I think that some opportunity should be afforded to the House of discussing the advisability or otherwise of extending the scope of the Trade Loans Act. For that purpose I tabled an amendment to the Bill in Committee in regard to which, however, in so far as it appears to exceed the scope of the continuing Bill, it can be contended that it is out of order. I am glad, therefore, to take the opportunity of raising this matter on the Money Resolution. It has been discussed here before, though, I think, somewhat inadequately and without any definite suggestion being put before the Dáil. The amendment which I proposed to insert in the Bill on the Committee Stage was to give the Minister power to guarantee loans, not merely for the purpose of acquiring fixed assets, but also towards, or in connection with, the development of any manufacturing concern in the Free State in such manner as to increase the amount of employment given by that concern. Under the Act as it is at present, the Minister, strictly speaking, has power to guarantee loans used for the purpose of securing additional fixed assets and for that purpose only. We have had discussions in the past upon the precise interpretation of the Act, but I do not intend to deal with that now.
Whatever may be the exact interpretation which the Minister or the Public Accounts Committee may put on it, we think that it should be definitely stated in the Act that power would be given for the purpose of enabling the Minister to guarantee a loan that will be used by an existing concern in a manner so as to provide that that concern will be able to increase the volume of employment it provides. It is quite possible that the Minister may say that he has this power already. Every time a debate on this subject takes place in this House we find that the Minister in the interval has discovered that the Act as at present drafted gives him some new powers, until those of us who are not lawyers have long since given up trying to ascertain what the Act really means and what powers it confers on the Minister. The proposal in the amendment raises a serious matter which will have to be considered seriously. In the discussion on the Second Reading of the Bill, Deputy Davin made a statement, of which I would like to remind Deputies. He said: "Deputies, when they come to consider either an amendment or an extension of this Act, will have to say how far they are prepared to go in using the taxpayers' money for the purpose of preserving decaying industries or building up better ones."
I suggest that Deputies will also have to consider whether money should be provided for one or other of these purposes. In that discussion we learned that the Minister has, or thinks he has, power to guarantee loans which will be used for the purpose of extinguishing existing liabilities. I asked him that question and his reply was: "I do not think it is entirely ruled out." Further, he said: "I have done what amounted to that in one case." It would, appear, therefore, that the Act, as at present worded, and as the Minister interpreted it, does confer on him power to preserve decaying industries, but it does not confer on him the power to build up better industries in place of those which exist. That is the purpose behind this amendment. I am not a draftsman and I do not contend that the amendment is fool-proof. It is quite possible that some amendment could be devised that would convey the same idea while, at the same time, be less liable to be torn to pieces by lawyers. It is not the words but the idea behind the amendment which I want to submit to the House. I think that there should be imposed on the Minister power to guarantee loans required for the purpose of developing existing industries with the qualification provided for under the amendment that it would be done in such a manner as to ensure that the industry concerned would, as a result, give an increased amount of employment.
On Second Reading I gave an example of what I meant. It is conceivable that there would be an industry in this country that was not working at full capacity with sufficiently fixed assets and a sufficient amount of machinery to enable it to turn out its products in greater quantity than it does at present. That industry might be protected by a tariff and the firm may be anxious to take advantage of the protection afforded it to spread out and capture trade in this country. It does not require fixed assets, but requires money for the purpose of providing additional staff, for the purchase of additional raw material, for the sending out of additional travellers, and to enable it to provide additional credit to its customers. We think it should be possible for the Minister to guarantee a loan to an industry in that position. There are other examples which I could give, but the one I quote is quite enough to give a general indication as to what I mean. The question of security, of course, arises and the Act gives the Minister power to advance loans on whatever security he regards as adequate in conjunction, I think, with the Minister for Finance, but there is no reason, so far as I can see, why loans given under such circumstances as I have indicated, and in accordance with the amendment I suggest, could not be as securely provided for as loans given for the purpose of fixed assets.
There is no compulsion on the Minister to give a loan unless he is satisfied with the security that is offered. When this matter was suggested before, the Minister gave me the impression that he was thinking of loans given in such a manner to firms which already got loans under the Act and which required additional money. I was not thinking of it in that light, but of firms which have not availed of the Act up to the present because they do not want additional fixed assets or new buildings, but because they want money to develop and give additional employment to Irish workers. I cannot see, therefore, how the question of security can constitute any difficulty in this matter, because security can be obtained just as good as that obtained in cases where the Act has been availed of. The argument of the Minister when he replies will, no doubt, be similar to that which he advanced on Second Reading. He said then that his view is that where originally or on reconstruction a firm finds itself unable to get working capital from shareholders or subscribers then there is a very bad case for that business.
As the Minister himself said, that may be, from the point of view of good banking and the purest of pure finance, very admirable, but we have got to ask ourselves whether that view does fit the circumstances of the country at the moment. The Minister may have changed his attitude recently concerning the facilities which financial concerns are prepared to give to Irish industries. It is very probable that having got into close contact with the directors of these concerns, he is, as Deputy de Valera suggested, so close up to them that he cannot see the wood for the trees. No doubt they are able to put forward very plausible arguments to justify their position, but I think those actually engaged in industry in this country realise, and painfully realise, that banking houses are not prepared to give to industry in Ireland facilities which banking houses in Germany, say, give to German industries. Those engaged in a manufacturing concern and anxious to extend that concern might find very considerable difficulty in getting accommodation from their bankers. We know there have been cases, quite recently, of what appeared to us to be very harsh actions by particular banks which is likely to result, and which in some cases did result, in the closing down of the firms concerned. If it was thought that the banking houses of the country were giving adequate facilities to Irish industries, then there was no need whatever for this Act, and there would be no need now for the Ministry to come forward with a proposal to continue the operations of the Act for another 12 months. It is because the banking houses of the country are not giving the facilities which Irish industry requires that this Bill was introduced. The lack of facilities for which the banks are responsible applies just as strongly in the case of capital required for development purposes as it does in the case of capital for fixed assets.
It is proposed also in the amendment to delete sub-section (4) of Section 1 of the Principal Act. That is the section which relates to working capital. The deletion of that section, of course, does not give the Minister power to guarantee loans for working capital unless he is satisfied as to the actual circumstances under which it will be used, because while that sub-section remains in the Act loans can only be guaranteed under the terms of sub-section (1), which is the principal clause of the Act. So far as Section 1 does limit the powers of the Minister in the giving of guarantees the deletion of sub-section (4), which concerns working capital, has no effect. The belief of Deputies on this side, at any rate, is that by an amendment of the Bill in the manner which I suggest its utility to Irish industrialists would be very considerably increased and it would be possible to realise some part of the hopes which were placed on the Act when it was first introduced in 1924. We know that the Act has not been as successful as was anticipated. We know it has not had any real or substantial effect upon the volume of employment or the amount of industrial activity in this country. In fact, I think I am correct in stating that the provisions of the Bill have not been very widely availed of at all since 1926, in the last year or so. Unless its scope is widened and these additional powers given to the Minister, its utility has practically come to an end. If, however, the Bill is widened in this manner and power to give a loan under these conditions is given to the Minister it will be possible, as I suggested, to get something of real value to the industry of the country from the Bill. Therefore I hope the Minister will consider the matter fairly and will see his way to accept the suggested amendment. It could not be inserted now except by agreement because, strictly speaking, it is out of order. I hope, however, that the Minister, in his reply, will be prepared to accept the suggestion contained in the amendment.