Trade Loans (Guarantee) (Amendment) Bill, 1949: Second and Subsequent Stages.

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

Since 1924 there has been legislation enabling the Minister for Industry and Commerce to provide guarantees for loans to assist in industrial development both for new industries and for established concerns wishing to expand their activities where the granting of guarantees was calculated to promote employment and development. The legislation also provided for the actual grant of loans for similar purposes.

As a preliminary to the guaranteeing or granting of any loan under the Trade Loans Acts it is necessary to consult an advisory committee, representing industrial, commercial and financial interests and the sanction of the Minister for Finance is also required before facilities can be granted by the Minister for Industry and Commerce.

The first legislative provision was made in the Trade Loans (Guarantee) Act, 1924, which provided that guarantees or loans might be granted to companies and public authorities for the purpose of meeting expenditure on buildings, plant and machinery and other fixed assets. The operation of this Act was limited to one year but, by a series of amending Acts from 1925 to 1932, inclusive, the Minister's powers were continued. In 1933 the scope of the trade loans scheme was extended by the Trade Loans (Guarantee) Act of that year which enabled loans to be guaranteed or granted to meet cases where the expenditure to be incurred related to working capital in addition to the acquisition of fixed assets. At the same time individuals, as distinct from companies, became eligible for trade loan facilities.

The duration of the Trade Loans (Guarantee) Act, 1933, was limited to five years and, on its expiry, the Minister's powers in regard to trade loans were continued for another five years by the Trade Loans (Guarantee) Act, 1939. This Act also fixed a limit of £1,000,000 as the total of guarantees and loans which might be granted. On the expiry of the Act of 1939 the powers of the Minister were extended for a further period of five years by the Trade Loans (Guarantee) Amendment Act, 1944.

The purpose of the Bill now before the House is to continue the powers to guarantee or grant loans for a further period of five years.

It is very desirable that some machinery should continue to exist to enable the Minister for Industry and Commerce to afford financial assistance for industrial development which might not in the ordinary way appeal to the banks or to the Industrial Credit Company Limited.

The advantage of the trade loans (guarantee) system as compared with ordinary commercial banking facilities is that it provides a fixed long-term period of repayment for which industrialists can budget in their costings. Banks normally require loans to be repaid over a shorter period, usually less than five years, whilst the Industrial Credit Company affords financial assistance to industry mostly in cases of large amounts where public issues can be arranged.

Under the Trade Loans (Guarantee) Acts, 1924 to 1944, guarantees were actually given in 101 cases, involving a total capital sum of £1,616,711. In 70 cases the loans totalling £721,471 were fully repaid by the borrowers.

In 25 cases, involving guarantees totalling £585,240, it was necessary to appoint receivers and some of these companies ceased to operate. Repayments to the Exchequer in cases where receivers were appointed amount to £149,170. There have been numerous inquiries recently as to the provision of financial assistance for industrial development in some cases by people contemplating the establishment of new industries and in other cases where industries are already established and the promoters need increased financial facilities. As guarantees under the Act of 1939 were availed of to the extent of £446,000 only, it is not considered necessary to have any extension of the limitation of the amount—£1,000,000. The provision enabling loans to be made has never been utilised and it is rather unlikely that it ever will be. It is desirable nevertheless that the power should be retained. The purpose of the Bill, as I have indicated, is to continue in operation for a further five years legislative provision under which the Minister for Industry and Commerce is enabled to provide loans for industrial development.

We welcome the introduction of this Bill, particularly at this stage, as it is an indication, if that indication is necessary, of the Government's decision to help the development of our industries in the future as Governments have done in the past. When the Government made the decision some few weeks ago to introduce this measure to make available for Irish industry whatever assistance might be required, it was a time which we might refer to as normal. In the last few days one would be justified, I should say, in saying that we have entered an abnormal period. If it has been the previous policy of the Government to encourage the development of Irish industries, then that encouragement should be given more energetically and enthusiastically from this day forward. The result of recent developments between ourselves and our neighbour is that we have come to the position where we must do whatever we can to make this country self-supporting in any events that may take place in either the near or the distant future. We have made offers for our representatives to take part in the councils of the nations of the world and, as was said yesterday and many times before, we are precluded from doing so. Lest the events that cast their shadows over Europe take place, we must develop energetically the resources of this country and build up our industries so that we will be in a better position to overcome such circumstances should they arise than we were in the past.

The Parliamentary Secretary has given us a brief outline of the history of the Trade Loans (Guarantee) Fund and, by and large, I think we must acknowledge that it has done a considerable amount of good in building up and in helping to extend and develop our Irish industries. There has been a very favourable return of the moneys lent. Eighty-five or 90 per cent. of the total amount of money borrowed has been paid back with interest and the losses sustained by the State are so small that they must be compensated more than a hundredfold by the development of flourishing industries as a result of that assistance.

While we welcome the Bill, particularly at this stage, and wish to encourage industrialists to go ahead, at the same time we are not giving them the facilities of doing so. I understand that a number of suggestions have already been made to the Department of Industry and Commerce in relation to the setting up and extension of industries as well as inquiries into the possibilities of starting industries. The interested parties have been informed on more than one occasion that the Department is not in a position to advise them at the present time as to what they should or should not do, as the Government is considering the setting up of an advisory council. That council was announced in February, if I am not mistaken, or at least in March, and we were informed that it would be a very important body, that it would achieve great results and that it was essential that it should function immediately. Since then very little has been heard and those people who are interested in starting small enterprises or enterprises of an extensive nature are being put from post to pillar by the Department. They are told that they cannot get the advice or the encouragement necessary until this council, which is only a suggestion so far, considers the matter and gives its direction.

It is very little use for the Minister for Industry and Commerce to hold meetings of manufacturers and other such people and to advise them to go ahead with the building of industries. It is very little use for him, having first criticised them for engaging in too extensive an advertising campaign, to advise them now to go all out on a large-scale advertising campaign, in order to sell Irish goods even to the Irish people while at the same time there is this hold-up. If this council is to be set up, if it is to be given certain functions, if its functions are to be so important that the Government will not give directions to persons interested in the establishment of industry until they first have advice as a result of the inquiries made by that body, then it should be set up without delay. I say that, not because I have any faith, any belief, in this particular council, but if it is Government policy at the moment to set it up and if industrialists will not get the necessary information from the Department of Industry and Commerce until it gets the imprimatur of this council, then the sooner it is set up the better.

A campaign has been conducted in this State against Irish industry, and the reaction to that campaign has now set in. It is to overcome that reaction that the Minister for Industry and Commerce calls Irish manufacturers, wholesalers and retailers together and advises them, appeals to them, to undertake a large-scale national advertising campaign. The reason for it is to put before our people the importance of buying Irish goods, while, on the other hand, quite a number of our people have engaged, some consciously and some unconsciously, in a blackmail campaign—if you like to call it that— against Irish manufacturers. If many of the statements made by responsible people, by Ministers of the present Government even since they became Ministers, were not given out to the Irish public, it would not have been necessary for the Minister to have called manufacturers together and given them the advice that he has now given.

We welcome the introduction of this Bill. It is a demonstration of a continued anxiety on the part of the Government to help Irish industries which exist and to develop new industries; but I would like to say to the Parliamentary Secretary that, if that policy is to be made fully effective, a change of outlook will have to take place and more appreciation must be shown by those people who in the past by their statements have not acted in the best interests of the development of Irish industry. We should appreciate those who are prepared to put their money into Irish industry rather than the persons who do not do so but are always prepared to put it into foreign investments. We hear very little criticism of the latter. I know people who lost considerable sums because they were patriotic enough to put their money into Irish industry rather than into foreign investments. Of course, there will be cases of persons anxious to make more profit than one would like to see, but I often think that arises from anxiety about the uncertainty of the future of Irish industry. There are many people who would put their money in, whether it is hardearned or easily got, but they see a certain section of our people so hostile that they fear a change of policy may occur with a change of Government and the encouragment or protection given may be withdrawn. In that event their investments would suffer and it would mean a considerable change in their lives. Therefore, it is only natural that they should be anxious to make as much as they can while they can. If the feeling is created that no matter what change of Government takes place and that no matter what has been said in the past by those who are going to occupy the Government benches, the national policy is the policy of developing Irish industry and, where necessary, giving them protection.

There is no use in saying we are prepared to give protection as long as the industry produces an article as cheaply as it can be imported. There is a big drive on at the moment in England in searching for world markets and it is a pity that in the last two years many opportunities have been lost by our people. The enthusiasm for building up our industries has been dampened. We have lost, I fear, some of the good things that could have been done but for the fears created by statements made, more than by action, and that could have gone a long way to creating industries not alone to supply our own needs but to give us an export market, so essential if we are to get out of our present difficulties.

I welcome the Bill and hope that whatever has taken place in the past will be forgotten and there will be removed from the people who are interested the fear that has been created up to very recently.

Some references have been made to losses on loans like this, but if you compare the loses in the Twenty-Six Counties with what has been done in the six counties of Northern Ireland you find they are very small. I know one industry recently started in the North of Ireland and I had a confidential statement from the Minister of Commerce up there. They gave, not a loan but a grant of three-fifths of the capital to establish that industry. I do not think anyone could get a grant, not to talk of getting loans, here. It is only right that every industry should be investigated when application is made, but that investigation should not be prolonged and passed from Pilate to Herod. There should be some dispatch. I agree with Senator Hawkins that promoters of new industries who put their capital in should get every encouragement, no matter what Government is in power.

I approve of this Bill, but I would like some information which is not available in it. Perhaps if I were familiar with the Acts on which it is based and of which this is a continuance, I would not have to ask. What type of industries were started with these loans and what type of industries failed? On what conditions are these loans given? Would they be available to small groups of people in rural areas who might endeavour to start an industry themselves in their locality? Does the provision made in this Bill supplement the work of the Industrial Credit Corporation? Does it fill a gap that obviously is there, both as to the availability of the money and as to the speed with which it would be given, if it is ever given?

Senator Hawkins talked about the respect we should show for the people who want to invest their money in this country. I have a certain amount of respect for any man with money and especially for a man who invests it in his own country, but there are more than investors of money concerned with the welfare of Irish industry. I may be going a little way outside the scope of this Bill if I say that the people who put their skill and labour into these industries are more vitally concerned in the welfare of the industry than the man who has put in part of his surplus capital or who has got capital by way of this or a similar Bill from the Government and is risking the State's money and not his own.

There is not enough attention paid to the fact that the workers themselves have an interest in Irish industry, provided that they are run for the employees, the public and the investors. We must not pay all the attention to the investors and none to the others. If I were a man with £50,000 or £100,000 capital, I could invest it anywhere in the world and live quite contentedly in Ireland, in normal times anyhow—it may be that the risks are greater now. Having nothing but the clothes I stand up in and the skill I possess, I must invest that in Ireland or take it with me as an emigrant. My capital must travel with my personality, as a worker. Therefore, I have a far greater interest in seeing that the industrial resources of the country are developed than any capitalist could possibly have, and, because I know efforts have been made and are being made to start small rural industries by groups of local people who cannot get capital and who have not enough capital of their own, I am wondering whether loans would be available under the Bill to such people.

I will give an instance, which has often been referred to in the Press, of a small industry started in Bansha. There was a factory in Bansha which had lain derelict for a number of years. It was an old creamery and it was about to be sold and pulled down by somebody who wanted to use the material, and especially the slates, for the building of a cinema elsewhere. Led by the local priest, the local people came together and bought the factory and site. Having done so, they had very little capital with which to start an industry, but they did raise a few thousand pounds amongst them. Even then they had not the experience or a sufficiency of capital and they had to bring in a man with experience and capital who, incidentally, came from their own locality.

Other small industries could start if there was an incentive, if it was possible for local people to buy up existing premises many of which are going to waste through the country and falling into ruin. If facilities could be given to parish councils or other groups of people to borrow money or to get grants or loans, it would be good policy on the part of the Government to facilitate these people. The Bansha factory is now employing between 40 and 50 people. It is making jam, and jam is being made in other factories, but the Bansha factory has a five-day week and is paying better wages than are paid in jam factories in Dublin. It has kept the people in the locality from leaving the country and has brought back some who had gone to London.

That was a good investment for the State and for the people of Bansha. I am wondering whether, if I wanted to start an industry merely to make profit for myself and if I applied for money to build a cinema or to lay out a greyhound racing track, would I get it for that purpose and would I be regarded afterwards as a benefactor of the country, or would they give it to me, to Senator Hawkins, Senator Campbell and a few others, if we proposed to start a small factory and put our own labour into it.

I am surprised at the amount of territory that has been covered in discussing what I thought was a very elementary and simple Bill. I welcome the Bill, of course, and to the degree that the loans given under the Trade Loans Acts up to now have helped in the creation and maintenance of our industries, all sane people must be glad of its existence, and I share the pleasure given expression to by others that the Government has decided that this fund should continue to be available for people who, in given circumstances, will apply for it. I am sure that Senator O'Farrell was not quite serious when he urged that the money should be made available for the building of cinemas.

No—that it should not be made available.

The Bill is distinctly entitled a Trade Loans Bill, having relation to the productivity of the State and I am not aware that the cinema contributes to either. It should not be forgotten that, coincident with the moneys available under the Act, the industrialists of this country speculated their own money and took far greater risks than were taken by people who availed of the moneys available under the Act. That is too easily forgotten. There has been a rather vile campaign against the industrialists in this country for daring to be successful. In all other countries, the successful industrialist is held up to public adulation because of the contribution he has made to employment and to the revenues of the State. Here we are now facing a difficult situation. Senator Hawkins indicated that, because of current events, it may be that this country will once again be thrown more completely on its own resources than it is at present. All people who have a real interest in the good of the State should refrain from carping criticism of those who have done good in the past and who are doing it at present and helping to strengthen the industrial machine on which the country will depend to a great extent if we have to face the dangers which seem to be looming over us.

I have no intention of going over all the ground with regard to industrial tariffs and protection and the new Industrial Development Authority, as I do not think these matters come properly within the Bill, but in welcoming the Bill, I think I am entitled to say that the public should be reminded of the very vital part the private industrialist played when he speculated his own money and took risks. If, in some cases, the rewards were fairly generous, let it be remembered that many of those who put up their own money had to suffer losses for which they got no sympathy of any kind.

There is a good deal of misapprehension in the discussion of this Bill. The last Senator who spoke talked about funds being available. There are no funds available under this Bill, so far as I know, and never were. This is a Trade Loans (Guarantee) Bill and it is an important part of our national machinery for making it possible for people to obtain additional capital, particularly for private industry. It is limited in its scope. It does not meet quite a number of cases and is entirely confined, as Senator Summerfield pointed out, to trade and industry. The guaranteeing of loans under the Bill is not done easily and without full investigation. It is not, so far as I know, a method of starting new industries, but it is and has been a very important feature of the development of older industries or the extension of industries. To the best of my belief, loans are found by the industry concerned and, where for various reasons they have not got sufficient resources to obtain a loan without a guarantee, the State, after investigation, provides the guarantee. That is something which should be continued. It is not by any means designed to take the place of the Industrial Credit Company. It does not deal with large new issues, but it fills an important gap and, as such, should be supported.

I want to dispel any doubts which Senator Hawkins may have as to a lack of either advice or information for those who have applied to the Department of Industry and Commerce in recent weeks or months. Any person or persons anxious to start a new industry or concerned in an existing industry and requiring information, who seeks that information or who seeks advice from the Department will receive it, and is receiving it, if the information is available and if it is possible for the Department to give the advice. No industrial development which has been brought to the notice of the Department has been held up pending the establishment of the Industrial Development Authority, and the fact that the Government decided to establish that authority has not in any way lessened the existing facilities, nor has it in any way delayed the giving of assistance or advice when required.

The fact that it was decided to establish it was due to the Government's desire to make available expert advice to people wishing either to expand existing industries or to start new industries, advice which is not readily available in any Department where the officials are civil servants who have not opportunities of acquiring technical knowledge or experience of commercial undertakings and the ordinary working of industries. It was merely because the Government came to the conclusion that it was desirable to have expert advice available that that authority was set up. The advice will be given to the Minister who will still retain the functions he has at present. He will have responsibility in the matter and will be informed as to the best steps to be taken and the facilities which should or should not be provided for a particular industry.

A good deal of play has been made with the idea that some Ministers have contributed by statements to a feeling of uneasiness. I want to remind the House that the phrases which Ministers have used have only applied to some industrialists and they made that quite clear. I think it is no harm to remind Senator Hawkins that if he looks up a speech by a former Minister for Posts and Telegraphs not so very long ago, he will find that he referred to the fact that some traders were dishonest enough to keep two sets of accounts. I do not remember any criticism by anyone of that speech. It is significant that, if Minister of the present Government say the same thing in a different way and apply it to a small group, it should receive such attention and publicity, although the same statement made, possibly, more directly and stated as a definite fact, received no comment or criticism when it was made by a Minister of another Government.

I should say that this Bill provides assistance both in cases where new industries are concerned and in cases where existing industries require further assistance. It must be in respect of an industry. It could not be applied in the case that Senator O'Farrell mentioned of a cinema. The minimum amount guaranteed is £500 and it is generally used in cases where the promoters are unable to provide from their own resources the full amount of the capital required. An advisory committee must be satisfied. The advisory committee is an independent committee, generally an ad hoc committee for each particular case, composed of people who have experience in industry and finance and who are qualified to advise the Minister on the particular application. It is eminently suitable for small industries because the Industrial Credit Company deals generally with cases where there are larger sums involved.

I think it was Senator O'Farrell who asked what type of industry is covered. It ranges over all types. It varies according to the particular case and according to the amount required but it has been utilised by various types of industries in the past and rural industries such as the Senator mentioned are covered, provided they can show that the proposed development is sound. While it is easy to talk about the successful industries, the Minister has a responsibility to those who guarantee the money as well as to those to whom he is providing the guarantee. This Bill, as the House is aware, continues these powers for another five years.

Question put and agreed to.
Agreed to take remaining stages now.
Bill reported without amendment and received for final consideration.
FIFTH STAGE.
Question proposed: "That the Bill do now pass."

Would the Parliamentary Secretary be able to give information as to when the proposed advisory council will be set up and will function because, apart from what the Parliamentary Secretary has already said, I have heard complaints from persons who were interested in industry, on the lines I have indicated to the House, that the Department is not prepared to give any go-ahead order until such time as the proposed industries are examined by this body? If it is going to be set up, the sooner it is set up the better. That is not to say that I am in thorough agreement with such a body being set up at all.

First of all, the proposed industrial development authority will be set up when the necessary legislation is passed. The legislation is now in draft and I hope it will be introduced in the near future. If the Senator can give me any particulars of cases where people anxious to start industries have found difficulty in securing advice or assistance from the Department, I will have them investigated.

Thank you.

Question put and agreed to.
Ordered: That the Bill be returned to the Dáil.