First of all, subsection (4) of the section as it stands is most important, and had it existed heretofore it would have meant that certain shareholders holding shares in recent years would not have been able to have so much money in circulation as against people who had shares in companies over very many years. I know of one or two Irish companies where people took up shares originally when they were scarcely valuable. In more recent times there was a tendency towards take-over bids which were turned down. The people who made the take-over bids started buying in the market and had offered 20 per cent. Some shrewd speculators spotted this and started buying shares and some made up to 300 per cent profit at the expense of the companies. Therefore, it is most important that there should be in a Companies Bill something of the nature of subsection (4) of Section 158. It does not apply to the Industrial Credit Company as it has operated heretofore because shares are not bought by them with a view to getting some controlling interest and then going to the Directors and saying : " Look here, we already own so much of the equity of your company and unless you put two of us on the Board we will make things unpleasant for you. Unless you are prepared to negotiate with us we will take further steps." Those are the ruthless sort of things done in business and this subsection does not apply to the Industrial Credit Company at all. Why drag the Industrial Credit Company into it ?
Now I come to the second point regarding the sensitivity of companies. No company starting off would pay more than it would pay in the bank for borrowed capital. It would borrow capital for 6½ per cent and where a company or its equity would not have that money to pay you are not going to sink your capital in it. A company that goes to the Industrial Credit Company for money has a scheme in mind. They are prepared to sink £20,000, £30,000 or £40,000 of their own money. They go to the Industrial Credit Company and say : " We need £80,000 to get this on its feet; are you prepared to facilitate us? You take up equity for £40,000 and we take £40,000." Having investigated the matter the Industrial Credit Company might agree. They might say : " You put up £50,000 and we will take up £50,000, or put up £60,000 and we will take £40,000." Right away you can assume that the people putting their £40,000 into it are looking at it in a purely speculative way. It is a most sensitive situation at the beginning. They will not increase the risk beyond what is necessary; they would prefer to drop the whole thing and advertise to the general public. By letting the Industrial Credit Company take an equity, not only do they get their money back but sometimes get it back at a profit. People are prepared to go back to the Industrial Credit Company and say, when the shares are paying 5 per cent, 6 per cent or 8 per cent, " We are prepared to take these shares from you at a profit." That releases money to the Industrial Credit Company for some other business. I can see Senator Lindsay's arguments but I know from my own experience of business that it would create a sensitivity that would not help to encourage speculators who are prepared to put their money into businesses just starting.