Seanad Éireann debate -
Wednesday, 29 Jul 1959

Vol. 51 No. 8

Industrial Credit (Amendment) Bill, 1959—Second and Subsequent Stages.

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

Dr. Ryan

The main purpose of this Bill is to enlarge the capital resources of the Industrial Credit Company, Limited, so that the Company may be able to play its due part in the implementing of the Programme for Economic Expansion. The Programme envisages a continuing expansion in the provision of credit for industrial purposes over the five years 1959/60 to 1963/64. As shown in Appendix II to the White Paper, it is estimated that the Company will be called upon during that period to provide fresh capital for industry amounting to £20 million in all.

It is visualised that the Company's capital expenditure will be at the rate of £3½ million in each of the years 1959/60 and 1960/61, £4 million in each of the years 1961/62 and 1962/63 and £5 million in 1963/64. In 1958/59 its capital expenditure amounted to £2.8 million including £1.4 million for the funding of existing temporary accommodation. It is, therefore, entering a period of greatly increased responsibility and activity. The enhanced facilities now proposed are intended to cater not only for new industrial projects but also to encourage the expansion and modernisation of existing industries throughout the country. It is, of course, essential for existing concerns to replace old machinery and equipment by up-to-date plant if they are to increase output for sale at competitive prices.

The Bill provides for the increase of the authorised share capital of the Industrial Credit Company from £5 million to £10 million and for the increase of its effective borrowing powers to £15 million. These two changes, therefore, provide for maximum capital resources of £25 million. Of the £25 million the Company has already used approximately £5 million, leaving available the £20 million estimated as requirements in the five years to 1963/64. Against the £20 million the Company already has commitments extending over the coming years which amount to over £7 million. This leaves a margin of about £13 million for entirely new business.

The increase in the Company's borrowing powers involves enabling the Minister for Finance to guarantee, where necessary, borrowing within the limit of £15 million instead of £5 million as at present. The Bill makes provision for this. Furthermore, loan capital may not always be available from the banks or other institutions as and when required. The Bill will enable the Minister for Finance to make loans to the Company on such terms and conditions as to interest and repayment as the Minister may stipulate. Under the existing legislation the Exchequer can make moneys available direct to the Company by subscribing for shares but this involves a permanent increase in the Company's share capital which may not always be desirable. Advances from the Exchequer will be permissible only within the limit of the Company's overall borrowing powers. The maximum amount that can be borrowed both from Exchequer and non-Exchequer sources will, therefore, be £15 million. These wider powers will give greater flexibility generally in the provision of finance to meet the Company's needs and will in turn give the Company greater flexibility in the supply of capital to industry.

Advantage is also being taken of the opportunity given by the new legislation to make some minor improvements in the existing law relating to the administration of the Industrial Credit Company.

The Bill can be seen as a further important step in the implementation of the policy laid down in the Programme for Economic Expansion. The Industrial Credit Company is in one of the key positions in the industrial sector of the economy. The Bill recognises this and is intended to place in the Company's hands the means of accelerating our industrial progress. It is an earnest of the Governments intention to secure that lack of adequate share and loan capital on reasonable terms will not hamper or hinder the development of sound industrial projects.

I express the hope that the adequacy of capital will be matched by the enterprise and initiative of industrial promoters and the co-operation and efficiency of labour all of which are so essential to success. I am indeed encouraged by the latest reports from the Industrial Credit Company. These show that the Company's activities have expanded appreciably and that there has been a marked rise in demand for credit for industrial purposes. The Company is now providing a variety of improved financial services for industry and it is evident that these improved services are welcomed and appreciated by industrialists. I look forward to further significant expansion.

It is only to be expected that expansion on the scale we envisage will give rise to difficulties and problems. Given the will, we will find the way to overcome the obstacles and press on with the development of our country. A major task in the sphere of industrial credit falls on the Industrial Credit Company. I am satisfied that the members of the Board are fully conscious of their responsibilities and are proceeding with energy and enthusiasm.

I commend the Bill to Senators and trust it will find favour with them. It does not involve any new principles and I feel that its objects should have the support of all.

Mr. Burke

This Bill received support from all sides of the Dáil. It commends itself to the people of this State because its purpose is to increase the capital available for industrial development. It also affords Parliamentary representatives an opportunity of discussing how far we are using the capital available to the best advantage. In published reports and in the newspapers it has often been publicly stated that in so far as this Government or any other Government in Ireland is concerned, nobody will be prevented from embarking on a worthwhile project for want of capital.

That is a very fine principle. It is one to which we all subscribe. I hold that the measure of our prosperity depends on how that capital is used. I think that in this present year of grace it is important for all of us in public life, and particularly for those of us who have some interest in industry and commerce, to see how we can cooperate with the Government and the organs of State to have that capital used and deployed to give the best possible return for the amount of capital used.

The assurance that capital will always be available inspires public confidence. That is very important. In fact, it is all-important in a democracy that the people should feel that money will be available for worthwhile projects. I spoke last week on the Appropriation Bill. As was fitting on a measure of that sort, I touched very briefly upon the effects of taxation and other matters on the smaller companies, on what we should call private companies in Ireland. I did not develop my points. I noticed that while the Minister in reply mentioned them stating he would like to consider them, he felt that I had not given sufficient information to allow him to go into detail. I hope, with your permission, Sir, as it has a great bearing on how capital will be used for industry, to develop briefly some of these points.

An Cathoirleach

The Senator must be very brief.

Mr. Burke

I shall be very brief. I think what I have to say has a great bearing on industrial credit and how industrial credit should be used. I do not think it will be irrelevant to the matter under discussion. I want to deal, first of all, with the number of companies registered in this country and the type of companies they are. Many of us think that in our economy here the public company is more important than the private company. I think that we in Ireland must realise that the reverse is the case. At Table 339 in the latest census of registered companies, the total number of private companies is 7,664 with a paid-up capital of almost £87½ million. It gives the total number of public companies as 371 with a paid-up capital of £58½ million.

Looking at these figures, I think it is probably true to say that the working capital in the private companies is probably very much larger than the figure that appears in this Table because the whole method of financing private companies is different from that of financing public companies. It is very often the intention of the private companies to keep their capital low and, therefore, avoid the payment of a high amount of duty. As their shares have not been marketed publicly, there is no necessity to place a nominal value on them in relation to what should be considered a proper issue price.

Therefore, I would hazard a guess that there must be at least twice as much working capital engaged in private companies as there is in public companies today. I mention this point because I believe that the private companies are much more important from the point of view of the national economy than is generally understood. I have had considerable experience, for good or ill, in the operation of private companies during the past 25 years or so.

I feel that I ought to state that here and now, particularly when private enterprise is very often assailed because it does not seem to be able to produce the rabbit out of the hat which the economy would like to get now and again. I suppose everyone would like to have easy ways of getting rich but let me go a step further.

I noticed that in the discussion in connection with these measures in the Oireachtas it was stated that for every £1,150 to £1,200 invested in the lighter type of industries, I presume public companies, one person could be employed. My experience in private companies, employing anything from 50 to 100 people, is that one person can be employed for at least half the amount of money which is needed to be deployed to employ them in a public company. As the private potential at the moment is twice the public potential, I think it behoves the Government and the Minister for Finance to do everything in their power to stimulate the operation of the private company. The private company has disadvantages and I want to mention one or two of them.

First of all, public companies with an Irish share register are allowed a preferential rate of income tax which must be a disadvantage to the private company. Further, the private company with its constitution etc., cannot offer its shares for sale and there is often the difficulty that people do not want to invest money in private companies because they know that, if they do, they may have difficulty in selling the shares. I want to ask the Minister to consider these two points when he is replying because I think that if he can make it more desirable for people to invest money in this type of company he will get a far greater return.

I should like to follow up some of the suggestions made on this measure in the Dáil. I was interested to read what Deputy Dillon had to say with regard to these matters—that the purely Irish company at the present moment is not getting the assistance or the sympathy that we should expect it to get here and that we are inclined to bring across the tycoon from America and expect that he will make us rich by his wonderful technique and know-how. I do not believe that such people will help Ireland to progress at all. It is from the success of the smaller companies that we shall get the people who will be able to operate bigger units, provided we can make these smaller companies prosperous.

In my own experience, in my own family business, we employ 100 people. When I was about 25 years of age, my father died and the development of our business was arrested for probably ten years by the impost of the death duties which we had to pay. We did not want to turn our private company into a public company because we would have had to change our whole constitution and we would not have had any family control over it. There must be thousands of other private companies in this country so situated, with their development arrested because they have to pay these duties. In my opinion that is the most serious hardship which they can suffer. I have no personal grievance in the matter because we overcame these difficulties but to-day, to-morrow and next year other companies will be similarly circumstanced.

I often feel too, that sometimes there are investigations by the Revenue Commissioners and others into the affairs of private companies which affect the progress of those companies. About two or three years ago there was a business concern in Mullingar where the father handed over portion of that business to his son. The son worked that business and developed it but when the father died all that business was brought in—I think they used the word "aggregated"—for the purpose of death duties. That must have been a great hardship on these people who had worked hard and given the best years of their life to developing the industry.

I should like the Minister to ask one of his officials in Revenue—I know many of them and they are men of excellent character, wonderful public servants—to ascertain how these imposts bear on the development of a business, how far they drive young enterprising men away from these types of industry into, if you like, the professions or into jobs where there is more security and where their adventurous spirit is damped down, the spirit which will give us the type of industry we should have here and which would help us to build up our economy in a way which nothing else can. It is that venturesome type of young man who believes, if he is given a fair opportunity by the State, that he is the person who can build up any industry. I have spoken to the sons of those engaged in commerce and they have said to me: "Would we not be better off in some permanent job with pension rights and with whatever capital we might have invested in Government Loans, just drawing the interest without suffering any disadvantage?" The Minister for Finance should direct his attention particularly to assisting the smaller industries, the private companies engaged in productive enterprise.

An Cathaoirleach

The Senator is going very far outside the scope of this Bill.

Mr. Burke

Well, Sir, I shall conclude on that note. I often feel—and this was mentioned in the other House —that banks very often cater for this sort of enterprise as well as the State and I know that very recently the Minister for Finance brought in a Bill which helped to redress some of that balance. I think I am in order in saying that as a result of a recommendation made in the report of the Reform Committee in 1958 a Bill was brought in—it was the Taoiseach who had charge of the measure in this House—which allowed the Industrial Credit Company to give private companies money in the form of redeemable preference shares. Before that it was illegal for private companies to purchase redeemable preference shares because they were not allowed to redeem portion of their capital.

In conclusion, I wish to say that if the Minister for Finance could in any way direct that money could be made available more freely for productive rather than non-productive investment he would be doing a great deal of good. I often feel that the banks are inclined to loan money on the purely risk basis; a cinema is a better risk than an enterprise which will export all its goods. I believe that if a climate is not created where it is better for people to be in industry and commerce though there is a greater risk from the point of view of loans and capital and if the balance is not redressed by the State to give them more profit, fewer people will be anxious to go into industry and commerce than in the past. Many of the bigger industries started under grants from the Industrial Grants Act——

An Cathaoirleach

The Senator will understand that it is the Industrial Credit (Amendment) Bill which is under discussion.

Mr. Burke

I meant to say the Industrial Credit (Amendment) Bill. The Industrial Grants Act is an entirely different measure and gives grants for the establishment of factories. This deals with the credit which is to be raised and granted by the Industrial Credit Company. I notice that many of those who have started factories, as a result of the amount of money given in the form of industrial credit, have very big ideas. All the directors and managers believe that in starting off they must have Mercedes motor cars. They have standards that are not the standards generally enjoyed in this country. That is another reason I would like to see our Department of Finance and our Industrial Credit Company assisting the development of the smaller industries.

It was only by a change of the law recently that the Industrial Credit Company was able to help those smaller industries at all. Those industries embrace probably twice the industrial output of the larger industries, as the capital employed by the private companies on the Register of Companies is, I believe, at least twice what it is in the public companies.

Our success industrially will depend on the manner in which we encourage the intelligent and vigorous young men, showing them that it is more profitable and that they will go further by engaging in the adventure of industry. Where to-day it is an adventure to go into industry and where the returns are less than those to be obtained by playing safe and taking up some ordinary position, I do not think young men will take the chance. The Minister for Finance can, in one way or another, in his Finance Acts and otherwise, make it more profitable for the man who is prepared to go into that great adventure. That great adventure will help the whole of our economy and it will help us to make progress as an industrial nation.

People who will venture over the seven seas of this world, selling our produce, are the people we want. Too many are prepared to work here in Ireland, running cinemas and petrol filling stations. There should be a better return—or, perhaps, less income tax charged—in the case of enterprise which will improve Ireland, redress our adverse trade balance and help us to improve this country in social and educational matters. Such action will be helpful, also, towards fulfilling our national aspirations, since none of these things can be done without money and it is only by an active and vigorous industry—trading boldly and sometimes dangerously—that we can hope to succeed. However, unless there is a chance of a good reward to those who engage in adventurous trading, it will not be possible to get the young men of Ireland to venture into that kind of trading and, therefore, we shall not get the capital to ensure that it becomes a success.

Eamon Ó Ciosáin

Senator Burke has told us that all Parties in the Dáil subscribe to the policy enshrined in this measure. That is true. He told us that he also subscribes to it. At the same time, it is very difficult to find out from his speech whether he is for or against the measure. Having made the express statement that he is supporting the measure, he proceeded to criticise the policy of the Government in relation to our industrial expansion.

Mr. Burke

I did not.

Eamon Ó Ciosáin

He said, for instance, that nothing can be done by way of industrialisation here without capital. Everyone agrees with him in that. There is no doubt about that. Then he proceeded to tell us that that capital should be properly utilised.

Mr. Burke

Hear, hear.

Eamon Ó Ciosáin

By saying that, he appeared to me to be casting some doubt on the policy underlying this Bill. The policy involved is to give to the Industrial Credit Company what the Minister for Finance and the Government think will be adequate capital to enable them to give financial assistance to industrial projects over the next five years. It seems to me that if that is to be the policy, the administration of the policy must be left to the Industrial Credit Company. They are the people entrusted with this very onerous task.

When someone says that it is right to give this capital but at the same time throws doubt on the position by saying that the capital must be utilised in the proper way, it is very hard to understand him. If the Senator has any doubt, even up to now, about the way in which the administration of these capital funds by the company has been handled, he should tell us from what source that doubt arises.

Senator Burke also drew comparisons between private and public enterprises. He seemed to convey the idea that the Government is not doing enough to encourage private enterprise. I do not agree with that. Every encouragement is being given to private, enterprise to carry out industrial projects here. Is it not for that very purpose we are trying to enact this measure here to-day, to make further and better provision for the expansion of private industrial enterprise?

My view is that there should be no conflict at all between private and public industrial enterprise. It is our duty to give encouragement to every enterprise, whether private or public, so as to give employment to our people and stem the tide of emigration. That is the policy enshrined in the White Paper published by the Government, the Programme for Economic Expansion.

This Bill should find general acceptance in the Seanad and, indeed, in the country generally, because its provisions are designed to ensure that the capital resources of the company will be adequate to meet what we hope will be an expanding industrial drive over the next five years. As the Minister has already stated, it is proposed that, as a result of this and previous legislation, no worthwhile plans for industrial development here will fall to the ground for want of finance. That is the policy of the present Government; it is the policy of the Minister for Finance; it is the policy to which I, for one, am prepared to subscribe. The encouragement and the stimulus we are giving in this measure should go a long way towards achieving what the Government have enshrined in the Programme for Economic Expansion.

This is a policy that should be supported by everyone who has the welfare of the country at heart. There is little use in advocating increased industrial activity if we are not prepared to make the necessary capital available. Nothing can be done without capital. Its provision is the first and most necessary step and that is the purpose of this Bill. It is only right and proper to give every encouragement to industrialists who are prepared to put some of their own money into industrial enterprises. They are worthy of the support of the State and the Government and of whatever support the country can afford.

The Industrial Credit Company's capital resources are being augmented by this Bill with the idea of promoting further industrial activity here and strengthening the position of the Industrial Credit Company so that they may be able to give more assistance to those who will engage in industrial enterprise over the next 5 years. I am sure that if the £20 million of fresh capital envisaged in this Bill is found to be inadequate, the Dáil or the Seanad will not hesitate to give the Minister and the Government the authority necessary to increase the capital resources of the Industrial Credit Company. That is a task for another day.

Certain criticisms have been levelled against the Industrial Credit Company. Some people criticise them for being too stringent in their handling of applications for credit for industrial undertakings; others criticise them for not giving more information to the people on their day-to-day transactions.

Dr. O'Donovan

I would not call a £5 million transaction a day-to-day transaction.

Éamon Ó Ciosáin

But it covers day-to-day transactions.

Dr. O'Donovan

It is quite common in financial transactions of that kind for a public statement to be made.

Éamon Ó Ciosáin

Does the Senator believe that it would be right for the Industrial Credit Company to give details of all they do in their day-to-day administration?

(Interruptions.)

Mr. Barry

The Senator is raising a hare now and asking for trouble.

Éamon Ó Ciosáin

I am trying to proceed with my observations. As in the case of the ordinary commercial banks, the Industrial Credit Company must exercise discretion as to the amount of capital they give out and to whom they will give it. Surely it is not right for us at this moment to begin to doubt their competence to deal with that situation. I am prepared to accept the view that the Industrial Credit Company are a body of experts, people of experience in these matters, and that they will exercise their discretion in the right way.

The capital resources of the country have not been fully tapped for the purpose of industrial expansion. Everybody knows that much of the country's capital goes abroad and is utilised in foreign investment, in industrial activities outside this country. It is a pity that some, at least, of that capital could not be diverted towards the promotion of industry here at home. That, again, is a very big question and one that deserves careful consideration by us and by the Government and everybody else who has the interests of the country at heart.

I am not attempting to advocate that there should be any interference with the people as to what they should do with their own money but I am wondering if ways and means could be devised to explain to the people who invest their money abroad that they would be better off if they invested it here at home and that they would get higher interest on their investments here, if only they could be made to realise that. I think this question should get more consideration and perhaps the best body to which the matter could be submitted is the Industrial Credit Company itself. At any rate, that is the suggestion I have to make to the Minister and I shall conclude by welcoming the Bill and giving it my support because I believe it is a step in the right direction. We all speak about the feasibility of increasing the industrial potential of the country but it cannot be done until adequate capital is provided and that is the purpose of this Bill.

Professor Quinlan

I am afraid I cannot share the enthusiasm of Senator Ó Ciosáin for this Bill because it seems to me that we should all feel the frustration on which Senator Hayes expressed himself earlier today in connection with the piecemeal approach and the fact that we are being given so much to deal with at this late stage. I feel that the most significant development in the past 12 months in this country was the publication of Economic Development. These measures, it may be claimed, are flowing out of that but I believe that much of the good that lay in Economic Development has been lost by the fact that a broader and more co-operative approach has not been adopted to the proposals. By that I mean that it is a great pity that we in the Seanad have not had committees sitting on the proposals in Economic Development to see if we cannot better them. I think the authors of that programme certainly pleaded for such.

Likewise, it is a pity we have not been able to view the whole capital development programme as a unit. Apparently there is an attitude that when we are giving away money, increasing the capital of the Industrial Credit Company, we should all applaud the fact that money is being put at the service of this company to give greater industrial development and that the more money put at its service, the better. That is all very well. It is a nice line of reasoning, if we did not have to pay the piper, if we did not have to find the money, if we did not have to meet all our capital requirements out of a very limited capital sum. We all know the amount of capital available here is very limited. That is made crystal clear in the publication Economic Development. What I fear is that we are squandering this money on projects that will not pay very good returns, while others will feel the shortage of capital. I should be far readier to agree to this if I saw similar schemes for opening the floodgates of credit to agriculture or opening them in a really effective way to the private enterprise sector of our economy.

I think that Government policy, as commented upon by Senator Ó Ciosáin, underlies this Bill. That policy, in so far as I can judge it, seems to be a continuation of the old forms of credit, the old machinery of credit, and so on, whereas something much more dynamic and revolutionary is called for. Local credit unions and savings banks are the channels through which credit must naturally flow to the private enterprise sector of our economy, at least to the people dealing in thousands or maybe hundreds of thousands. These are the people who require that help. The greatly augmented resources being placed at the disposal of the Industrial Credit Company by this Bill would be far more productive and acceptable if we could see clearly the channels through which the credit is to flow down to the community.

To my mind, these channels are the channels which have proved successful in other countries. One is the proper development of the local savings bank, which will not merely act, as unfortunately the bank in Cork acts, as a means of collecting money for the Minister, but will utilise its position in the local community to channel the funds coming from the parent body and from local savings. If we could do that, we could reach the real people who will spark off industrial development—the small business people in our cities, towns and villages and not the people dealing simply in millions. To develop credit adequately here, we would need to study, as a matter of top priority, the development of local credit unions. It is a great pity we cannot utilise more fully some of the expert advice available to us. Only last week I met here an expert on the credit union movement, Father Delahunt, one of our own missionaries back from Trinidad, where they have accomplished wonders by this movement. Until I see how the channels flow out from this company, I am very reluctant to subscribe to increasing its scope as drastically as is proposed in the Bill.

We have also the question raised by Senator Ó Ciosáin, which was the subject of comment in the Dáil, concerning the secrecy of the operations of the Industrial Credit Company. There cannot but be uneasiness at what has been bandied about concerning recent investments, especially the investment in the Cork dockyard project. It is unfortunate that the matter has been raised in the manner in which it was raised and that a doubt has been cast as to whether the Dutch concern are really investing any sizeable amount of money here. I know it can be objected that the Dáil and Seanad are not the proper places to rehash the decisions and reasons for the acts of the Industrial Credit Company, but much could be done here if we had an industrial development committee of both Houses or, perhaps, of each House singly. Then, in confidence, you could get the details in those committees.

When you are dealing in millions and when the House is charged with the responsibility of voting millions of the taxpayers' money or committing our people to guarantee an amount, as proposed here, of £15,000,000, we should know the facts; but I suggest they should be given in confidence. The working of such a committee would do a great deal to bring a non-Party or all-Party approach to the important task of our industrial development. Then there would not be any need for any suspicion such as has arisen in relation to this project.

Another point I wish to mention is the piecemeal nature of what has come before us—so many millions for aviation, so many for tourism, so many for grassmeal, and so on. In all this, the only way in which agriculture seems to be coming before us is that this year it will get the Minister out of a hole. The farmers are getting into a hole. Production is down and, because of this, the Exchequer will gain by £1,000,000 this year. The sum set aside for subsidising exports will not be used; it will be one of the windfalls for the Minister as one of the errors in estimation. I appeal strongly that the time is urgent for doing something positive, something really spectacular, to develop agricultural production and to channel credit——

An Cathaoirleach

Clearly the Senator is now going outside the scope of this Bill.

Professor Quinlan

I was trying to establish that my objection to this is the fact that we have not yet seen the whole of the demand on the public purse. I fear that the contents of the public purse are being poured out to industry at the expense of agricultural development.

There is one other point. When these funds are made available for industry, we then need the co-operation of labour and efficient work from labour. There, again, I think something really new is called for. We cannot ask our people to take home less in the week, but surely we can ask everybody in the State, including labour and management, ourselves and everyone else, to work some hours longer. That additional work by labour might be used to pay back some of the capital invested in these industries and, in that way, the labour force could be brought in as partners in industry, providing more and more capital for industry as the years go on.

Even at this late date, I suggest that the Government should have an over-all review of the position. There should be a report from some body, like the Capital Investment Advisory Committee, or some similar body, as to whither we are going, in what way will we get the finances necessary for our development and, above all, what shall be the order of priorities.

Professor O'Brien

There was one aspect of this Bill which figured very prominently in the debate in the Dáil and which caused me a certain grave disquiet. I refer to the power given in the Bill to the Industrial Credit Company to impose vast contingent liabilities on State funds. In the course of the debate on the Finance Bill, I quoted from the report of the Central Bank on this subject. The Central Bank report pointed out that the amount of contingent liabilities of the Irish Government has been growing materially in recent years and that many of those liabilities have had to be met. I think it is the universal experience of business people—everybody in this House will agree with me in this—that contingent liabilities have a way of coming home to roost. People who back bills usually have to pay them in the long run. I believe that is equally true in the public, as in the private, business sphere.

The central problem that causes me most disquiet is the growth of the national debt, coupled with public expenditure on a more or less stable income structure and a falling population. This makes a reduction in taxation almost impossible and a reduction in taxation is necessary to encourage savings and private enterprise and to provide investment. It seems to me we have here something like a vicious circle. Unless we have a reduction in taxation, we shall not have more private enterprise and, as long as the contingent liabilities of the Government go piling up, we shall not have a reduction in taxation.

I am particularly disquieted by the suggestion that these vast contingent guarantees are being extended now to foreign investors. I, for one, am completely opposed to Irish taxpayers underwriting the risks of foreign investors. If outside business people are not prepared to come in here with real equity capital, risk-bearing capital, I suggest that we really do not want them at all. If they are simply going to lend money to this country, they are imposing a burden on the balance of payments. If they are coming in to invest with guarantees against loss, then they are imposing a burden on the taxpayers and, ultimately, on the balance of payments also.

I am afraid that as a nation we all suffer—I mentioned this before—from a certain inferiority complex. We like foreigners to come in and invest their own capital, but the argument put forward now is not so much capital as know-how. They will bring us the know-how. We can put up plenty of capital if there are attractive propositions. Luckily, we are still a creditor country. We have vast savings available for domestic investment, if the propositions are attractive. If attractive propositions are put up, we are in a position to import all the technicians and all the know-how we require for our industries.

As I said, there is a sort of inferiority complex, a complex to which I, for one, do not subscribe. Irish people are at least as intelligent as other people in Europe. We are exporting vast numbers of graduates of the highest professional qualifications, graduates who are grabbed up by industries in other countries. It seems to me to be an altogether unnecessary price for us to pay for so-called foreign know-how to guarantee vast sums of money to foreigners so that they will come in here and open branches and bring with them some of their technicians to staff these branches. We have graduates of the highest intellectual calibre who could very easily be trained abroad. If the worst came to the worst, we could temporarily import foreign graduates and technicians in order to start the industries.

So far as the foreigner is concerned, as I said in the debate on the Finance Bill, no outsider, no foreigner, is bound to keep this country. We must keep going by our own efforts. Foreigners are not bound to buy our products unless we sell at a price that attracts them. Similarly, no foreigner is bound to invest money here unless he sees a profitable opportunity of doing so. Foreigners get every encouragement and every form of preference in regard to taxation, export allowances and everything else. If foreigners see openings, they will take them. If, however, they want to come in here on the basis that they will get all these preferences and, if they make a profit, they can put that profit into their own pockets, whereas, if they make a loss, the unfortunate Irish taxpayer will have to make it up to them, then I feel we would be better off without that type of foreign investor. I do not see why foreigners should be treated more favourably than Irish citizens.

I do not know the sums that have been guaranteed for certain foreign companies, but, if what rumour says is correct, very few Irish concerns would be in the least likely to get guarantees of the same nature from the Irish Government for anything like the same amount. It would be very interesting, indeed, if the Minister could, without giving away any secrets, give us some sort of approximate idea— a global figure without reference to individual enterprises or companies— of how much real foreign risk capital has been invested here in recent years. My suspicion is that it is a great deal less than we have been led to believe. I may be wrong; I hope I am wrong. The Minister is the one person in a position to prove me wrong and, until the Minister contradicts me, I shall continue to assert that a very small amount of risk-bearing equity capital has been invested here from outside.

This proposal that the Industrial Credit Company, which was actually founded for rather different purposes many years ago, should now be put in the position of giving these vast guarantees on contingent obligation of the Irish Government is one which, in the present state of our public finances, causes me a certain amount of disquiet. When the Government are being asked to pledge credit of this amount—I shall not say the Dáil or the Seanad, because that might be giving away secrets—at least the Minister for Finance should have the right to refuse, or to agree, and should accept full responsibility. Under this Bill, so far as I can understand the debate in the Dáil, the Minister for Finance washes his hands completely of all responsibility for these guarantees. But, when the guarantees come home to roost, when the guarantor is called on to pay, then the Minister will not be able to wash his hands and in future Budgets he may find himself faced with very disagreeable consequences.

Dr. O'Donovan

I do not wish to speak at any great length on this Bill but I do feel that some more explanation is required for bringing in the Bill at this time than has been vouchsafed by the Minister. All this journalistic phraseology like "further important step in the implementation of the Programme for Economic Expansion” and “the Industrial Credit Company is in a key position in the economy” and all that kind of thing, does not get away from the fact that we had last year an Industrial Credit (Amendment) Bill and one asks oneself how is it that, the conditions in regard to financial matters not having changed in this community, as far as I can see, to any serious extent in the last 12 months, all this was not done 12 months ago? Moreover, the existing position under the law, as I understand it—the Minister will contradict me if I am wrong—is that the authorised share capital of the Industrial Credit Company before this Bill was introduced was £5,000,000, of which only 2,000,000 shares were issued up to the 31st October last, leaving them with £3,000,000 in hand to issue, if they wished to do so and, in addition to that, they had power, apparently, to get guarantees up to £5,000,000. Again, if one is to take it that this covered their overdraft, just under £2,000,000 on the 31st October last, that meant they had another £3,000,000 there. That is a total of £6,000,000.

One asks oneself straight away what has happened that a company that has been expanding in a very slow way for a very long time past require suddenly more than £6,000,000. Assuming that they had commitments of another £1,000,000 since last October, one asks oneself how is it that they suddenly require sums in excess of £5,000,000? Of course, the answer is immediately available in relation to a particular transaction.

I am in full agreement with my colleague Senator O'Brien, save to this extent, that there has been a substantial investment by the oil companies in the oil refinery. There is this much to be said for Senator O'Brien's point of view—the oil industry in this country is a monopoly and they got certain guarantees. They have a monopoly market. So, it was not risk capital in the strict sense of the term. They are much the same as the monopoly industries we get in this country, where you are secured both ways—not alone secured by being given part of the capital but also by the fact of being given a monopoly market.

It is all right, as I say, to bring in this Bill with a great deal of blah—I think that is the suitable word to describe the Minister's brief, in this House certainly—but you cannot get away from the fact that at the 31st October last the Industrial Credit Company had £6,000,000 of unexhausted capital resources available to it if it wanted to draw on them and you immediately ask yourself how is it that, this year, one year after another Bill was introduced, this Bill should be brought in?

I agree with Senator Hayes that legislation should certainly not have to be amended within 12 months of a job having been done on it in relation to any corporation unless, possibly, in the case of the Department of Industry and Commerce who, occasionally, have been in such a hurry that some error was found in the legislation, but this is not due to any error that was found in the legislation. I think that this proposal, which really is to put into law —not put into operation, but put into law—the proposals in the White Paper, is premature unless, as has been suggested, there is something that has not been disclosed. I think there is, of course, and, as a person who, I suppose, can be regarded primarily as representing the City of Dublin, I must object very strongly to an important industrial concern in this city being put in jeopardy at the expense of the introduction of an enormous monopoly which may prove to be a complete white elephant. I must object to that kind of thing when I see private enterprise being put into serious jeopardy and the people concerned with the private enterprise have good reason to object to this kind of legislation and to this kind of procedure. I make no apology for taking that attitude.

One other point that comes to one immediately is, where are the corresponding proposals in relation to agriculture? Before the war, the Agricultural Credit Corporation was a larger institution financially than the Industrial Credit Company, roughly speaking, the capital being about £1,500,000 in the case of the Agricultural Credit Corporation and £1,000,000 in the case of the Industrial Credit Company. Last year, roughly, the position was that when you allowed for its holding of its own agricultural bonds by the Agricultural Credit Corporation, its capital was about £2,500,000 and the Industrial Credit Company capital was about £4,000,000, so that one had investments of £2,500,000 in the agricultural industry and the other has invested about £4,000,000 in various forms of light industry and some industries not related, strictly speaking, to the Government's social programme, and so on. At any rate, the position was that, compared with 1939, in the intervening 20 years, the Agricultural Credit Corporation in real terms had not expanded at all, when you take real values but, in fact, had decreased in size very much, and the Industrial Credit Company had expanded moderately, when you have regard to the value of money. That was a moderate expansion but this, of course, is an enormous expansion of it, on paper at any rate.

One asks oneself how is it, in relation to a part of the economy which produces one-third of our national income, 80 per cent. of our exports, the Government does not seem to be able to put capital into it or to be interested in putting capital into it. It is not just good enough for the Government to say, as Governments have said, that there are various methods of helping the farmer. Of course, there are various methods. I do not agree with some of them because I think they are in the nature of charity of various sorts and, again, if I am asked for my opinion about that, I certainly think it is very much inferior to lending money to a man who is prepared to borrow money to develop his business. It is altogether inferior. I know it is popular in both Houses of the Oireachtas to climb on the band wagon when something like that is suggested but I do not mind climbing off that band wagon here and now. I would prefer to see farmers who have land, even if they have not a good farming record, if they are prepared to assume liability for a loan. getting the money. I would much prefer it than that they should be given some form of charitable hand-out.

An important matter has arisen in this connection. There was considerable discussion in the other House about it and it was raised by Senator Ó Closáin here this evening, that is, the question of what he calls a day-to-day transaction. If any transaction involving a sum of, say, £3,000,000 to £5,000,000 is to be regarded as a day-to-day transaction in this country, I think the people who are running the nation's affairs will have to revise their opinions. It has always been quite common in private banking, all over the world, that when important transactions take place they are given immediate publicity. It is the common practice and I could instance dozens of occasions, from the creation of the United States Steel Company by the House of Morgan, 50 years ago, up to the take-over bids in Britain in the last six months. You could instance them by the hundred. It is the common practice in private banking in every country in the world to do that.

Yet, the Government have the hard neck, and the Minister for Finance has the hard neck to come into the Oireachtas and to say that he will not give information to the Houses of the Oireachtas about a major transaction which everybody knows has taken place. Of course, that is the attitude of a dictatorship. Senator Lenihan may smile but it is the attitude of a dictatorship, nothing else. He can smile as much as he likes. Whether it is that he is amused at the idea of being able to put across a dictatorship or that he is amused at the fact that anybody should refer to it in public, I do not know. Perhaps there are various other reasons.

Mr. Lenihan

The Senator is getting hot under the collar.

Dr. O'Donovan

At any rate, there is certainly an attitude reminiscent of an extreme wielding of the big stick, an attitude of: "We are not responsible to anyone. We got enough votes in the last election to form a Government and we are going to be responsible to nobody." That is what it amounts to.

Éamon Ó Ciosáin

There is no change in their policy.

Dr. O'Donovan

Of course there is a change in their policy. Their balance sheet was only £4 million last year.

Mr. Carter

There is no change in policy.

Éamon Ó Ciosáin

Was the Industrial Credit Company obliged to give details of these transactions to the public during the lifetime of the previous Government?

Dr. O'Donovan

It was only £4 million after 20 years and now it suddenly becomes £20 million in a few years. A very big transaction.

Éamon Ó Ciosáin

Would the Senator reply to my question? Was the Industrial Credit Company obliged to give details of these transactions during the lifetime of the previous Government?

Mr. Lenihan

Answer the Senator.

Dr. O'Donovan

I served for 20 years in the Department of Finance and, every year I was there, a statement was provided to the Department giving details of every one of their holdings, down to the last shareholding, even in the smallest company.

Tomás Ó Maoláin

That is not the question Senator Ó Ciosáin asked.

Dr. O'Donovan

The information is available to the Minister and the Minister refuses to give it to either House.

Tomás Ó Maoláin

Answer the question Senator Ó Ciosáin asked.

Dr. O'Donovan

The Minister has never denied that he had the information but he took the attitude: "We shall not give any information because we might be held up to political criticism if we gave that information." That is the reason for the whole affair.

Tomás Ó Maoláin

Why not answer the question Senator Ó Ciosáin asked?

Dr. O'Donovan

The Minister admitted in the Dáil that the Industrial Credit Company have never refused information to the Minister for Finance.

Dr. Ryan

Did I say that?

Dr. O'Donovan

I understood the Minister to say that.

Dr. Ryan

Better go back and read it again.

Dr. O'Donovan

That is what I read into what the Minister said.

Mr. Lenihan

I should like to say a few words arising out of what has been said by some of the previous speakers, and it might be no harm to bring back a bit of common sense, if I might say so, to this debate. I am sorry that Senator O'Brien is leaving the House. In years gone by, I learned from him an elementary economic maxim that you cannot have your cake and eat it. We are faced with the problem of providing more employment for our people here at home. That is the basic problem facing this Government, or any Government that holds office, and in order to get down to grips with the problem it is a question of having projects economically productive on the one hand and, at the same time, which give employment. If the Government, in following that objective, think it is desirable to adopt a certain attitude in regard to specific projects and if criticism is directed at them, ultimately that criticism is directed against the Government for providing employment for our people. It is the old maxim that you cannot have your cake and eat it.

There may be certain penalties in refusing to divulge certain information in regard to such projects as that in Cork and, if we have to pay these penalties to provide employment for our people here at home, I shall certainly be willing to defend any Government in regard to them. Running through every Central Bank report, through every economic statistical report and through every report from every committee interested in this country's economic position is one stated fact—that there is no lack of capital in this country. Given that premise, this Industrial Credit (Amendment) Bill is a Bill to provide the machinery whereby that capital will be made available in increasing amount for any worthwhile project, no matter if it be a project inspired from at home or abroad. That is the elementary principle of the Bill before us.

Senator Quinlan used the word "dynamic". He said there was no evidence of a dynamic attitude on the part of the Government towards progress in our economy. Since the Industrial Credit Company was set up in 1933 it disbursed £4.8 million in the way of loans towards Irish industry. The Government now propose to disburse £20 million over the next five years, to make available £20 million for investment in industry and, if that is not a dynamic improvement in regard to industrial credit, I do not know what is. There is an improvement from £4.8 million made available over 25 years since 1933 to £20 million over the next five years, and I think that "dynamic" is the appropriate adjective for a Bill of this nature. Realising that there is no lack of capital in this country, this Bill is merely a machinery Bill to make available, through an industrial credit institution, plenty of capital, capital up to the amount of £20 millions for any worthwhile project that may emerge during the next five years.

What has been lacking in this country is the technical know-how, and worthwhile projects emerge from fusion of industrial know-how and capital. We have the capital and now it is merely a matter of fusing that with the know-how to provide projects that will help to arrest emigration and provide employment. It is merely a physical matter of inducing more projects to set up in this country like the oil refinery, the Verolme project in Cork, and others like that which has attracted American finance to the factory in Waterford. It is in that direction that we can best progress, and what this Bill proposes to do is to say to anybody who has the know-how, be he from home or abroad, and providing he conforms with the law of the land with regard to investment: "We have the finance for you." In some cases I should go so far as to say that if people were bringing in no capital, only know-how, provided the fusion of the two would result in providing employment here at home, capital should be available.

That is the whole purpose of this Bill. It is a very laudable purpose, and I think that much of the criticism of it has been due to the fact that certain people are getting away from the elementary fact that if we are to provide more employment for our people at home we must have industrial projects. In the immediate future the land cannot provide more employment. In the long run it will, but not in the immediate future—in the next five or ten years. Increased production from the land will not yield immediate increased employment. The aim is to provide more employment for our people and, to do that, we must have industrial projects set up that will give greater employment to them. It is in that context that I say this Bill is a very worthwhile one and one which is merely providing the machinery, following on the recommendations in the White Paper, to make capital available for industry, to provide more work for our people.

Mr. O'Quigley

I must confess I was somewhat amused when I got this Bill to notice that it concerns a company which was created or formed under the Companies Acts because last week we had a Bill here which proposed and has now, in fact, brought about the situation, that Córas Tráchtála Teoranta should be created into a semi-State body. The Minister for Industry and Commerce, in commending the Bill to the House, gave as one of the major reasons why it was proposed to turn the company into a state body, that its enhanced status would make it more certain that foreign industrialists would have dealings with it, and that our economy would profit thereby. We have here a Bill which is merely enabling a company to amend its memorandum or articles of association, and there is no loss at all upon foreigners when they want to get sums amounting to about £5 million in dealing with the company, so that I must say that I was amused to find a difference in outlook between the views of the Minister for Industry and Commerce on companies and semi-State bodies, and the views of the Minister for Finance as reflected in this Bill.

Apparently it is not proposed to raise the status of the Industrial Credit Company and to make it into a semi-State body. I suppose the Bill really does not have to, because anybody is glad to take money from anybody when he can get it—not the least foreigners. I must confess it is extremely difficult to form any true judgment upon a measure of this kind because ordinary members of the Oireachtas, like myself, have not the specialised information with which we could form judgment on a measure of this kind. Of course, any measure that will help to create employment of a worthwhile character will always receive the support of every member of this House, no matter what his political outlook is. We all realise that it is a dreadful business to have people eking out a miserable existence on the unemployment benefits they can get under the social welfare code, and if we can do anything for them and their families to provide them with a better living, that is not only a humanitarian objective which would appeal to all, but something that would contribute to the welfare of the country in many directions.

Senator Lenihan, in saying that the Government are being criticised for providing employment and that any criticism of this measure is to be taken, and must be taken, as criticism of the Government for providing employment, was not speaking sincerely at all. I should like to have the benefit— but I am sure the Minister could not possibly give it at this stage—of seeing some statement or chart showing what companies have got what finances, what projects they have engaged in, what products they have made available, how much is being exported, what employment they have given, how many of these companies have fared well, how many of them have gone out of business, how many have been able to repay their loans and so on.

If we had that kind of statement, and if we saw that as a result of the introduction of the Industrial Credit Act, 1933 and 1958, there was a continuous expansion in industrial activity and a continuous increase in production, we would have no hesitation in voting whatever sums were available to the Minister for the purpose of creating employment and expanding industrial activities along those lines. I must confess that I do not know what the position is. I rather gather that there is a movement in that direction of creating increased employment. Perhaps some of these companies which will get the benefit of this Bill or the industries which will get benefit from Bills of this kind do increase our exports or provide for the home market and obviate the necessity of importing goods which are not manufactured at home.

It should be possible to get some kind of five-yearly or three-yearly statement which would show us what exactly was the net position and in what direction industrial expansion was moving. If the Minister for Finance or the Minister for Industry and Commerce could show quite clearly what way events were developing as a result of the introduction of measures of this kind, it would be clear evidence of the soundness of the Bill and it would be a well-deserved feather in his cap.

An aspect of a Bill of this kind which must give rise to a certain amount of uneasiness, and which must make us pause and consider, is that we are not at all sure that the money is being put to the best advantage. It is disturbing for me to learn from Senator Lenihan—I do not know whether or not he reflects the Government point of view on the matter— that nothing really can be done to increase employment in agriculture for the next ten years. He said that we can only hope to increase agricultural productivity but that will not necessarily increase employment in agriculture. I think that is a wrong attitude to adopt because the fact of the matter is that at the present time persons engaged in agriculture, small-holders, have not got a sufficiently high standard of living to keep them at home and everyone who has not got a sufficiently high standard of living is another added to the number who emigrate, so that if we can raise productivity on small farms, we will at least be keeping people in employment and not forcing them to emigrate. It is for that reason that I wonder whether the money being provided under Bills of this kind is being used to the best national advantage.

During the debate on the Appropriation Bill I said that I did not know what Government policy was in relation to small farmers. I do not know what it is. I have not been able to gather what it is from any publication or any statements made by Government speakers. A pinch of lime or a shake of fertiliser is not my idea of a policy for small farmers, or my idea of a policy to increase agricultural production on these farms to the extent of providing these people with a proper standard of living in order that they may be enabled to remain at home on the land and not have to emigrate. There must be something much more far-reaching and fundamental which will give a real assurance to the people on the small farms, who constitute an extraordinary number of the people of the country, that they will have such an income that England will not mean as much to them as it does at the present time.

Another matter which seems to me to be called in question in relation to a Bill of this kind is the wisdom of providing money for industrial projects when so little money is being provided in the field of education. I should much prefer to see some of the money provided under this Bill devoted to extending schools and to providing more equipment in the secondary and technical schools to give young boys and girls a basic knowledge of those sciences and skills which will be useful to them afterwards. I do not think that nearly sufficient money is being devoted to our educational services with an eye to the requirements of industry or agriculture. I should prefer to see money out of the resources of the State being channelled into the production of those services which will redound in time, perhaps in a short time and perhaps in a significant way, to the benefit of production in agriculture and industry.

There is not very much more I wish to say except that I note from the daily papers that it is intended that Comhlucht Siúicre Éireann will build a skyscraper office at the corner of Earlsfort Terrace and Leeson Street. It is my sincere hope that none of the money provided under this Bill will be used to finance that over-ambitious and unnecessary project.

Mr. Carter

I expected that at the opening of the debate on the Second Reading of this Bill, I would hear something about industry, and I did not think when we started that we were to be dragged into the by-ways on the subject of agricultural production. Senator O'Quigley knows well, if he read the Government White Paper, that there is a plan for the small farmer as well as for the large farmer. If the Senator has not acquainted himself with the facts in the White Paper, I shall be very pleased to send him a copy.

This Bill deals with the Industrial Credit Company. We are all familiar enough with it, even though I do not pretend to be in any way interested in public finance, any more than any other Senator. Senator Barry and any other Senator on the other side may sneer as long as they like. I deprecate such expressions from the other side of the House because there is an innuendo that something is being done in the Seanad which is not strictly in accordance with the principles governing the establishment of the Industrial Credit Company.

Senators opposite are trying to cast a slur on the activities of the Government, but they know that when the Government took over in the Spring of 1957, you would not get one penny from a local authority to reconstruct your house, never mind being able to underwrite or give sanction to a private company to increase its capital to £20,000,000. Because the Government have restored confidence in the finances of this country, we can today undertake the Second Reading of this Bill. There is no reason at this stage why Senators should say we are seeking to bring in American tycoons or, for that matter, any other tycoons at the expense of our industrialists.

If Senators will look back at the 18 months' work of the Government, they will soon see that amongst the important matters dealt with over the past 18 months, were some Bills which will, we hope, make industrial history. We have dealt with Bills such as that to provide money for the manufacture of nitrogenous manure. We have the refinery. We have various other industrial projects. All were undertaken in the hope of making our mark in the industrial drive.

I remember that in the past Deputy Dillon was quoted here. He is a very bad example. He is a very poor prophet. He was quoted as deprecating this measure in the Dáil. I remember other times when Deputy Dillon deprecated other projects. If it ever comes to the stage that Deputy Dillon has to eat his speeches, he will have a very bad attack of political indigestion by the time he has finished. He is completely discredited, even as a propagandist, because his speeches have no basis either in fact or in fiction.

It is wrong, at the outset, to seek to disturb public confidence. The Government are pursuing what they set out to do when seeking the votes of the people in the Spring of 1957. Having sought the votes of the people and obtained them, the Government are now engaged in putting their policy into effect. Just because they have succeeded so far——

Mr. Burke

Would I be in order in asking if the Senator read Deputy Dillon's speech in the Dáil? I mentioned it. He did not deprecate this Bill. He suggested ways by which the money might better be used in industry. That was a constructive Second Reading speech.

Mr. Carter

That is not a point of order. The Senator is merely asserting that Deputy Dillon is doing now what he did in the past and that Deputy Dillon has no confidence in the future of this country.

Mr. Burke

Deputy Dillon is a red rag to Senator Carter.

Mr. Carter

The Senator is merely asserting that Deputy Dillon has no confidence in his Party or in the people and that he suffers from a bad dose of inferiority complex.

An Leas-Chathaoirleach

Senator Carter should now try to come back to the Bill.

Mr. Carter

The Industrial Credit Company publishes a balance sheet every year. In the statement of accounts, the Chairman always deals with the state of industry as he finds it at the time—just the same as every other statutory corporation in the State. There are many statutory corporations. When Senators opposite criticise our statutory corporations, they never take into account developments which these corporations have brought about. They never think that private enterprise would never have reached the stage at which it could grapple with developments of the description mentioned. They never think of the assets created by these statutory corporations. They never give the personnel in these corporations any encouragement or praise for the work done in the past and the work which we hope they will do in the future.

Let us be realistic about this because we are all in it together. We are not so big that we can afford to have the whisker at one end and the clean part at the other, like the Mac's Smile safety razor blade. There is no use in Senators opposite deprecating the action of the Government in seeking to increase the capital of the Industrial Credit Company merely because present trends demand an increase in capital for that company.

Mr. Burke

I want to protest. Nobody made these statements.

Mr. Carter

We cannot afford to be insular in our movements. Trade is not a one-way street As someone said lately, the policy of Sinn Féin, Ourselves Alone, is dead and buried. It was carried too far. We have to live by our efforts and by the example we set to outsiders. At this stage, it is not fair to say that because the Government underwrite a risk for statutory corporations, we are encouraging business tycoons to come here at the expense of the taxpayer. I deny that and I deprecate the statement.

The Minister for Finance when introducing this Bill in the Dáil and in this House today said its purpose was that no worthwhile project would fail for want of capital. There is no use in Senators dragging in the Agricultural Credit Corporation or any other corporation, for that matter. We are dealing today with the Industrial Credit Company and that being so, I for my part am very glad to see that, following a slow start, the Industrial Credit Company is in a position to ask for this increased capital, to be able to exploit it later on, to be able to invest it here and to invest it, we hope, successfully.

We are living in times of great change from a political, economic and financial point of view. We are living in times of sudden change and in times when the countries of Europe are coming together to see if they can better their respective positions by joining together in common market areas or in free trade areas. We should be looking to the future, too, and I am rather disappointed that some of our private companies who are engaged in business have not come together to discuss the possibility of amalgamating and thus forming a basis for competing in the export market.

We read in every publication and it is stated again and again by foreign businessmen and foreign experts coming here that the future as regards business will be keen and doubtful. It behoves us at this stage to consolidate and knit together, as it were the businesses we have and, if possible, amalgamate them with a view to the export market. Relatively, we have as good businessmen as any other country. It has been said that we are 25 years behind the rest of Europe. I am not in a position either to deny or to comment on that, but if that be so, we have a lot of leeway to make up, even to gain a footing with them on a current basis. I would hope that our labour leaders and our leaders in industry would come together in the future to discuss ways and means of accelerating the industrial drive in the State with a view to getting markets abroad.

Mr. Barry

I should like, Sir, to offer a personal explanation before you call on the next speaker. The last speaker referred to me by name and said I had sneered at him. As I have not yet taken part in this debate, he must have decided that a facial expression of mine was a sneer. That facial expression, if it was a contortion, was probably the reflex of an inner stress of some kind which probably would be quite understandable to most people. I certainly do not want to be recorded as having sneered at anybody.

Professor Stanford

In justice to Senator Carter, I think I ought to say a very audible sound came from the Senator's direction when Senator Carter was speaking. As well as I could hear, it was the word, if it can be called a word, "shucks" or rather "Ah, shucks".

Mr. Barry

Certainly I agree to that.

Mr. Carter

It was a comment I referred to, not a facial contortion.

An Leas-Chathoirleach

I think we shall regard the matter as closed.

Mr. Murphy

I did not expect there would be such a wide debate on this Bill but when millions of pounds are being thrown around, it is natural that some words should follow them. However, I am more interested in men. I am intrigued by the present situation, this Government saying, and Senator Lenihan reminding us again this afternoon, that there is plenty of capital in the country. I remember some years ago when the trade union movement published this book, Planning Full Employment, and wrote its recommendations, we were told there was no money available. Now, apparently, we have plenty of money and I know we still have plenty of men available to do the work. I did not hear fully, unfortunately, Senator Quinlan's speech but I gather he was urging that labour should work longer.

Professor Quinlan

Everybody.

Mr. Murphy

Everybody should work longer and harder. I cannot see that there is any shortage of labour. The shortage now seems to be of projects. I can imagine if there was a shortage of men to do the work offering, it might be advisable to urge the working of overtime at, I hope, proper remuneration, but there is no shortage of men and it seems to me, not having heard the full speech, a little ridiculous for the Senator to urge that labour should work longer for the purpose of putting themselves out of work and to prevent their colleagues being employed.

The situation seems to be that we are short of projects and we have reached the situation, whether the two sides of this House like it or not, in which private enterprise cannot provide the projects necessary to use the money we are now told is available and to use the men that have been available all the time. We are turning to foreigners to come in here to give us the projects and put the men and the money to work together. I have no objection to foreigners as such providing the enterprise and the know-how but I think we are avoiding the issue; we are passing the buck; we are now saying: "If the foreigners will come in to do it, everything will be all right." We had another example of passing the buck lately in the local authorities being asked to suggest projects so as to put the money and the men to work. We cannot dodge this issue very much longer. Private enterprise, either in Ireland or foreign enterprise, will not do the work and will not put the men and the money which is available now, as we are told, to work. No Government in those circumstances can pass the buck to foreigners or to local authorities. If it is true that there is plenty of capital available, the Government should, in such circumstances, set up some authority to plan and to initiate projects which will put the money and the men together and provide employment for our people in their own country.

Mr. McGuire

What projects?

Mr. Murphy

That would be the function of the State authority. I do not know the projects; neither do the local authorities know the projects.

Mr. McGuire

But neither does private enterprise.

Mr. Murphy

Neither does private enterprise. Why does the State not set up some authority and give them the responsibility of thinking out these projects and making them available?

Mr. L'Estrange

Senator Carter, in his opening remarks, spoke about Fianna Fáil plans for the future. He told Senator Quinlan that if he did not know about them, he would send him a copy of the White Paper. Unfortunately, the Irish people have heard too much about the Fianna Fáil plans. What the Irish people would like to see is something being done, something being accomplished. I am not at all too old to remember when that Party had plans to end the Border, restore the Irish language, end unemployment, end emigration, whip John Bull left, right and centre and send every British ship to the bottom of the sea. A few years ago, they had a plan to spend £100,000,000 per year and 2½ years ago, they had the famous plan when they were to get cracking and put 100,000 people into new jobs every year.

What has become of all those plans? Instead of putting 100,000 people into new jobs, there are 32,000 fewer people employed than there were 2½ years ago. All the credit is claimed for the present Government in restoring confidence in our financial policy. I think credit should be given where credit is due. That credit is due to the inter-Party Minister for Finance who put the country before Party at that time. He took courageous action which righted our financial policy before the change of Government. It will be remembered that we had the Suez crisis and the Argentinian glut of wheat. You had cattle selling in Britain at £3. 10/- or £4 per cwt. Now they are nearer £10 per cwt. All those things helped the present Government.

I am in favour of any project that will help to increase production and give employment to our people at home. I believe that if things were property tackled, we could accomplish much in that direction. I doubt the wisdom of the policy of the Government in giving unlimited credit to industry as they are doing and neglecting agriculture at the same time. If that continues, our financial policy will become lopsided. I agree with Senator Quinlan when he said that we are squandering money on projects that are not giving a good return.

There is no doubt that we are cutting down upon projects which definitely give employment and which would give increased production, as has been proved. If we make unlimited amounts of money available for industry, why have we cut down on the grant for lime? Why have we cut down on Section B of the Land Project which gave employment and which would help to increase production? Why have we done away with the Local Authorities (Works) Act and why have we cut the guaranteed price for grade A pigs which, as we all know, increased production in this country?

While we have cut down on schemes that would give employment and help to increase production, there seems to be no end to the amount of money we are prepared to spend on wildcat schemes, if they happen to be connected with industry. That, in the long run, may prove fatal for this country. I think that economists and everyone in this country believe that Ireland is predominantly agricultural; that if the people on the land are prosperous, the whole nation will be prosperous and that if the people on the land are poor, then the whole nation will be poor. The standard of living of every man, woman and child, whether working on the land, in the factory or on the roads—no matter where any of them works—depends upon what the farmers and their labourers are able to get from the land of Ireland and export profitably abroad.

It is a well-known fact that we must have the money from abroad to buy the raw materials to keep the wheels of industry turning in this country. It is reckoned that we have 17,000,000 acres of land in this country. We have 12,000,000 acres of fertile arable soil. We have a population of only——

An Leas-Chathaoirleach

I think the Senator is going wide of the Bill.

Mr. L'Estrange

Yes, Sir, but at the same time, it would be much better if we spent the money we have to spend on agriculture instead of spending so much of it on industry. It is reckoned that you can spend £100,000,000 on the land. If that money were spent on the land, it would do what we are told this Bill is designed to do—give employment and increase production. I claim that it is altogether wrong to spend an unlimited amount of money on industrial projects and, at the same time, neglect what would give employment and what would increase production more than anything else.

I just want to speak briefly about what has perturbed many Senators and I am sure many other people, that is, the suggestion that the Industrial Credit Company are providing virtually unlimited quantities of money in one or two cases in this country. I think it is fairly well known that between £4,000,000 and £5,000,000 have been given or pledged to one firm. I do not think it right that the resources of the State should be pledged to certain firms and then that the whole scheme should be clouded in secrecy. It is the taxpayers' money. The Minister, just as is every one of us here, is a servant of the people. The money belongs to the people. Senators and the taxpayers should be entitled to know how their money is being spent.

Mr. Lenihan

Does the Senator want to sabotage the project?

Mr. L'Estrange

No, there is no necessity. There is more danger of the project being sabotaged by the veil of secrecy that is over it. If there is nothing to hide, why not tell the people the truth and have no secrecy, good, bad or indifferent? In any case, we seem to be prepared to give more to foreigners than we are prepared to give to our own people and to Irish industrialists, the people who have been here and who have kept their industries going through hard times in the past.

Dr. Ryan

Senator Burke started off by saying that our prosperity would depend on how our capital was used. I suppose that, to some extent, that is true. Our prosperity does not depend entirely on that but it is one thing that is important. So far as this Government and this Bill are concerned, I think I can state, as I stated before, that no worthwhile project will fail for want of capital. That is as far as I think we need to go, and if we are able to stick to that, we shall be doing very well.

Senator Burke spoke a good deal about private companies as opposed to public companies. I am afraid that it is not possible to remedy the troubles he has in mind in a Bill like this. In a private company, the shareholders elect to do certain things. They do not want to have their shares put up for public sale on the Stock Exchange. For that reason, they cannot get the benefit of Section 7 of the 1932 Act, that is, some relief in income tax. Another thing is that they cannot call in capital as easily as a public company. A public company can make a flotation, if they are doing well, and get in extra capital. The private company cannot do that and suffers disadvantages. On the other hand, the private company has certain advantages, as Senator Burke pointed out. Usually, private companies are composed of members of a family who hold the shares amongst themselves and they do not want to let them go. They cannot therefore have the advantages which are associated with public companies. The Senator also referred to the trouble of death duties. I know that there is a certain amount of trouble there. You cannot say it is a disability because the total assets of the estate of every person who dies are subject to death duties. If the owner of a private company dies and has a certain amount of shares in the private company, naturally they must be taken into account as assets of the estate and death duties must be paid on them.

All these matters cannot be dealt with in a Bill like this. In fact, it is hard to say how they can be dealt with in order to give the relief which Senator Burke thinks should be given. I should say, however, that the Bill does not make any change in the situation. The Industrial Credit Company has always had power, and has always exercised it, of giving advances to private companies and they are under no disability, as far as this Bill is concerned.

Senator Ó Ciosáin rightly pointed out that the Bill was brought in for the purpose of making greater provision for the expansion of industry. The Industrial Credit Company deals practically entirely with private enterprise and in fact I do not know if they have made any advances to a State company. They deal practically entirely with private enterprise and of course that includes private companies and even individuals. They have made advances to individuals who owned their own businesses and they are not confined to dealing only with companies. In that way, they cannot be accused of dealing with the bigger man.

The Senator also dealt with the question of trying to induce people—as he said, we cannot compel them, and that is true—who have been putting their money into foreign investments to put it into home investment. We do offer certain inducements in that regard. If money is put into Irish industry, there is a certain income tax concession which does not apply to money invested in other ways. I do not know what effect that has had— whether it has had the effect of inducing people to invest money in Irish industry or not—but it must be said that up to date anyway, no great difficulty was found by anybody trying to get money to start an industry. It was always there to be got and if it was not got from private investors, it was got from organisations like the Industrial Credit Company. I should be very glad indeed to consider any suggestion that might be made which would induce people to invest money here rather than in foreign securities.

Senator Quinlan said that we were relying on the old form of credit. I do not know exactly what he means. He said we should think of something more dynamic, or that something more dynamic is required, and he talked about getting money from the small investor. As a matter of fact, most of our money comes from the small investor. If you examine the amount of money that comes into capital use every year, you will find that, I would say, more than half comes from the small investor, from the Post Office Savings Bank, other savings banks, and from the small investors in the national loans, so that I think we are getting all that possibly can be got from the small investor. There may be other means of getting more but we are not doing too badly, so far as that is concerned.

One Senator said that agriculture was down. Well, of course, we do not know yet how it is. We know that butter is down because we get a return of butter production every month or every half month. We know how it stands. Milk production did not fall as much as butter production fell because more milk is going into other uses. The total milk production is down this year, but I do not know whether that applies to other agricultural production. Personally, I believe that the production of crops will be very good. The crops look very good so far and I am sure they will turn out very well. When we see the total production for 1959, I have every hope that it will be better than 1958, though, of course, we should like to see it better still.

Senator O'Brien talked about the vicious circle, that without reduced taxation, you cannot have increased production. I do not know whether he has closed the circle exactly. I think he said without reduction in contingent liabilities, you cannot have reduced taxation. Well, if I heard him correctly, that would close the circle. I think his last proposition is not exactly a rule of the Medes and Persians. It is something that might not always hold.

It has been alleged by certain Senators that a foreigner is treated better than a native with regard to proposals for industry. That is not true, of course. In every Act brought in here, rules are laid down with regard to industry and so on, and no rule is made that will give better treatment to the foreigner than to the native. As far as I know, a foreigner, as such, is not treated better than a native. As a matter of fact, under certain legislation, natives are treated better than foreigners. The Control of Manufactures Act, which has now been altered somewhat, still, to an extent, gives better treatment. I have already mentioned Irish citizens who put money into Irish industry, controlled and managed in Ireland, who get certain reliefs in income tax. If there is any differential in the legislation, it is in favour of the native and not the foreigner. This allegation is often made, whether in ignorance or through malice I do not know, but it is not one which should be made. I do not see what advantage is to be gained by giving the impression to the Irish industrialist that he is not getting as fair a show as the foreigner. It can serve no useful purpose, and possibly it could do a certain amount of harm, to give the Irish industrialist the idea that he had a grievance.

There is no departure in this Bill— Senator O'Brien spoke as if there was—either in policy or in principle. The Bill is only to enlarge the credit at the disposal of the company, but as far as the spending of that money by the company is concerned the position remains the same. There is no change whatever. This Bill deals entirely with the provision of more capital by way of share capital in the company and with more capital by way of loan and that is all. It does deal with a few other small points with regard to administration, like audit and a few things like that, but it does not alter any rule laid down in the original Acts, or since, relating to how the company disposes of its money. It does not do any good that Senators should give the impression that a change is being made. I cannot see what good purpose is being served by conveying, by innuendo and suspicion, that certain things are being done for certain companies.

Those who would like to have a rap at the Government may do a certain amount of propaganda by giving an impression to their followers that the Government has something to hide. It may serve their purpose, but surely it cannot serve the purpose of industry? If suspicion is shed on these new companies, it will not do any good to the country. It may do these companies a certain amount of harm and it may make it more difficult to get other companies to come in, if this sort of propaganda is continued against companies now starting.

Senator O'Donovan asked why we were in a hurry with this Bill. For one thing, when we issued the Programme for Economic Expansion, it was necessary to bring in four or five different Bills—one dealing with shipping, another with air services, another with industry, and so on— and they were all drafted around the same time. In any case, on the 30th April of this year, this Company was either committed to or had spent £7 million. I said in my opening speech that their estimate of expenditure for the present year 1959-60 is £3½ millions. That would make £10½ millions by the end of March. They would like to have enough to meet any propositions that might come along. As we all know, they are not entitled even to make commitments beyond the amount voted by the Oireachtas. Therefore, they would be in a rather invidious position in dealing with any projects that might come along towards the end of the year, if their capital were not a bit above what it is now. I suppose it could be said that it would be time enough in October. Perhaps it would, but all these Bills came along at the same time. This Bill was brought in, like those dealing with shipping and air services, and it covers a five years' expansion, as envisaged in the Programme for Economic Expansion.

Senators mentioned agricultural credit. Agricultural credit has been going out quite satisfactorily. If we go back two years, to 1956 and the beginning of 1957, the banks were squeezing farmers and trying to get money back and would not consider propositions for a loan of any kind. In the last year, however, between the 30th April 1958 and the 30th April 1959, the credit to farmers with the commercial banks has gone up from £17 millions to £26 millions, an increase of £9 millions in one year. It is absolutely nonsense for a Senator to say we are giving unlimited credit to industry and nothing to agriculture.

Mr. L'Estrange

It is the banks that are giving it.

Dr. Ryan

Is money from the banks not as good as that from us?

Mr. L'Estrange

The industrialist can get money from the banks, too.

Dr. Ryan

Perhaps the Senator did not take in what I said. The banks would not lend money to the farmers two years ago. The argument is now that we did not give it to the farmers, that they could get all the money they want. The banks now will give it. Actually, they have advertised, asking farmers to come along with any worthwhile scheme. The cry two years ago was: "Come along and pay up what you owe."

A question was raised about publishing the amounts of loans made by the Company. Such a practice would be entirely wrong. The need for this Company was felt 20 years ago—I am not sure exactly when it was started— when it was found that the commercial banks did not deal in that sort of business.

Mr. L'Estrange

They are not prepared to take the risk.

Dr. Ryan

The Industrial Credit Company came along, to help those looking for money to start, who want the capital, as it were. The Company are paid the interest, but they hardly ever get back the capital. The banks do not like that type of business. This company was started then and got power to underwrite the shares of a new company, to invest in its shares, to make loans or give guarantees to new companies. All this was provided for at the time. It was set up entirely as a credit corporation. We all know that a credit corporation, in dealing with its clients, keeps any negotiations between them in confidence and it does not go around talking about them. In fact, a company looking for money usually prefers to have its affairs kept secret. That has always been so with regard to this credit corporation, from the time it was set up 20 years ago. It was there through two terms of office of another Government and it had the very same working conditions, and the very same practice was followed. Those two Governments never made any move to change the position. Neither, of course, did their followers in the Dáil or Seanad raise the point. It makes me think that it is now raised more to embarrass the Government than for any other reason.

It was said here that it is the practice in other countries to make these matters public. Only a few days ago, the chairman of the Finance Corporation for Industry in England—which is very similar to this body—referred to various loans which had failed, but he refused to give particulars of any of them. He said it was not the practice and he would not do it. As far as I know, that is the practice in every country. Our banks do not give particulars of loans or guarantees and it is not expected that they would. This corporation was set up on that basis, as a credit corporation in every way like a private bank. Therefore, this talk about some company starting a business and getting a big loan is wrong talk. I purposely avoided looking for the information, so that I could say that I do not know. I do not want to know and I am sure many Senators here do not want to know, as people would come badgering them.

Mr. L'Estrange

There is £5 million of public money invested in this.

Dr. Ryan

That is the way in which finance is done. This company was set up to finance new projects, whether inaugurated by natives or foreigners. That has been continued for the past 20 years and no question was raised about it. I do not believe any question should be raised now.

Mr. O'Quigley

There never was a question of £5 million.

Dr. Ryan

Now we have the shadow boxer. First he says it is £5 million. How does he know it is £5 million?

Mr. L'Estrange

The Taoiseach said it was between £4 million and £5 million.

Dr. Ryan

It is a good point on which to attack the Government. If I say it is less than £5 million, the Senator says it is £4 million; and if I say it is less than that, he says it is £3 million, and so on until he gets to the figure he wants.

Mr. L'Estrange

The Taoiseach said in the Dáil that there was between £4 million and £5 million.

Dr. Ryan

Do not mind what the Taoiseach said.

Mr. L'Estrange

There you are.

Dr. Ryan

It does not matter about that. He may be right or he may be wrong. I say it is wrong to give the information. If Senators opposite were really interested in building up industry, they would not look for this information. What they are really interested in is in attacking the Government. I do not describe them as vultures because the country is not dead, but they are around the country waiting for an opportunity to swoop.

Mr. L'Estrange

We were interested in industries when others were burning them down.

Dr. Ryan

If a company like this succeeds it will really be due, of course, to Fianna Fáil, and it will be gall to Senator L'Estrange and other Senators.

Mr. L'Estrange

The Shannon scheme was gall to the Minister at one time.

Dr. Ryan

As Senator Carter said, we expected we might hear something about industry. I must say I did think we would hear something in that regard; as a rule I can compliment Senators on a good debate because they talk relevantly and give their views but on this occasion I must say I heard nothing but carping and criticism of a destructive kind.

Mr. L'Estrange

The Minister should refer to his own Party members' speeches.

An Leas-Chathaoirleach

Senator L'Estrange should now cease interrupting.

Dr. Ryan

I must agree with Senator Carter that the possibility of bringing in a Bill like this, the necessity, if you like, to bring in a Bill like this to finance industry, is in part due to the fact that we have got away from the credit squeeze of some years ago.

Professor Quinlan

Would the Minister please comment on my plea for an all-Party industrial expansion committee of both Houses? That would get away from questions about how much was guaranteed and to whom the guarantee was given.

Dr. Ryan

I wonder if it would? After all, we must remember that the Industrial Credit Company was set up by the Fianna Fáil Government, renewed by the Inter-Party Government, and later again renewed by them but still that does not prevent Senators on the other side from casting suspicion on the gentlemen making these loans and suggesting that they are doing something that they should not be doing. I do not think an all-Party committee would save us from that sort of thing.

Question put and agreed to.

Agreed to take remaining Stages to-day.

Bill considered in Committee.

Sections 1 to 3 inclusive agreed to.

SECTION 4.

Question proposed: "That Section 4 stand part of the Bill."

Professor Quinlan

On subsection (2) of this section, if the Minister would explain the situation here it might get rid of some of the uneasiness that is present about the power of the company to give loans—and very large loans—apparently, without the knowledge of the Minister. Subsection (2) says:—

Advances under this section shall be made on such terms as to repayment, interest and other matters as may be determined by the Minister.

When the Minister is giving either an advance or a guarantee, surely in giving that advance or guarantee he would need to know the purpose for which the money is to be used? Does that effectively mean that if the company proposes to give say £2,000,000 to an industry, when they come to the Minister to ask either for an advance or a guarantee they will have to tell the Minister the purpose for which they propose to use the money?

Dr. Ryan

It would be very difficult to answer that question straight off. Certainly, if I were asked for £1,000,000 or £2,000,000 I would have to see the balance sheet of the company. The balance sheet, as Senators are aware, is very good and has been so in the past. Something like £17,000,000 has passed through the hands of the Board so far and still they have not met with what you might call bad debts, so that on the basis that they are a sound company doing good work I would say "yes", unless some very special reason was put up to me by my advisers as to why I should not do so. But I do not think I would say to the concern: "You are not going to get this money, unless I know what you are going to do with it". I do not think that it would be in the public interest. I think it would be very wrong if I did that and I believe we should allow them to carry on as they are doing.

Professor Quinlan

The Minister would not ask the company to whom did they want to lend the money?

Dr. Ryan

No, I would not. Great care has been taken with the setting up of this Board. I think we have one of the best Boards in the country in that company and they would surely know much more about their business than I do. I suppose if I sat down and studied the case for three or four hours I might get to know as much but in a ten-or 15-minute examination of the case I could not possibly know as much.

Professor Quinlan

In that case I feel an amendment to the Bill would be necessary stating that in the case of loans of a significant amount, say, £1,000,000 or so— whatever the figure may be—the Minister's prior consent should be sought. I think that is the only fair way in which we can deal with the taxpayers' money no matter what confidence we have in the Board. I think the double check is absolutely essential.

Dr. Ryan

I would ask the Senator to consider this further. Suppose a case is put up and suppose the Company want to give a loan for a large amount, can I know more than the Board about it? Does the Senator think I should?

Professor Quinlan

The Minister has his Department there to review all the evidence that can be submitted in favour of giving such a large loan.

Dr. Ryan

But the Board are dealing with these loans all the time and surely they know more about it than my Department. The record of the Board is good and it has given good service to the public. Possibly if we see from their balance sheet that they have lost money during any year we may go more carefully.

Mr. O'Quigley

Arising out of what the Minister has said, are we to take it that this Board are to conduct their operations and that nobody in the country is going to know anything about what they are doing, whether they are allocating money to the right people or to the right projects? What the Minister says is just begging the question. If the suggestion put forward by Professor Quinlan were adopted, that advances over £1,000,000 should not be made without the consent of the Minister for Finance—and I believe that the Minister, placed as he is at the apex of affairs, would be able to pass judgment on whether or not an advance in any particular case was a prudent operation for the Company— he would certainly be able to raise some questions with the Board and satisfy himself about that transaction. I do not at all doubt the Minister's capacity to deal with this kind of business when he is dealing with millions of money every day. I would prefer such a course on the basis that two heads are better than one.

Mr. McGuire

I think there is confusion here. I do not think it is the Minister's function to give this information or to interfere with the company's handling of affairs. Surely we must remember that if we vote this money it is on the Industrial Credit Company that we are relying and it is their duty to administer the money. We know from their records that they have shown themselves to be capable of handling the money and can be relied on to continue to do so. I always defend private enterprise which I represent here and I feel if the State is to support private enterprise, as it is doing in this case, through the Industrial Credit Company, it is wrong that the books of the private enterprise should be open to anybody. I think the should be open only to the Industrial Credit Company.

What we are being asked to do to-day is to trust the Industrial Credit Company with this extra capital. It would be most inadvisable that the Minister should interfere in the work of the company in relation to the disclosure of its affairs. If he did, his action would be open to criticism in the Dáil. It would mean that this company's affairs—and the affairs of any other company, for that matter—would be open to criticism by every T.D. and Senator. That is wrong. What we are being asked in this Bill is to give the Industrial Credit Company this extra capital on their record in the past and to trust them to use it properly.

Mr. Murphy

The point seems to be that we are giving the Industrial Credit Company far more power and far more money. It is not a State planning body. It could conceivably happen that the Industrial Credit Company would be making money available for some projects about which the Minister would be unaware and it might, in fact, be clashing with the plans of the Minister or of some other semi-State undertaking. It would be prudent that where there is a big advance, the Minister should have his finger in the pie and should at least know what is going on.

Mr. McGuire

Senator Murphy may disagree with giving the Industrial Credit Company this amount of money and power, but the point is this: We are being asked to pass a Bill in which we are showing our confidence in the company. We are showing it to the tune of this amount of money which we are giving them. If we do that, we have to trust them to distribute that money in such a way that it will be profitably and well used. I do not think the Minister comes into it.

Professor Quinlan

There was no suggestion made by me or other Senators that the affairs of the Company should be dragged through the Dáil and Seanad. All we asked was that the Minister for Finance should have the right to say "no"; in other words, that with respect to an advance of whatever sum is in question, £1,000,000 or £2,000,000, there would be two heads dealing with it. That does not mean the affairs of the company should be open to discussion in the Dáil and that the Minister would have to say any more in reply to a Dáil question than that the Act was being complied with and that he had agreed to the advance.

I might point out that this is in marked contrast with the way in which other and much more private enterprise businesses are treated, as in the case of universities and others in connection with which £20,000 is allowed for building this year. It is made available in instalments. You have to prove to the Department concerned you are actually doing the work and what work you are doing. The Agricultural Institute is in that very position. That is completely wrong. It is the other extreme. These bodies should be trusted. Surely there is a limit above which we require two heads? It seems to be giving very reasonable power to the Minister, especially when he is backed by such an excellent Department. You have the Department of Finance with all its experts viewing the proposal of the Minister and then they both decide: "This is risk enough for £1,000,000."

Professor Hayes

This is the old dilemma: if you give power to the Minister, you give power to the Dáil. I know Senator Quinlan's bona fides in this matter; I do not think the Universities are a fair analogy. From the point of view of procedure in the Dáil and Seanad, if you put into this Bill and make it an Act that the Minister has power to investigate their actions and to reject proposals over a certain figure —I do not care what it is; say, over £1,000,000—then the extent of the exercise of that power by the Minister is a matter for debate in the Dáil. There is no remedy for that. Once the Minister has the power, any Deputy can get up and say “Under Section 4 of the Industrial Credit (Amendment) Act, 1959, I want to know did the Minister do so-and-so?”, and the Minister is obliged to answer. That applies to any Minister. I sympathise with Senator Murphy's desire but let me assure him that even socialist States do not succeed in doing this.

Mr. Burke

The Dáil and Seanad have sufficient opportunity of bringing this matter before the public, because, if large sums are given out, the Minister will have to come frequently before both Houses, to look for additional sums of money. If they are not being properly invested, and if it is generally known that is so, the Minister will have to answer us in this House and answer the members of the Dáil. Is that not sufficient? The proposal to increase the company's capital by £10,000,000 is before us to-day. We can ask the Minister any question we like in connection with these matters. We could refuse to give him the money and have the matter referred back to the Dáil, if we felt the money was not being invested in a proper way and the Dáil would be right in upholding our decision not to pass this Bill. To my mind, that is Parliamentary control without the difficulty and undesirable procedure of having the day-to-day affairs of the Industrial Credit Company debated by way of Parliamentary question and answer. In passing, I may say that from my reading of the Dáil debates, I found no suggestion that that was, in fact, to be the procedure. In fact, I think the previous Minister for Finance said it might be desirable if grants over £200,000 were subject to Ministerial sanction. I do not think it was suggested that, except in the case of very large sums, the day-to-day business of the company should be brought before the Minister at all.

Professor O'Brien

I am trying to clear my own mind. I usually agree with Senator McGuire. He and I are of the same way of thinking about private enterprise, but it does not seem to me to be a private enterprise undertaking, if all the losses are guaranteed by the State. My idea of private enterprise is that the operators should take the risks and losses as well as the gains. I am not criticising the Industrial Credit Company. I have the highest possible opinion of all the people on the Board and the utmost confidence in their judgement. The particular part of this Bill that seems to be dangerous is that part which relates to these contingent obligations of the State. I agree with Senator Hayes that, if the Minister has power to review or reject, it means he is subject to Parliamentary question. However, I think that the sums in this Bill are so vast that to give any body of people, however experienced and good in judgment, the power to add to the contingent liabilities of the State these millions of pounds, at a time when everybody is agreed that the public debt is mounting so rapidly, is a dangerous power in the Bill. It certainly does not seem to me to be consistent with private enterprise that people are allowed to start companies and then the Irish taxpayer pays off their losses. Whatever else that is, it definitely is not private enterprise.

Mr. Barry

We are all talking about one thing. We all want to know what money this Dutch firm got. That is the question about which there is public speculation and, undoubtedly, exaggeration, but none of us is in the position to contradict or reject that exaggeration. A company of that size borrowing money of that size cannot be injured by any disclosures. The only fellow you will ever injure in a case like that is the fellow like myself who has to borrow a couple of thousand. When you start borrowing in millions, you cannot be injured. I believe the company would be helped in this case by the full light of day being thrown on its transactions. The Irish people are fairly intelligent. It is being said that the company is taking no risk and we are putting up the money. I do not know whether that is true or not, but I know the people want to know whether it is true or not. The public relations in this have been deplorable.

Professor Quinlan

I want to quote from the Estimates, page 220, in connection with the power of the Minister over the Agricultural Institute. It says here:

Issues from the Grant will be made from time to time of such amounts as the Minister for Agriculture, with the consent of the Minister for Finance, may think proper.

Mr. Lenihan

That is a grant.

Professor Quinlan

But it is the taxpayers' money voted by the Oireachtas to the Agricultural Institute. It is subject to this proviso, that:

Any balance of the Grant remaining unissued from the Vote at the close of the financial year will be surrendered.

On what basis can the Minister for Agriculture, in conjunction with the Minister for Finance, decide that the Agricultural Institute does or does not want money? They can only ask: "What do you want to do with the money?" That is what we are asking here. If they get the taxpayers' guarantee for £1,000,000, we ask them: "What do you want to do with the money?" At least, the Minister should have that power. I hold that it is definitely wrong in connection with those grants issued for any small or reasonable sum on the Votes, but when you get into the millions, it is a different thing. However, by next year, I hope this blotch will be removed. I wish to be recorded as dissenting from this section.

Professor Stanford

On a point of principle, I want to be recorded as dissenting, too. It seems to me wrong in the circumstances that vast sums should be voted from our pockets without Ministerial sanction. I should like more support in opposition to this clause than we are receiving at the moment. It seems to me to be a very important point of principle. I do not think we should rush it, even though it is now three minutes past six.

Mr. Murphy

I desire to be recorded as objecting in principle also.

Mr. P. Crowley

I am sorry Senator Quinlan is not moving an amendment to this Section. I certainly would be prepared to support it. His suggestion is perfectly reasonable and I cannot see why both sides will not agree with it. I desire to be recorded as dissenting.

Dr. Ryan

I suppose it is in order, but I think the Senators are speaking for different reasons.

Professor Quinlan

I am prepared to move an amendment.

Seán Ó Donnabháin

Are we to reopen the whole discussion on the Bill on this clause? Previously it was backstreet and backyard factories. Now, because we are giving big money, we hear the opposite criticism. Now the money is too big. We were criticised when the small amounts were given and now we are criticised when the large amounts are given. We should not interfere in that case.

An Leas-Chathaoirleach

The position is that there is no amendment before the House at the moment. A certain number of Senators have indicated their desire to be recorded as dissenting. Does Senator Quinlan wish to move an amendment?

Professor Quinlan

Yes.

An Leas-Chathaoirleach

I suggest that if we got the Committee Stage over before tea, the amendment might be moved on Report.

Question put and agreed to, Senators Quinlan, Stanford, Murphy and P. Crowley dissenting.

Section 5 agreed to.

SECTION 6.

Question proposed: "That Section 6 stand part of the Bill."

Mr. O'Quigley

This section amends Section 4 of the Principal Act. It is proposed to substitute the words "directed from time to time by the Minister, and such balance sheet shall contain..." That seems to me to bear upon the very point I have been making. Up to this, the balance sheet was prepared in accordance with regulations. Now, apparently, the Minister will merely give a direction. That, again, seems to me to be a substantial relaxation of Parliamentary control in relation to the preparation of balance sheets. Will the Minister tell us if that is a correct interpretation of this section?

Dr. Ryan

This arose really out of some relatively minor point. We had to agree to the form of the balance sheet and that meant laying the regulations on the Table of the House. Henceforth, the balance sheet will, of course, be laid before both Houses in accordance with the normal practice, but the form can be changed in future, by direction of the Minister or with the consent of the Minister, as the case my be, rather than by formal regulation.

Mr. O'Quigley

Does not that bear out my point that previously the balance sheet had to conform with regulations, which were laid upon the Table of the House? Henceforth, the balance sheet will be prepared in accordance with any direction the Minister may give. Parliament will have no notice of any such direction given by the Minister as to the form the balance sheet will take. Up to this, Parliament had notice by reason of the fact that the regulations prescribing the form of the balance sheet were laid on the Table of the House. That, again, is a further relaxation of the control by the Minister over the Company.

Question put and agreed to.

Section 7 agreed to.

Title agreed to.

Bill reported without amendment.

Business suspended at 6.15 p.m. and resumed at 7.30 p.m.

Bill considered on Report.

An Cathaoirleach

Senator Quinlan, on his amendment.

Tomás Ó Maoláin

May I ask whether this amendment is strictly in order in connection with this section?

An Cathaoirleach

The amendment has been accepted.

Professor Quinlan

Arising out of the discussion on Committee Stage, I move the following amendment:—

In page 3, section 4, between lines 8 and 9 to insert the following:—

"(3) A loan in excess of £1,000,000 shall not be made by the Company without the prior approval of the Minister."

If the amendment is accepted, the existing subsection (3) will become subsection (4).

At the outset, the Minister agreed with Senator O'Donovan that there is not any extreme urgency in regard to this Bill, that it could be passed in October just as well as now. Consequently, it may be of some use to move an amendment, despite the fact that the Dáil is not in session and, if we do succeed in getting the Minister to accept the amendment, no great harm will be done by leaving the Bill over until the Dáil reassembles.

The State checks minutely and queries and cross-queries every item of expenditure by various bodies and we all feel apprehensive when, suddenly, when they get into the millionaire class, they can give out millions without any check by the Minister for Finance. In other words, the Minister for Finance does not carry responsibility for that money and, if the project fails and the Minister is called on to pay up on the guarantee given to the corporation or company, he can say that he had no responsibility and all he has to do is to pay up.

That is a rather unhappy position for the taxpayer to be in and it is in marked contrast with the extreme care and caution that have always been exercised by the Department of Finance in regard to financial matters. In fact, they seem to have gone much too far in dealing with other bodies such as the universities and the Agricultural Institute, which I mentioned earlier.

I have here a copy of the Agriculture (An Foras Talúntais) Act, 1958, Section 12 of which states in subsections (1) and (2):—

(1) For the purpose of assisting the Institute to carry out effectively its functions under this Act, there shall be paid to the Institute in every financial year, out of moneys provided by the Oireachtas, a grant towards the expenses of the Institute the amount of which shall be determined by the Minister for Finance in consultation with the Minister and the Council after due consideration of any information furnished under subsection (2) of this section.

(2) The Council shall furnish to the Minister such information regarding its income and expenditure as he may from time to time require.

We were assured by the former Taoiseach during the passage of that Bill through the House that the new body was to be completely autonomous, was to have every autonomy associated with a university, and so on. Yet, we find that its finances are drastically supervised by the Department of Finance. The section is, perhaps, rather ambiguous. It states that the amount of the grant shall be determined by the Minister for Finance in consultation with the Minister for Agriculture but we see the way in which that has been applied. It has been applied, as shown in the Estimates, on page 209. It says that not alone will the provisions that are set out here apply but that issues from the grant will be made from time to time of such amounts as the Minister for Agriculture with the consent of the Minister for Finance may think proper—something we never envisaged in passing the Act—and, if the total amount voted in any one year is not spent in that year, it goes back to the Exchequer. That is the type of control imposed on what we were assured was the most autonomous type of body we could set up here—one that should be absolutely free. I know on the Board of the School of Advanced Studies——

An Cathaoirleach

I am afraid that the Senator is now going very far outside the scope of the amendment.

Mr. Carter

He does not know where he is.

Professor Quinlan

I just wanted, by contrast, to establish the case, showing on the one hand the care that is taken, in fact, the irksome standards that are set for handing out moneys, while, on the other hand, we find the Minister himself has stated that if he were asked for a loan by the finance company he would not ask them what the loan was for—he would ask them only where the finance was going. Perhaps that raises the question then as to what is the Minister guaranteeing? Is he guaranteeing only the issues in globo of the company or is he guaranteeing individual issues?

The point is that we should feel much happier if the Minister, with the excellent staff at his disposal in the Department of Finance, would have to carry his share of the responsibility for loans above a certain limit—it does not matter where you put the limit, that is, that the Minister would give his prior approval to a loan. I cannot see what is unreasonable in that suggestion. Certainly it would prevent any recriminations and it could not be said that it was just the finance company that did this. It would mean that you had both the company and the Minister in agreement on a project.

Only last week we met here and it was regarded as being absolutely essential to change the status of Córas Tráchtála Teo. from a limited liability company to a semi-State body. Why is it suddenly discovered that this limited liability company here can get on without this very small modicum of Ministerial supervision? I have nothing further to add except to suggest that, if the Minister cannot agree to this amendment now, perhaps he would consider leaving the whole Bill over until Autumn?

Mr. Ryan

I suggest that this amendment is not relevant to the section and is out of order. Section 4, which it is proposed to amend, deals with advances to the company by the Minister. In fact, the description of the section in the margin is: "Advances to the Company by the Minister." The amendment, I think, deals with advances by the Company to applicants. They are two entirely different things and, therefore, I suggest the amendment is not relevant to the section. It may be that an amendment of this type could be brought in under some other section, or that an amendment of the original Act could be asked for, but I suggest that this amendment is irrelevant to Section 4 and is out of order.

Mr. O'Quigley

In relation to what Senator Ryan has just said, it seems to me that the amendment is relevant and entirely in order. Subsection (2) of Section 4 states that advances shall be made on such terms as to repayment, interest and other matters as may be determined by the Minister. There is nothing whatever to prevent the Minister putting down the conditions on which he will make advances or from stating that one of his conditions is that where they are making a loan of £1,000,000 he should be acquainted and his consent sought. That is what Senator Quinlan is seeking to have done. I disagree with Senator Ryan's suggestion that it is out of order, and suggest that the amendment is entirely in order.

There is not a whole lot to be said on this. I am quite satisfied that, if you examine the whole range of Parliamentary control of finance, the amendment put forward by Senator Quinlan is entirely in line with policy over the years. On the Committee Stage, we were urged to adopt the view that this company had been operating since 1933, that it had been operating successfully, and had a fine record. Nobody disputes any of these statements, but what we are saying is that where State funds are being given out by an outside body the Minister for Finance should have a say in determining whether that liability—it may be only a contingent liability but, as Senator O'Brien tells us, a liability that may come home to roost—should be imposed upon the State. The aim is to enable the Minister for Finance, who has much greater experience in regard to the community's liability for loans of that kind, to have some say, on the principle that two heads are wiser than one.

Professor Stanford

As I see it, we are offering a subsidy of approximately one-thirteenth of our revenue from taxation—that is, to the ordinary man, almost a month's salary—to business firms, and some of these business firms, as we well know, are foreign business firms. I have no prejudice against foreign business firms; but it does seem to me that they are less likely to be careful in spending the Irish taxpayers' money than Irish firms. They are not directly involved to the same extent. That is the main reason I should like to see control by the Minister over large loans under this Bill, and the consequent control by Parliament to which Senator Hayes referred. I think it would do no harm at all if an occasional question were asked in the Dáil where a loan of £2,000,000, £3,000,000 or £4,000,000, was involved; and I think it would do the country no harm that the Minister should keep an eye on the larger loans, because this is a great deal of money for a comparatively poor country.

I should like to see a double scrutiny. There will be a scrutiny by businessmen, by the worthy directors of the Company; but I should like a political scrutiny, too, from the point of view of national policy and from the point of view of the welfare of the nation as a whole. I can myself see a divergency between business interests, even the most respectable business interests, in a matter of £5,000,000, and national policy. A very sad thing could happen if a large foreign firm came here and set up a factory costing £6,000,000 or £7,000,000. That firm, perhaps, would be following a policy recommended by one Government, a wrong-headed policy. Then another Government might come in, prove the policy wrong, and reject it, but find themselves saddled with it and unable to prevent the loan because there was no final Ministerial control. It seems to me that quite a serious situation could arise from that point of view.

I would urge that some kind of amendment—I support this one and, if necessary, I would support a better one—should be brought in to ensure that where the equivalent of a month's national salary is being given to business firms in this way, the Minister could, if necessary, say, "No". It is an old proverb but a good one, that if we are paying the piper, we are entitled to call the tune. We are Parliamentarians, and as representatives of the taxpayers I think we would be abdicating our duties if, when a company wants £10 millions, we provide that money and say: Take this £10 millions of taxpayers' money and spend it just as you think best." I firmly resist that principle.

Mr. Lenihan

The debate on this section appears to be broadening and before that occurs, I wonder if it would be proper at this stage for the Chair to give a decision on the point raised by Senator Ryan which I think has a very real validity. If a decision is taken on his point that the proposed amendment is out of order, it cannot be debated.

Professor Quinlan

The Chair has already ruled.

Mr. Lenihan

I should like to know if the Chair is ruling at this stage on the point made by Senator Ryan.

An Cathaoirleach

The Chair has already ruled that the amendment is in order, that the amendment arises out of the proceedings on Committee Stage. I do not know if I should attempt any further explanation of my ruling but I have ruled that the amendment is in order. It is to be regretted that amendments can be handed in in such fashion without appropriate opportunity for the Chair and the members of the House to examine them.

Mr. Murphy

I support this amendment but probably for very different reasons from those advocated by other speakers. I have every faith in the good sense of the Industrial Credit Company in advancing large sums of the taxpayers' money but I think it is desirable that the Minister should have control in a matter like this because I can envisage a conflict. For example, you might have a private undertaking coming to the Industrial Credit Company and looking for an advance of £5 million, maybe, to purchase ships to operate between here and Great Britain and the Minister might, at the same time, be in consultation with Irish Shipping Ltd., and advocating to Irish Shipping Ltd., that they should enter into the same field. It may be unlikely but you could have a situation where, at one and the same time, a private company would have a fleet of ships, brought with money advanced by the Industrial Credit Company and Irish Shipping Ltd. coming forward with another fleet. That may seem a bit ridiculous but it could happen in a situation like this, and the same thing could happen with the Irish Sugar Company and perhaps some private manure company.

Where large sums of money are involved for the purpose of advancing industries in this country, it is desirable that such a situation should be guarded against and that the Minister should know what is happening and should have control over such large advances. I would urge the Minister to accept the amendment and I think it is desirable in the long run for Parliament and the country.

Mr. P. Crowley

I want to add my voice in support of what other Senators have said in relation to this amendment and I want to make the point also that, apart altogether from any precedent quoted by Senator Quinlan, I suggest this amendment on its own merits is both reasonable and desirable. Nobody in this House decries the value of the work done by the Industrial Credit Company over the years, and certainly I do not regard this amendment as a contradiction of that statement, nor do I regard it as an attempt, in any sense, to curtail the company or to curtail them in the work of development, and the encouragement of the development of industry which they have been doing so successfully over the years.

The whole point which I see in the amendment is that its value lies in the fact that we are dealing to-day with an entirely different and new proposal in this Bill which intends to place at the disposal of the Industrial Credit Company very much larger sums than the company have, in fact, been expected to deal with over the past 25 or 26 years. A case was made here to-day from the Government side of the House that this was an example of the dynamic evolution that the Government intend to see will take place in this sphere of their activities. We are now asked, in effect, to vote sums to be placed at the disposal of this company in the region of millions instead of thousands, as was the case up to now. On that point, this House would be entirely lacking in its responsibilities if we did not put at least some reasonable check on the manner in which these funds are handed out by the Industrial Credit Company.

Again—I want to emphasise this point—there is no lack of faith in the company but I strongly suggest that a proposal that a company should be free to dispose of millions—literally millions—to be put at the disposal of any Tom, Dick or Harry who looks for them without at least consulting with and securing the approval of the Minister for Finance as suggested in this amendment is unreasonable. I appeal to the Minister to accept the amendment in that spirit and, as has already been suggested, if necessary, to postpone the enactment of this Bill to October.

Mr. Lenihan

In connection with this amendment, knowing their attitude in the Seanad over the years and the approach made by Senators Quinlan and O'Quigley, I can understand that their attitude is in keeping with the sort of academic and legalistic argument we have heard here, because this amendment is entirely impracticable in the sense that you have here a State company staffed with excellent personnel, an independent company set up in 1933 which, over the years, has disbursed nearly £5 millions to good effect. Their failures have been of the average of one in 100.

Here we have this independent State Corporation which it is now proposed to curb on purely academic or legalistic arguments. In fact, as Senator Hayes has pointed out, any loan in excess of £1 million would be subject to the approval of the Minister and subject to the normal procedure of Parliamentary Question in the Dáil. As I say, I can understand that coming from Senators Quinlan and O'Quigley because these are the academic and legalistic arguments we have heard from those people here every day of the week and if they were adopted, we would get nothing done.

Mr. O'Quigley

Lawyers like yourself.

Mr. Lenihan

Lawyers and legalistic gentlemen are not allowed too much latitude by reasonable courts.

Mr. Carton

The Senator should stop talking about himself.

Professor Quinlan

Deal with the amendment.

Mr. Lenihan

I fail to understand the attitude adopted by the last two spokesmen of the Labour Party. The whole position is that the Labour Party in this country and in other countries is in favour—and rightly so —of that line of thought, the independent State corporation such as we have developed in this country. We have developed that idea in the E.S.B., Bord na Móna and the Industrial Credit Company over the years and, in fact, we are rather unique in the world in that respect, in the amount of State investment channelled through these companies to good effect. We now have two Labour Party spokesmen, who think of themselves as belonging to the left, getting up and proposing to place an impediment in the way of a State corporation whose primary function is to see that as much investment as possible is put to industrial use to provide good employment. It is an institution that has performed that function very well in this country since 1933. Here, they are placing an impediment in the Bill which proposes considerably to enlarge that company's functions to the tune of £20,000,000.

Mr. Murphy

Where is the impediment?

Mr. Lenihan

Are the Labour Party in favour of having State corporations? Earlier this afternoon, Senator Murphy talked about investment through State channels. Here is a State company making use of capital in order to channel it into useful projects that will give employment. Instead of facilitating the passing of such a measure, we have two trade union speakers one of whom has spoken at length about devoting insurance funds to the very purpose of this Bill, namely, productive investment at home which would increase employment and the other has been talking in the way extreme Tory speakers talk in London.

We have the unique experience in this Assembly of hearing the Labour Party follow, pari passu, the same arguments pushed by legalistic and academic people. Let us get down to the realities. A White Paper has been placed before the Houses of the Oireachtas by the Government. It follows the scheme of economic development proposel by the Secretary of the Department of Finance. Its major proposal is that legislative effect be given as quickly as possible to broadening the functions and funds at the disposal of the Industrial Credit Company.

Since 1932, a sum of £4,800,000 has been spent on productive investment by that Company. Senator Quinlan demanded something dynamic. Nearly £5,000,000 was spent in 25 years. It is now proposed to spend up to £20,000,000 over the next five years. Through this machinery, it is proposed to make available out of the capital at our disposal a sum of money so that any entrepreneur either here or abroad with the know-how can, with the help of that capital, provide employment on productive projects.

All you get here is this carping attitude—nothing constructive. There is no attempt to hand out praise where praise is due. We have nothing but niggling, carping and legalistic argument coming from Senator Quinlan and Senator O'Quigley.

Professor Quinlan

What is the Senator talking about?

Mr. Lenihan

I am talking about the amendment which proposes that a loan in excess of £1,000,000 shall not be made by the Industrial Credit Company without the prior approval of the Minister. It must be subject to the full process of Parliamentary Questions, and so on. In other words, if a useful project requires a loan of £1,000,000 and applies to the Industrial Credit Company, if this amendment is passed, such a loan will never go through.

If Senator Quinlan had any knowledge of the realities of business— which I am afraid he has not got in the rarefied atmosphere of whatever college he comes from—he would realise that no entrepreneur either here or abroad would come to the Industrial Credit Company to seek a loan in excess of £1,000,000 if he knew that the details of the loan, the mechanics and the day-to-day administration of the company that got the loan would be subject to week-in, week-out Parliamentary Question in Dáil Éireann. That is the reality. It may be all right in abstract theory to talk about the undesirability of making a loan available without the sanction of the Minister for Finance but no businessman here or abroad would avail of such a loan if it were subject to such supervision. If you want real employment-giving projects you will turn down this amendment. If you want to sabotage any sort of industrial revival here, you will vote for the amendment.

Professor Quinlan

I object to the use of the word "sabotage".

Professor Hayes

I rise under a very severe handicap. I gathered from the opening part of Senator Lenihan's speech, of which I fully disapprove, that he approves of me and my argument. Senator Lenihan has brought this debate to a line which it had not reached before that.

I am against this amendment for reasons which I am afraid Senator Lenihan, if he were on the other side, would find academic and even legalistic. But, while I am against the amendment, I am not in favour of the argument which says that the more public money you slash out through this company, the more good you will do for Irish industry and employment.

Seán Ó Donnabháin

Nobody said that.

Professor Hayes

Senator Lenihan said it, combined with abuse of the Labour Party, Senator Quinlan and Senator O'Quigley. The notion that, by slashing out public money, you are doing good and that the more money you spend in a given year the more good you are doing, is completely wrong and I do not subscribe to it.

The purpose of Section 4 is to enable the Minister for Finance to make advances to this Company. The reason for the existence of the Company is that the Irish Government, from the very beginning, felt that private enterprise with "risk capital", as it is called, was not sufficient to give us the industrial development we wanted. Therefore, almost from the very beginning, in various ways, arrangements were made to have capital advanced for suitable industries. That is what is being done in this Bill.

The question that arose at once was: What machinery would you contrive for industrial development and for the giving of employment? The first thing that was decided—it is in this Bill, too—was that it should not be subject to Civil Service control; When I say that, I say it without any imputation of blame in any way on the Civil Service. It should be recognised that the Civil Service is competent in certain spheres. There are certain spheres which are outside the competence of the Civil Service. Civil servants have certain qualities and, necessarily, like the lot of us, they have the defects associated with the qualities. The Civil Service is not a business. The idea that the Minister for Finance would have control means, in effect, that the Minister would consult his officials and must have in his Department somebody sufficiently skilled and sufficiently experienced to be able to judge this matter. If I had that skill I would not be in the Department of Finance. I would be making money outside. I have not got it and I do not profess to have it.

The Civil Service is not a business. There is no such thing as a business run in such a way that the directors have to face representatives of the shareholders more than a hundred times a year, let them ask Parliamentary Questions and find themselves under an obligation about answering the questions. That is not business. It is democracy. It is Parliamentary democracy.

The whole trouble with this Bill and the amendment is the endeavour to combine Parliamentary democracy with business methods. We might discuss that point when we have more time than we have this evening. This is a Bill to endeavour to get business people to come to certain decisions. If the amendment were adopted it would mean in relation to this Board—carefully chosen I understand and praised all round—that as well as their consideration, you would have consideration for the Department of Finance Ministerial decision and the possibility, apart from the probability, of a Dáil or even a Seanad debate on that decision. I think that is precisely what the Bill is meant to avoid.

I do not think there is any scheme by which you can put in an amendment which will combine the two things, the business methods and democratic Parliamentary debate. You cannot do it. It is not a question of degree, whether you make a loan of over £200,000, of over £500,000 or £1,000,000. It is a question of principle and a question of general method. The real trouble here seems to be, as Senator Barry says, that in regard to a company and a particularly large loan, people want to know how much is being given by the State and how much the Company are putting into it. I might vote for an amendment which would ensure that the amount of risk capital which the private people are putting into the thing themselves would be stated in every instance either by way of a sum or a percentage; say, they are putting in £50,000 or 30 per cent. of the total amount, or the State is putting in 70 per cent. and they are putting in the other 30 per cent. That might be stated but this amendment, the idea of which apparently is to bring the matter under Parliamentary control, is, I think, not sound. For that reason, I do not intend to vote for it if it goes to a division.

I should like to say, however, that it has not been found possible in other countries to find this Parliamentary control. The control of this Company, as the Minister suggested here today, is a general control, not a particular one, that is to say, you look at the whole figures over a period and you say: "They lost too much money. Therefore, we must do something about them. We must change the situation. We must alter the Act. We must put more restrictions on them." But if over a period they are doing well that is a different matter. We must remember, however, that every business that does well has some failures; the essence of business is that you have failures. The fundamental difference between the businessman and the civil servant is that the businessman can risk the failure and the civil servant cannot. If I am in charge of a business which is doing well, I can put £1,000 into something. It may work and it may not, but there is nobody to ask a question about it later on unless something is wrong in relation to the law. For that reason, this amendment is not workable because the kind of control is general control and not particular control. That was the point raised in the other House.

I do not see any objection to the total amount that a company is getting being stated; in fact, I think it is desirable because undoubtedly there is public uneasiness—it may not have any basis but human nature is what it is—that a company will get all the money from the State and risk none of its own money. Certainly it would add very much to public confidence and assist the Industrial Credit Company themselves if we could have a statement that a body that were getting a substantial loan or a substantial guarantee, were themselves investing a certain amount. I do not want the figure but the percentage total, so that the people would know that if the State lost a certain amount the promoters who got the loan or the guarantee would have lost some of their own money.

That is all the people really want to know and I suggest that is more important and more workable than this amendment. The matter is one on which one could speak at great length. It has escaped other Parliaments as well as ours and, from the point of view of my own friends in the Labour Party, it has escaped places where they have professedly Socialist Governments. However, it would be desirable that at some time—and we have plenty of time—we should discuss this whole question which involved much more than this Board. As far as I am concerned, I regret to be out of agreement with people on this side of the House and I regret to find myself in agreement with Senator Lenihan because of the strange arguments he used, but I am certainly against the amendment.

Dr. Ryan

The example which Senator Quinlan has given is quite different from what we are considering here. An Foras Talúntais gets a grant not a loan or a repayable advance and it must be paid out of the Exchequer. I do not think Senator Quinlan would suggest that An Foras Talúntais should get whatever they ask for without any inquiry. Somebody must at least have a look at it. If they ask for £1,000,000 and we think it should be £50,000, we should be able to say so. If it is a repayable advance we make to the Company in some way or other and it is paid to a trading body, I think what we do in this case is the proper thing. We take the balance sheet of the Industrial Credit Company and we look at it from year to year. We make up our minds in the Department of Finance if it is worth supporting; if they want more money we shall give it if they are doing good work. I do not think we should inquire into each individual case. As long as the over-all picture is good, they deserve the support of the country by way of financial assistance. That is the proper basis if its general operations are satisfactory.

This amendment, as now worded, would operate whether the Minister was making advances or not. If the Industrial Credit Company do succeed —and they may succeed; I do not know—in raising the money elsewhere, the amendment would operate so that they could not make an advance of more than £1,000,000 even though the Minister for Finance was giving them no money at all. If the amendment were related to advances made by the Minister for Finance, there might be some sense in it but it is not related in that way. Even if the Minister for Finance does make an advance, it is not related to any loans they may be making or guaranteeing. They show what their finances are and that they have received so much money. They have made advances to a certain amount; they have committed themselves to a certain amount and they are coming near the margin where they have no more money. Therefore, they want some money to carry on but the advance made to them in that case is not made to cover any advance on their part or any loan made by them.

It must be remembered that the Board of the Industrial Credit Company takes the case on the financial merits or demerits, as the case may be, and they have, as I am sure every Senator is aware, refused loans in certain instances because they thought the finances of the applicant were not good or there was not a fair promise of success in whatever proposal the applicant put up. Where they did make an advance they believed that the proposition would be successful and, as I mentioned already, in most cases they were generally right in their opinion.

The principal argument against this amendment has been dealt with both by Senator Lenihan and Senator Hayes. I agree with Senator Lenihan that it is a legalistic type of amendment. There is nothing very practical about it. Anyway the point made by Senator Hayes is that if the Minister has any power under any section and if he approves of a loan of, say, over £1,000,000, he can be asked in the Dáil, and he will have to tell the Dáil, all the points in favour of that company and of course there will be men in the Dáil and the Seanad—we need not go very far to find that out; if you read the Dáil Debates and the Seanad Debates on this Bill it is very plain—to point out all the bad points in the application.

I do not think that would do very much good. It might not do a great deal of harm to the person who got the loan but it would prevent anyone else coming along. If this amendment were accepted, if a man had a very big proposition in mind, had a fair amount of money himself and wanted £1½ millions from the Industrial Credit Company, and the Minister were obliged to give his approval, is it not quite obvious it would come up for discussion in the Dáil and Seanad and the man would say: "I shall not go on with it"? He would be a very foolish man if he did go on with it and have himself dragged into a public discussion in the Dáil and Seanad, when all the arguments for and against him would be thrashed out. I think, therefore, that the only effect of this amendment would be to prevent any big proposition being put to the Industrial Credit Company in future because people would be afraid of the publicity. It would have the effect of curbing industry in a big way. There is no doubt about that.

Professor Quinlan

I do hope what the Minister has said foreshadows treating all bodies as responsible adult bodies. That applies to groups like Macra na Feirme and others which are called back month in and month out to see why they must get the next £50 already voted to them. I still cannot see why it should be impossible to give the safeguard which they asked. Surely the Minister is not the monster he is pictured to be by Senator Lenihan—a monster capable of stymying every proposition put to him. In Senator Lenihan's view, he would be most unreasonable.

I want to make one other point in relation to a comment made by some speaker on the lateness of the amendment. That is due to two causes. First of all, we facilitated the Government by taking the Committee Stage directly after Second Reading and, consequently, we did not have the time to draft the amendment. Secondly, in answer to a question on Second Reading, the Minister said he would not dream of asking the Industrial Credit Company what it needed the money for. That was a revelation to me. I thought that in the section itself he had the power.

Mr. Carter

Why should he?

Professor Quinlan

Let me mention one final point. Surely when the E.S.B., for instance, come looking for more money, he does not consider it unreasonable that they must specify that they want to put up a new power station and so forth. We have got into a complete jumble. In the circumstances, I now feel in relation to Córas Tráchtála that they would be far better off had they remained a limited liability company.

Senator Murphy rose.

An Cathaoirleach

There may be no further discussion. The Senator has already spoken.

Mr. Murphy

I thought we were on Committee Stage.

An Cathaoirleach

No.

Mr. Crowley

On a point of correction.

An Cathaoirleach

A point of explanation?

Mr. Crowley

A point of correction, actually. I was described as speaking on behalf of the Labour Party. I want to make it quite clear that I was speaking for myself as a member of the House.

Professor Hayes

Would the Minister say whether consideration has ever been given to the idea of revealing the percentage of capital invested by the people who get the grant or whether there is any difficulty about that?

Dr. Ryan

I could not really say if it was ever considered. Therefore, I could not give any opinion on that at the moment.

Senator O'Reilly rose.

An Cathaoirleach

The debate has concluded. Is the amendment being pressed?

Professor Quinlan

Yes.

The Seanad divided: Tá, 13: Níl, 24.

Tá.

• Barry, Anthony.
• Carton, Victor.
• Crowley, Patrick.
• L'Estrange, Gerald.
• Murphy, Dominick F.
• O'Donovan, John.
• O'Quigley, John B.
• O'Sullivan, John L.
• Quinlan, Patrick M.
• Roddy, Joseph.
• Sheridan, Joseph M.
• Stanford, William B.
• Tunney, James.

Níl.

• Ahern, Liam.
• Brady, Seán.
• Carter, Frank.
• Dowdall, Jane.
• Hayes, Michael.
• Hayes, Seán.
• Hogan, Daniel.
• Lahiffe, Robert.
• Lenihan, Brian.
• Ó Ciosáin, Éamon.
• Ó Donnabháin, Seán.
• Ó Grádaigh, Seán.
• Cole, John C.
• Colley, Harry.
• Connolly O Brien, Nora.
• Ó Maoláin, Tomás.
• O'Reilly, Patrick.
• Ó Siochfhradha, Pádraig.
• O'Sullivan, Ted.
• Ruane, Thomas.
• Ryan, Eoin.
• Teehan, Patrick J.
• Walsh, Laurence J.
• Walsh, Louis.

Tellers:—Tá: Senators Murphy and Stanford; Níl: Senators Carter and Ó Donnabháin.

Amendment declared lost.

Bill received for final consideration and passed.