Dáil Éireann díospóireacht -
Wednesday, 9 Jun 1926

Vol. 16 No. 7

IN COMMITTEE ON FINANCE. - VOTE 5 (OFFICE OF THE MINISTER FOR FINANCE.

Mr. BLYTHE

I move:—

Go ndeontar suim ná raghaidh thar £39,984 chun slánuithe na suime is gá chun íoctha an Mhuirir a thiocfidh chun bheith iníoctha i rith na bliana dar críoch an 31adh lá de Mhárta, 1927, chun Tuarastail agus Costaisí Oifig an Aire Airgid, maraon le hOifig an Phághmháistir Ghenerálta.

That a sum not exceeding £39,984 be granted to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1927, for the Salaries and Expenses of the Office of the Minister for Finance, including the Paymaster-General's Office.

I do not think it is necessary for me, in moving this Vote, to speak at great length. Many of the matters which I might, perhaps, have dealt with in moving the Vote were dealt with in very considerable detail last March when the Vote on Account was being moved. Except some fresh points are raised in regard to them, it is unnecessary to repeat them at the present moment. The Deputies will notice that there is not any great change in the Vote this year. The reduction which appears is mainly due to the reduced amount required for temporary clerical assistance. The amount under that heading is £5,081 this year, as compared with £11,458 last year. This reduction in the amount of clerical assistance required practically represents the decrease which has occurred in connection with compensation work. Work, which was of very considerable volume, in connection with personal injuries compensation is practically at an end. Work in connection with pre-Truce damage is very largely decreased. The Wood-Renton Commission is wound up and, while a certain amount of clearance of ordinary awards has to be made, what remains, in the main, to be done is the distribution of moneys to which reinstatement conditions were attached.

The work of the Department of Finance in the Saorstát was started under very considerable difficulties. There was nothing corresponding to the Department in existence here. The work of financial control had been done in London. Our staff had to be brought together from various branches of the Civil Service and set to the work of what I might call Treasury control. While this Department had to be improvised, many new Departments of State had been established and existing Departments of State had to adapt themselves to new conditions. The work of the Department of Finance was, therefore, done under very great difficulties and under very great pressure. It would have been difficult enough to deal adequately with the ordinary work of financial supervision and control which would have arisen in connection with the Departments in the ordinary way.

In addition to that, we had a great volume of work arising out of the disturbed condition of the country. A great deal of difficult work arose from the military operations and from the building up and demobilisation of a large army. There was also much work in dealing with the various classes of claims for damage that arose from military operations. Much work was done under the same heading, in a way, in dealing with the claims under the Damage to Property (Compensation) Act. The emergency work, which arose in the beginning, has very largely passed away. After this year, there will probably be very little to do other than the normal work of the Department of Finance.

In other respects, we have made great changes. There has been a very considerable output of legislation. New services of various sorts have been undertaken. Some of these services should have been undertaken a considerable time ago. They have imposed a heavy strain and will continue to impose a great strain on the Department. The civil servants who came on to the staff of the Department of Finance were, perhaps, in the beginning, largely occupied in getting an adequate knowledge of the ramifications of Government work. That knowledge, I think, has been very satisfactorily acquired. We are now in the position, I think, that we can claim that proposals involving expenditure are adequately considered and adequately criticised in advance and that the administration of services which have been undertaken is scrutinised and checked in an extremely satisfactory manner. On the other hand, we have done as much as the most exacting could expect in the way of seeing that public money was not spent wastefully but that full value was got for it in every possible respect. I dealt, as I said, with that aspect of the matter at very considerable length last year, and I do not think it is necessary that I should detain the Dáil by any prolonged reiteration of what I explained then at the present stage.

Major COOPER

There are two questions which I should like to ask the Minister under sub-head A. The first question is whether he has considered the possibility of making the salaries of the highest paid civil servants inclusive and of wiping out the bonus. On this Vote we may have a somewhat anomalous situation. The Minister has a salary of £1,700 a year inclusive. The Secretary of the Department has a salary of £1,500 a year and a bonus of £239 a year, at the present rate. That is to say, the Secretary of the Department gets £39 a year more than the Minister.

Mr. WILSON

He pays more income tax.

Major COOPER

I do not think £39 would make very much difference in income tax.

Mr. WILSON

But the Minister has the first £360 of his salary—his allowance as Deputy—free of income tax.

Major COOPER

The Secretary has other advantages. He is a permanent official and the Minister is not. He has pensionable rights and the Minister has not. I do not want to under-value the services of civil servants. I do not say that you should skimp civil servants or pay them in a niggardly manner. You must get an exceptionally experienced man as Secretary of the Department of Finance, but it is a little anomalous that the salary he receives is greater than that of the Minister, who has to bear final responsibility for all the actions of the Department. I should like if the Minister would tell us if any investigations on those lines are being made.

My second question is: What has happened the Government consulting engineer? He figured on this Estimate last year. No provision is made for him this year. Has the office been abolished owing to the reduction in compensation claims?

Mr. BLYTHE

Yes.

Major COOPER

If engineering advice is needed, perhaps the Minister would indicate on what Estimate it will be charged. Will a Supplementary Estimate be necessary or will it be taken on the Board of Works Vote?

Mr. NORTON

I desire to refer to the Civil Service Representative Council, which has been described by the Minister as a conciliation scheme and which was promulgated under his authority. It was promulgated by the Minister last year, but its constitution was so narrow and so limited that it had the effect of shutting out from this so-called conciliation scheme the most important staff-organisation in the Civil Service, the Post Office Workers' Union. One of the conditions governing the scheme was that an organisation could not be represented by a full-time officer. In other words, if an organisation was big enough to necessitate the services of a full-time officer— a man who every day in the week deals with the cases that occupy the attention of the association—he was not to be allowed to go to this representative council and use his knowledge and ability for the benefit of the members of his organisation. I should like to hear the Minister justify that attitude. I wonder if the Minister were an employer whether he would adopt that attitude towards full-time officials of outside trade unions?

The Minister's scheme has another serious defect so far as the Post Office Department is concerned. The grievances which would arise in the Post Office would be largely departmental grievances. There was no provision in the scheme formulated by the Minister for the setting up of departmental councils, with the result that so far as the Post Office Department is concerned the staff can have no real benefit from the so-called representative council scheme. These are two serious defects in the Minister's representative council scheme—the absence of departmental councils and the limitation of representation on the council so as to exclude full-time officials. The Post Office Workers' Union, which caters for over 4,000 Post Office employees, should be given some opportunity of coming into this scheme and thereby taking its proper part in any scheme of conciliation which would apply to the Civil Service.

Mr. HEFFERNAN

The present time may be suitable to call the Minister's attention to certain articles which have appeared in the public Press recently with regard to certain companies with which the Minister, in his position as Minister for Finance, is connected. I think it would be advisable if the Minister would make a statement in explanation of the situation if it is as it is alleged to be. I refer to an article which appeared in the issue of 29th May of the publication, "Irish Truth," which the Minister may have seen. It is headed "The New Finance—Multiplicity of Functions." A great many of the statements which are made in this article have been the subject of conversation amongest certain members of the public from time to time. Without a clear and explicit statement by the Minister these rumours might give rise to ideas which would not be favourable to the Minister's Department. The best way to deal with the matter is probably to raise it on this Vote, and the Minister can then make a statement to the Dáil and, through the Dáil, to the public.

I do not say that anything exists in connection with this matter that may not be satisfactorily explained. But I think the matter is of sufficient public importance to warrant its being raised here. We would, perhaps, be lacking in our duty if we did not call the attention of the Minister to the article in question. The writer of the article seems to have gone to a good deal of trouble to substantiate his statements, so that they are probably statements of fact which cannot be denied. Possibly the simplest way for the Dáil to deal with the matter would be for me to read the article in question, but as it is rather a long one I do not propose to do so. This article refers to the multiplicity of functions of the directors of certain companies with which the Minister, in his capacity as Minister for Finance, is associated. I refer to the Land Bank and the Trust Company of Ireland.

AN LEAS-CHEANN COMHAIRLE

Are the persons to whom you refer officials of the Department of Finance?

Mr. HEFFERNAN

The Minister himself is a director of the Land Bank. For that reason alone I think I am entitled to raise the matter here. Not only is he a director, but also the Minister's assistant secretary, Mr. McElligott, is a director of the Land Bank. The object of the article is to point out that certain gentlemen, while directors of certain financial institutions, are at the same time advancing money to private companies of which they are also directors.

AN LEAS-CHEANN COMHAIRLE

The Minister is not responsible for those individuals.

Mr. HEFFERNAN

He is responsible in view of the fact that the Government has advanced money to these companies, and that the money advanced to these companies as part of their finances is being used for the purpose of making loans to these private companies to which I have referred. I say that the Minister is responsible to a certain extent in that regard, and I say that this is the proper Vote on which to bring the matter up. If it cannot be brought up on this Vote it cannot be brought up at all. We have the duplication and triplication of functions in regard to several of these institutions. Take the case of the National Land Bank, amongst whose directors is Senator J.G. Douglas and Mr. L. Smith-Gordon. Mr. Smith-Gordon was formerly managing director of the National Land Bank. He is now managing director of the Industrial Trust Company. I presume he has retained his position on the directorate of the National Land Bank. He is also a member of the Advisory Committee which has been set up to advise the Minister for Industry and Commerce in regard to the functions of Section 2 of the Trade Loans Act, 1924, and in that position Mr. Smith-Gordon will naturally be called upon to advise the Minister in regard to applications which are made for guarantees for loans, and which loans, if guaranteed, will afterwards be advanced, as far as I know, either by the National Land Bank or by the Industrial Trust Company.

Some of the companies which are applying for loans, or which have got loans, are companies with which Mr. Smith-Gordon is connected in his individual capacity. For instance, Mr. Smith-Gordon is a director of the Kilteragh Development Syndicate. I believe that the clearest way for me to put this matter is to read portion of the statement in this paper:—

Mr. L. Smith-Gordon is, in addition, engaged as director in the business of several companies. Thus, he is a director of the Kilteragh Development Syndicate, with a capital of £20,000, incorporated 7th January, 1924, which borrowed £10,000 from the Industrial Trust Company; a director of the Irish Glass Bottle Company, Ltd., and, together with Mr. Timothy Caffrey (himself a director of the National Land Bank), is joint trustee for debenture holders in respect of £50,000 charged upon that undertaking. He is also a director of MacLysaght and Douglas; he is, or was until recently, a director of the Peugeot cars (Ireland), Ltd., and of the Irish and Foreign Trading Corporation, Ltd.

Senator J.G. Douglas, who until recently was Deputy Chairman of the Senate, is Chairman of the National Land Bank and Deputy Chairman of the Industrial Trust Company, on whose board apparently he represents the Government as its nominee. He is a Director of John Douglas and Sons, Ltd., which was incorporated in May, 1925, with an issued capital of £10,497, and which issued debentures to the amount of £10,000 to the National Land Bank in the same year. He is a Director of MacLysaght and Douglas, formed in May, 1922, which had a paid-up capital of £1,301, held as to 650 shares by himself, as to 650 shares by Mr. MacLysaght, and as to one share by Mr. Smith-Gordon. He is a Director of the Irish and Foreign Trading Corporation, Ltd., whose return, dated 3rd July, 1923, of allotments of shares shows that 8,702 preference shares of £1 each had been issued, viz.: 3,602 to Lord ffrench, 4,900 to the National Land Bank, 100 to Major Browne, and 100 to Mr. Smith-Gordon, while 649 fully paid shares each were alloted to Mr. MacLysaght and Senator Douglas in exchange for the same number of fully paid shares in MacLysaght and Douglas, Ltd. In the latter company, therefore, the documents of record show that towards the close of 1923 the three Directors, viz.: Senator Douglas and Messrs. MacLysaght and Smith-Gordon, were possessed of one share each, and the Irish and Foreign Trading Corporation of 1,298—and that these 1,298 were re-transferred in December, 1925, to their original owners.

Of the exact relationship of this company of MacLysaght and Douglas, Ltd., with the Peugeot Cars (Ireland), Ltd., we are not fully informed, but the latter seems to have passed in some way into the ownership or under the control of the former. The title of the establishment at 40 Dawson Street, where Peugeot and Hupmobile cars are sold is now "MacLysaght and Douglas, Ltd. (Peugeot Cars (Ireland), Ltd.)." Whatever the nature of the transaction has been, any dealing between MacLysaght and Douglas, Ltd., with Senator Douglas and Mr. Smith-Gordon on the Board, and the Peugeot Cars (Ireland), Ltd., with Mr. Smith-Gordon on the Board, must illustrate the difficulties on which we are insisting. The records of the Peugeot concern will show why. It was incorporated on the 8th August, 1923, with a fully paid-up capital of £1,000—of which Mr. Pullar Phibbs owned 998 and Mr. Smith-Gordon and another one apiece. Debentures were issued to the National Land Bank on the 17th September of the same year by way of a floating charge, and the amount due by the Company up to 30th December, 1924, was stated to be £24,363. Mr. Pullar Phibbs and Mr. Smith-Gordon were the two Directors. On the 15th November, 1923, Mr. Pullar Phibbs transferred 997 of his shares to Messrs. Smith-Gordon and Caffrey as, presumably, trustees for the Bank. At the end of 1925 the amount due by the Company was stated at £21,011 18s. 4d. The Bank had, apparently, been carrying on the business as mortgagee in possession, or owner, or both. Thus, with the exception of £3 of share capital, everything belonged to the Bank, which had also the prior rights of creditor and debenture holder.

That is the gist of the article. My reason for raising the matter at all is this, that I think it is well that it should be cleared up. I do not say nor do I believe that there is anything dishonest in regard to the duplication of functions in the case of some of these directors, but I do say that it is not in the interests of the State that such a state of affairs should exist or should continue to exist. It will, I believe, give rise to rumours, and these rumours, if not contradicted, will give rise to statements which would imply that these companies which had been subvented by the Government are not being run in the interests of the public but rather in the interests of private individuals. That, of course, was not the intention of the Dáil in making these subventions.

The National Land Bank was subvented to the extent of £300,000 from the National Exchequer in 1925, and the Industrial Trust Company of Ireland got a grant, or is entitled to have its shares purchased, to the extent of £50,000 by the Government; the Government are entitled to appoint directors and have apparently appointed them to both these companies. Apparently Mr. Smith-Gordon and Senator Douglas are the nominees of the Government on the Industrial Trust Company of Ireland, and the Industrial Trust Company of Ireland has been making advances to companies of which both of these gentlemen are directors. One of these gentlemen, in addition to being the managing director of the Industrial Trust Company and a director in most of these other companies, and associated in his position as director with Senator Douglas and other directors, is also a member of the Advisory Committee appointed to advise the Government in regard to guarantees which they may make under the Trade Loans Act to gentlemen or companies who may apply for such guarantees and who, if they secure them, will go to the Industrial Trust Company or to the National Land Bank for the money.

I maintain that that is not a desirable state of affairs. I maintain that some steps ought to be taken, either to get these gentlemen to cease their functions as directors of these companies or else that they should be called upon to sever their connection with those companies which are in receipt of Government subventions and one of which— the National Land Bank—is understood to be practically a Government institution. I will not go further into the matter; I think I have outlined the position. I do not want to elaborate it any more than is necessary but, as I said before, I and certain members of my Party, felt that this was a matter with regard to which we would not be doing our duty to the public if we did not give the Minister an opportunity of making clear that there is nothing in it which is not right. If there is nothing in those statements that is right and justifiable and if the Minister can show that, he will have done good work, and I am sure that the Dáil will be satisfied with his explanation.

Mr. BLYTHE

Deputy Cooper referred to the question of bonus on the salaries of retired civil servants. I suppose some of the higher paid civil servants were entitled to the bonus they had when we came into control, and I do not think that there can be any question of interfering with the bonus of any civil servant's salary. Deputy Wilson, I think, showed in reality that there is no civil servant receiving a higher salary than a Minister because of the exemption of £360 on a Minister's salary from income tax. In any case I think the remedy was not indicated by Deputy Cooper.

Mr. WILSON

Then increase the Minister's salary.

Mr. BLYTHE

Perhaps Deputy Cooper was really driving at that. Deputy Norton spoke about the Civil Service Representative Council, and he criticised it in certain respects. We do not allow whole-time representatives who are not civil servants to attend on behalf of any union because we believe that the case of the private employer meeting his own employees is not at all parallel to the case of civil servants meeting another body of civil servants. That was our objection to Whitleyism in the Civil Service. We believe that Whitleyism has its uses in industry and might, perhaps, serve very important ends in industry, but we believe that it is not suitable to the Civil Service. While the British Government, for their own reasons, thought fit to introduce it, we did not think it wise—in order to try and give a lead to employers and to industries—to continue it. The civil servant of a certain grade who goes, as it were, to represent the State, as against the staff, is not at all in the position of a private employer who is fighting for his own profits. It is not right to put the civil servant, who is there, as I say, representing the State, up against the sort of opposition against which the private employer, fighting for his own profits and his own interests, may well be expected to contend.

There are civil servants only on one side and we think that there should be civil servants only on the other side. That is really the reason we imposed the particular restriction to which Deputy Norton first referred. In the matter of departmental councils, the view we got here was that these councils, at any rate on a Whitley basis, involved a great waste of time, involved even the searching out of grievances, and the results were not commensurate with the loss of time. They were, in fact, strictly speaking, unworkable, because again you had not employers and employees represented. You simply had two groups of civil servants and you could not put the representatives of various departments in a position of being able to agree and decide. A private employer may agree to give away what he likes, but you could not put it in the power of a group of higher civil servants to give away something contended for by another group of civil servants. The whole position seemed to be unworkable. It was generally felt, and generally agreed, that the old pre-Whitley conditions in the Civil Service ought not be got back to. The extreme difficulty of access to the head of the department ought not to be restored, and there ought to be arrangements in all offices whereby representatives of an association, as well as individual officers, who may be aggrieved and who are appealing, should have easy and immediate access to the head of a department so that the matter could be discussed face to face.

I do not know whether it is a fact that in a particular department there is not access and that the representatives of the staff cannot, when they have something to put up, meet the head of the department along with whatever higher officials he likes to bring with him to discuss the matter. Remember that although Whitley councils were supposed to decide questions at issue, that was largely a pretence. Higher civil servants representing the State had definitely to be instructed to agree to nothing. They could not be allowed to agree. There was not the drive that a private employer feels to save his profits. You had a pretence that things were being done by agreement, but there was something like a chronic state of stalemate. Without any formal departmental council being in existence, there is personal access, and I think you get all that can be got out of Whitleyism without a great many of the disadvantages which it would have as applied to the Civil Service.

Mr. NORTON

Might I call attention to what seems to be an anomaly in the Minister's speech? He talks about the representatives of the staff having the right of access to the head of a department. That presumably means that the staff can send anybody they wish to the head of the department. Though they can, as they do, send whole-time officers, the Minister says that under no circumstances must that whole-time officer be allowed to go to the Civil Service Council. If he can see the Minister personally, why cannot he sit as the staff representative on the Council? I think the Minister's action is inconsistent. There are not many associations with full-time officers and he ought to remove this restriction which has the effect of keeping out the largest organisation in the Civil Service.

Mr. BLYTHE

Perhaps Deputy Norton takes a diametrically opposite view to mine and it might be difficult to convince him that the view I was taking was right. It is not a question of a full-time officer. You might have any outside officer employed and, if you got away from the position that it is a council of civil servants, there is no reason why a Civil Service association should not employ, say, a fighting attorney as their representative.

Mr. NORTON

Did the Minister ever know that to happen?

Mr. BLYTHE

I did not say that I did, but there is really no distinction. Deputy Heffernan referred to an article in "Irish Truth." I saw that article a few days ago for the first time, but I cannot say that I studied it with great care, because it seemed to be an article which was libellous in intention. I am confirmed in that view when I see Deputy Heffernan drawing certain wrong inferences from it. I heard him say that the Kilteragh Development Company had borrowed from the Industrial Trust Company presumably on a Government guarantee. Of course there was no question of a Government guarantee, but I have no doubt that this article was written, whomever it was written by, for a certain purpose. I do not know whether I should go into it. I can hardly go over that article in great detail, but I will take certain points out of it. I do not know whether some of the statements are facts or not, but others I know are facts. The Deputy referred to the fact that Mr. Smith-Gordon was a director of the Kilteragh Development Syndicate. As I understand the position, Mr. Smith-Gordon has no interest in that syndicate which really is, I understand, Sir Horace Plunkett. Mr. Smith-Gordon has been associated for many years with Sir Horace Plunkett, and when Sir Horace Plunkett, instead of rebuilding his house, which was destroyed by Irregulars, decided to erect substitute buildings and to develop the estate—his house, for instance, has been turned into a series of flats, and other buildings have been erected on the estate—certain people were appointed as directors, but they have no interest except a nominal interest in it. As a mere matter of business, when opening up the place, they approached the Industrial Trust Company, most of the capital of which is put up by private people.

The Government only put up one-third, or less, of the capital because they wished private people to invest money in such institutions. We saw that there was a need in our system for institutions of that sort, and we put up £50,000 to induce other people to put money in it. The Government has no control whatever over that company, and it is not responsible in any way. The company lent money to a certain institution as a business proposition. Anybody knows that it is the ordinary arrangement that where directors of either a banking or similar institution are not whole-time officers they are often directors of other businesses. They are generally people engaged in numerous commercial enterprises, but there is no arrangement that the other institutions with which they are connected shall never do business with them.

Mr. HEFFERNAN

Is it not a fact that Mr. Smith-Gordon and Senator Douglas were appointed as directors of the Industrial Trust Company as nominees of the Minister?

Mr. BLYTHE

No; Mr. Smith-Gordon was not appointed on the nomination of the Minister.

Mr. HEFFERNAN

But two directors have been appointed.

Mr. BLYTHE

Mr. Smith-Gordon is not one of them. Mr. Smith-Gordon, I think, is a director of the Irish Glass Bottle Co., Ltd. Again, he is appointed because that is an institution that was reconstructed on getting a loan, and he is there, as it were, for the purpose of giving additional security to the Industrial Trust Co., which advanced the money.

It is very difficult to discuss these things, one or two of which I know something about, from the point of view of the National Land Bank. Some of them arose at a time when I was connected with the National Land Bank. Ordinary transactions between a bank and its customers are confidential, but there are some of them to which I think I can refer without any breach of trust. There is a reference here to a loan by the National Land Bank to Messrs. John Douglas and Sons, Ltd. I believe I have authority to say what I happen to know. I was appointed by the late General Collins, when the National Land Bank was started, as one of the directors of that bank, and I acted as a director until I became Minister for Finance. Since I became Minister for Finance I have not done anything in the way of touching the business of the bank. I have not attended meetings of boards of directors. I have received no information as to the business done at the Boards— that is, no information as to private cases.

At quite an early stage of the work of the National Land Bank the Belfast boycott was instituted. Mr. Douglas's firm at that time banked with the Ulster Bank. The late Mr. Childers and myself asked that, when they had, as we believed they would have, to transfer from the Ulster Bank, they should transfer their account to the National Land Bank. We promised that we would give them, in the National Land Bank, whatever accommodation they had from the Ulster Bank. As many firms did at that time, they transferred their account, and they were given accommodation. Afterwards, when the Belfast boycott came to an end, I know that many firms reverted to the bank with which they had been doing business before the boycott. Mr. Douglas's firm did not revert, but Mr. Douglas himself had nothing whatever to do with the National Land Bank at that time. At a later stage, when Mr. James MacNeill went to London as High Commissioner, and the chairmanship of the bank became vacant, Mr. Douglas was asked to join the Board. The arrangement which his firm had with the National Land Bank remained, although he had joined the Board. Then at a certain stage it was decided by Mr. Douglas, for his own reasons, to turn his firm into a limited liability company—into a private company. When that was done, certain arrangements were necessary in regard to the accommodation which the firm had from the bank, and those necessary registering steps were taken.

There is an attempt in this article, which I say is simply a particular form of libel to which small and moribund papers are very prone to fall, to cast reflections upon the transaction.

Mr. GOREY

Are some of the papers behind the Government included in that class?

Mr. BLYTHE

I do not know.

Mr. GOREY

Indeed you do.

Mr. BLYTHE

Which paper would that be?

Mr. GOREY

"The Leader."

Mr. BLYTHE

I get sent to me, occasionally, a copy free, and I read it when it is sent free; otherwise I do not see it.

Mr. GOREY

So do I.

Mr. BAXTER

Only when you get abuse do you see it?

Mr. BLYTHE

I never read it when I get abuse. As I was saying, there is an attempt in this article to suggest that Senator Douglas was in a happy position by reason of his connection with the Land Bank in order to get an accommodation from the bank for his private firm. As a matter of fact, that is entirely a false suggestion.

With regard to the question of Peugeot cars, I think, again, it is very difficult for me to talk, but I might say that originally a certain loan was made and afterwards, as a means of securing repayment, a member of the Land Bank—Mr. Smith-Gordon—was asked to associate himself with the Peugeot Company. In, I think, practically all these cases where there are directorates a person was asked to go on the board of the firm which had got accommodation for the better security of the loan or for the better securing of its repayment.

When the Industrial Trust Company was formed, Mr. Smith-Gordon and Mr. Telford tendered their resignations from the Advisory Committee set up under the Trade Loans (Guarantee) Act. It is an extremely difficult thing to get people to act on that committee. As a matter of fact, we have been trying for some months past to get people and cannot. The type of business man you want to act on such a committee as a rule says he has not time or that he is not going to act on the committee and be libelled and slandered. It is almost impossible—at least extremely difficult—to get business men to act on a committee such as the Trade Loans Advisory Committee. The Minister for Industry and Commerce, because there were certain half-investigated cases pending, asked Mr. Smith-Gordon and Mr. Telford to remain on as members for some little time further and deal with other cases. They probably would not have remained any length of time only because of the difficulty of getting people to act— people of the right knowledge and understanding and people who are willing to give the time and take the risk of the particular sort of slanderous criticism which one must certainly expect, at any rate in this country, and perhaps in other countries, but I think more particularly here where we are new to things and where we are emerging from a particular state.

It is suggested, too, as I gathered when reading this article, that there was some great anxiety on the part of the Government to have business sent to the National Land Bank. As a matter of fact, so far as the loans guaranteed under the Trade Loans (Guarantee) Act are concerned, the position was that the ordinary joint stock banks —we found out this after certain proposals had been passed—were not prepared to make the advances. Where it was recommended by the Committee that a loan could be given to be repaid in ten or fifteen years we found, as a rule, that the ordinary joint stock banks refused to give the loan for any longer period than five years. That period would have meant that an impossible burden would be cast on the undertakings getting the loans. In consequence of that, to avoid a complete deadlock, and to prevent the Act being completely inoperative, I came to the Dáil and asked for an advance of £300,000 to enable certain of the loans actually to be made through the Land Bank. It is because other banks would not take up the loans that certain of them had to be made by the Land Bank.

I have recognised for a very considerable time that the position of the Land Bank is anomalous. I have recognised that it is a State-owned bank which is not a State bank. It was formed to do a certain work at a time of stress; it was formed to prevent the national struggle being changed into a land war during 1919-1920. Since then it has simply been carrying on as a small bank on very much the same lines as other banks, with this difference, that as the Minister for Finance was the holder of the shares the directors were nominated by the Minister for Finance instead of being elected by a meeting of shareholders.

When it was determined to set up a Banking Commission it was also determined that no change should be made in regard to the National Land Bank until the Banking Commission had reported. One of the things which the Banking Commission has been specifically asked to report upon is whether the National Land Bank should be continued as a State-owned bank, and, if continued, what functions should be assigned to it. I think it was presumed that there could be no purpose in continuing it as quite a small bank, doing practically the same business as the other banks and committed with them in a small way.

I have already referred to the difficulty of getting people to act as members of the Advisory Committee under the Trade Loans (Guarantee) Act. It is equally difficult to get people of the stamp that one would like to have acting on a body like the Land Bank. It is all because the shares are owned by the State and the money is State money. The most ordinary transaction will be made the subject of libellous and slanderous rumours. Transactions that nobody would even look at twice if they were done by an ordinary joint stock bank will be passed around from mouth to mouth and twisted and exaggerated in every possible way.

For a very long time Senator Douglas has been anxious to leave the National Land Bank, but I could not see any possibility of replacing him easily and I had to ask him to remain on and to carry on the work until the time would arrive when some definite decision could be come to in regard to the future of the bank. If we are to carry on a bank like the Land Bank I do not see any possibility of doing it except by appointing somebody at a salary of, say, £2,500 a year, giving him something approaching judicial tenure and forbidding him to carry on any other functions. I think in no other way could we possibly carry on a State-owned bank, and, even with that, I believe difficulties and troubles would be encountered that do not exist in respect to ordinary banks.

The shares of the National Land Bank, by the Dáil Loans and Funds Act, were definitely transferred to the Minister for Finance out of the name of the sort of bogus society which was created at the beginning for the purpose of holding the shares. When the bank was started it was feared that the British Government might come down on it in some way and the society was started. The story was prepared that it had collected funds in America as it was feared that the British Government might make an investigation. Nominally that society held the shares, and held them until the Dáil Loans and Funds Act was passed, when they were transferred to the name of the Minister for Finance. Since that time, because they were the direct property of the State, Mr. McElligott has sat on the Board of the Bank with a sort of watching brief. The bank was simply carrying on and marking time, and Mr. McElligott sat there with a watching brief. He has no interest in the bank whatsoever and no interest in getting business for it. He had no interest in it at all except to see that State property was not frittered away. As I say, you find in this moribund publication an article which, if not libellous because of false statements, is libellous because of presentation and libellous in intent.

I do not know exactly whom the writer is driving at, but he must be driving at somebody. There is nothing to conceal about the matter. It is all open and above board. I have explained Mr. McElligott's position in regard to the Industrial Trust Company. There is no connection between the Industrial Trust Company and the National Land Bank except that I believe the Industrial Trust Company keeps its accounts with the National Land Bank. Beyond that there is no connection between them. One is privately owned, but I believe it has made arrangements in cases where it makes advances, that a representative should sit on the Board of the Company getting an advance. In certain, other cases, at the request of the Government, that has been done by the National Land Bank. In Ailesbury's case, where an advance was made through the National Land Bank, a representative of the Bank was appointed to sit on the Board of Ailesbury Bros. at the request of the Minister for Industry and Commerce so that he might see that undertakings given were actually carried out, and to ensure that money owned by the State did not go wrong in any way. The position, as I have pointed out, is an interim one. For considerably more than a year—since it was decided first to set up a Banking Commission, and, I think, for some time before that—the position in regard to the National Land Bank has been that we carried on until we could have advice from expert people as to what should be done in regard to it, whether it should be discontinued, whether it should be disposed of, whether it should be developed, whether it should be given entirely new work or whether it should continue its present work on a much larger scale. I do not think I need say any more in regard to it. At the present time I certainly would not call on any of the people mentioned to cease their functions either as directors of any of the companies of which they are directors or as directors of the National Land Bank.

Mr. HEFFERNAN

I think the raising of this matter has served a useful purpose. It has given the Minister an opportunity to clear up the rumours which were going around, and would go around, because of this article. I want to say that personally I have no knowledge of the matter except what I got from the article in the paper. Any deductions that I arrived at were made from reading that article. I think the Minister may have been a little bit unfair to the writer of the article because it seems to me quite possible that he did not write the article with a libellous or slanderous intent. The facts and the figures which he has quoted are taken from the usual books of reference. It does not necessarily follow that the article was written with a libellous or slanderous intent. I think the Minister's statement that these gentlemen who are duplicating their positions as directors of the National Land Bank and of the Industrial Trust Company are doing that for the purpose of protecting the position of these institutions, explains their position and clears up the whole situation from my point of view. The statement of the Minister that the present position is an interim one, and that it may change, and probably will change, when the findings of the Banking Commission are published, also makes me realise that it is not necessary at this stage to suggest that the gentlemen who are acting in certain positions should cease to hold those positions now.

Professor THRIFT

I desire to refer briefly to a point I raised on the Vote for the Department of Education. I desire to know from the Minister for Finance whether he has considered the question that I then referred to, namely, the superannuation allowances to inspectors of national schools. The fact is, as I understand it, that the service they have put in as national school teachers does not count in any way for pension. Many of them will have attained the age of 65 long before they would have qualified for probably more than half of the ordinary pension rate. I know the Minister will say that it will cost money, but that plea should not prevent what is right and fair being paid in pensions.

Mr. BLYTHE

This is one of a series of pension problems that I have had from the Department of Education and on which I have promised to give a very speedy answer, but I have not been able yet to come to a decision in regard to it.

Mr. HEWAT

On this Vote there is not very much room for criticism left, because we have done very little except to criticise the Minister for Finance for a considerable time in connection with his efforts to keep money from us and in his position as an over-riding authority in the case of other Departments. I would like to take this opportunity of complimenting the Minister, not on what he has done, but on the resistance that he put up against the claims made from all directions on the National Exchequer. As the watchdog of the national finances he has done, I think, a very good service. He has been receiving a considerable amount of abuse for his parsimony and his efforts in resisting ambitious claims from various directions. I think it is due to him, as far as I am concerned, that I should express a word of praise for the sturdy resistance he offered to the claims put forward.

Mr. MORRISSEY

A vote of thanks.

Mr. HEWAT

I rose with that object in view, but if I were to propose a vote of thanks to the Minister on this Vote I might not be in order, and possibly might not get a seconder, but that will not prevent me from congratulating the Minister on the firm attitude he has taken up on this matter.

Vote 5 put and agreed to.