SUPPLEMENTARY ESTIMATE. - CREAMERY BILL, 1928—THIRD STAGE.
The Dáil went into Committee.
Section 1 agreed to.
(1) Where a creamery or a company owning a creamery was (whether before or after the passing of this Act) acquired with moneys provided by the Oireachtas, every person engaged in the manufacture of milk products or in the sale of milk who obtains (whether before or after the passing of this Act) a supply of milk (in this Act referred to as a new milk supply) from a person who supplied milk to such creamery during the whole or any part of the period which commenced on the 1st day of January, 1927, and ended on the 30th day of June, 1927, shall, unless he obtained such new milk supply under an agreement with the company in the form set out in the First Schedule to this Act or the form set out in the Second Schedule to this Act, be liable to pay in accordance with this Act to the company a principal sum calculated in the manner hereinafter specified with interest at the rate and from the date hereinafter mentioned.
(2) The principal sum payable in respect of a new milk supply by any person to the company under this section shall be ascertained and certified by the Department in accordance with the following provisions, that is to say:—
(a) the Department shall in respect of such person select and appoint some one year prior to the year in which the selection is made but not being in any case prior to the year 1927 nor subsequent to the year 1933;
(b) the Department shall ascertain the day in the year so appointed on which such person received the largest quantity (in this Act referred to as the peak day quantity) of milk on foot of the said new milk supply;
(c) the Department shall appoint the day (in this Act referred to as the transfer day) on which such new milk supply was transferred from the said creamery to the said person and such day shall normally be the day on which such new milk supply was first received by such person, but the Department may in any particular case appoint any earlier day not more than six months prior to the said day on which such new milk supply was first so received;
(d) the said principal sum payable by such person to the Company shall be calculated by the Department at the rate of one pound for every complete gallon of milk in the peak day quantity;
(e) the interest payable by such person to the Company shall be interest on the said principal sum at the rate of five and one-half per cent. per annum from the transfer day;
(f) the Department shall issue to the Company a certificate (in this Act referred to as a certificate of liability) in respect of such person certifying the amount of the said principal sum payable by such person to the Company under this section and the rate at and date from which interest on such principal sum is payable under this section by such person to the Company.
(3) Every certificate of liability issued by the Department under this section shall be conclusive evidence of all matters purported to be certified therein.
I move Amendment 1:—
In sub-section (1), page 2, lines 35, 36 and 37, to delete the words "during the whole or any part of the period which commenced on the 1st day of January, 1927, and ended on the 30th day of June, 1927," and substitute therefor the following words "at any time after the 22nd day of February, 1927."
The effect of the section is to provide that a creamery that gets milk supplies shall pay for them, and for that purpose some period must be indicated within which the creameries will get the milk supplies. As the Bill stood that period was defined as from the 1st January, 1927, to the 30th June, 1927, but on thinking it over we decided that in view of the fact that there are other companies also purchased, such as the Golden Vein Dairy Company—and we hope to purchase other companies this year or next year—we should not limit ourselves by dealing in this section purely with transactions of the purchase of the Condensed Milk Company. That company was purchased on the 22nd February, 1927, and so far as that company is concerned this section as it stood would be all right. It was always intended that this Bill should cover not only the purchase of the Condensed Milk Company, but the purchase of companies such as the Golden Vein Dairy Company and creameries, say, in North Cork or Kerry. In order to make the Bill apply to these it has been decided to alter the date to the 22nd day of February, 1927.
I would like to know whether, in this or some other section of the Bill, the Minister is taking power to deal with the case of a supplier who dies and who had entered into an agreement. Suppose a supplier died will it be necessary to have some provision to deal with the position of his representative?
In any Act of Parliament a decreased person is included in the term "personal representative." When a person is referred to, his legal representative is always included. That is a strictly legal question, but that is the position. There are amendments dealing with that point which will come on later. Generally speaking, if I am asked the wider question, whether there is going to be any elasticity provided in the case of a man who gives up supplying a creamery, there is, because, as the Bill stands, the Department have discretion in a case of that sort. It is for the Department to issue a certificate and, administratively, they can always exclude or include anybody on his merits. We will deal with that bigger point in a later amendment.
I would like to know from the Minister if the definition that he has put upon the term "person" refers also to a society, and would it also refer to an individual?
Certainly. A "person" is a society or a joint stock company or an individual.
If it refers to an individual, I am afraid that the term "person" may prove to be rather complicated.
"Person" is a well-known legal term, and means a joint stock company.
And it might also mean individual?
Amendment put and agreed to.
I move amendment 2:—
In sub-section (2) (a), page 2, lines 49, 50 and 51, to delete the words "some one year prior to the year in which the selection is made but not being in any case prior to the year 1927 nor subsequent to the year 1933" and substitute therefor the words "the year in which the selection is made or some earlier year not being prior in any case to the year 1927."
This amendment is for the same reason as the last one. The point is that we want the section to cover future transactions.
Amendment put and agreed to.
I move amendment 3:—
In sub-section (2) to delete paragraph (b) and to substitute the following new paragraph:—
"The Department shall ascertain the week in the year so appointed on which such person received the largest quantity of milk on foot of the said new milk supply and one-seventh of this quantity shall be regarded as the peak day supply."
I think it is only reasonable we should take into consideration that in many creameries the peak day will be a Monday or the day following a holiday. In many parts of the country creameries do not find it economic to work on Sundays, and consequently the milk supply on Monday includes three milkings: Sunday morning, Sunday evening and Monday morning. It would be possible for a creamery to send in those three days' milkings as representing an ordinary day's supply, and take it as the peak day. I think the most reasonable way of fixing the standard entitling to compensation would be by taking a peak week and dividing it by seven, which would give you the real basis upon which to form your estimate of the value of the milk received in any one day as the best day of the year.
The Deputy has said something that has rather surprised me. I thought most of the creameries took their milk supplies on Sunday mornings as well as on Monday mornings, or any other morning of the week.
No, and it is to meet cases of that sort I moved my amendment.
I have no objection to this amendment, but I do not think it is of any practical importance. I believe if the amendment is accepted it will create a certain amount of unnecessary work, for this reason: First of all, we have never failed to agree as to the peak day. In fact, there has never been any discussion between the Dairy Disposals Board, the Department and the creameries as regards the peak day, whether it be Monday, Tuesday or Wednesday. You agree for some time in the middle of July, some day in the middle of the week. You would never take a Monday or a Sunday. Some day in the middle of July would be regarded as the peak period. I have never heard of a dispute, and I am sure there never was one, between the Dairy Disposals Board and the Department about the peak day. It is not a question of looking up the accounts and finding out the day on which, for some reason or other, they got the largest amount of milk. Some day in the middle of the week is taken, and that is accepted as the principle throughout between the I.A.O.S., the Department of Agriculture and the creameries. If you want to be extremely correct, I agree that Deputy Maguire's amendment looks better, as it rules out all possibilities of friction, but the trouble is that this Bill covers a large number of agreements, all voluntary and about which there is no dispute. If you change the system, if you make a new arrangement in regard to the peak day other than the arrangement existing already on which these agreements are based, it will really mean if we are to administer the Act strictly that we will have to re-open these agreements, and all for the sake of a few shillings or a few pounds.
The Bill covers 70 or 80 agreements that have been already made, where the figure has been ascertained and the peak day ascertained by agreement. They have got a definite figure by agreement. If we insert this amendment we will have to re-open, for the sake of a few shillings or a few pounds, voluntary agreements about which everybody is quite satisfied and about which there is no dispute. It will be a pity to have to do that in view of the fact that there is no dispute in regard to the peak day. The Department always settled that with the I.A.O.S. or the societies in a rough and ready fashion. There is never a question, if the society says Tuesday, of the Department saying Wednesday. Under no circumstances would we attempt to look up the books of a creamery and see whether by accident on some Monday morning they got a particularly large supply because of a certain amount of milk being held over from Sunday. I will give an undertaking, for what it is worth, that in the administration of this Act under no circumstances will we take such a day as Monday. We have never done so. We have never taken a day when there is a double milk supply. If the Deputy is satisfied with that I will give a definite undertaking, so far as this Bill is concerned, that we will continue the policy we have always adopted and take a fair day as the one in which the largest supply has come in.
That would meet the case, but there is also the possibility that a holiday might come in.
The Bill covers that. I will give an undertaking that we will ask the creameries not to regard the peak day as the day in which there was a double supply, but a day in which there is a normal supply.
Could the Minister in the Report Stage bring in an amendment which would cover Deputy Maguire's point? It is not necessary that it should go through the whole form included in Deputy Maguire's amendment, but in the amendment it could be set out that Monday would never be taken as the peak day.
I do not know if the Minister's undertaking would be of much use, even though it is given in good faith. "The Department shall ascertain the day and the year" and so on. It may be compelled to take the highest day, as the Bill stands, whether an undertaking is given or not.
I have no doubt a judge would interpret that in quite a liberal fashion—in other words, that he would take the whole Act as it stands. I have no doubt a lawyer would compel a judge to take into account that this only refers to normal supplies of milk. That would take a long legal argument to go into now, but I am satisfied that the Department would not take a day following Sunday or a Church holiday as the peak day.
Or a day following a holiday, or a day on which a creamery would not in the ordinary way receive its supplies.
I will consider that. The trouble is that there may be some creamery, say in Limerick, where by agreement Monday was the peak day, because on Sunday they got the supplies as they did on the Saturday and the Friday. There may be some of our agreements where the peak day was Monday, and for all I know we might have to re-open these.
If the peak day operated in such a way that an undue price had to be paid for a creamery it would be to the interest of suppliers to re-open the agreement.
It may be to their interest, but here is a case where the purchase money and the peak day were agreed on and everybody was satisfied.
That would be all right if the suppliers had been taken into consultation before the price and the peak day were fixed, but in other cases they had no choice but to accept the letter of the law interpreted by the Minister's officials.
That goes to the root of a great many questions. This Bill took the view that the Disposal Boards could not do business with each individual supplier. The suppliers must elect a committee. If farmers are capable of organisation at all, then we presume their organisation represents them. We cannot draft or carry out schemes on any other basis than this, that the committee elected by the farmers themselves, and over which they have complete control, represent the suppliers. If you once get away from that basis we can never make an agreement, for you have to consult every individual farmer and be at the mercy of every small minority of three or four cranks; if you think that is necessary then what you are saying is that it is impossible to organise farmers. If you agree they are up to the standard where they can be organised, and we must assume they are up to that standard, we must accept it that the committee they elect is speaking for them. If we once get away from that we can never reorganise and we can never make agreements, because we would not be dealing with organised bodies; we would be making agreements and establishing new organisations which might be upset at any time by any single individual. It would be a most extraordinary state of affairs if we had to assume that the committee elected by the farmers of a parish could not speak for them. Occasionally they do not, at a particular moment, but we cannot do business on the assumption that they do not. There are rare occasions when the committee does not represent the farmers, and they have no remedy except to change the committee the next time. But at the same time we must assume that as long as the committee are there they represent the farmers who elected them, or we must assume at the worst that they represent a very big section of them. Here you have a case where committees, all over the country, quite voluntarily made these bargains, signed these agreements, and are quite ready to carry them out. It would lead to a great deal of work for the Dairy Disposals Board, who are only three or four officials, who have their hands full now, and it would lead to a situation in which most of the committees in the country who disapprove of a thing could say: "Re-open these agreements," because of details. I will give a most definite undertaking that we will never choose as the particular peak day a day on which an abnormal supply of milk comes in because the previous day's milk has not been supplied, or because of any accidental circumstance like that.
I am quite prepared to accept the Minister's undertaking that the peak day will not be the day following Sunday or a day following one on which the supply of milk was not received, but I do think where the peak day was selected for a Monday, or such a day, it would be entirely unfair to the suppliers themselves if the matter could not be re-opened. On the Minister's admission, it would be an unfair basis of calculation. I can quite understand that the committees must be held responsible to a certain extent to speak on behalf of suppliers, who are also placed in the peculiar position in which committees very often find themselves in connection with the various influences that are brought to bear on them to encourage them to do things that are really not in the best interests of the suppliers. If in such an instance it occurred that the committee, having acted with due regard entirely to the position of their suppliers, I would say that if two-thirds of the suppliers, by petition or otherwise, requested that the agreement entered into on their behalf by the committee should be re-opened, the matter should be re-opened and reinvestigated in the light of that, and in the light of what the Minister says, that is, on the basis of calculating the amount of money to be paid on the supply of milk. Otherwise I am quite prepared to accept the Minister's acceptance of the principle.
I think the Deputy misunderstood one point. I said that in the County Limerick, where they take milk on Sunday and Monday, it is possible, for all I know, that the suggestion of some committee to the I.A.O.S. or to the Dairy Disposals Board would be: "Let us take the peak day as Monday, 10th July," and that Monday would be quite normal for that creamery, because they take milk on Sunday just the same. I was pointing out that if we accepted Deputy Aiken's suggestion, while it might meet cases of a district where the creameries did not take milk on a Sunday, it would not meet the case if it was to re-open agreements perhaps in Limerick, where the peak day was settled as Monday, and which agreements were quite fair and the day was one actually suggested by the committee.
I think if the Minister put in something like this—"being a day following a day on which the creamery receives its normal supply," it might cover what Deputy Maguire wants.
That might be Saturday, and it would then bring you to Sunday. Saturday might be a normal supply day.
If that was the peak day it would be all right.
It might not be. That might run you into the very difficulty you are trying to avoid.
But if it might not be you could not take it. The peak day must be a day on which the creamery receives its normal supply.
Yes, but there is a normal supply to-day, and it must be the day following that. That might be the particular day that Deputy Maguire wants to avoid.
Monday does not follow Saturday. Sunday intervenes.
I would suggest to Deputies that they should leave that section. This question has never arisen in practice. There was never a dispute about it in that way. There are seventy or eighty cases covered by this section, and I will give an undertaking that we will not choose any abnormal day.
There is a further danger in this clause, in connection with the term "person"——
We will dispose of the amendment first.
If I had a little more information on it we might come to terms on it. I am satisfied with the undertaking that the Minister gave, that he will have due regard to the point that has been raised. But the section also refers to a person in receipt of a milk supply. We will assume that a dairyman in a town or city will receive a supply of milk from a person who has been supplying one of the creameries. Will he also be held amenable for compensation for the milk he has received from that farmer, or number of farmers, and be made liable to the co-operative creamery for the quantity of milk supplied on the same basis? Furthermore, if he is, will the fact be taken into account that the dairyman is living in a town where some fete is being held on a particular day, or for a week, that he receives on that day or during that week a quantity of milk greater than his ordinary supply? If he decides on ceasing his contract, as the clause makes provision for, and thereby evading payment to the creamery, there is nothing in the clause that I see to prevent him from entering into another contract with the farmer who had previously been supplying to the creamery, and in that way debarring the ordinary farmer who had been supplying to the creamery from continuing that contract or of ever re-opening it again. These are rather dangerous points that I see in this clause, if this is to apply to individual dairymen in towns or cities.
The Deputy will see in Section 2: "Where a creamery or a company owning a creamery was acquired with moneys provided by the Oireachtas," that is to say, where one of the Newmarket Dairy Company's creameries was acquired by moneys provided by the Oireachtas, "every person engaged in the manufacture of milk products or in the sale of milk who obtains a supply of milk from a person who supplied milk to such creamery," and so on, and then follow the various things that are set out in paragraphs (a), (b), (c), (d), (e) and (f). We are dealing now with the case of a supplier to a creamery concern bought by the Dairy Disposals Board and sold to another creamery, and we include definitely there "every person engaged in the manufacture of milk products"— which, of course, would cover the ordinary creameries "or in the sale of milk"—shall do certain things, and shall do that for this reason: We found that after we had bought the Condensed Milk Company, a tremendous amount of interest began to be taken in the milk supplies of County Limerick and County Tipperary. Various firms and people who were never so interested before, began to make inquiries, to go down there and make other arrangements. This person wanted to start a casein factory, and another person wanted to start a whole-milk depot, and so on. I am quite satisfied that that generally was done from ulterior motives. There are a great many people in this country who do not like the policy of handing over the whole manufacturing of milk products to the farmers on a co-operative basis. That is not an accepted principle by every class in the country. It is there, but there are a great many people who do not like it, although they do not like to say anything about it at the moment, because co-operation is in the air and in the fashion.
Deputies can take it that a great many people with money and other private interests in general connected with other forms of organisations, such as Joint Stock Companies, do not like that process at all. It is rather a new process, rather revolutionary, and we found —I forget whether it was in County Tipperary or in County Limerick—that people were coming in and were going to start whole-milk depots for certain purposes. They planked down a whole-milk depot next to a creamery we bought, and offered very attractive prices to the farmers for the whole-milk. I do not know how long that would last, perhaps one year or two years but, at least, some suggested that they were prepared to offer very attractive prices. There was nothing to stop them doing that in that district up to the year 1927, and there is nothing to stop them doing it in the various districts to which this Bill does not apply, but where there are very big milk supplies they did not do so. If we allowed that, what would happen? Someone would come along and put up a tin shed, take in the whole-milk, rail it to Dublin and get off their milk without paying a penny. We deliberately inserted the word "person" not only to cover a creamery, but every other person, whether an individual or a limited liability company. It was our intention deliberately to cover these. I believe all individuals are covered. Deputy Maguire's case is in regard to a creamery outside a town.
We have taken over the creamery and sold it with its supplies to some creamery in the district. Some milkman in the town buys milk. Has he to take shares? I am afraid he would, but I do not think that case could possibly arise in practice. I never heard of such a case. Remember, if it was a genuine bona fide transaction, or was on the border line, or was a man half a mile away who, up to the date of the sale, was supplying milk to the creamery and if he decides to sell in the town of course we would let him off. We have power to do so in the section. It is for the Department to say who the supplier shall be. There is plenty of elasticity in the Bill, and plenty of elasticity to allow a man to sell out his cows, to give up supplying milk at all, or to make butter with it at home. If ten or fifteen men say: "We will not supply the new creamery," there is no reason why we should charge them, because, after all, we have the issuing of certificates, and we do so, as a rule, by agreement with the creamery that is purchasing. We would never force them to pay for milk they did not get. On the other hand, we would never force a milkman in a town to pay for milk which he got from two or three suppliers. But we must have provision in order to cover the cases I mention, the case where people threaten to come and put up a whole-milk depot right up against the creamery which we have closed down in order to collar all the milk. But that point would have to be left to administrative action. In no case would we attempt to charge a supplier who had gone to town with his milk.
Is it not a fact that Kilmoyler and Cappaunice, in County Tipperary, applied for registration and that the Minister refused to register them, although there is no creamery in this district?
I could not say; probably it is.
They have applied and have been refused.
There are bound to be such cases arising. How can we get over that? Either you have to have redundancy or you should have someone who will have authority to draw the line and to say that no creamery shall come in there. The whole principle underlying this purchase, any way, in this matter of redundancy was to see that each creamery had an economic area. Anyone connected with creameries knows full well that is vital. When you start to map out creamery areas difficulties will undoubtedly arise. There will be three creameries in a district, and it is a question of closing one of them. They all agree that there is only milk for two. On the other hand, five per cent. or ten per cent. of the suppliers to one will be a little bit inconvenienced by the closing of one. What are you to do? Are you to allow the three to go on pulling the devil by the tail for the rest of their existence or close one and inflict a small degree, perhaps, of inconvenience by making the suppliers bring the milk a mile further? That is the whole dilemma. If you once say that everyone may do his own business, that if they want that creamery kept open they should be allowed to keep it open, you should also say that when they become bankrupt they should not come to the State looking for money or credits. Of course they will promise to do that now, but in three or four years' time, when they did go down, as of course they would, there would be an agitation in the Dáil to take them out of their difficulties.
Is not five or six miles too far to carry milk, and is it not practically churned by the time it reaches the creamery?
Indeed it is. I saw several instances of it.
Very well, what is your suggestion. Take a district which is rather narrow but long, near the sea coast, or something like that in which there are two creameries, one at each end, receiving only 4,000 or 5,000 gallons daily, what are you going to do?
Where the distance is too far you could have a separating station.
It is all very well to say that. Where the distance is three or five miles, the difficulty is not insuperable. Rather than have two uneconomic creameries in such a state of bankruptcy or poverty always in the bank's books, the way to remedy that is to have one first class creamery with ample conveniences for carrying on, one that is able to put in new equipment and machinery. I will tell you what they could do. The difficulty is not insuperable. They could make arrangements in the case of people living far away—say a five-mile limit— and I suppose there would not be more than thirty or forty such people—by which one man would bring the milk one day and another man another day. A little bit of organisation could do that.
The journey is too far, and another obstacle is that the milk is churned and will not be taken when it reaches the creamery. That is the whole objection. The distance is too far.
Then they should give up supplying milk to the creameries and turn to something else.
The Minister knows that there is a map hung up in the Department which settles that. If we are to have more acquisition of creameries and the closing down of redundant creameries, the question is whether the circles drawn on the map are going to hold or whether there is going to be any elasticity. The Minister says there is, but we have not seen any evidence of it.
The circles are purely arbitrary. The idea of the circles was this. I got a map made with a black spot for every creamery in the country, then a circle was drawn round that of a radius of one and a half miles, so that the diameter of the circle would be three miles. There was a red circle for co-operative creameries, a black for proprietary creameries, and another for something else. The idea was that at a glance you could see the situation —you could see the circles crossing each other. But no one would attempt to draw a definite line round an area and say: "This house, because it is one and three quarter miles from the creamery, must not come in." The ordinary normal area as it works out in practice is an area which is not circular, not any shape at all, but quite irregular. The circles were merely to give an idea at a glance of the present position as between the proprietary and the co-operative creameries, to show that they were cutting across each others area of supply. It was never intended to define an area within which a creamery should operate in such a definite way. It never happened in that way, because, in fact and in practice, districts are all irregular. Some man is three miles away, another three and a half, another one and a half, and perhaps the nearest creamery to the right comes within two miles of that creamery. So that you need not be under any delusion as to the circles. It was never intended to draw up a regular area for each creamery.
In my district there are two creameries in a direct line. One of the creameries used to have a large supply of milk. This creamery was established in 1908 and was run for 15 years as a co-operative creamery. Then it was sold to the Condensed Milk Co.
Owing to some mismanagement, the Society went down. When the Labour Government was in power in England the sale of butter was held up. Now the people of the district have to travel a very long distance— five or six miles—in a mountainy district, and it is a great hardship on them.
Yes, three miles from it. I cannot see any reason why this creamery should have been made redundant. It covered a large supply, and was in one of the best dairying districts, while other creameries which have been left open have a less supply. Creameries have been established in other areas which are not as good dairying districts. Some of these people, as a result, can hardly get to Mass on Sunday, as they do not get home until 12 or 1 o'clock. As a consequence, they are out very much against the closing down of this creamery.
I am not sure that I know the case referred to, but I admit that there will be cases of hardship. It would be extraordinary in a big scheme like this if the first organisation was absolutely correct. I will admit also that it might very well be that in practice it will be found that perhaps one or two creameries were closed that should not have been closed. I will admit that as a general principle. On the other hand, we must make an attempt to prevent redundancy, and we can only make a beginning somewhere.
As to the disadvantage of having to travel long distances, I am aware that for the past twelve months these people are supplying to a dairy, with a small supply, working economically, with a small number of hands. They are paying within a halfpenny in the £ of the large supply dairy. It would not pay the small suppliers to go five or six miles for the difference.
Generally it is the other way.
Could not the Minister meet the requirements by putting up a separating station? In our district we have a separating station which cost only about £700—a one-man creamery it is called. It can separate up to two or three thousand gallons.
Possibly that is the solution of it.
Would it not be more economical?
Possibly. We are only in the experimental stage as yet with one-man separating stations.
We have two in our district in South Tipperary.
If you went to that particular parish, would there not be a first-class dispute in another parish as to whether you are right or I am right?
There is no dispute at all. They are well pleased to get the separating station.
Supposing I did what the Deputy wants, some other Deputy, sitting on the same benches or some of the other benches, would raise a question on behalf of another section who did not like the change. That will happen in a great many cases.
Every Deputy will have to look out for himself.
Section 2, as amended, agreed to.
Sections 3 and 4 agreed to.
(1) When the Department has issued under this Act to the company a certificate of liability in respect of a society, it shall be lawful for such society to issue and such society if and when so required by the Department shall issue to the supplier of milk on account of whose milk supply such certificate of liability was issued such number of shares (in this section referred to as debt shares) of the nominal value of one pound each in such society as shall amount to three shares for every cow then owned by such supplier as certified by the Department.
I move amendment 4:
In sub-section (1), page 4, line 29, to delete the word "Department" and substitute therefor the word "company."
That is a drafting amendment. It is obviously the business of the company and not the Department, once the Department has issued a certificate to the company.
Amendment agreed to.
I move amendment 5:
In sub-section (1), line 29, to delete all the words after the word "issue" and to substitute the following:—
"to each supplier of milk to such society such number of shares (in this section referred to as debt shares) of the nominal value of one pound each as the society with the approval of the Department may determine or, in default of determination by the society, as the Department may require: provided that there shall not be issued to any supplier under this section a number of such shares exceeding three shares for every cow then owned by such supplier as certified by the Department."
There are two kinds of suppliers, as the Minister pointed out. There are the creameries which have acquired the supplies which were formerly given to the Condensed Milk Company's creameries. You have the original suppliers, and you have the other suppliers, some of whom have gone to the creameries which the Department have arranged for, and some of whom have gone to other co-operative creameries. The Minister pointed out that Sections 2, 3 and 4 are provisions by which the Department would charge to the creameries the definite amount which is fixed upon them in respect of these purchase agreements. Section 5 is a very important section, because the suppliers are dealt with there. Section 5 decides that a certain amount be fixed upon. The idea of the amendment was that since this transaction was carried out for the benefit of the creamery industry as a whole, and since we have not sufficient information on this side of the House to enable us to say that the suppliers to the redundant creameries, or to the creameries belonging to the Condensed Milk Company, should alone have to pay the purchase price, it seems to us that if the thing was being tackled on a national basis, in view of the fact that these people have to suffer inconvenience, even in cases where they were not members of redundant creameries, were not even members of the co-operative movement, but had been suppliers to a proprietary creamery, they may have had very good reasons from the business point of view. They may not have been satisfied with the general conduct of the co-operative creameries in their area, and may have been getting a better price. Now you are asking these people to change their supplies and are putting them to a great deal of inconvenience probably, and, in their opinion, some loss. That may be purely a local outlook, but it seems to me that there is some danger of injustice, and that an endeavour should be made to meet it.
I do not know whether the amendment I suggest covers the point. The Minister has more knowledge than we have and probably understands what I am driving at. Our idea is to distribute the liability more evenly and not to have it falling wholly on the suppliers to the closed creameries. When the Minister was dealing with the point in his opening speech the following discussion took place:—
Dr. RYAN: With regard to the 48 creameries closed down, and for which someone paid £38,000 for the milk supply, I presume that the farmers paid for their own milk supply. That would be like buying their own good-will.
Mr. HOGAN: No. The existing co-operative societies paid that and the farmers took shares to that extent.
Dr. RYAN: They are paying, then, for their own milk supply?
Mr. HOGAN: No. That is not the value of the milk at all. First of all, the farmers are coming into a creamery that has all the advantages of a big milk supply from another source, and that is what they are paying for. If you organise a creamery it costs a certain amount to build it. It generally costs £1 a gallon to get the plant and equipment to handle the milk, and the more milk you have the more equipment you want. Three shares per cow will give it to you.
Then he goes on to say:
"They will have the advantage when they take out these shares that at the end of eight years they will own that creamery without owing one penny to a bank."
I am not quite clear whether these debt shares cover the ordinary meaning of shares. The ordinary meaning we take from the expression "debt shares" is that they are issued against a liability which the supplier has, and in the course of time, on paying these 8 annual instalments he gets rid of that liability. If the Minister can show at the end of the time that he will have the same claim to the society, and the same rights as an old supplier will have, well and good. There has been a feeling that he will not. For example, in the committee of the creamery to which this supplier has now to go he will not have any representation in the management. We want to see that there are some safeguards for the suppliers, in that way that they will have some control in the management and that the liability will be distributed more evenly. As against the security that you are giving to him in making him a definite part of the co-operative movement you have the fact that there was a certain plant—I am speaking of the redundant creameries, because I think the point covers both, which was realised. We would be glad to know from the Minister when that plant is realised and the assets are sold that they will be put to the benefit of the redundant suppliers, and they will not be in a position that all the work they have given to the co-operative movement will be at a loss. It seems to me at present that you are just taking them as entirely new people and that you are fixing a charge on them. You are assuming that all the advantage lies with them, whereas, in my opinion, the old suppliers have the advantage. They have an entirely new milk supply. They have new people coming in, and they have people coming in who are prepared to finance the business. If the Minister had gone a little further in this Bill towards the Co-operative Act, and had fixed a levy for the raising of capital on all milk suppliers throughout the country it would be easier to reach agreement. The danger is at present that redundant milk suppliers may be unfairly treated. On the other hand, in future agreements it may be right to make them pay, but in view of the position of the dairy organisation we would like to distribute the claims. The old suppliers, it is suggested, may not have been shareholders. They may not have paid up their capital.
I understand Deputy Derrig's point. Section 5 reads:—
(1) When the Department has issued under this Act to the Company a certificate of liability in respect of a society, it shall be lawful for such society to issue and such society if and when so required by the Department shall issue to the supplier of milk on account of whose milk supply such certificate of liability was issued such number of shares (in this section referred to as debt shares) of the nominal value of one pound each in such society as shall amount to three shares for every cow then owned by such supplier as certified by the Department.
Now mark, it is shares of the society and that these shares are issued. These people are shareholders in the society to that amount. The term "debt shares" is merely a definition term there. People would possibly be led into a false conclusion by the term "debt shares," because there are such things as ordinary shares and shares for the purpose of securing loans issued by co-operative societies. There are different sorts of shares, but these are shares in the society purely and simply. The man who takes three of those has three shares in that society. The suppliers on the aggregate who take, say, £1,000 worth, £2,000 worth, or £3,000 worth of shares has, as the case may be, 3,000 ordinary shares in that society and to that extent are the owners. That is one side. The other side is this: We find it extremely difficult to draft the Co-operative Bill, because when it comes to drafting it is a matter between the I.A.O.S. and the leading men on committees through the country. They ought to know best what they want, and, of course, it is a matter for the Department of Agriculture finally. You cannot get a Co-operative Act of any value until there is a certain amount of agreement between these bodies. We found it extremely difficult to draft because we are venturing into new fields and trying to find how the new creameries can operate. When we come to details, we will find the difficulties arising.
There is one thing agreed and it is essential and at the basis of the whole policy, and that is every supplier must take three shares per cow. The Co-operative Bill must be passed next session, and when that is passed the other suppliers will come in and take all a share. The position is that the new suppliers will have taken three shares per cow, the old suppliers will have three shares per cow, and, of course, have ample time to pay up these shares. The time will be the same, eight years, and five and a half per cent. interest, and by that time everyone will have shares in the company according to the number of cows he or she may own. The company will be satisfactorily financed. Moreover, the private guarantors will be released. That will place the whole co-operative movement on a new basis, and that is the underlying idea. Meanwhile we have to deal with this Bill, which is more urgent on account of the transactions which took place. Apart from its urgency, we found that when we could not draft a Co-operative Bill, we had to make a beginning somewhere, and these were the steps. We intended originally to include the provisions of this Bill in the Co-operative Bill. At any rate, we had to go ahead with this as a beginning. This will provide three shares per cow. Every new supplier will become a shareholder, will have the same rights absolutely, and be in the same position as a supplier old or new. When the Co-operative Bill is passed the other suppliers to that society will have to take shares. When that time comes the society will be on an absolutely sound basis. I think that covers the point that Deputy Derrig mentioned. With regard to the complaint where a redundant creamery is sold, there is taken into account first the value of the plant. That is deducted from the gross figure, and it is the nett figure that the society pays.
What about the committee?
Of course, as shareholders, they will have the right to vote. They have the fullest right. They are members of the society. They have an absolute right to vote. In fact, they have a better right than anybody else, because they will have shares before the others.
When will they become shareholders?
When the shares are issued.
When the Minister takes over these creameries does he also take over the stock?
No, unless you bought a society in that way, and we have not done that up to the present. Take a company like the Condensed Milk Company at £365,000. We bought that at a gross figure. We have a guarantee from Lovell and Christmas that the stock was worth £200,000, and we had a further guarantee that if the stock did not fetch £200,000 they would pay the difference. We bought that society as a going concern.
It seems to me that if this is a Creamery Bill, the Minister should do now in relation to it what he proposes to do under the Co-operative Bill as regards creameries. There is no doubt about that; it should be done now. As to the figures, I do not know what proportion the paid up share capital bears to the capital of the creameries throughout the country.
A number of co-operative creameries have failed throughout the country because the share capital was never paid up. Some of these people who were closed down were suppliers to redundant creameries that have since closed down. When they are forced to join another co-operative creamery, they will have to come in there and pay £3 per cow over a period of eight years. It might well happen, and it would happen in a large number of cases, that where these men would be paying £3 per cow into a creamery whose members have not paid up £3 or anything like it, that that would cause a great injustice. The usual thing in a co-operative society, or in most cases, is that a man comes in and pays his first moiety and he is never asked for anything else. There is a large amount of capital not called up, and there is a large overdraft at the bank. I do not see why in this Bill it would not be made compulsory in all societies and creameries that are affected by this Bill that all suppliers should pay £3 per cow over a period of eight years, if necessary. If the Co-operative Bill is to come, it will come, but we should see that every piece of legislation that we pass here is made complete, absolutely as far as we can make it so.
I think that there should be a new section introduced into the Bill to make it compulsory on suppliers of milk to creameries to pay up £3 per cow. The new suppliers should be put on the same footing as the old suppliers. These are people who ordinarily supplied milk to a creamery that has now been found redundant, and now they are being forced to join a new co-operative society. I submit that they should pay up only as much of the share capital as the members of that old society paid on the average per cow. Take a case like this—it may be that I have ten cows, and I was supplying a creamery that has been found now to be redundant. I am now forced to go to another co-operative society. Under this Bill I will have to put down £30 over eight years. It may be that the society that I am forced to join was so organised that the members only paid 5/- per cow and they are running on a couple of thousand pounds overdraft. It is not right that I should be forced to pay in £30. That should be remedied in this Bill. The farmer should not have to wait until another Co-operative Bill that may be delayed for two or three years is brought in. Either these suppliers should be put on the same footing as the old suppliers or the old suppliers should be made to pay up £3 per cow.
I would like to ask the Minister why he proposes to allow a larger amount than three shares per cow?
I would like the Minister to clear up a little bit better this question of the number of cows. It states in this section: "When the Department has issued under this Act to the Company a certificate of liability in respect of a society it shall be lawful for such society to issue and such society if and when so required by the Department shall issue to the supplier of milk an account of whose milk supply such certificate of liability was issued such number of shares... of the nominal value of £1 each in such society as shall amount to three shares for every cow then owned by such supplier as certified by the Department." I would like to know what means the Department have of determining what the number is or how they are to take statistics of the number of cows owned by a farmer? Will it be determined by the number of cows the farmer has on his farm when the inspector visits the farm? Sometimes a farmer has 30 cows. He keeps 15 of these for milking purposes and he sells the other 15 at the market in a commercial way. When the inspector comes to the farm he sees the 30 cows, though the number that the farmer would be milking would be only 15 and the inspector would say to the farmer: "You will have to pay £3 per cow on 30 cows." That would not be fair to the farmer. If the inspector comes to a farm in that way and discovers a number of cows in excess of what the farmer is milking, the farmer is up against it. There may be a case where the farmer in the previous year had 15 cows but in the present year not more than 7 of these would be producing milk this year; 7 or 8 of them may be dry. These are the matters I would like to see cleared up. There are some technical points about this that would require a definite order to be made or that would necessitate some elasticity in this section so as to enable the inspectors to give due regard to the requirements of the farmer.
I will begin with Deputy Maguire. His question is a very definite one. He quoted the case of a man who had 15 cows and 15 strippers. I cannot imagine a man having 30 cows and milking all of them in the spring, and later on in the year only keeping 15 of them at home.
I did not mean a case like that. I meant where a man would be selling some of his cows.
It would be more likely that there would be 15 cows and, say, 5 strippers.
I know of cases where farmers kept 30 cows in their farm up to a point, and then sold off some of them and kept the others for milking purposes.
That would be a matter for the committee of the creamery. The committee would see how many cows each man actually has. In actual practice it would not be a matter for the Department at all. Of course we have inspectors in the different counties, inspectors under the Dairy Produce Act and under the I.A.O.S., and in that way there is a fair amount of inspection. In the first place the committee would say: "Such a man has ten cows apart from strippers and cows on the farm, for the purpose of selling them when they are about to calve down." Until there was a dispute between the committee and supplier we would not come in at all. That is the way it works out in practice. If a supplier had fifteen milch cows and fifteen others in respect of which no milk was sent to the creamery, then if a dispute arose some of our officials would possibly consult with members of the committee, and they could look up the books of the company and see what amount the particular farmer in question supplied before. They could get reliable information from the creamery managers and the inspectors under the Dairy Produce Act, and from other sources of information in the county. From all these sources information could be secured, and very probably they would be able to arrive at something like fair play. When you are dealing with a man who has cows, some for one purpose and some for another purpose you may possibly come across a case where there is fraud under the Act. You will probably have a man saying that he has thirty cows, but he sends the milk of only fifteen, and in another case a man with ten cows will tell you that he sends the milk of only five. That may be done, and in the last analysis we must really leave it between the various committees and the suppliers themselves. It is only when there is a dispute that we come in, and we would come in with a possibility of getting at the facts. We have our dairy produce inspectors and other inspectors under the various Acts, and we have also the books of the old company, and we know what the usual supplies were.
But you have already made bargains for a certain quantity of milk and, therefore, you have to get a certain number of shares.
We have arranged for a certain quantity of milk, undoubtedly. On the whole, we find in practice that £3 per cow always covers that. We do not dispute a few gallons one way or the other. We find that £3 per cow always covers it; in some cases it was a little more and in some cases a little less. In answer to a point raised by Deputy Aiken, I may say that the Department, first of all, are not under the necessity of forcing a committee to issue shares to the amount of £3 per cow. In practice, I think, however, that they will always do it. In the Co-operative Act it will be provided that every supplier must take three shares. The reason is this: That, taking one creamery with another, you cannot build the creamery or finance it at less than three shares per cow. That is an iron rule and it is the principle agreed to by the I.A.O.S. They, to some extent, represent the suppliers and the creameries. Even where three shares per cow do more than build the creamery, it is extremely sound that they should have some money on hands in the way of working capital. It is well that they should have some money over and above for improvements and investments of one kind or another which they will find they will require. You are doing nothing more than is prudent when you tell a creamery society to issue three shares per cow. Even where the amount subscribed in that way would be more than enough, the fact that you have a little money over is all to the good. It is there against a possible loss, and it will be there for the purpose of buying equipment.
In a case where there are shares issued for £3 per cow, if there is a mortgage on that, they could only call up the amount that will pay the mortgage. That is set out in paragraph (b) of Section 5: "Such society shall, so long as any part of the debt remains unpaid, either by deduction per gallon on the price of milk purchased by it from the holder of such debt shares or in such other way as it may decide call up in each year so much of the capital at the time uncalled of such debt shares as may be required to provide for the payment to the Company of the amount of the instalment and interest of the debt falling due in that year"; so that, in fact, where they get a good bargain, they will only call in fifteen shillings in the pound and leave five shillings outstanding. That is there as security if they want to borrow money from the bank. It is agreed that, so far as the new suppliers and the old suppliers are concerned, everyone of them should be forced to take three shares per cow in order to make the average creamery economic.
Deputy Aiken's point was to insert in this Bill provision to deal with co-operative societies not affected by this Bill, co-operative societies who have not paid anything towards belonging to the Condensed Milk Company or any other company which we purchased or intend to purchase. That would. I think, be a mistake. We have to make a beginning somewhere. This Bill is complicated enough, and it deals with a certain definite problem. If we go outside it now and attempt to deal with a different problem, a slightly different even if somewhat co-related problem, we raise all sorts of questions. We could not think of inserting at this stage a section making it obligatory on every supplier of every society to pay up £3 shares at once. I do not think it would be right to do it at this stage. It would not be right in this case, because the money is mortgaged at once. I do not think we should put that in any Bill until we have made provision for auditing and other matters of that sort. That provision would properly be in a Bill that deals with appointment committees, affiliation with the I.A.O.S., inspection of books and proper audit. All that hangs together and should be included in the same Bill. I agree it makes it much easier for us to collect the shares from the other suppliers, and, while I admit that, at the same time I could not think of inserting a provision like that in this Bill. It would mean four or five times as much money as is involved in the purchase of the Condensed Milk Company. When one considers all the implications it is obvious that the proper place to insert it is in the other Bill, the Bill dealing with audit, appointment of committees, affiliations with the I.A.O.S., etc. In such a measure there will be safeguards to see that the money is properly spent in the interests of the shareholders. In this case we will get the money as it is paid up.
The Minister has stated that a beginning should be made. It was in order to make a beginning that I suggested that he should see that the shareholders and societies touched by this Bill—that is, shareholders and societies that are new suppliers but that had been closed down—should be included. I do not want the Minister to put in this Bill a clause making it compulsory on all creameries, but on the creameries affected by this Bill. I refer to creameries which receive new supplies because other creameries have been closed.
That limits it to some extent, but the same difficulties are involved, and I do not like to make this Bill any more complicated than it is.
I do not think that it would make it any more complicated. It would be putting into effect in this Bill a very good principle.
It would affect 75 per cent. of the creameries, and would involve a large amount of money coming in at once. You can only do one thing at a time. The Dairy Disposals Board have their hands full, and if this section is inserted, it would have to be hung up until we finished off this Bill, or, at least, until the spade work was done. A Co-operative Bill will be introduced next session, and I will try and deal with that point then.
Is the Minister aware that a large section of the suppliers have no shares at all?
Will they be compelled to take shares?
Certainly, so as to relieve the guarantors.
I have not heard from the Minister in regard to my point about the three shares.
Yes. I forgot that. I do not want to develop it at great length now, but it will be almost absolutely certain that if we are to buy some creameries which are still unbought, we will have to buy them at more than £3 a cow. There are certain creameries that should be bought in regard to which suppliers would actually agree to pay more than £3 a cow and in regard to which they are pressing us to buy them. They are provided for in every other respect. I want the Bill not only to apply to the Condensed Milk Company but to any purchase that takes place this year or next year.
Where the purchase is completed the £3 will stand?
We will have three classes in each creamery, namely, compulsory shareholders, ordinary original shareholders, and suppliers who are not shareholders?
Every supplier will be a shareholder.
As this Bill is intended to cover any future purchases of creameries for the next few years, I would like some provision to be made for districts which differ materially from those to which this Bill is intended to apply. I have in mind areas where the economic supply of milk would be worth considerably less than £1. I know a district where the conveyance of milk would cost 1½d. a gallon and the economic value of that milk will be a good deal less than the value of milk supplied to creameries where the milk supply is conveyed free of charge. That is an outstanding, but a rather usual, case. The conditions in the West are different to those in the South and there ought to be some special provision made where the economic milk supply is different. Therefore there should be distinction made where not only economic conditions of the supply, but the value of the plant and machinery would be taken into account. I am not satisfied with the Bill, because it does not take into account the conditions of creameries in the West.
You cannot legislate for contingencies. There will be contingencies after this Bill is passed, but this Bill will not be the last one.
Does the Minister fully understand what Deputy Moore asked him about the three classes of shareholders? Is he not right—until the Co-operative Act is passed there will be three classes?
Yes, until it is passed there will be suppliers who have shares voluntarily, those who have no shares, and those who had to take shares.
I am not satisfied with the Minister's explanation as to why he did not make it compulsory on suppliers to creameries affected by this Bill to pay £3.
Perhaps the Deputy would wait until we put the section.
Amendment, by leave, withdrawn.
In sub-section (1), page 4, line 31, to delete the words "such number of" and in line 33 to delete the words "as shall amount to three" and substitute the words "the number of such shares to be so issued to any such supplier being calculated at the rate of three or such greater number as the company shall require of such."
I have explained that point already.
Amendment put and agreed to.
The question is, "That Section 6, as amended, stand part of the Bill."
I think that on Report the Minister should bring in an amendment such as I suggest. I think that now would be the correct time to do it. I am certain, where a farmer comes into a creamery whose shareholders have only paid five shillings a cow and who is forced to sign an agreement to take out shares at £3 a cow, will not be pleased.
I will consider that point, but if it has a great many implications which would alter the Bill to any great extent and would mean several consequential amendments I might not be inclined to agree to it.
That will require a great deal of consideration.
You might change the phrasing in line 33 of the sub-section and say: "Shares held on an average by every member per cow."
The book-keeping of that would be absurd and you would have to go back again and make another calculation. I think the other way would be simpler. We are coming along with a Co-operative Bill. Deputies forget that this is agreed by all interests. There is a minority who do not agree, but it has been agreed by the I.A.O.S., by practically every committee in the country, by the Department, and by practically everyone concerned. It has been agreed that this arrangement of three shares a cow is safe and necessary to the committee. If the I.A.O.S., which represents a great number of the committees, agrees, and if a body like the Shorthorn Breeders' Association, which represents a tremendous number of dairy farmers, also agrees why should we complain?
You stated that more than £3 would be necessary in certain cases.
I suggested that in future more than £3 a cow will be necessary in certain cases, and that people who are actually going to pay more will perhaps be anxious to do so.
Is the Minister aware that the people who are satisfied are not the people who have nothing to complain about?
They will complain when we charge them.
I think it should be made an even levy.
I want to see the inception of co-operation getting a fair chance, and certainly the new suppliers to a co-operative creamery will have a grievance if they have to pay more than the original suppliers.
They will not have to pay more.
They will until the Co-operative Bill comes into force.
I cannot do any more in the matter, and I have considered all the pros and cons.
You are making it compulsory on suppliers who were supplying redundant creameries.
As I explained before, if every supplier takes three shares per cow it will take the full amount to finance the creamery. We are making a beginning with a portion of the creameries. Suppliers coming in must pay for it, such as it is. Later on we will come along with the Co-operative Bill, and the other suppliers will have to take shares. When every supplier takes three shares per cow that will finance the undertaking. The arrangement may not be ideal, but I cannot argue it any further.
Suppliers who take milk from a redundant creamery have to pay for it at the rate of £3 per cow.
The supplier has to pay for his share in the creamery. He is joining in a creamery which formerly had, say, four thousand gallons. It will now have eight thousand, and is worth twice as much as before. Assuming that one-half are new suppliers and one-half old suppliers, the new suppliers will own half that creamery and will have an interest in the creamery represented by half its value. The old suppliers will have the full value of one-half, and they will have the profit which the owner had before then. There will be nobody to come in to compete with them, and if they cannot make money out of it in that way they will never make money. In a Bill like this we cannot cater for a particular problem.
In view of the Minister's statement that this Bill shall apply to the future purchase of creameries, I must take exception to it. If this Bill is intended to apply to future purchases in the West of Ireland, it is going to be fatal to any creamery purchased under these terms.
Is there a proprietary creamery in the West of Ireland?
There is no proprietary creamery, but I have in mind the kind of creamery which will be bought under this Bill.
We will not buy anything but proprietary creameries.
There are auxiliary creameries whose headquarters are in the North of Ireland, and already negotiations have taken place to buy them. If they are to be purchased on the terms contained in this Bill——
If I am not able to purchase them under the terms of this Bill I cannot do so. I am thoroughly incapable of catering for a problem that has not matured yet.
If purchased, they must be purchased under the terms of the Bill.
We need not purchase them under the terms of the Bill. If we are to make agreements which do not come under the terms of the Bill we will have to come here for another Bill. If we are to try to hammer out an Act for a special set of circumstances which we are not sure of or for which we have not got the full facts, we cannot do it.
Will we get an undertaking that no creameries will be purchased in the West of Ireland?
I will give the Deputy an undertaking that we will apply this Act only to creameries to which it is intended to apply.
I think the Minister is making no case against the suggestion that all suppliers should be compelled to take shares.
There is not even an amendment down to that effect. I do not think I could insert it in the Bill, because it would have all sorts of implications and would mean a very large number of consequential amendments. If that is so, I could not insert it in the Bill, but I will see if it is so between now and the Report Stage.
Amendment put and agreed to.
Any agreement (in this Act included in the expression "agreement validated by this Act") in the form set out in the First Schedule to this Act and made whether before or after the passing of this Act between the Company and a society shall be and (in the case of any such agreement made before the passing of this Act) be deemed always to have been valid and accordingly it is hereby declared that as and from the date of such agreement such society shall have and (where such agreement was made before the passing of this Act) be deemed always to have had power, notwithstanding anything contained in the Industrial and Provident Societies Act, 1893, and the rules of such society, to do all such acts and things and execute all such documents as may be necessary or proper to carry out the terms of such agreement.
In line 17, to insert after the word "form" the words "or substantially in the form."
That is a purely drafting amendment.
Amendment put and agreed to.
Section 6, as amended, ordered to stand part of the Bill.
Any agreement (in this Act included in the expression "agreement validated by this Act") in the form set out in the Second Schedule to this Act and made whether before or after the passing of this Act between the Company and a society shall be and (in the case of any such agreement made before the passing of this Act) be deemed always to have been valid and accordingly it is hereby declared that as and from the date of such agreement such society shall have and (where such agreements was made before the passing of this Act) be deemed always to have had power, notwithstanding anything contained in the Industrial and Provident Societies Act, 1893, and the rules of such society, to do all such acts and things and execute all such documents as may be necessary or proper to carry out the terms of such agreement.
In line 31 to insert after the word "form" the words "or substantially in the form."
That is the same amendment.
Amendment put and agreed to.
Section 7, as amended, ordered to stand part of the Bill.
Any agreement (in this Act included in the expression "agreement validated by this Act") in the form set out in the Third Schedule to this Act and made whether before or after the passing of this Act between the Department and a society shall be and (in the case of any such agreement made before the passing of this Act) be deemed always to have been valid and accordingly it is hereby declared that as and from the date of such agreement such society shall have and (where such agreement was made before the passing of this Act) be deemed always to have had power notwithstanding anything to the contrary contained in the Industrial and Provident Societies Act, 1893, and the rules of such society, to do all such acts and things and execute all such documents as may be necessary or proper to carry out the terms of such agreement.
In line 45 to insert after the word "form" the words "or substantially in the form."
That is the same as the previous amendment.
Amendment put and agreed to.
Section 8, as amended, ordered to stand part of the Bill.
Section 9 ordered to stand part of the Bill.
(1) Where a society is required by or under this Act or is bound by an agreement validated by this Act to issue shares to any person and does issue such shares accordingly then, whether such person does or does not take such shares, it shall not be lawful for any other society to take any supply of milk from such person.
(2) If a society takes a supply of milk from any person in contravention of this section it shall be lawful for the Department to serve by post on such society a notice in writing requiring such society to cease to take a supply of milk from such person, and if such society after the expiration of seven days from the service of such notice takes a supply of milk from such person such society shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding ten pounds together with a further fine not exceeding two pounds for every day during which the offence continues.
In sub-section (1), line 9, after the word "lawful" to insert the words "without the consent of the Department signified in writing."
I will accept the amendment.
Amendment put and agreed to.
To add at the end of sub-section (2) a new sub-section as follows:—
When the Department is satisfied that any person to whom debt shares have been issued by a society under the authority of Section 5 of this Act would suffer any injustice or unreasonable hardship by supplying or continuing to supply milk to such society, the Department may authorise any other society to accept a supply of milk from such person.
I will accept that amendment also. Possibly it may be necessary to re-draft it. I do not think the amendment is necessary really, because the discretion is there already.
Amendment put and agreed to.
Section 10, as amended, ordered to stand part of the Bill.
I would like to ask the Minister what is the necessity for Section 11.
I know a man in Tipperary who has 80 cows.
Yes. Why should not he be made to pay? He has increased his stock from 35 cows to 80, and it is quite possible there may be men who are on the border line—men with 50 and 60 cows. I do not see why they should not take their shares like anybody else. There is no danger that this will become a limited liability company, because such men are the same as anybody else in the society. Such a man has only one vote. He has no control other than the control that one vote gives him in the society. As I say, I know where one man has run up his stock to 80 cows, and why should he not be made to pay?
I cannot see the danger, but at first sight it appears to be a danger.
I do not believe there is a danger, because we only repealed the Act in that one respect, that a man may not hold 200 shares for the purposes of the Act.
Would this apply to "dry" shares?
There are "dry" shares in cases where money was raised in a bank and where a man went security for it, but he would have no other interest in the creamery. Would such "dry" shares be included?
A man has to take three ordinary shares per cow, apart from any loan or guarantee. There will be no necessity for a guarantee if a man takes three shares per cow.
This is only to apply to the shares per cow?
I do not think it would be fair to allow a shareholder in who is not supplying milk to the creamery to purchase a large quantity of shares in the creamery.
He cannot do that. This only applies for the purposes of this Act. The old limit extends to him. I cannot recall at the moment the provisions of the Industrial and Provident Societies Act in connection with a shareholder coming in and taking shares who is not a supplier. But, whatever the provisions are in that Act they are untouched.
Then this section would not apply to that?
No. This section only applies to the case of a man who is a supplier in the way set out in this Bill and who has to take shares under this Bill.
Is the Minister convinced that there is no loop-hole in the Bill whereby these "dry" shareholders could get in and take more shares?
I have consulted the lawyers on that point and they say no.
Section 11 agreed to.
Whenever the Department has whether before or after the passing of this Act advanced any moneys on loan to a society, any other society shall have power and in the case of any moneys so advanced before the passing of this Act be deemed always to have had power to guarantee the repayment of such moneys to the Department.
There is just one question I wish to ask in connection with this section. Does the section mean that in the case of a society that has failed it may be lawful for a society about to be formed to take over its liabilities? Take the case of a society that has been operating for some time and that through one cause or another has failed. It has been unable to pay its debts or to meet its liabilities. Does the section mean that if a new society is formed—part of the finances of which are provided by the State—and purchases the business of a society that has gone wrong, that the new society must make good to the State any losses that have been sustained by the old society?
This section is simply in the Bill for the purpose of meeting one case. There was one case in which we found it very difficult to come to an agreement. Finally we came to an agreement by another society giving a guarantee. In one case, as a result of a considerable amount of local pressure, and where if we had not done so a considerable amount of hardship would have resulted, we sold a creamery to a certain society, but we did not regard it as a very sound transaction. There would have been considerable hardship if we had not done so. It was the wish of the other societies in the district that we should do so, and what happened was that they offered to give the guarantee. We accepted the guarantee, and this section is to cover that particular case.
In the case of a new company taking over the liabilities of a concern that has failed, will it only be bound to meet whatever liabilities there may be in regard to a Department of State, leaving out altogether whatever creditors there may be?
Would you give me a case?
Take the case of a creamery that is indebted to the extent of £2,000. Let us assume that it is taken over by a new society for £500.
We would not buy a society burdened with debts.
It may happen that in the case of some societies they may owe money to parties other than the State. The point I want to get at is: will the outside creditors receive no consideration?
Take the case of the Condensed Milk Company, which we bought. We made arrangements that they would have to pay their debts, or that if they did not do so that we would have to get an offset of some kind or another if the debts were to be liquidated. Until the debts were liquidated we would not buy. This section deals with a society which we sold, and which was not in debt, to a small society in the neighbourhood. We did not think it an economic proposition to do so, but the position was that considerable hardship would have resulted if we had not done so. Another big society in the district came forward and said that if we purchased they would guarantee the price.
Then this section does not aim at giving to a Government Department a priority as regards existing debts?
Section 12 agreed to.
(1) It shall not be lawful for any person to erect, establish, or acquire any creamery unless such creamery is erected, established or acquired under and in accordance with a licence granted by the Minister under this section and it shall not be lawful for any person to maintain a creamery which was erected, established, or acquired in contravention of this section.
(2) The Minister may, if he so thinks fit, grant to any person a licence to erect, establish, or acquire a creamery at such place and subject to such (if any) conditions as the Minister shall specify in such licence.
(3) If any person erects, establishes, acquires, or maintains any creamery in contravention of this section he shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding one hundred pounds together with, in the case of a continuing offence, a further fine not exceeding ten pounds for every day during which such offence is continued.
I move amendment 12:—
To delete all words after the word "person," line 34, to the end of the section, and substitute the words:—
(a) to acquire by purchase or otherwise a creamery which at the time of such acquisition is being worked and carried on as a creamery, or
(b) to establish a creamery in any premises in which the business of a creamery is not being carried on at the time of such establishment,
unless such acquisition or establishment is done by such person under and in accordance with a licence in that behalf granted to such person by the Minister under this section.
(2) It shall not be lawful for any person to maintain a creamery which was acquired or established by him or any other person in contravention of this section.
(3) The Minister may, if he so thinks fit, grant to any person a licence to acquire a specified creamery then being worked and carried on as a creamery or a licence to establish a creamery in any specified premises and the Minister may attach to any such licence such conditions as he shall think proper and shall specify in such licence.
(4) If any person acquires, establishes, or maintains a creamery in contravention of this section he shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding one hundred pounds, together with, in the case of a continuing offence, a further fine not exceeding ten pounds for every day during which such offence is continued.
(5) For the purposes of this section the establishment of a creamery by a person shall be deemed to take place when such creamery is opened by such person for the carrying on of creamery business therein.
What the amendment means is simply this: that the section has been re-drafted and that no creamery can be established without a licence.
With regard to my amendment to this section, I just want to know from the Minister what is the necessity for putting in "person" rather than "society." I know, of course, that person includes society.
It may be that in the future it may be necessary to give a licence to the Dairy Disposal Company to act temporarily as a holding body. For instance, the Dairy Disposal Company may at some time or another be working three or four creameries together. If a large number of creameries are to be worked together, then you will have to have some such body as a holding body set up to work them; and it would have to get a licence. This amendment is intended to meet a contingency of that sort.
I take it then that it is not contemplated to let the business into the hands of individuals but of societies?
Will a creamery be entitled to register as a society under the Act without being affiliated to the I.A.O.S.?
I have no objection then.
I think that we are providing under the Co-operative Bill that every creamery must be affiliated to the I.A.O.S., but that does not apply under this Act. This only deals with new creameries, and until the Co-operative Act is passed there is no question of affiliation.
Amendment agreed to.
Amendment 13, by leave, withdrawn.
Section 13, as amended, agreed to.
SECTION 14 (4).
(4) This section applies to any creamery erected or established at any time between the period which commenced on the 1st day of January, 1928, and ended on the day immediately preceding the passing of this Act.
I move amendment 14:
In sub-section (4), page 7, to delete all from the word "erected" in line 3 to the end of the sub-section, and substitute the words "which, on or after the 1st day of January, 1928, and before the passing of this Act, either was opened for the first time for the carrying on of creamery business therein or was re-opened for the carrying on of creamery business after a period during which such business was not carried on therein."
The purpose of Section 14 is to make Section 13 retrospective as from the 1st January, 1928. The reason for this is, that a certain German company went down to Tipperary and proceeded to put up a casein factory there so as to compete with the Condensed Milk Factory, purchased by us and which we propose to hand over to the farmers. The Condensed Milk Company can take all the creamery milk for that district. This German company got a sudden interest in the district, and they came along and proposed to set up a casein factory. There was a casein factory there already but it is now closed. This German company is very wealthy and could afford to make losses for a great number of years. If they wished they might consider it good business to smash the Condensed Milk Company so as to get a monopoly of the skimmed milk. As a rule when people come into this country to start an enterprise they come to some member of the Government and say "How much money are you going to give us?" These people came in and they said they did not want any money. It was just love of Ireland brought them in to start the business. I told them if they started it would be against my wishes and the whole policy of the Department in the matter. They were encouraged by a local society to start, and that was a piece of black-legging and that was a piece of black-legging who are giving us any trouble. These German people have put up some very slight buildings in the last six months. They did that in the teeth of the advice of the Department of Agriculture, and knowing that this Bill was going to be passed they continued to do it. I want under this section to get power to stop their activities.
Is that the only case that would come under this section?
The people in Tipperary wanted something that would give employment. Does the Minister not know the reason the co-operative society refused to take over the creamery is that they were charged too much for it?
I know that the Tipperary Co-operative Society is the only society that has refused to make a bargain. It is one of the biggest societies in Ireland. They suffer from some disadvantages. They, one of the biggest societies in the country, come along and tell us "We will pay the money but no interest."
Is it not a fact that they made an offer to buy the creamery?
They never wanted to buy it. I believe the suppliers wanted to buy it, but a small minority wanted to make trouble to show how strong they were.
That is not fair to Tipperary.
Will the suppression of the German factory mean that there will be no casein manufactured in the Free State?
It would mean we would stop the manufacture of casein there by the German company. Our policy is that all the milk products should be manufactured by the farmers' societies. Condensed milk manufacture is a notoriously better paying proposition than casein manufacture. The farmers will own the casein factory and the condensed milk factory. They will own the raw material for that factory, which is the same raw material as is used for the manufacture of casein. When the farmers come to own the condensed milk factory, if they want to start a casein factory they can do so. They will own the skimmed milk, which is the raw material, and the equipment of the factory. Meanwhile we intend to keep out this firm who are anxious to bid for that skimmed milk and to split the farmers of the district.
I think it is desirable that amendments 14 and 15 should be debated together. I propose, on this, when giving a decision, to put the question that the words proposed to be deleted, that is by the Minister's amendment, stand part of the Bill. If that question were negatived, then the Minister's amendment would be inserted, and Deputy Ryan would not be able to move his amendment.
I put my amendment down to get an answer from the Minister. I asked him did he only want to deal with that particular company and he said "yes." I withdraw the amendment.
Is it not agreed that the industry and commerce should be mobile as far as possible? It may well happen that the farmers' societies may not have the enterprise to start casein manufacture. It may be found to be a very profitable side-line. It does not look a thing that we should entirely approve of, keeping out an enterprise not already established.
You can always give a licence if you wish.
The enterprise to start it may not be there.
You can always give a licence. The position is that you have a condensed milk plant there capable of dealing with all the skimmed milk in the district. That is to be transferred to the farmers. They are the owners of the raw material. We are not going to allow any outsider to come in and be-devil that situation. If we did what would happen? If you allow a company with big resources in money to establish a casein factory there they would pay a certain price for skimmed milk until they had killed the factory owned by the farmers, and then you would be faced with the problem we were faced with when we purchased the creameries.
I agree that the local society should be protected, but is there not an intermediate course by which there would be milk enough for them both?
No. I do not believe this is genuine. I believe it was got up not so much in an anxiety to produce casein as in a desire to spoil the attempt at organisation by the farmers of that district on a co-operative basis. The worst aspect of this case is that this attempt was helped by a big co-operative society.
Amendment 14 put and agreed to.
Amendment 15 not moved.
Question—"That Section 14, as amended, stand part of the Bill"—put and agreed to.
(1) Every person in charge of a creamery shall, upon being so required by an officer of the Department, produce to such officer all records, books and other documents in his custody relating to such creamery and permit such inspector to examine and take copies of or extracts from the same.
(2) If any person fails or refuses to comply with the provisions of this section, he shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding five pounds.
In sub-section (1), line 7, to insert after the word "creamery" the words "to which the provisions of this Act apply."
Amendment put and agreed to.
Question—"That Section 15, as amended, stand part of the Bill"—put and agreed to.
Sections 16 to 19, inclusive, agreed to.
First, Second and Third Schedules agreed to.
Title agreed to.
The Dáil went out of Committee. Bill reported with amendments.
I would like the Report Stage to be taken to-morrow.
As the Minister is not prepared to accept amendments this evening, he might do so to-morrow. I have a few consequential amendments.
If the Minister would put back the Report Stage till Thursday we would have no objection to the Fifth Stage being taken on the same day.
Report Stage ordered for Thursday.