The chief purpose of the Bill is to get the approval of the Oireachtas to increase the financial resources of the Agricultural Credit Corporation so that the Corporation will be able to continue to lend money for the benefit of the agricultural industry.
The last occasion on which the Oireachtas increased the Corporation's resources was in 1961. The Agricultural Credit Act passed in that year increased the share capital of the Corporation from £300,000 to £2 million and it also increased from £8.3 million to £10 million the Corporation's authority to borrow money. These additional resources are now practically exhausted. The Corporation's share capital has been fully subscribed and borrowings have almost reached the £10 million limit.
It is good to be able to record this increased borrowing which is in step with the increased activity in the agricultural industry. The Corporation's lendings have greatly increased since 1961. Between the start of business in 1928 and April, 1961, total lendings amounted to £10¼ million but in the four years from April, 1961, to April, 1965, practically the same amount, £10.3 million to be exact, was lent. One must allow for the fall in money values but even so the increase is remarkable. I should also say that of the £10 million lent since 1961, about half was lent in the year ended April, 1965.
The present Bill, therefore, in order to enable the Corporation to carry on its good work proposes to increase the Corporation's share capital from £2 million to £6 million and its borrowing powers from £10 million to £20 million.
There are a number of other provisions in the Bill and I hope that the explanatory memorandum which I have circulated will be helpful to Senators. There is one point I would like to draw attention to in connection with the explanatory memorandum. As a result of an amendment brought in by me in Dáil Éireann, the Bill as passed by the Dáil has a section—section 4—which does not appear in the Bill as introduced. The purpose of section 4 is to enable the Minister for Finance to guarantee in full borrowings by the Corporation. This is a necessary corollary to increasing the Corporation's borrowing powers.
Section 5 in the Bill as passed by An Dáil is referred to as section 4 in the explanatory memorandum, with consequential renumberings in other sections.
The purpose of the other provisions in the Bill—described in section 4 and onwards in the explanatory memorandum—is mainly to extend the provisions of the Agricultural Credit Act, 1961. That Act as well as giving the Corporation additional financial resources also widened the range of purposes for which the Corporation could make loans and extended the means by which loans could be made. The 1961 Act, for instance, brought in the "charging order" system which provides a fairly simple procedure when the Corporation takes a charge on registered land as security for a loan. The 1961 Act also enabled the Corporation to engage in hire-purchase business.
The present Bill proposes to enable a charging order to be used when the Corporation is making a loan to the personal representative of a registered owner of land. Also, the Bill proposes to allow a registered owner to have his land charged as security for a loan made to another party as, for example, where a farmer guarantees a loan made to a son who is establishing himself in another farm.
The Bill also proposes to increase from £1,000 to £2,000 the limit up to which charges by the Corporation on land will rank prior to equities. Priority to equities in the Corporation's favour was first fixed in 1928 and the limit was then set at £400. It remained at that figure until the Agricultural Credit Act, 1961, increased it to £1,000. The Corporation have assured me that they are not aware of any case where a priority charge in their favour was a cause of loss to an equitable claimant. £2,000 would be well in excess of the average loan made by the Corporation but in view of the Corporation's assurance and having regard to falling money values, I am satisfied that the increase in the limit is reasonable. It facilitates considerably both borrower and lender in that normally pre-registration title would not have to be investigated in such cases.
The limit on borrowings by personal representatives is also being increased from £1,000 to £2,000 and the Bill provides that the Corporation may guarantee loans by third parties to personal representatives. Under the 1961 Act, the Corporation was given power to guarantee loans by third parties but this power was not specifically extended to guaranteeing loans raised by personal representatives from third parties.
As regards the recovery of moneys due, the Bill provides that a certificate by the Corporation of moneys due under a hire-purchase agreement may be accepted in Court proceedings asprima facie evidence of the debt. There is a similar provision under existing legislation as regards moneys due in respect of loans or advances but the existing provision does not extend to hire-purchase dealings. I propose to remedy that deficiency. I am happy to be able to say that the number of cases in which the Corporation has to resort to court proceedings is comparatively small.
The 1961 Act gave the Corporation authority to accept deposits from cooperative societies. It is, however, precluded from accepting deposits from sources other than co-operatives. I, therefore, propose to give the Corporation the necessary authority.
Under the Agricultural Credit Act, 1961, the charging orders introduced by the Act were exempted from stamp duty and registration fees in the Land Registry. The Bill proposes to exempt from stamp duty and registration fees all mortgages and charges in favour of the Corporation, and also releases from such instruments. This will place borrowers using mortgages or deeds of charge in the same position as borrowers using charging orders in so far as these duties and fees are concerned.
The Bill also makes certain provisions as regards membership of the Houses of the Oireachtas by directors, officers and servants of the Corporation. These provisions are in line with established provisions as regards membership of the Houses of the Oireachtas by directors and staff of State companies.
This Bill is a very important measure to enable the agricultural industry to maintain its progress and I confidently recommend it to the Seanad.