. It is true to say that in relation to the amount of their deposits, the majority of the banks operating here make twice as much per £100 of their deposits as their confreres in England do. That being the case, and looking at it from that point of view, this community, if it wants short-term accommodation, is entitled to get it at no worse terms than the British Government get it, and I do not believe that our people would stand for one minute for any higher rate. I would not ask them to do so.

Sir John Keane

With your permission, Sir, I shall withdraw the amendment.

Amendment, by leave, withdrawn.

Sections 3 and 4 and Title of the Bill put and agreed to.

Bill reported without amendment.

Question—"That the Bill be received for final consideration"—put and agreed to.

Question—"That the Bill do now pass"—put and agreed to.

Bill ordered to be returned to the Dáil.