Before we proceed with the Orders of the Day the Minister for Finance desires to make a statement.
THE NATIONAL LAND BANK.
I wish to make an announcement to the Dáil with reference to the National Land Bank. The Executive Council have decided to dispose of the interest of the Minister for Finance in the National Land Bank. I had occasion previously in the Dáil to refer to the anomalous position of the National Land Bank and to the difficulty that exists in carrying on such a bank. As I have already told the Dáil, I had asked the Banking Commission to consider what should be the future of the National Land Bank: whether it should be given new functions, whether it should be continued as it has been carried on heretofore or whether its work should be terminated. The Banking Commission, in an interim report which I have received from them, recommends that the National Land Bank should be discontinued either by disposal to another institution or by winding up. Before the matter had been considered by the Banking Commission I received an inquiry from the Bank of Ireland as to whether the Government would consider an offer for the purchase of the National Land Bank. A reply was given to the Bank of Ireland to the effect that an offer, if made, would be considered on its merits as an offer. Following that, certain investigations and negotiations took place with the Bank of Ireland, and a conclusion has been reached. The Bank of Ireland have made an offer which seems to the Executive Council to be a good offer, and it has been determined to accept it. The Bank of Ireland have offered for the interest of the Minister for Finance in the National Land Bank a sum of £203,000—that is the amount of the paid-up capital of the National Land Bank. A certain sum of the purchase money, however, to the amount of £13,000, will remain outstanding for a period of three years. The reasons for that arrangement are that it was felt necessary by the Executive Council to take particular steps to see for certain that the interests of the staff of the National Land Bank were properly safeguarded.
Deputies will have some recollection of the circumstances in which the National Land Bank was started. It was founded in 1919 principally with the object of preventing the national struggle from being turned into a land war. It was started for the purpose of making some beginning in the distribution of land which would prevent men who were engaged in the national struggle from diverting their energies to land activities. At a later date it was decided to widen the scope of the bank in various ways and to do ordinary banking business: to attempt to get money from the public by deposits, and finally it was decided to start a number of branches. Now there was no very great success in getting money from the public. Perhaps that was not strange in the circumstances of the time. I remember very well that in the case of certain branches prominent people urged us to open a branch. When the branch was opened, the people who had been most urgent in asking that it should be opened gave a very small amount of business indeed to the bank. The bank came under the suspicion of the British authorities. There were many raids on the Head Office of the Bank, and on the branches of it. In one case all the members of the staff of one branch were taken out in a lorry as hostages and carried around the country. The people who entered the service of the Bank, leaving other banking institutions or other posts of substantial value to do so, did take a very considerable step and undertook very substantial risks. They took steps which make it incumbent on the Government, in disposing of its interest in the bank, to be sure that they are not victimised or let down in any way.
The Bank of Ireland has agreed that the permanent staff of the National Land Bank shall be dealt with in accordance with the practice of banks in dealing with their permanent staffs; that is, they will have permanent employment without reduction in salary unless dismissed on grounds of negligence, insubordination or misconduct, and they will have rights to pension in accordance with the terms of the Irish Banks Arbitration Award. That is to say, they will carry over the pension rights which they had in the National Land Bank. I might say that when the staff entered the employment of the National Land Bank they were given by the National Land Bank credit for the years of service they previously had in other institutions. Now with regard to any of the staff for whom the Bank of Ireland may be unable to find employment without reduction of salary, they will receive compensation by way of superannuation allowance equivalent to two-thirds of their salary at the date of the purchase of the shares. There may be some members of the staff for whom the Bank of Ireland will be unable to find employment. They may be people who came over, in the way I have described, at considerable sacrifice, to the National Land Bank. It was felt fair that an arrangement should be made entitling them to a pension to the extent of two-thirds of their salaries. That is more than they would have been entitled to under the Irish Banks Arbitration Award. Because we felt it necessary that that arrangement should be made, we had to agree that half the cost of giving that particular compensation to those people should be borne by the Government to the extent of an amount not exceeding £13,000, and in order that we may bear half of the expense of giving two-thirds of the pension to those people who may not be employed, this sum of £13,000 will remain outstanding for three years. At the end of three years this sum of £13,000, or whatever remains of it after having discharged the liability that we are undertaking in respect of these people, will be paid over to the Exchequer.
Will the employees of the National Land Bank have the option of going over to the Bank of Ireland or of declining to do so?
They will not have the option. An employee will have to go over if he is given equivalent employment without reduction of salary. If he is taken over by the Bank of Ireland, of course he will have to go over. Otherwise, the bill would be very high indeed. I do not know what sum it would amount to, but, at any rate, it would be very high.
Can the Minister say whether the two-thirds of salary is the standard rate of compensation, or is it based on the number of years' service given?
Yes, in the case of those who are not taken over by the Bank of Ireland the compensation will be based on two-thirds of their standing rate of salary. For the convenience of customers the Bank of Ireland will continue for some time to run the Land Bank as it has been run heretofore. They will undoubtedly at an early stage close the branches in the country, but, as far as the central branch is concerned, they will continue to run it for some time, but a definite period has not been specified. It will be run, perhaps, for a year, so that there will be no inconvenience. People who have had accommodation or arrangements with the National Land Bank will have these arrangements continued for a substantial period until they can, if they desire or think it necessary, make other arrangements. The offer, as I have already indicated, has been carefully examined by officials of mine and by the auditor of the National Land Bank. Before the auditor knew that an offer was being made he was asked, in view of a statement I made in the Dáil regarding the position, to estimate what would be the selling value of our assets in the National Land Bank, and his report was such that we are satisfied the present offer is a good one, which would give a much greater sum to the Exchequer than could have been realised by liquidating the bank. Liquidation would have been an extremely difficult matter, because the mere disposal of the staff would have meant that great sums would have to be paid out in compensation to the staff. In addition, it would have been impossible in the case of many customers of the bank to close their accounts without allowing a very long period to elapse. I do not see how, without causing hardship to customers, the bank could be closed without an interval of four or five years. Of course, a bank that was being closed would gain no new customers, and it would be more and more a losing concern. I do not see that it would have been possible to get anything like the value of the bank by liquidating it, and I consider that in the circumstances we are fortunate in having got a good offer for the interest of the State in this particular institution.
May I ask the Minister if he proposes to give the House an opportunity of discussing this matter before it is finally disposed of, because, apart from all questions of details, surely this is entering on a big departure from national policy, and as such it ought to be discussed?
I desire to know whether any opportunity was afforded to any other bank to make an offer for the National Land Bank besides the Bank of Ireland.
Every company had the same opportunity, and, of course, it was known in banking circles that the matter was under discussion. If we got into the position of hawking the National Land Bank we would not do so well.
The Minister has made no reference to the Exchequer advance of £300,000 to the National Land Bank. Does the Bank of Ireland take over the liability for that?
That advance was made subject to twelve months' notice, so that in order to recover it we would have to give twelve months' notice. Now I am not sure whether we should give that notice. The £300,000 advance was given in the face of the estimate for the general purposes of the National Land Bank, but it was given primarily in order that the National Land Bank might be able to undertake certain work in connection with the Trade Loans (Guarantee) Act. The Bank of Ireland were willing under the new arrangement that that work should continue to be done—the making of advances under the Trade Loans (Guarantee) Act. There might be some object served in leaving the £300,000 there, otherwise I think the course would be to give notice to withdraw at the end of the twelve months.
From whom? Is it the Bank of Ireland?
Yes, up to that period the National Land Bank would be in existence. It would not be merged.
I take it the Bank of Ireland will take over the assets as well as the liabilities?
Quite.
Will the Minister say whether he has got any security from the Bank of Ireland to protect the country from the Bank of Ireland in this matter, or any other bank? Has the Minister put himself in the position of preventing, say, the Bank of England gobbling up the Bank of Ireland as the Bank of Ireland has gobbled up the National Land Bank, and in the way other banking combinations have been undertaken in the last three years? Or is the Minister proposing to enlarge the powers and functions of the Savings Bank?
I do not quite see the drift of Deputy Johnson's question, but it certainly would be quite easy to prevent further banks from being gobbled up. When the final report of the Banking Commission is received, a question that will have to be considered is that of banks which are not Irish banks and carrying on business here, and their position, and as to whether, further, banks not registered here should be allowed to carry on. The whole question of the domicile of banks is one that will have to be considered.
Would the Minister explain what was the particular hurry in this matter? For instance, if the Interim Report of the Banking Commission was the basis of his action why did he not wait for the full report to see how one fitted in to the other?
You will see them in due course.
The suggestion made by Deputy Johnson is one that I think ought to be carried out. It is not right that a matter of this importance, involving a change as regards the connection of the State with banking, should come before the House in this manner. No notice is given of it, and I do not know that the Dáil is even asked for a decision. We are merely given a statement by the Minister. My opinion is that a matter so important as this ought not to be decided by the Minister until he has before him the final report of the Banking Commission and until that report has been discussed by the Dáil. We expect developments as a result of that report, and some Deputies think that the National Land Bank should be retained, and not absorbed into any other financial institution pending that report, when it may be given other functions to perform. I suggest to the Minister that, in view of the importance of this matter, action should be postponed until the final report of the Banking Commission will have been received.
I have not received the final report of the Banking Commission, but I have received several interim reports within the last two or three weeks. I know a good deal about the National Land Bank, apart from what may be contained in any report. I am quite satisfied that whatever other functions may have to be carried out, you could not economically transform the Land Bank into a different sort of institution. It has been organised as an ordinary, small bank, and you could not economically transform it into a specialised institution. One of the problems that arises is the problem of disposing of branches and branch staffs and that sort of thing. The question of urgency simply amounts to this—once the question of the continuance of the bank has been raised in any definite way, customers who are desirable and whom the National Land Bank has found it most difficult to get—the customers who deposit money—will not come to the institution. They will not come to an institution which is in danger of being closed down. The immediate result of the continuance of the bank being in question is that these customers who, to some small extent in the past, have given it funds, will begin to draw off to other banks. They do not want any arrangement come to, without their consent, as it were, that may disturb them. They do not want to enter into an arrangement with one institution and find that that institution is being dropped. We have a certain goodwill: we have an asset of a certain value to sell. That depreciates with delay, especially when the question of continuing the bank has been raised. Delay will most seriously depreciate it, and, whatever price we would get to-day, if we wait six months we will certainly get a lower price. Then you do cause anxiety and disturbance to customers by leaving the whole matter in doubt. We have got an arrangement whereby the position of customers is very reasonably safeguarded, and I think delay could only result in making the position generally less satisfactory than it is at present.
Can we take it, in view of the statement now made officially by the Minister, that the statement made three weeks ago in a certain journal named "Irish Truth," outlining this policy as a decision of the Ministry, was a decision communicated to that paper officially?
There was no decision three weeks ago.
Perhaps the Minister is aware of the fact that what he has now told us was stated in this newspaper a few weeks ago, but in view of his attitude to that paper was naturally discounted. Now, it turns out to be the truth.
That may have been published, but I did not see it.
I think the Minister in this matter is treating the Dáil unfairly. While the whole position of banking is under review, and while we are awaiting the final report of the Banking Commission, the Minister proposes taking a step which it may later be necessary to retrace. The Minister dissents. He is in possession of the interim reports of the Banking Commission and the Dáil is not. The Minister is satisfied that his policy is the right policy. In support of his contention, he says that once this matter of transfer has been dragged into the light of day, business prospects for the National Land Bank will not be satisfactory. What was the necessity for dragging the matter into the light? What was the necessity for the Minister coming forward at the tail of the session and making this statement on banking policy without giving Deputies an opportunity of considering the matter and without giving the facts which enabled the Commission to make this recommendation? Is it not likely that it will be found necessary to set up here some institution along the lines of the National Land Bank, as a result of the final report of the Banking Commission? Yet we are to cast away this institution with its staffs. The Minister has not dealt fairly with the House in this matter. Whether he is wise as regards the attitude of the State to banking, remains to be proved. It would be better, I think, if the Minister would defer action pending the final report of the Banking Commission.
I am quite satisfied that it would be easier to set up any institution that might have to be set up from the foundations under any new scheme, than to transform the National Land Bank into such an institution. I am fully satisfied as to that.
On what grounds does the Minister make up his mind? Is it on the reports that have come to him?
Because I know the whole position.
I fear I will be obliged to move the adjournment of the House for the purpose of discussing this matter, which is a matter of urgent public importance. I do not know whether I should give reasons for my proposal at this stage. While there are certain grounds for believing that the Minister's statement is justified in certain respects, still the matter is of such urgent public importance that the Dáil should not give tacit approval to the arrangement made by the Minister with the Bank of Ireland with regard to the National Land Bank. As regards the details, there might be many matters to be discussed. I do not know whether we are expected to discuss them or not. We have not got enough information at our disposal intelligently to discuss details in connection with this transaction. If it is intended that the Dáil should discuss the details of this transaction, then they should get sufficient time to acquire the necessary information. I, therefore, give due notice that I will move the adjournment of the House for the purpose of discussing a matter of urgent public importance, namely, the transfer of the National Land Bank to the Bank of Ireland.
Will the Minister indicate for the information of the Dáil how the Saorstát taxpayers stand with regard to the bargain?
Is it proposed to afford any opportunity for discussion of this matter?
No, I had no intention of making any further arrangement than simply announcing the matter to the House.
Is the Minister announcing a decision? Has it been signed, sealed and delivered?
Not signed, sealed and delivered. We have intimated to the Bank of Ireland that we are prepared to accept their offer.
Why come here at all then?
To inform the House.
Deputy Heffernan seeks to raise this question as one of urgent public importance. I do not think it is sufficiently urgent to suspend the business on the Order Paper, but I think the Deputy could have an opportunity, on the motion for the adjournment, to discuss the matter, or we might discuss it to-morrow. The question of urgency is complicated by the fact that we might not be meeting to-morrow. An opportunity might be found for an hour's discussion of the matter some time to-day.
I will certainly agree to that.
Then if the business is not concluded by 9 o'clock the Minister will move the adjournment of the House at 9 o'clock; that will afford an hour-and-a-half for discussion of this matter.
To enable that discussion to be carried on, will the Minister provide the House with figures showing not merely the amount of private support given to the National Land Bank but the amount of State support also and the amount that might have been given to it but was not given to it.
I wonder would the Minister put some information in our hands before we come to discuss this matter this evening? I suggest that we should be told the amount of capital held in the bank by private individuals.
There is none.
And what arrangements will be made by the Bank of Ireland with regard to the share capital and with regard to the directors when the transfer takes place. Will the directors of the Land Bank be taken over by the directorate of the Bank of Ireland? Also, I would like to know on what service are the officers of the Land Bank to get two-thirds of their present salary? It seems that an officer with one or two years' service can now retire on a pension of two-thirds of his present salary. That is an extraordinary arrangement. No account is taken of the number of years service. Information on this and many other matters should be placed in our hands. I suggest that a copy of the interim report of the Banking Commission should be placed in the hands of Deputies before this motion comes on.
The suggestion is that I should supply this report privately to Deputy Heffernan, owing to the great assistance he gave the Banking Commission.
The position is that at 9 o'clock this evening, if the business is not then concluded, the adjournment will be moved to enable the statement of the Minister for Finance on the proposed transfer of the National Land Bank to the Bank of Ireland to be discussed. If the business is concluded at an earlier hour opportunity will be afforded for an hour-and-a-half's discussion of the matter from such earlier hour.
Would it not be possible to have the motion put in such a form as to enable a division to be taken?
That is what I am trying to get at. No division could be taken on a motion such as has just been indicated, and I want guidance from the Ceann Comhairle in regard to that. I want to get an opportunity of putting to the House the question whether they approve or do not approve of the Minister's statement with regard to this transfer of the Land Bank to the Bank of Ireland.
Would the Minister indicate to the House how much the Free State is making on the bargain?
It is time enough to do that when the bargain is gone through.
Or how much it is losing?
Nothing.
The position is such that a motion could be taken with general assent without notice. If a motion is framed I will consider taking it without notice with the consent of the House. If the Deputy desires to frame a motion he can consult with the clerks, who will assist him.
To protect myself I will give formal notice now that I will hand in a motion to the effect that the Dáil do not approve of the statement made by the Minister for Finance with regard to the transfer of the Land Bank to the Bank of Ireland.
I take it that we have to sit until 10.30?
The order with regard to the sittings of the House covers to-day's sitting and tomorrow's sitting, should there be a sitting to-morrow.
The adjournment will be until to-morrow if the business on the Order Paper is not cleared at the time Deputy Heffernan's motion comes on.
Would the Minister for Finance tell us when he will give his sanction for the transfer to the County Councils of the amounts allotted under the Trunk Roads Scheme? When does the Minister propose to hand over any of the two millions?
As soon as it is required.
It is required now.