IN COMMITTEE ON FINANCE. - DAMAGE TO PROPERTY (COMPENSATION) (AMENDMENT) BILL, 1926—THIRD STAGE.

The Dáil went into Committee.
Question—"That Section 1 stand part of the Bill"—put and agreed to.

I move the following amendment to sub-section (2):—

After sub-section (3) to insert a new sub-section as follows:—

(4) This section shall not apply in respect of any decree to which a full re-instatement condition or a partial re-instatement condition has been attached unless and until the Minister for Finance is satisfied that the said condition has been complied with in full.

I dare say that there is no necessity for me to argue this case, because I would hope that the suggestion contained here would be generally acceptable. If it has been a condition of the award that reinstatement, or partial reinstatement, shall be made, then it should appear, I think, that that condition should be fulfilled before any 10 per cent. could be granted. That seems to me to be an obvious proposition. I think I am right in saying that the awards were not only for building but that conditions for the reinstatement of buildings were applied in these as in some of the awards under the previous Commission. We know that in the previous Commission there were a number of reinstatement clauses attached which were not fulfilled, and there was a remission of a certain proportion of the awards as a consequence. In some cases the beneficiaries got off very well without having to fulfil the obligations imposed by the Commission. I think that in this case, at any rate, we ought not give 10 per cent. additional unless the reinstatement condition has been fulfilled.

I think it is fairly obvious that in any case in which a reinstatement condition has been attached, the 10 per cent. cannot be paid until the work is completed. In other words, let us assume that the cost of replacing a destroyed house is £2,000. The Minister for Finance will pay £200 in bonds, but he cannot pay until the work is finished. A contract may have been entered into for £1,500 or £1,600 and the entire cost may be only £950. On the other hand, although the contract was only for £1,500, there could reasonably have been extras amounting to £600.

In that case, he would have certainly no discretion but to pay the full two hundred pounds that would have been involved. In any case in which a reinstatement condition is imposed and the amount is five hundred pounds or under it, the ten per cent. cannot be paid until the work is completed. But take a much bigger proposition—a building costing £20,000 or £30,000, the contract having been entered into. I have heard of a case in which it would not have been possible to have gone on but for the ten per cent. There it is obvious that it would be a hardship to hold up payment when the work was actually in progress and certificates were coming in regularly from the architect in respect of its continuance. It may be taken generally that where a reinstatement condition has been imposed, payments will not be made until that has been fulfilled. But it may be that some little elasticity is required in certain cases. It would, I think, be a hardship to impose a condition in the case of an immense building that the money should not be paid until the work was completed. The work being in progress and good faith being shown by the person responsible, I think that should be sufficient to warrant this payment of ten per cent.

Either I am misunderstanding the original Act or the President has misunderstood my case. Compensation has been awarded, let us say, in the case of a building and its contents—say, machinery—amounting to ten thousand pounds, with a reinstatement condition affecting the building alone. The compensation is paid but the re-building is not gone on with and two thousand pounds for re-building is allowed to lapse.

To lapse altogether?

Yes. But there is ten per cent. involved here in respect of the eight thousand pounds for the contents.

Might I explain to Deputy Johnson that no case has come under my notice of any lapsing of a reinstatement condition in respect of the Damage to Property Act. Deputy Johnson has in mind, I know, some cases under the International Commission, but there are so many conditions which an applicant can select and put to the judge in respect of compensation under the Damage to Property Act that there is no necessity for evasion. For instance, a huge house is burned down in the country. The claim is made that the person concerned would not be comfortable down there and the desire is expressed to build a terrace of houses in Dublin. I have not read of a single case in which a judge refused to allow a transfer from a county like that to Dublin. It may be taken generally that any reinstatement condition imposed under the Damage to Property Act will be complied with by reason of the fact that it is not confined to the particular class of building destroyed or to the particular county in which the damage was done. In the case of the Wood-Renton Commission, the reinstatement condition applied to the particular place and, I think, to the same class of building.

It is quite possible that I have misread or misunderstood the implications of the Act, but I should certainly desire to ensure that before any ten per cent. is paid upon the contents of a building, some re-building has actually commenced in respect of the amount to which the reinstatement clause applied. No case of this kind, the President says, has come under his notice, but cases may have occurred which did not come under his notice. As the President has reminded the House, the idea involved in this amendment arises from the omission of such a compulsory clause under the previous arrangement. I want to prevent the possibility that people will get this ten per cent. additional on the amount awarded in respect of machinery and contents of a building and not use the remainder of their award in respect of the re-building, there or somewhere else. This particular form of amendment may not suit the special circumstances, but I would like to get some assurance that it is not merely unlikely, but impossible, for any person to get this ten per cent. on the contents of a building in respect of which a reinstatement condition has been made, that condition not being at the time fulfilled in any way.

To my mind, it would be very bad business on the part of a person who had got a decree, with a reinstatement condition, not to go on with the work, in view of the advantages. In a small case in which, let us say, there was a five hundred pound award for a building which would cost eight hundred pounds or a thousand pounds, the applicant not having the extra money to go on with the work, there should, I think, be more consideration shown than in the case of an award for ten thousand pounds for work which would cost ten thousand five hundred or eleven thousand pounds. I am fairly well satisfied, from the way the Damage to Property Act was drawn, that there is no likelihood of the same set of circumstances arising as arose out of the Wood-Renton or Shaw Commission in which a person might elect to take all the advantage and leave the site behind, with a building condition attached to it and a sum of money wrapped up which could be used for no other purpose. I am satisfied from the information I have had from the Departmeit that putting in a clause of this description might delay certain payments which it would be inadvisable to delay. Having brought the Act before the House, having a knowledge of the way it was drawn, knowing that it gave every facility for other classes of buildings, knowing that in the case of a large building partially destroyed it gave to the applicant the entire cost of the re-conditioning of the building, I think this Damage to Property Act, 1923, is in an entirely different category from the Wood-Renton Commission. What Deputy Johnson had in mind is as secure as it is possible to make it by legality and in view of the restrictions that might arise, I would ask him not to press his amendment.

In view of the President's explanation, I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.
Sections 2, 3, 4, and 5 put and agreed to.
SECTION 6.
(1) For discharging the liability assumed by the Irish Free State by Article 3 of the Agreement made on the 3rd day of December, 1925, between the British Government and the Government of the Irish Free State amending and supplementing the Treaty of 1921 and also for making the repayments to the British Government agreed by the said Article to be made by the Government of the Irish Free State, there shall be charged on the Central Fund and the growing produce thereof and paid thereout to the British Government the following sums at the following times, that is to say:—
(a) a sum of one hundred and fifty thousand pounds payable immediately on the passing of this Act, and
(b) an annual sum of two hundred and fifty thousand pounds payable on the 1st day of April in every year for sixty years commencing with the year 1926.
(2) Whenever by agreement between the Minister for Finance and the British Government any sum or part of a sum payable under this section to the British Government is set-off against an equal amount payable by the British Government to the Government of Saorstát Eireann, the amount so set-off shall cease to be charged on and shall not be paid out of the Central Fund or the growing produce thereof.

I move amendment 2:—

In sub-section (1), lines 57 to 61, to delete clauses (a) and (b) and substitute the following:—

"(a) a sum of one hundred and fifty thousand pounds payable on such date as Dáil Eireann may determine by resolution declaring that the payment of the said sum may be made without imposing an undue burden upon the finances of Saorstát Eireann;

(b) an annual sum of two hundred and fifty thousand pounds payable on the first day of April in every year for sixty years commencing with the year next following that in which the aforesaid sum of one hundred and fifty thousand pounds becomes payable."

I do not propose to detain the Dáil very long in arguing in favour of this amendment. The case has been, more or less, discussed already, but the fact remains that, in my opinion, the Dáil should not pass this Bill, in its present form, but should pass it, if it is to be passed, amended in such a way, as to relieve the country of the necessity for paying this sum of money until it is in a better position to do so, than it is today. The case, already stated, has not been made by the President or anybody else, that there is any obligation, express or implied, legally or morally, to begin the payment of the sum of money involved under the 1925 Treaty Amendment Act in this year 1926-27. I desire that we should be in a position to say that we can afford to pay this sum of money before binding ourselves to pay it. Now there are some people who have suggested that it would be the business of the House at any time to say we cannot afford to pay it, and I know that many people engaged in controversy at the recent times would always be in a position, with a clear conscience, to argue that the country cannot afford to pay it. That would be their perpetual cry, no matter how great the ability to pay, or how low the taxation; I can well imagine that. It has been the normal experience in every country. But I am not prepared to say that the responsible Government of the time, in the future, and the party behind the responsible Government in the future, is going to perpetually say it cannot afford to pay a debt which has been entered upon.

But we have been told upon the highest authority that we are bearing at present, and will have to bear for a long time, an undue burden, and that we are not honestly able to pay a single penny. While I do not accept that as a true presentation of the case, I believe that there are urgent demands upon any £400,000 that we could raise this year that ought to be met before this particular £400,000 is paid away, and that we ought not, in this Bill we are now discussing, bind ourselves to pay money until the Dáil is in the position to say, by formal resolution, that this year we can afford to pay it. Therefore I ask the Committee to support me in the amendment I am moving.

Deputy Johnson. raises the question whether the country can afford to pay this amount or otherwise. I think the amount will bear rather heavily on the present resources of the country, but that is beside the mark. We must bear in mind that the original obligation undertaken by this State, in connection with the Treaty. was far in excess of the amount covered by this Bill. The President in another place already stressed the poverty in the country and by that argument got the original amount reduced.

What was the amount?

The original Treaty provided for considerably more than this amount.

Not at all.

No sum was mentioned.

The President stressed that the bargain he made, in connection with this matter, was a very good one for the country. The Dáil accepted that, and undertook the obligation. Now Deputy Johnson's plea is that there should be postponement of the annual payment to be made, to some future date. But that, to be a valid argument, would seem to visualise that the country, in two or three years, is going to be in a substantially better position to pay the amount than now. Postponement does not, in any way, take away from the amount that has ultimately to be paid under the agreement. The policy of this country would be very badly interpreted if we were to put that proposal into operation. I think the sooner the country, once it has a liability to face, faces it and carries out its obligations, the better.

Deputy Johnson disclaims any idea of repudiating the liability. I think it would be very unfortunate if, at this stage or any other, this House should attempt to repudiate liability; but when Deputy Johnson says the country is badly able to bear it, he may, of course, say that I said the same thing— I think the right course to adopt is to concentrate on saving our expenditure, as far as possible, and on the reduction of our commitments in some other way than by postponing our liabilities.

When we come to consider the Budget proposals I suppose there will be a good deal of contention on the question of economies, and so forth, but that I think is no argument at the present time by which we should, having undertaken an obligation, postpone the footing of the Bill.

I want to take the opportunity to state my position with regard to the vote that I will give on this particular section and the vote that I gave for the financial motion. The reason that I am voting for this section and that I voted for the financial motion is that we were confronted here, when the agreement was put before us in December last, with an accomplished fact. To all intents and purposes a pistol was held to our heads. We were told "You must submit to this agreement or else have chaos." The decision of the Boundary Commission was said to be the alternative to chaos. As a result of that I supported the agreement.

I am prepared reluctantly to support the section as I have already supported the financial resolution. I disagree almost altogether with the arguments used to support the inclusion of these compensation claims in this agreement. I agree with what Deputy Morrissey said that giving this 10 per cent. additional to those who got compensation under the Act, is a confession that the decisions of our judges were not just or reliable. The President claimed that a great many people had been under-compensated. My experience is directly to the contrary—that a great many people were over-compensated.

Under the Damage to Property Act?

I should like the Deputy to give some instances.

I could state dozens of cases.

Is the Deputy aware that members of his own Party have suffered very much in this respect?

I am aware of that.

That ought to be mentioned then.

I believe there has been discrimination. I say there has been discrimination by the judges, that people of a certain class got compensation, while people of another class did not get it. That is my view of it. I think this 10 per cent. is being given because of the clamour of that particular class who were over-compensated and not because of the clamour of Deputies on these benches. We all know that compensation was granted as a sop to the so-called loyalists who went over to England, and said they were under-compensated, and all kinds of other ridiculous things, which were not true. I also want to say that I did not misunderstand the statement of the Minister for Finance when he said that the payments would not start until 1929. I fail to understand how any Deputy could have understood to the contrary. For that reason I cannot support the amendments put down by Deputy Johnson. However, I do not support the sections because I think they are reasonable or just, but because we have no alternative. Having supported the Confirmation of Agreement Act, I see no alternative but reluctantly to give my support to this and the other sections.

Like Deputy Heffernan, I am not enamoured of the section which Deputy Johnson proposes to amend. In my opinion, it is accepting one of the worst features of the Bill. While the Bill is definite in point of time as to repayments, this amendment is indefinite in my opinion and that makes it more unacceptable. Deputy Johnson accepts the payment of the interest on the sums advanced. He accepts the whole Government contention that we are liable according to this method of repayment for the annuities for 60 years. He accepts the whole Government case that we are liable for over £5,000,000. It works itself down then to whether, if we accept those things—and I do not wish to be taken for a moment as agreeing to the suggestion that we should—we should post ourselves as defaulters, for that is what it would amount to, with this thing hanging over us indefinitely, because I presume as good a case can be put up next year to show that we are not able to bear the charge and, perhaps the same thing five years hence. While I would cut down our payments to the minimum, while I would scrutinise every penny as closely as possible. I would not like to be a party to anything that might be looked on as defaulting. It would be bad business for the country. Therefore, I do not propose to vote for the amendment. In my opinion, there is very little to distinguish between it and the section, and as such, I believe the Dáil should reject it.

Deputy Hogan is not prepared to support the amendment because it accepts as something definitely decided by the Dáil a liability to pay the total sum. I am prepared to support a motion to delete the section, because I am opposed to the thing in toto, but I am trying to arrive at a modification of the evil. I think that the Bill is inopportune, because it is asking us to do something in the way of paying moneys which we are told on every hand we cannot afford to pay. I am going to take it as an indication of the real mind of the Dáil and of every Deputy who votes, if they say that we can afford to pay this this year, that they are not sincere and honest when they talk about reducing this, that and the other during the discussion of the estimates in the next few weeks.

Deputy Hewat repeated what many people have come to accept as a truth, but which is by no means the truth: that we undertook an obligation to pay a sum larger than this in the Treaty. The President will agree with me that we did not undertake any obligation of the kind. We undertook an obligation to pay X if that was a sum greater than our counter-claim which had to be decided by a tribunal. What the Dáil agreed to in December was to pay a sum of money rather than have an indefinite amount hanging over our heads.

Will Deputy Johnson give us an idea of what the amount of X would be?

It was never presented—the President told us the Bill had never been presented.

I think I did not. I am almost certain that I told Deputies that it had been presented for something like £155,000,000.

The President told us that a provisional amount had been suggested on the other side, but that he had never put forward the counter claim——

That is right.

——believing no doubt that it was going to overwhelm the £155,000,000 and that there would be a big debt due to us instead of due from us. But rather than have that doubt in the minds of the people, the Dáil agreed to buy off that doubt by the payment of this sum of money. The whole question involved is: when shall the payment begin? Shall it begin in the year 1926/27? I suggest following the guidance of the expert financiers that we cannot afford to pay £400,000 this year, and I submit that the evidence before us shows that we may be in a very much better position to pay in the near future. Much will be cleared up to-morrow, I have no doubt, but in the absence of fore-knowledge I am going to refer Deputies to the Estimates for last year in which there occurred a sum of £3,690,000 for property losses compensation. When that is cleared off, we may be in a reasonably good position to begin to pay this £400,000. Let us clear off those property losses compensation claims. Let us clear off one part of our war debt before we begin to pay off the other part. That ought to appeal to the economists. It ought to appeal to the businessmen; it ought to appeal to the farmers.

Is it fair to the creditors?

The Deputy will be the first man to cry out if an attempt is made to raise all the money in one year and pay all these debts in one year.

I would not accept that at all. The alternative, as the President put it before us, was that we were to pay four millions in liquidation. I do not know if that would not be a more acceptable plan, if it were feasible.

All I say is that we estimated and attempted to raise the money to meet £3,690,000 for the year 1925-6. We did not pay within two millions of that sum, and, I am presuming, that that is going to be put into the accounts due for the year 1926-27.

Not necessarily.

I am assuming that, as the estimate has been placed in our hands. I am justified in assuming that we are to pay off that bill in 1926-27.

The estimate does not disclose how much the Minister is going to raise by loan.

I understand that. We are asked to pay this in 1926-27. When that sum is paid off, surely, it is a reasonable proposition to come forward with the later and less clamant claims. That is all I am asking in the amendment, and, as I said. I think it is really a test of whether there is any sincerity in the cry that is going on for a reduction in expenditure in 1926-27.

I think it is hardly fair to attempt to place those who are demanding a reduction in expenditure in that position, because it is perfectly evident that having agreed to a definite contract we should stand by our word. That is the first claim, and it must come before any reductions. I am not going to stand up and ask that we repudiate contracts in order to bring about a reduction in expenditure. I say that we should stick to a contract. Having made a contract it is up to us to carry it out. I believe that the country can very ill afford to pay this money. I believe with Deputy Johnson that there are many other claims more urgent, both from the humanitarian point of view and from the point of view of the taxpayer. But a contract is a contract, and nothing has happened since that contract was made to justify us in repudiating it. As one of the people that Deputy Johnson, I am sure, referred to, and one of the advocates of economy, I believe that I am acting perfectly consistent in voting for this section of the Bill, while, at the same time, standing for economy and demanding cuts in the estimates in every possible quarter.

If we are to follow, or to place any reliance on the statements of British Ministers, there is no payment directly out of our Treasury this year to Great Britain. The statement made by Mr. Baldwin was that they were retaining this £900,000, which he stated constituted the first instalment. The sum is to be £400,000 this year; £250,000 next year, and £250,000 in subsequent years. It is true that we will have to increase the Damage to Property Vote by £900,000, but as the British are retaining this sum, if we refuse to complete the work of the Commission, what is going to happen? Is it not a sign that we are repudiating liability? I think Deputy Johnson's case fails about paying money this year which we have not got, and which we are not in a position to pay. You have to meet it. You have to meet the Damage to Property Vote. As far as I understand, you will have to increase that, unless the Government—that is a thing we have to discover when the Estimates are under discussion—have included sums which would come from the British in respect to their liability under the Wood-Renton Commission. I submit that Deputy Johnson's case fails. We want to get rid of the work of this Commission. Is it not better that it should be finished within the next year or so, rather than be defaulting, the State, more or less, committing itself to bankruptcy, because of a repudiation of its liability to complete the work of the Commission? I think Deputy Johnson's amendment falls short of the object, which is to save the Exchequer in these troubled times.

There is no question in my mind of repudiating a contract. I deny that the Dáil entered into any contract. There is, therefore, no question of repudiating it.

Amendment put, and declared lost.
Question proposed—"That Section 6 stand part of the Bill."

In view of what has occurred I suppose there is very little use debating this matter in any great detail, but it is essential that Deputies should have a further chance of determining what they are about to commit the country to. I contend that under the London Agreement the strict reading was that we were to repay to the British Government the sums which they had advanced to us, and which had come into our Exchequer. I find on examination of the Government proposals, as outlined in Section 6, that that has not been adhered to, and that the situation has been altered to our manifest disadvantage. I would like to get some answer from the Government, but so far they have consistently ignored it, as to why we were first liable for interest, and why we are accepting capital liability on their own figures of 5¼ millions, when we have only received, according to Mr. Baldwin's statement, four millions. What is the difference? It is just over 1¼ millions. Mr. Baldwin's exact words were: "Our liability will be in excess of five millions, but we are retaining a sum of £900,000." Even if it were 5¼ millions, which the Government is assuming, does not that mean that the British Government had handed over a sum of £4,300,000? It is difficult to understand what the finance of our Executive Council is. There is one thing must be apparent even to the most dense, that they had a bad case, and that they know they bungled their job. They have accepted liability for sums which never came to them, and which the country must bear because they were not able to do a sum in subtraction.

The country must repay this sum of £900,000. In the course of 60 years it must redeem it, and pay an interest of 4½ per cent. for all that period. The sum of £2,700,000 will fall upon the people of the Saorstát. Similarly we will send across to London 57 payments out of our Exchequer of £250,000 annually, or, in other words, a sum of £14,250,000. Our debt at the moment cannot exceed more than £4,250,000, so we are losing £10,000,000. What is the justification for our paying that money? If we did owe £5,000,000, which I deny, there is a sum retained by the British to our detriment, which is not the fault of the British but of the Government here when they offered them an annuity of £250,000 for 60 years. If we are to meet this payment if that sum of £900,000 which the British hold was justly due by us, and if it is withheld as interest and sinking fund, then a year should elapse from the date of the London Pact before any interest is due. The normal proceeding would be to meet this at the beginning of the financial year 1927, nearly a year hence. There is no interest due in the interval. It is not business-like to ask us to meet the charge this year, and it shows a lamentable want of financial policy, or financial astuteness, on the part of our Government. There are three sums which the British hold, one of £400,000 and two of £250,000 each. One in one eventuality would not fall due until two years hence, and in another case would not fall due until three years hence. That is something at the moment, and they are getting a discount which they would not be entitled to until three years had elapsed. If you were to discount £250,000 due three years hence, how many thousands would it amount to?

At what per cent.?

I presume the per cent. we pay.

Mention it.

It is 4½ per cent. The British Government, I believe, are paying about 5 per cent. at the moment, and I presume they would not offer you terms less favourable.

How does that fit in with your other statement?

It fits in perfectly.

I mean as regards the £15,000,000?

We have two alternatives. We are either responsible for £5,000,000, of which we are told the British Government have retained at the moment £900,000, as interest. There is something accruing to us on that sum of £900,000, the last of which is not due until four years hence.

You are getting out of the percentage on £15,000,000.

I did not suggest a percentage was coming to us on £15,000,000, but I said we are paying over £10,000,000 interest. When the President is replying——

I do not intend replying.

I am putting it to the House that because the President knows he has no case he is not replying, and that he knows he is in the wrong. We are not endeavouring to break faith, or to repudiate the London Agreement. We will give what is justly due, but not more. This country is too poor and cannot afford to pay beyond its just liability. I contend that the Government has over-estimated our liability and must bear the responsibility.

Am I right in saying that the proposal is to delete Section 6?

It is that Section 6 stands part of the Bill.

But the Deputy's proposal is to delete the section.

I am taking it the other way.

No matter what way you take it, that is really the purpose and point of this, and I cannot accept the proposal to delete the section.

Question put—"That Section 6 stand part of the Bill."
The Committee divided: Tá, 41; Níl, 13.

Tá:

  • Earnán Altún.
  • Séamus Breathnach.
  • Seoirse de Bhulbh.
  • John J. Cole.
  • John Conlan.
  • Bryan R. Cooper.
  • Máighréad Ní Choileáin Bean Uí
  • Dhrisceóil.
  • Desmond Fitzgerald.
  • William Hewat.
  • Seosamh Mac a' Bhrighde.
  • Liam Mac Cosgair.
  • Seán MacCurtain.
  • Pádraig Mac Fadáin.
  • Patrick McGilligan.
  • Risteárd Mac Liam.
  • Eoin Mac Néill.
  • Seoirse Mac Niocaill.
  • Liam Mac Sioghaird.
  • James Sproule Myles.
  • John T. Nolan.
  • Peadar O hAodha.
  • Mícheál O hAonghusa.
  • Seán O Bruadair.
  • Parthalán O Conchubhair.
  • Máirtín O Conalláin.
  • Eoghan O Dochartaigh.
  • Séamus O Dóláin.
  • Peadar O Dubhghaill.
  • Pádraig O Dubhthaigh.
  • Eamon O Dúgáin.
  • Mícheál O hIfearnáin.
  • Aindriú O Láimhín.
  • Séamus O Leadáin.
  • Fionán O Loingsigh.
  • Séamus O Murchadha.
  • Máirtín O Rodaigh.
  • Seán O Súilleabháin.
  • Mícheál O Tighearnaigh.
  • Caoimhghín O hUigín.
  • Seán Príomhdhall.
  • Liam Thrift.

Níl:

  • Pádraig Baxter.
  • Connor Hogan.
  • Séamus Mac Cosgair.
  • Tomás Mac Eoin.
  • Pádraig Mac Fhlannchadha.
  • Liam Mag Aonghusa.
  • William Norton.
  • Ailfrid O Broin.
  • Tomás O Conaill.
  • Aodh O Cúlacháin.
  • Liam O Daimhín.
  • Domhnall O Muirgheasa.
  • Pádraig O hOgáin (An Clár).
Tellers:—Tá: Deputies Dolan and P. Doyle. Níl: Connor Hogan and Morrissey.
Motion declared carried.
Section 7 and Title put, and agreed to.
The Dáil went out of Committee.
Bill reported without amendment.
Fourth Stage ordered for Tuesday, April 27th.