Seanad Éireann debate -
Wednesday, 19 Mar 1947

Vol. 33 No. 14

The Industrial and Life Assurance Amalgamation Company, Limited (Acquisition of Shares) Bill, 1947 (Certified Money Bill) — Second and Committee Stages.

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

Minister for Industry and Commerce (Mr. Lemass)

In 1938 there was an Act passed by the Oireachtas to make certain provisions regarding the conduct of industrial and life assurance business here. Under that Act two companies were established: The Industrial and Life Assurance Amalgamation Company, Limited, and the Irish Assurance Company, Limited. The first of these companies—the amalgamation company—was set up for the purpose of taking over the business of various Irish and British assurance companies then in existence which had agreed to transfer their assets and liabilities to the amalgamation company. There were five British and four Irish companies concerned in the amalgamation. The Industrial and Life Assurance Amalgamation Company, Limited, had an authorised share capital of £200,000, divided into 2,000,000 ordinary A shares of 2/- each, and 100 B shares of 2/- each. The 100 B shares alone carry voting rights, and are held by the Minister for Finance, thus giving him complete control of the company.

When the amalgamation was carried out, the companies that transferred their business to the amalgamation company were not given any cash consideration for the transfer but were awarded, each of them, a share in the equity of the company, the proportionate share of each participating party being determined, in accordance with the agreement that they had made, on the basis of their ascertained premium income and the degree of solvency of their funds. In accordance with the provisions of the 1938 Act, the Minister for Finance had to make good any deficiency in the funds of the participating Irish companies. When that deficiency was ascertained, the Minister subscribed to the funds of the amal gamation company the prescribed amount and received, in return for his contribution, 191,051 of the A shares of the company. In addition to the terminating company, there was also established, as I have said, the Irish Assurance Company, a public limited liability company set up for the purpose of taking a transfer of the staffs of the participating companies and the goodwill of any new business of the amalgamation company. That company's authorised capital is £200,000, divided into 200,000 ordinary shares of £1 each, all of which were issued and taken up, as arranged, by the amalgamation company. The position, therefore, is that there are two companies in existence, following the implementation of the provisions of the Act of 1938—the amalgamation company, which is controlled by the Minister for Finance by reason of his holding of the voting shares, and the Irish Assurance Company which is, in turn, controlled by the amalgamation company.

It was arranged that the amalgamation company should confine itself to taking over the business then existing of the participating companies and working off that business as a closed fund, after which it was contemplated that the company would be liquidated and its surplus assets divided amongst its shareholders in proportion to their share holdings, the shareholders being, as I have indicated, the nine participating companies, each holding shares determined in accordance with the agreement to which they were parties, and the Minister for Finance. As the position worked out, the result of the arrangement would be that, when the amalgamation company was liquidated, the majority of the share holdings in the Irish Assurance Company would be in the hands of the British participating offices which at present own 72 per cent of the shares of the amalgamation company, the remaining share holdings being as to 9.4 per cent. by the participating Irish companies and 18.6 per cent. by the Minister for Finance. That position has been under consideration for some time. It was, of course, foreseen when the Act of 1938 was being passed that, eventually, the situation would arise with which we are now proceeding to deal.

It was always felt to be undesirable that the majority share holdings of the largest Irish industrial life office should be in external ownership. For the purpose of resolving that position, it was decided that an effort should be made to acquire the shares in the amalgamation company owned by the British participating offices. Negotiations were undertaken with the representatives of these offices and have been carried on for a number of years past. They have now resulted in a provisional agreement under the terms of which the British participating offices will sell their 737,984 shares to the Minister for Finance at a price of 3/- per share, involving a total payment of £110,697 12s. 0d. I have pointed out that the Minister for Finance has at present control of the two companies— directly over the amalgamation company by reason of his existing holding of the voting shares and, indirectly, over the Irish Assurance Company through its control by the amalgamation company. That control by the Minister for Finance would have disappeared on the liquidation of the amalgamation company but it will be permanently secured through his purchase of the British participating offices' shares in the amalgamation company.

This Bill is required for the purpose of carrying the provisional agreement into effect and to provide for the issue from the Exchequer of the agreed amount for the purchase of the British shares, £110,697 12s. 0d. I have mentioned that the distribution of shares in the amalgamation company amongst the participating offices was designed to achieve a proper assessment of the relative value of the business transferred by each office to the amalgamation company, the number of shares which each participating company got in the amalgamation company being determined in accordance with agreed rules to that end. It may be asked why these shares were given the nominal value of 2/- each. I have said that no cash consideration was paid and that the only compensation which the participating companies got in the amalgamation company by reason of the transfer of their business to it was shares in that company. Any nominal value could have been put upon those shares. The sole purpose of those shares was to determine the relative proportions of the equity of the new company which should pass into the ownership of each of the participating companies. It was of no importance what nominal value was placed upon the shares from the point of view of determining the compensation to be given to each of the participating companies. It was, however, considered to be of importance that these shares should have a low nominal value, because, by keeping the nominal value low, the goodwill item in the amalgamation company's balance sheet would be kept at a low figure also, and could, in course of time, be more easily eliminated. The actual value of the shares would be determined not by the nominal figure put upon them but by the value of the assets of the amalgamation company and it was considered that, in the course of time, this company, working a closed fund, would gradually get rid of its liabilities and finally reach a stage at which it would have assets only, at which stage the company was to be liquidated and its assets distributed amongst the participating concerns. It was contemplated then that, eventually, the actual value of those shares might rise to as high as 15/- each. When negotiations were taking place with the British offices for the purchase of their shares, the British offices put upon the shares a much higher value than the price at which it was, ultimately, agreed to purchase them. The agreement to transfer the ownership of those shares for a payment of 3/- per share was reached only after protracted negotiations. I am satisfied that the price is a reasonable one and that the agreement for the purchase of the shares at that price should be implemented.

I have said that, when the Act of 1938 was being considered by the Dáil, it was assumed that, when the amalgamation company had worked off all its business and had been liquidated, the control of the Irish Assurance Company, Limited, the company which is now doing new business, would fall into the hands of the shareholders of the amalgamation company, and that the interest of the Minister for Finance in the company would be limited to the extent of his share holding, namely about 18 per cent. of the total shares. This position, although foreseen, was not regarded as a happy one because when the position of the Irish companies participating in the amalgamation was determined it was found that the amount of money which the Minister for Finance had to transfer to the new company in order to make up the deficiency in the funds of the Irish offices was very substantial. In fact, the amount was £1,053,707.

Since the Irish Assurance Company was established, that is to say, the permanent company which is doing new business, it has made substantial progress and in the normal course of events it is bound to be an important business concern in this country. As the company developed its business and increased its activities the fact that the British companies through their share holding would have control of this company became a matter for consideration. As long as the Irish Assurance Company remained under the existing control of the amalgamation company, control remained in the hands of the Minister for Finance but when the stage was reached when the amalgamation company was liquidated control would pass from his hands to the British offices to the extent of 72 per cent. This being the position there was obviously reluctance and hesitancy about terminating the amalgamation company. The position was that control of the companies remained here so long as the amalgamation company remained but when it was terminated control passed into the hands of the British offices. It is considered that there are substantial advantages to be secured by bringing the amalgamation company to an end now and by combining the business of the amalgamation company with the business of the Irish Assurance Company and the completion of this agreement which will protect the position as to ownership will facilitate this step. I do not want to be understood as saying that it has been decided to take this step immediately. When it is desired to take it there need not be any hesitation about it by reason of any fact affecting ownership of the amalgamation company. The Bill, therefore, provides that the main company doing industrial and life insurance business here will remain at all times in Irish ownership, and since the agreement with the British offices for the transfer of their shares has been completed with complete goodwill on both sides there is no solid reason why this Bill should not be enacted. It will of course create a situation in which in future the Minister for Finance, instead of being a minority shareholder, will be a majority shareholder. But he will not be the sole shareholder because the Irish offices participating in the original amalgamation will have share holding interest in it.

Mr. Sweetman

What has happened to these old Irish companies?

Mr. Lemass

They still have shares.

Mr. Sweetman

Are they in existence or in liquidation?

Mr. Lemass

I presume they are still in existence as holding companies but not for the purpose of doing life assurance business.

Mr. Sweetman

I know that.

Mr. Lemass

The number of shares allotted to them was only 9 per cent. of the total number of shares created, the balance of the shares, which they might have received, being transferred to the Minister for Finance by reason of the fact of his having to subscribe over £1,000,000 to meet their deficiencies. The purchase of the shares at 3/- each is regarded as good business. The actual value of the shares might be difficult to determine at any particular time but the value would appreciate because a company operating a closed fund would reach a position where it would have assets with no liabilities. The value of the assets at present is about £6,000,000. No doubt it has liabilities equivalent to them but the liabilities are disappearing with the course of time. The Bill, in fact, completes the step which we took in 1938. We took that step in 1938 for two reasons, one was the necessity then existing for legislation for the regulation and control of the conduct of life insurance business in this country. We would have needed legislation for such control in any event even though there were no weaknesses in the Irish companies. The second step arose out of the weakness of the Irish companies, most of whom had reached an unhealthy position from which might result grave losses to their policy holders. The two purposes were combined in the same legislation. The general aim at the time was to create one company to do industrial life assurance business and to eliminate that element of competition which had given rise to so many abuses. We did not, however, seek to secure that amalgamation compulsorily. It was sought by agreement and eventually complete amalgamation did not prove practicable. One Irish company at least declined to participate in the amalgamation. Nevertheless, the company which emerged from the amalgamation is doing industrial life insurance business here on a large scale and will inevitably become a most important financial organisation here. It is, therefore, from every point of view desirable that we should never have to contemplate a position arising in the future in which the control of that company would pass outside the country. For that reason, as well as the fact that the arrangement made with the British companies is, as a business deal, a good deal, I recommend the Bill to the Seanad.

Mr. Sweetman

The first principle with regard to this Bill is one with which I think no member of the House can quarrel, namely, that the control which will at some stage operate should be taken back from foreign companies and retained in this country. I do not see any difficulty whatever in respect to this House accepting that underlying principle, and I do not propose to address myself to it.

The second principle which arises is that the Minister for Finance should be authorised to pay 3/- per share in respect of the shares in the terminating company, which is the manner in which this control is operated and will ultimately operate in respect of the new company, the Irish Assurance Company. It appears to me that the Oireachtas is hardly a suitable place to determine whether 3/- per share is or is not a suitable price. We have not got before us anything like the amount of information that would be necessary to enable us to determine whether the price is too high or too low. In regard to insurance business, in matters of valuation, it is extremely difficult to determine the value without a complicated actuarial calculation. In any business it requires considerable skill to disentangle balance sheets and to know what is behind the balance sheets in the shape of hidden reserves and so forth, before one can arrive at the true valuation of the shares.

The ordinary law of supply and demand does not arise in respect of these shares, as they are not quoted on the stock exchange and, so far as I know, not one of the shares has ever changed hands by ordinary sale since the company was formed. Therefore, the position seems to be that, as far as the payment of 3/- per share is concerned, the Minister comes before us and asserts that that valuation is correct and we must leave the responsibility for determining that with him and accept the Governmental assurance that it is a reasonable and fair valuation in all the circumstances. I do not propose, therefore, to dwell on that point either, but I do propose to dwell on another point that will arise as the result of and flowing from the principles that are involved in this Bill.

The Minister stated in the Dáil, as reported in column 1764 of the Official Debates for the 11th March, 1947, that "there was objection to bringing the activities of the terminating company to an end by winding it up"—pending, of course, any changing of the control from the British companies—"even though such a step would confer many advantages upon the Irish Assurance Company, Limited". I do not understand what advantages are going to arise in respect of the winding-up of the terminating company. I would like to know what advantages the Minister visualises. I would also like to know why it is that the current balance sheets of these two companies were not deposited on the Table of the House, that is, in the Library. As a matter of interest, I tried to get the last balance sheet of each company and the last one I was able to get was that as at the 31st December, 1944. Having regard to the provisions of the Companies Acts, I am certain that balance sheets have been issued since that date and it would be right and proper that they should have been placed on the Tables of both Houses, even as a non-statutory presentation, so that they might be available for those who want to see the position.

There is a point about which I am rather apprehensive. The arrangements which have existed up to this for the purpose of servicing non-industrial life business by the British companies are now being brought to an end. The terminating company, as from the date it was set up under the 1938 Act, took over the industrial business of the five British companies mentioned in Section 1 of the Bill; but the Irish Assurance Company undertook then, by contract with the British companies, to service their other life business, the non-industrial life business. I understand the situation now has arisen—in fact, I have been told by the Irish Assurance Company themselves— that as from the 31st December last they are not doing any servicing for the British companies. The situation, therefore, arises that those people who have policies effected before 1938—and who must, of course, continue to pay the premiums to their respective companies until the policies mature, if endowment policies, or death occurs, if whole life policies—have now no one here to whom they can go for advice or consultation in respect of the position which arises under the policies.

Up to this, though the terminating company did not take over the existing contracts—I am a little bit at sea as to which thimble the pea was under, whether it was the terminating company or the new company, for they are both in the same building and it comes to exactly the same thing—they carried on an arrangement by virtue of which they provided service facilities for those insurance companies which, as a result of the 1938 transaction, no longer have offices in this country. It seems to me to be an undesirable result that a substantial body of policy holders— dwindling every year, of course, but substantial, none the less—should have no official place in this country to which they can go with any queries that may arise as to their rights under the policies. For example, in the case of the Refuge Assurance Company, it is necessary to deal with matters solely by correspondence with Manchester. That seems to be an undesirable situation and one which does not necessarily flow from this arrangement.

I am surprised that it has been considered necessary—I suppose contemporaneously with this Bill, as I do not know what lies at the back of the termination of the service agreement—to terminate the service arrangements, but I suggest it is bad and that some arrangement should be introduced again, so that, until those policies terminate, there would be in this country some place like the Irish Assurance Company's office where those policy holders would be entitled to get the information and assistance that a normal office of a normal assurance company has for its policy holders.

There is another matter, which refers more properly, perhaps, to the new company, as I think the staff was transferred to the new company, though they carry on the business of the terminating company as well. It is an unfortunate thing that, in regard to insurance employees, the Irish Assurance Company, Limited, is a worse employer than any other insurance company. So far as I can ascertain, it is the only insurance company which did not keep on its pay-roll employees who, in the national emergency, volunteered and joined the Army. So far as I understand, every other insurance company did so, even the British companies. I am told that the Irish Assurance Company did not do that. I am told also that their outlook towards their staff is not such as is likely to build up that contentment which is absolutely essential if any business is to prosper in the future. I hope that, as a result of the new system of affairs we are going to have when this Bill is passed, what I may describe as a mean outlook will be altered and efforts will be made to make certain that the staff of this company will be in as good a position as the staff in any other comparable insurance company.

This Bill will mean that, at some stage or other, the life insurance business carried on by the new company will be controlled and owned to a 90 per cent. extent by the State. I suggest that, no matter what business it is suitable to have under State control, insurance business is the most unsuitable. The purpose of the Amalgamation Acts in 1936 and 1938, particularly the latter, was to make certain that the proportion of expenses to premium income would, by reason of amalgamation, be reduced to a more equitable level, so that the proportion of expenses to premium income would not be so high as to make the company unsound and make it impossible to pay the exact benefits promised and assured under the policies. That has now been achieved. As a result of the operations that have come into effect under the two Acts, the situation exists that only two industrial companies are carrying on business—the New Ireland Assurance Company and the Irish Assurance Company. It is extremely undesirable that the business of the Irish Assurance Company should be retained in State ownership and control.

When the Minister made these agreements with the five British companies, he should not have got the Minister for Finance to take over these shares but, having made that provisional agreement, he should have got the Industrial Credit Company or some similar concern to underwrite those shares to the company at a price which would ensure that the Exchequer would be recouped for the moneys paid. Anyone having anything to do with the stock exchange will readily tell the Minister that it is utterly impossible to get an outlet for investments in Irish securities at the moment. The Minister would not have the slightest difficulty in having the shares held properly in the hands of Irish nationals and achieve the results he very properly wants to achieve by transferring the control from British to Irish ownership. He would have done it without the objections that arise here. There are objections to many forms of State investment and operation in commercial enterprise. I suggest that, in respect of an insurance company, there is an even greater objection.

It is an inevitable part of the business of an insurance company to be, to some extent, an investment company; to hold ordinary shares in commercially operated companies. Through the holdings of the Irish Assurance Company, the Government can operate control, right down the line, in industrial concerns by swinging blocks of votes at general meetings and so forth. One of the main complaints which I will put before the House on the motion that appears very low down on the Order Paper in my name is that the Industrial Credit Company has used its power to make investments not only for the purpose of underwriting but of purchasing shares in ordinary commercial concerns that do not require assistance. The company is therefore able to utilise the power it gets in that way to swing votes at times of election, and perhaps get its nominees elected on boards. What is true of the Industrial Credit Company is equally true—it is, perhaps, true in a stronger degree—of these companies. If one looks at the 1944 balance sheet of the terminating company, one finds that a sum of £30,000 has been invested in ordinary stocks and shares, while in the case of the new company one finds that £34,000 has been invested in ordinary stocks and shares. There is not, of course, the same objection to investment in debentures and preference stocks, but there is a substantial objection to the investment by these companies of the moneys that they have to invest in ordinary commercial concerns. There is an objection to their invasion in that field because through such investment they can exercise a degree of control which would be extremely undesirable so far as the commercial life of the State is concerned.

I should like very much if the Minister had given some indication of the dividends, if any, that have been paid in respect of these two companies since their formation. The last accounts that we have seen are for 1944. The manner in which they are presented does not give a picture as to the net rate of dividend paid, if any. I should like to know if, in fact, any dividends have been paid. There is a note in the profit and loss account which refers to "interest, dividends and rents". The Minister, of course, must have the latest figures available. I should be glad if he would tell us how these three items are segregated. I think it would be desirable to have on the records of the House whether or not any dividends have been paid in respect of the terminating company and the new company. So far as the Bill itself is concerned, it obviously flows from the first principle that I stated at the beginning—that the control should pass from the five British companies to Irish hands. I think that all of us will be in agreement with that principle.

Mr. Duffy

I am very glad that Senator Sweetman has raised one question which seems to me to be of considerable importance, and that is the question in relation to the treatment of the staffs of these companies. As I understand it, during the whole period of the war the staffs—that is, the clerical staffs, superintendents and others employed by these insurance companies—received two bonuses only. In the first instance, there was an emergency bonus of 3/- a week, while a second bonus of 5/- a week was awarded in 1946. Therefore, the position is that all that the staff have received, over and above what they were receiving in 1939, is 8/- per week. I do not think there is any other comparable employment in the State where the bonus awarded during the emergency, and paid, did not reach 16/- a week. This industry seems to stand apart. Eight shillings a week are, roughly, an 8 per cent. increase in remuneration for the staff to meet a 70 per cent. increase in the cost of commodities. I do not know whether or not that is the best the company can do. If it is, it is a very sad commentary on all the legislation which has been enacted over a period of years to put Irish industry on its feet.

It is notorious that, in the case of competing foreign companies, both British and Canadian, conditions of employment are good. I should say that many of the employees of British and Canadian insurance companies receive a higher rate of remuneration than is received by holders of corresponding positions in banks or commercial concerns. How then can we justify this disparity in the case of a concern which is very largely under the control of the State, and which, shortly after this Bill becomes law, will be almost exclusively the concern of the Department of Finance? I think that fact should give pause to the Minister. It must be apparent to the Minister and the Government that, if British and Canadian insurance companies can pay their staffs, particularly their outdoor staffs, a rate of remuneration three times as high as that paid by the British companies, the most competent and the most popular officers of the Irish company will drift from that company to serve foreign companies. Surely that will not build up a valuable insurance organisation here.

This is a matter to which the Minister cannot be indifferent. Insurance occupies a key position in the building up of the economy of the country. Insurance organisations accumulate more money, collected from the ordinary people, than any other organisations in the country. The new insurance company is designed to have a monopoly of this kind of business. If properly administered, and served by a loyal and enthusiastic staff, it would have at its disposal several million pounds every year for investment in Irish industry and for lending to the Government and local authorities. It is well known that the insurance companies in Britain have always been big lenders. If the British Government wants money at any time in a hurry, it can get it in almost unlimited quantities from the insurance companies. There are, of course, other financial corporations, but the insurance companies are very large lenders. If we expect our insurance company to become a large lender to the State, to local authorities and to industry, then it is our job to see that that company has popular appeal, that its servants, agents and officials are enthusiastic— enthusiastic because they are serving a generous, well-disposed concern. Therefore, I think that Senator Sweetman has done a good service in drawing attention to the conditions under which the employees serve this company. I hope that the Minister will make it his business, when this Bill becomes law, to make representations to the Department of Finance that the service of this company is vital to the State and that, in order that the company may do for the State what insurance companies usually do in other countries in the financial field, it must be made attractive and its employees must be, at least, as well remunerated as those of our countrymen who serve rival, foreign concerns.

Mr. Lemass

Senator Sweetman said that members of the House could have no information which would enable them to arrive at an independent decision as to whether the price to be paid for the shares is too high or too low and that they would have to take my word that it was a fair price. That is true up to a point. I want, however, to emphasise that the price proposed to be paid for the shares is an agreed price, resulting from protracted negotiations.

Mr. Sweetman

I appreciate that.

Mr. Lemass

And that it does not necessarily represent what I might think should be paid or the amount I should like to pay. Having brought the negotiations to a conclusion, having considered the price that emerged from the negotiations and taken the advice of the board of the company and other persons in a position to express an expert opinion, I was satisfied that the agreement was one that should be made. The results that might follow from the liquidation of the amalgamation company and the transfer of its business to the Irish Assurance Company, Limited, are partly practical and partly psychological. The practical consideration is that the superstructure of the two companies can be replaced by one and that the commission being paid by the amalgamation company for the servicing of its business by the Irish Assurance Company will no longer be necessary. Some economy in staff might also be achieved. The psychological advantage is, of course, that which any insurance company enjoys when it has very substantial funds under its control and can show financial strength which, in the case of an insurance company, is a most important magnet for attracting business. The funds of the Irish Assurance Company shown in that company's balance sheet are those which it has accumulated as a result of the new business which it has been conducting since 1938. The reserve funds, which represent the security of the existing policy holders whose policies were transferred from the amalgamating companies, appear on the balance sheet of the amalgamation company.

I think it would help the expansion of and the improvement of the business of the Irish Assurance Company, Limited, if those funds were amalgamated. In any such amalgamation measures will have to be adopted to safeguard in all circumstances the interests of policy holders transferred from the amalgamating companies. I have not heard of any change in the position concerning the servicing by the Irish Assurance Company of the non-industrial life business transferred from the British participating offices. I must say, however, I have no function regarding the administration——

Mr. Sweetman

Since I spoke a member of the House who is in a position to know has told me it is only in respect of one of the five companies that the service agreement is concerned.

Mr. Lemass

However, the remark I was going to make applies at any rate to the observations of Senators who spoke concerning the conditions of staffs of the Irish Assurance Company. I know nothing about the conditions of the staffs. I could not say whether they are adequately remunerated or whether they have a legitimate grievance. I know some negotiations are proceeding at the moment between the company and representatives of the staff but I have no function whatever in regard to the determination of the rates of remuneration.

This alone I would like to say in that connection: one of the main arguments against the method of carrying on life assurance business in this country before this amalgamation was that it was unduly costly. With companies competing with each other for business, maintaining large numbers of canvassers for the purpose of securing new business, there were expense ratios which appeared to be extraordinarily high and which meant that those who were buying this class of insurance were paying unduly high prices for it. It was considered that as the result of the amalgamation, the system of carrying on industrial life assurance business itself should be completely and fundamentally reorganised and that the elimination of the competitive element would facilitate that reorganisation and that the most obvious result would be a substantial reduction in the expense ratio. I must say, studying the accounts of the Irish Life Assurance Office, that it has not got the expense ratio down as rapidly and as adequately as I believed in 1938 would be possible.

Mr. Sweetman

What is the expense ratio?

Mr. Lemass

I could not say that.

Mr. Sweetman

It used to be something around 45 per cent.

Mr. Lemass

It varies from one company to another. I think 35 to 40 per cent. of premium income was not unusual.

Mr. Sweetman

I think 45 per cent. was more usual.

Mr. Lemass

I think it could be brought down below that. It has been astonishing to hear that the company did not re-employ any of its staff who had enlisted in the Army during the emergency. I have heard no complaint that the company has not done so. There are, I think, statutory obligations on the company as on all other employers in that respect and I feel certain that if the company failed to carry out its statutory obligations or acted unreasonably somehow or other it would have come to my attention. No dividends have ever been paid by either company. The reference to dividends in the company's accounts is, I think, to dividends receivable and not to dividends paid.

With regard to more general considerations as to whether this is the type of business in which the State should engage, I would like to point out that it is possible for the Minister for Finance to dispose of his shares to the public if he thinks it desirable to do so. I would advise him against doing so on practical grounds for the time being, and on grounds of policy at any time. While it may be questionable as to whether the industrial life assurance business is suitable as a field for State enterprise, I think it is true to say that if there ever was any business in which all the evils which uncontrolled and unrestricted private enterprise could produce were evident, it was this business. I should think that for many years industrial life assurance business was nothing more than a legalised robbery and that was due to highly-competitive, privately-owned firms trying to snatch business each from the other. No doubt the most glaring abuses which resulted from these practices could have been eliminated by legislation without any question of transferring ownership, and in the course of time many of the companies which were the most piratical in their practices, acquiring millions in their reserve funds, became eminently respectable. I should think that it is a business which requires such a degree of State supervision that State ownership appears to be the logical development. It is, I think, known that in other countries where State social services have been extended further than has yet been attempted here, the desirability of putting industrial life assurance business within the scope of State service has been considered and that it is quite possible that this business like workmen's compensation insurance will ultimately become unnecessary because of the development of State social security services. I do not think that it is necessarily a desirable course so long as the business of industrial life assurance is carried on under proper supervision and in an unobjectionable manner.

I would regard it as a desirable course for the State to retain that control over the business of this company which its shareholding gives it, and even to consider whether we should not at some stage go to the full extent contemplated in 1938 and establish the business on a monopoly basis—one company only doing industrial life assurance business. If there is to be a monopoly enterprise in this field then I think it will not be disputed that the monopoly should be in the public ownership. These are rather general questions. I do not think that the Government would have come to the stage of intervening in this business, to the extent of acquiring ownership of an industrial life assurance company, if circumstances had not forced its hand. In this country up to 1938 privately-owned insurance offices had been carried on in a manner which had seriously jeopardised their solvency and it became necessary for the Government to intervene and even to contribute public funds for the purpose of preventing the hardships involved to tens—I might say literally hundreds— of thousands of our people by the possible failure of some or all of these companies. It was the practical needs of the situation that induced the Government to take action and having decided to intervene at all, it tried to make a complete job of the business by bringing both the British and Irish companies into an amalgamation. We did not completely succeed in that but we have established an organisation which is not run for private profit but is conducted solely in the interests of the policy holders and which is a foundation upon which a larger enterprise may be built.

Mr. Foran

The Minister made no references in his reply to the very serious allegation made in the debate that the Irish Assurance Company refused to treat its employees who answered the call during the emergency as it should have treated them.

Mr. Lemass

I referred to that. I stated that I had received no such complaint and that I considered it most unlikely that it was correct. Apart from that there were certain statutory obligations.

Mr. Sweetman

I did not mention the statutory obligations.

Mr. Foran

Will the Minister look into the matter? All companies are obliged to look after their employees who answered the call and I do not know how an exception could be made in the case of the Irish Assurance Company.

Question put and agreed.

An Cathaoirleach

Next stages?

Mr. Quirke

Now.

Mr. Duffy

Personally, I object to taking all stages of a Bill at one sitting, except in very exceptional circumstances.

Mr. Douglas

I agree with Senator Duffy, but we have not always carried out that rule in the case of a Money Bill.

Mr. Duffy

Are we sitting to-morrow?

An Cathaoirleach

Yes.

Mr. Duffy

Can we not take it to-morrow?

An Cathaoirleach

It has been arranged to take the Central Fund Bill to-morrow and it will probably occupy the whole day.

Mr. Duffy

I do not think this Bill is going to take a lot of time to-morrow.

Mr. Quirke

Senator Duffy is generally reasonable in those matters but I think he is unreasonable, in this case, to ask the Minister to come back to-morrow.

Mr. Baxter

That is no excuse.

Mr. Hayes

That is not the point. The point is, this is a Bill based upon agreement and there is nothing that we can do with it in Committee except that it gives us an opportunity of making observations and recommendations. While I agree with Senator Duffy that we should not take all stages of a Bill at one sitting, it never has been observed too rigidly in the case of a Money Bill.

Mr. Duffy

Would it facilitate the House if we took the Committee Stage now and the Final Stage to-morrow?

Mr. Hayes

There is not very much difference between the two suggestions.

An Cathaoirleach

In the circumstances shall we proceed as suggested?

Agreed to take Committee Stage to-day.

The Seanad went into Committee.

Section 1 agreed to.

Section 2.

Question proposed: "That Section 2 stand part of the Bill."

Mr. Sweetman

This is the operative section and therefore, I presume, I can say what I want to say. First of all, I want to correct the Minister's reply in respect of this question of men who joined the Army. There were certain statutory obligations on every employer that when an employee joined the Army and when his services in the Army were terminated, the employer would take him back into his service. That was a statutory obligation and it was the extent under the law to which any employer was bound to go. He was bound to go no further than that. I did not allege that the Irish Assurance Company refused to perform this statutory obligation. What I did allege and what I repeat now was that every Irish insurance company of which I have had any experience, through talking to people in the city, retained its employees on their salary roll and paid them anything they might have lost in salary or emoluments by joining the Army. So that, in fact, if any assurance official joined the Army and during his period of Army service received less than he would have received if he continued in the employment of this company, he had the difference made up. That was done by all the companies of which I have had experience, with one exception, the Irish Assurance Company. This difference was made good, not as a matter of statutory right but purely as an ex-gratia payment, and I think it was unfortunate in the extreme that the same procedure was not followed by the Irish company. This was not the point to which the Minister replied and, therefore, I am taking the opportunity now of correcting him. I want also to raise another point, in connection with drafting.

This Bill, as I understand it, is a Bill to enable the Minister to give effect to an agreement that has been provisionally entered into by him with the five companies mentioned in Section 1. As a matter of drafting, therefore, would it not have been better for the Oireachtas to see the agreement and would the form of the Bill not have been better if the Minister was authorised to enter into the agreement and confirm it, in the terms of a schedule? This was the course adopted by the Minister for Agriculture in the case of the Johnstown Castle Bill. There the Minister for Agriculture entered into a tentative agreement that would be ratified when the measure was passed and the agreement was scheduled to the Bill. This, I think, would have been a better method of dealing with it than the method adopted here. I do not understand why in line 30 it is provided that the Minister may purchase at a price "not exceeding 3/- per share." Surely the Minister has already fixed his price at 3/-. I understand that the Minister in introducing the Bill indicated that 3/- was the price that he was going to pay. It that is so why have we got all this tautology? Surely it will be better to say that he is going to pay 3/- a share.

Mr. Lemass

With reference to the first point I do not know whether the Irish Assurance Company made any contribution to the wages of staffs who had joined the Army and I do not know whether other companies did either. Therefore, I cannot deal with the matter. With regard to the second point raised by Senator Sweetman, the Minister has not entered into an agreement. A provisional agreement has been arranged with the British holding companies which cannot be completed until the Minister for Finance gets this power to purchase from the Oireachtas. That is why it is not possible to schedule an agreement. The matter has been discussed and it is understood that the agreement will be made but the agreement itself cannot be completed until the Minister for Finance has the power which this Bill is designed to give him. I do not know whether the insertion of the words "not exceeding" is any more than a protection. Certainly there is no reason why we should prevent the Minister from paying less if he can. It is the ordinary legal practice. The intention is to pay 3/- per share.

Mr. Sweetman

Provisional agreements are often scheduled. The Johnstown Castle agreement was provisional.

Mr. Duffy

May I recall to Senator Sweetman's mind the difficulty this House had over the agreement with Johnstown Castle? Whereas, in fact, the agreement provided that it would be implemented by a certain date, it was not implemented by that date.

Mr. Lemass

The agreement to amalgamation was scheduled to the Act of 1938. The agreement I refer to to-day was between the board of the amalgamation company and the British holding companies, under which the British holding companies will offer their shares for purchase by the Minister for Finance at 3/-.

Mr. Sweetman

There is no binding agreement?

Mr. Lemass

It is only a provisional agreement.

Mr. Sweetman

Therefore, the British companies can turn round to-morrow and say they will not carry it out at all.

Mr. Baxter

The Minister did not express any opinion as to the payment of the company's employees who went into the National Army.

Mr. Lemass

I do not know whether they did or not.

Mr. Baxter

It was the practice in other companies.

Mr. Lemass

I will not take Senator Sweetman's word for that, either.

Mr. Baxter

The banks did it.

Mr. Lemass

It is a matter for the company itself.

Mr. Baxter

Surely an organisation like that should set an example.

Question put and agreed to.

Sections 3, 4 and 5 and Title agreed to.

An Cathaoirleach

Now as regards the next stage?

Mr. Lemass

As a matter of personal convenience, if it is desired to discuss it to-morrow, I should like to know. Ordinarily, at 3 p.m., a Minister has to attend in the Dáil to answer Parliamentary Questions and I have arranged to answer certain questions to-morrow, but it will be my business to be here if the Seanad desires to discuss this Bill to-morrow. Therefore, if it is desired to discuss it, I would prefer, if possible, that it should be arranged for some other hour. If it is not desired to discuss it, my presence would not be essential.

Mr. O'Dea

Perhaps Senator Duffy will withdraw his objection to the Report Stage. It is a Money Bill. There is no difference of opinion between us. There is nothing in the Bill itself but the one section authorising the Minister for Finance to purchase these shares at a price not exceeding 3/- per share.

Mr. Duffy

I do not accept that interpretation. I think one could raise a number of matters on the Final Stages of the Bill.

Mr. O'Dea

Matters have been raised, but surely they are entirely irrelevant.

Mr. Hayes

Will someone protect the Minister from Senator O'Dea?

Mr. O'Dea

Surely the question of whether the officials were paid——

Mr. Hayes

Sir, I object to Senator O'Dea passing an aspersion on you that you did not control the business of the House in a proper way and permitted irrelevancies.

Report Stage ordered for 7 p.m. to-morrow.