Dáil Éireann díospóireacht -
Wednesday, 12 Jul 1933

Vol. 48 No. 17

In Committee on Finance. - Industrial Credit Bill, 1933.—Money Resolution.

Minister for Finance (Mr. MacEntee)

I move:—

1. Chun crícheanna Achta ar bith a rithfear so tSiosón so chun socruithe do dhéanamh chun cuideachtan do bhunú agus do chlárú ag á mbeidh sé mar phríomh-chuspóir cáirde tionnscail do chur ar fáil agus chun an Aire Airgid do thógaint scair-chaipitail leis an gCuideachtain sin, agus chun crícheanna eile bhaineas leis na nithe roimhráite, go bhfuil sé oiriúnach a údarú:—

1. suim ná raghaidh thar cúig míle déag púnt do thabhairt ar iasacht don chuideachtain roimhráite as airgead a sholáthróidh an tOireachtas;

2. go gcuirfí mar mhuirear ar an bPrímh-Chiste no ar a thoradh fáis—

(a) gach airgead is gá chun scaireanna do cheannach fén Acht san,

(b) colann agus ús aon urrúsanna bhéarfar amach fén Acht san (chun airgid do chur ar fáil i gcóir na suimeanna cuirfear mar mhuirear ar an bPrímh-Chiste) agus na costaisí fé n-a raghfar maidir leis na hurrúsanna san do thabhairt amach.

That, for the purposes of any Act of the present Session to make provision for the formation and registration of a company having for its principal object the providing of industrial credit and for the acquisition by the Minister for Finance of share capital of such company, and for other purposes connected with the matters aforesaid, it is expedient to authorise:—

1. the loan to the aforesaid company out of moneys provided by the Oireachtas of a sum not exceeding fifteen thousand pounds;

2. the charge on the Central Fund or the growing produce thereof of—

(a) all moneys required for the purchase of shares under such Act,

(b) the principal and interest of any securities issued under such Act (for the purpose of providing money for the sums charged on the Central Fund) and the expenses incurred in connection with the issue of such securities.

The expenses involved in the flotation of this company will fall under three heads: (1) From advances to the company to meet preliminary expenses which will not exceed £15,000 and which will bear interest and be ultimately repayable, therefore involving no financial liability upon the Exchequer; (2) the moneys expended by the Minister taking up that balance of the company's issued capital which may remain unsubscribed by the general public. It is absolutely impossible to ascertain what the cost to the Exchequer will be in this connection, but it cannot exceed £5,000,000. The capital, however, will not be issued en bloc and, therefore, this liability, if it ever arises, or if that figure is ever reached, will certainly be spread over a number of years. The third is to cover expenses of issue and interest and sinking fund on the loan for the purpose of providing the necessary moneys to pay for the shares taken up by the Minister for Finance. The whole or part of the expenses borne by the Exchequer, in connection with the purchase of the company's shares, may eventually be recovered from the sale of the Minister's holdings and the shares, standing at premium at a date on which such sale or sales took place, the Exchequer would stand to make a net gain.

General Mulcahy

In view of the general difficulty the House has of getting information from Ministers or members of the Executive Council with regard to developments taking place, or the amount of money spent, would the Minister, on this Resolution, give the House some indication of what information it will get, from time to time, as to what exactly is taking place in the general application of these moneys towards the development of companies in the country, and towards the consolidation of the general industrial fabric?

Mr. MacEntee

I have indicated, in my speech on the Second Reading, fairly fully the position in which the House will be placed in regard to this Bill. First of all, under Section 11 of the Bill, the accounts of the company are to be laid before the Oireachtas, and while they will not disclose particulars relating to individual firms, in which the company may be interested, they will show very definitely the position of the company, indicating the manner in which it has been managed and, I presume, in connection with reports of the company, they will be published from time to time showing the range of its activities. When these accounts are laid before the Oireachtas the Minister may be questioned on a Vote regarding them. I have no doubt the House will be able to elicit whatever information they require consistent with the activities of the company. I think it would be exceedingly undesirable that any Minister for Finance should attempt to withhold information from the House in connection with an undertaking of this kind. I am perfectly certain no attempt will be made to withhold such information as the House may reasonably require, because, if such an attempt were to be made, it would react against the Minister and Government to which he belongs.

General Mulcahy

The Minister has told us now that we will get the account of the company as to how that company is getting on, but from the point of view of its balance sheet; that we will no doubt get reports from the various companies in the ordinary commercial way. Is that the only responsibility that the Minister for Finance takes upon this matter? If this company is flourishing from what its balance sheet shows, is the Minister for Finance or the Minister for Industry and Commerce going to be responsible for indicating to us in any more general way what effect on the industrial life of the country the operation of this company is having?

Mr. MacEntee

I do not quite appreciate the Deputy's difficulty in this matter. It seems to me that since the Minister is responsible for the loaning of public moneys in this country, it would be possible by putting down a Parliamentary question to get an answer eliciting all necessary information as to the general activities of the company. But I think the Deputy will admit that it would be undesirable that I should pledge myself or my successor, who will probably have to deal in this case with the daily operations of this company, that that undertaking should be the subject of unkind review in this House. I do not want to take up the attitude that any Minister would be justified in withholding from the Dáil, which is responsible in connection with financial matters, information that could properly be disclosed. But at the same time, I do not want the company to be put in the position that it is going to be managed by the Dáil. I think that would be very undesirable, and would certainly eventuate in the failure of the company, and the complete loss of the money invested in it.

Mr. Minch

I take it that there will be a parent company, and that shares will be issued in the different industrial developments that arise, such as paper pulp mills, sugar beet factories, cement and mineral development. I take it that the parent company will take shares in the flotation of these different companies, and will have a controlling interest in every one of them. I take it that they would hold the majority of the shares, and that a committee of the directors of the parent company will be in complete control of the auxiliary companies.

Mr. MacEntee

It has got to be remembered that in this connection I do not want to bind or fetter, by Ministerial declarations in this House, the discretion of those who will be appointed directly. I think we have heard, from time to time, references to "the dead hand of the Government" in industrial matters, and our desire is that, while we have to provide finances for this company, and while we have to see that these finances are judiciously and properly handled with a full sense of responsibility, we do not want unduly to hamper the men of affairs who will be placed in charge of this company. The full responsibility will be placed upon them. We, in selecting them, will have to take responsibility for their selection; but we do not wish that any part of the individual, personal responsibility, which would rest upon a member of this board, should be passed on to the House or to the Minister. If these men are permitted to operate in that way, and if they make mistakes, and the mistakes result in serious losses to the State, then the Minister, or the Government which nominated them as directors, will have to take responsibility for the mistakes; but the persons concerned will also have to take personal responsibility, and the Minister will be able to visit the consequences of their mistakes on them, and the House will be able to visit the consequences of his misjudgment in selecting these men on the Minister.

Mr. MacDermot

I should like to know from the Minister will the directors of the new company have to give such information as they would have to give if they were directors of an ordinary company. Will the shareholders get the information that shareholders in a company ordinarily do get?

Mr. MacEntee

Precisely. That is the intention. The intention, as it is disclosed in the Bill, is to offer the shares to the general public in the first instance. If the general public, taking into consideration all the risks, are not anxious to subscribe, then the Minister will have to come in and take up such shares as may not be taken up by the public. Consequently, he will secure the representation upon the board to which the extent of his investment would entitle him. At the annual general meeting of the company, when the statement of accounts is submitted and the report of the directors is received, and at which the chairman's speech is made, any member of the general public who holds a share of £1 in the company will be entitled to go there and put whatever questions he may wish to the chairman and secure answers to them. I am perfectly certain that, in a case of that kind, where a nomination can be so easily secured, all those interested in the public welfare will qualify themselves as shareholders and thus elicit the information even if there were an attempt on the part of the Minister to withhold the information from the House.

Mr. Dockrell

I should like to ask the Minister how far the subsequent operations of the company will be disclosed by their balance sheet. The Minister has stated that this company is going to be floated and that the shares will be taken up either by the general public or by the Government. To my mind, that is a detail. The really important question for this Dáil is the subsequent operations of this company. The Minister has stated, quite frankly, that, apparently, this is to be used for underwriting the issues of large capital flotations that are required in connection with the development of industries. He has stated that, and yet in the schedule here he takes power to lend money, apparently, to an individual. There is already the Trade Loans Board and I should like to know will an individual, who has been turned down by the Trade Loans Board, be able to come to this company and, presumably, get terms that he could not get from the Trade Loans Board.

There is another point about which I should like to ask the Minister, and I have not gathered it from his remarks. The Minister seems most anxious that this company should not be managed by the Dáil, and I think that is very proper. At the same time, here is a company that is going to be floated, presumably, with Government money. I do not know the exact proportion, and the Minister himself does not know it either. We want to see that it is not managed by nobody, because if it is an industrial concern and the capital is obtained from the public, the directors would be responsible to the shareholders; but it occurs to one that in this company, which is practically solely an underwriting company, the real question that will arise will be the value of their holdings in various concerns. Will that be stated, for instance, in the published accounts of the company, and will it be stated at what value the investments are taken? To my mind, that would be one of the points that we are entitled to know, because when this company is going to get a very large share of public money or Government money, we ought to be quite clear that the shareholders, or the people wishing to have information about it, were not left with less information than they would have in an industrial concern.

There is another matter about which I should like to ask the Minister, and, to my mind, it has a most important bearing on this Bill. Presumably this company would be qualified to apply under the Approved Investments that funds that were in court and trustee funds could be invested in this company. If that is so, and I take it to be so from reading these two Bills, a trustee would be in the position of having his patriotism impelling him to invest in this company, and there would be less information disclosed to the shareholders than would be disclosed in an ordinary industrial company. I should like to ask the Minister to deal with these points.

Mr. Cosgrave

This Money Resolution puts a very big potential liability on the State. We are committed, in the first instance, to approximately £15,000. We will get that back, I presume, as soon as the company is launched. The other portion of it, however, is a very much larger liability. It is, perhaps, the largest liability that the State will have entered into so far, if we exclude the Shannon scheme. This is a matter from which politics ought to be excluded altogether, and I am not so well satisfied that the scheme is a sound one. In fact, the more I hear of it the less satisfied I am that it is going to work. This sum of money will be like Mahomet's coffin, for fifteen months. We will either be entitled to ask about it in the House during the fifteen months or we will not. From some statements made, I conclude that no question should arise pending the balance sheet. I presume that, if we allow fifteen months, we will probably have the balance sheet in twelve months, and allowing the usual time to run, it will take fifteen or eighteen months before it will be in Deputies' hands. Is it not inevitable from the construction of the scheme as it stands that a question as to some one being refused some grant, or some one being in a hurry to get some finance, is bound to be ventilated in the House; that any suspicion that there is red tape operating, if you wish to put it that way, or delay, or something else of that sort, will occasion some apprehension. There is, in addition to that, the possibility of a big sum of money being subscribed which cannot be employed, of the persons who are on the directorate desiring to see it immediately employed, and I can foresee the anxiety of the Government to see sums of money invested without delay, and we know what dangers there are in that connection.

I suggest to the Minister a further reconsideration of this matter even to this extent: that the Bill might be limited in its scope to provide for whatever present needs there may be for the immediate industrial experiments that are under consideration, and that further consideration should be given to the bigger question of extension or of some other method of dealing with the sum. In connection with the construction of the board, I think it is practically inevitable that the Minister's nominees will be in excess of others. If the Minister's nominees are in excess of others, there are going to be Parliamentary questions and answers in connection with the matter. That is not a good scheme. Consequently, I suggest that, if it were considered feasible, a lesser sum than that involved here should be considered in connection with this scheme. Although I expect that we will pass the Money Resolution, I suggest that the Minister should reconsider the matter with a view to giving the company whatever chance it can get, and not having all the business subject to question and answer in this House.

I would also suggest one other matter to the Dáil. A short time ago we had a Trade Loans Bill before us, and some request was made that a balance sheet should be submitted. If my recollection is correct, the Minister for Industry and Commerce objected to that. We might have even a larger Government commitment in respect of one of these trade loans than we would in connection with a loan under this Bill. The Minister thought on that occasion that it was inadvisable to produce a balance sheet. If that be so with regard to the Trade Loans Bill, why have we departed from that policy in this case? I therefore suggest that a smaller sum should be provided for until some system would be evolved under which the Dáil's interference would be limited while, at the same time, retaining its hold over the expenditure of public money.

Mr. Good

I should like to ask the Minister why it is necessary to introduce this Bill. As I understand the position, it is in order to get funds to finance certain developments in connection with beet, cement, and other prospective industries. Is the Executive Council satisfied that it is not possible to get these industries under way without Government intervention of this kind? I might remind the Minister that when the present beet factory was started the conditions in this country were not at all what they are to-day, yet the capital was obtained for that particular industry.

In that connection I should like to point out to the Minister that capital is only one of the essential features in industry. The Minister may say that we have people in this State as capable as can be found in any other country, but we lack, of course, experience in many of the larger industries. It is one of the misfortunes of this country that we have not any number of large industries. Consequently, we have not experience of these industries, and it is essential, if we are to make a success of them, that we should have at their head men of experience and knowledge in these industries. From that point of view, I should like to impress on the Minister that capital is only one of the essentials of success in industry. I think, therefore, that it would be advisable for the Executive Council to examine the problem a little more fully before they embark on this measure, because once they put a certain amount of capital into an industry it may be necessary, in order to save that capital, to advance further sums. That has been the experience in connection with the Trade Loans Act. In that way Government investments in industry became in some cases rather larger, probably, than the Executive Council or the Minister for Finance would have desired. I therefore suggest that, before we embark on a measure of this kind, inquiries might be made in the other direction, and that the Minister should satisfy himself that it is not possible to get these industries started without assistance of this character. That is one of the matters to which I should like the Minister to give attention. I do not know whether he could answer the problem contained in it when replying on this debate.

There is another point which has been touched upon by Deputy Dockrell. This Industrial Credit Bill and the Approved Investments Bill, introduced a week ago, I take it, hang more or less one on the other. On the Second Reading of the Approved Investments Bill inquiries were made as to exactly what is the amount of Government funds dealt with in that measure? Could the funds advanced by the State, say, as a first charge on these industries, become trustee securities under that other Bill? If so, the courts would probably put trust moneys into them. What would happen in the event of any misfortune overtaking such an industry and its funds? There is a speculative element of that character involved in these Bills that one would like some explanation of. Probably it is out of order to discuss the other Bill, but I think the Minister will agree that there is a connection between the two Bills, and one would be glad if the Minister could see his way to let us know exactly the extent of that connection.

The only other point I should like to make is that, in view of our experience in connection with the Electricity Supply Board, and also in view of our experience in connection with the advances that were made under trade loans, I think it is desirable that the State should, as far as possible, keep apart from industry. I grant that there may be special occasions when State intervention is essential, but I think it is the experience of all States, including our own, that while we may be good people at governing, we are not, as a rule, the best people to manage business. The surroundings of a Deputy, and, might I say, of a Minister, are not always what might be called business surroundings. Other interests come into play that cannot always be dealt with from a business point of view. There are things called votes that are considered of importance. When you come to manage a business, with all those influences before you, you realise the difficulty that a State or a Minister is in. For that reason I think it would be very desirable, except as a last resort, that the State should not take a really active part either in starting or in financing any of those industries.

Mr. MacEntee

On the points raised by Deputy Dockrell as to the amount of information which might be given in the balance sheet, I think I should refer him to sub-section (2) of Section 11, which states:

"The balance sheet and profit and loss account to be furnished as aforesaid shall be drawn up in such a manner as shall be prescribed by regulations made under this section, and such balance sheet shall contain (in addition to any matter required by such regulations) a summary of the capital, assets, and liabilities of the company, together with such particulars as will disclose the nature of such assets and liabilities and the manner in which the value of the assets was arrived at."

It seems to me that that will compel the auditor, who will be appointed by the Minister, and for whose appointment and actions the Minister will be responsible to this House, to make in the balance sheet a fairly full disclosure of the nature of the assets and liabilities of the company. Furthermore, I wish to point out that the company is bound under sub-section (3) to furnish to the Minister "such explanations as the Minister shall think proper to require in respect of any balance sheet or profit and loss account furnished pursuant to this section." I take it that the anxiety of the Deputy is not to secure information if things are going well with the company, and if the balance sheet disclosed a satisfactory position, particularly if it carried with it the certificate of an auditor of repute. I take it that it would not be the anxiety of the Deputy, or of any Deputy in the House, to probe very closely into the affairs of the company in that case—that it would only be when the balance sheet disclosed that things were not going well with the company that there would be an anxiety on the part of the House to prevent disaster if it could, or to retrieve losses. In that connection the Minister responsible would have to give to the House the fullest information that might be at his disposal. Under this section he has the power to secure, under penalty, any information that he requires. Therefore, I say that he should furnish any information which the House might require him to demand as to the operations of the company. This section is put in so as to ensure that at any time the House thinks it is desirable in the public interest to secure the fullest information about this company that information will be forthcoming, or else that the Minister will have to take upon himself the public odium of refusing to give that information. I think we have got to assume that the House is going to be reasonable in matters of this sort. I do not think that the House is going to ask for information when it does not seem in the public interest desirable that such information should be given, but facilities are afforded to the House to procure the information if necessary.

Section 4 of the Bill gives the House another safeguard, and another means of control over the operations of this company, because Section 4 states:

"No issue of the share capital of the company (other than share capital issued to subscribers of the Memorandum of Association of the Company) shall be made at any time, unless the Minister, after consultation with the Minister for Industry and Commerce, has authorised such issue."

Consequently the House, when an issue is authorised by the Minister for Finance, will be put in the position that it may ask the Minister to disclose the purposes for which the issue has been made. If the issue seems to be for so large a sum of money that the possibility which Deputy Cosgrave envisaged might arise—that large sums would be lying idle—the Minister would have to answer to the House for such a lack of foresight in provision, and failure to exercise ordinary financial prudence. Deputy Cosgrave said that, at the beginning of its operations at any rate, the Minister would possibly have a majority on the Board, because he would hold a majority of the shares. The Deputy seemed to be of the opinion that that would be undesirable, and that such a provision could not lead to the efficiency or harmonious working of the company because there would be too much political interference. I cannot assent to that, and particularly I cannot assent to it because there is at present operating in the State a company in which the State has sunk, and the general public has invested, very large sums of money. I refer to the Agricultural Credit Corporation. In that corporation the chairman and secretary, and other members, constituting a majority of the Board, are nominated by the Minister. I can speak for myself and for my colleagues in the Executive Council in saying that we have never attempted, and I do not believe that our predecessors attempted either, to bring any sort of undue influence to bear on the members of that Board. There has not been, during the whole course of its history, anything like a division of opinion between the members of the Board nominated by the Minister and those elected by the ordinary shareholders. If that sort of arrangement worked and is working quite satisfactorily in regard to the Agricultural Credit Corporation I cannot see that there is any great likelihood—to put it at the lowest —of its operating undesirably in the case of the Industrial Credit Company.

Mr. MacDermot

Would not the Minister agree that the problems confronting the directors of the Agricultural Credit Corporation are of a very much more limited character? There will be very much more diverse problems to be faced by this company.

Mr. MacEntee

I would not be prepared to agree to that, because after all this company, at the outset at any rate, will be dealing with a limited number of propositions, whereas the directors of the Agricultural Credit Corporation have to deal with a considerable number of proposals, and consider each of them—those of any magnitude—on their individual merits, merits which, because the personal equation enters into them very largely, are very difficult of assessment. In the case of industrial projects at any rate they will have the experience of other countries to guide them. The company will, I am sure, have the reports of competent technical advisers to guide it. There will be a mass of information before it in relation to any of the considerable projects that will be dealt with here, which the directors of the Agricultural Credit Corporation cannot get in regard to individual applications made to them. Therefore, I say that I think the directors of this company, although they will be handling undertakings of greater magnitude, will probably have a simpler task than the directors of the Agricultural Credit Corporation.

Deputy Good said that the Government ought to remember that capital after all was only one of the essential features. I quite agree. I will put technical skill and commercial acumen and ability on a par with capital as an essential, but unfortunately in this country, as the experience of the Sugar Beet Manufacturing Company shows, it is easier to get technical skill and commercial experience than it is to get capital for an Irish enterprise. If there was ever an undertaking floated under favourable auspices, with every encouragement to the Irish people to subscribe to it, it was the Irish Sugar Beet Manufacturing Company, and yet the amount of Irish capital subscribed to that concern was infinitesimal.

Mr. Minch

Capital was not boosted at the time.

Mr. MacEntee

And the rate of interest paid on the foreign capital in connection with that concern has been enormously high. It is the general policy of the Government, and I do not think that from any point of view the wisdom of the policy can be questioned, to secure to the utmost measure the support of Irish investors for the undertakings which will be launched in fulfilment of the Government's policy of industrial development, but we have got to face facts. We are anxious to get ahead with our industrial programme, but we do think that one of the big difficulties we shall have to face is to induce Irish investors at the beginning to risk their capital in this concern. We feel that like many another good undertaking, they will have to go to the Irish public as a proven success. That is one of the reasons why, in order to give them a chance of proving successful, we have to take those measures to defend them.

There was a question raised by Deputy Dockrell in the first instance, and subsequently referred to by Deputy Good, as to whether shares of this company would constitute trustee investments. Personally, it is not my intention to refer shares of this company for the consideration, and for the approval, if deemed fit, of the committee to be set up under the Approved Investments Bill. I would consider, personally, that the shares of this company should be regarded as a trustee investment, particularly as a suitable investment for the Government funds which we had in mind when we were submitting the Approved Investments Bill to the House, but there is nothing in this Bill which guarantees the interest on capital or any stock, whether debenture or otherwise, to be issued by this concern. The stock carries no Government guarantee, and that will be made clear in the prospectus.

Mr. Minch

Is there debenture stock going to be issued?

Mr. MacEntee

There may be. If the Deputy would refer to the schedule to the Bill——

Mr. Minch

There is power to do it.

Mr. MacEntee

——he will see:—

"that the company shall have power for the purposes of the company to raise money by means of debentures, subject, however, as follows:—

(i) the amount so raised shall not exceed at any time the paid-up share capital of the company, and

(ii) the said power shall not, without the consent of the Minister, be exercisable at any time while the Minister holds more than one-half (in nominal value) of the issued shares of the company."

This company has been floated as an ordinary commercial proposition, not carrying any Government guarantee. The Government will, possibly, have to invest considerable sums of money in it from time to time. The wisdom of those investments can be questioned in this House, but beyond the commitments, which must be made under Section 5 of the Bill, the House is not committed in any way whatsoever. It may happen, and it will happen, in connection with the sugar beet proposals, that certain stock issued by the Government will carry a Government guarantee as to the payment of interest and repayment of capital. In that case and in this particular sense they would ipso facto, under the law as it exists at present, because they did carry that Government guarantee, be a proper investment for Government funds, and would be trustee securities, irrespective of any action that the committee to be set up under the Approved Investments Bill might take in regard to them.

Mr. Good

With the guarantee?

Mr. MacEntee

With the guarantee. I wish to be quite clear that so far as this company is concerned there is no guarantee attaching to the shares. This company may be a very profitable undertaking. We hope it will be so managed that it will be profitable, and it is the desire of the Government that once it is firmly established the Government should place the shares in the hands of the general public as quickly as the general public will absorb them. That is the extent of our commitments in regard to the company.

Mr. Minch

Even at a discount?

Mr. MacEntee

I do not want to pledge myself that if we are not able to make it a success, and there were other people who would come along who thought they could make it a success—I will put it this way possibly it is unhappy to use the pronoun "we" in this case, because that implies an extent of Governmental control which I certainly do not contemplate, and which the history of the Agricultural Credit Corporation should assure the House would never be exercised by any Government; but if the directors whom we nominate do not make a success of it, then if other people would come along and would be prepared to take over the company as a going concern, with its existing assets, there is nothing in this Bill that would at any time debar the House, or whatever Government might be in power at the time, from disposing not merely of the assets but of the liabilities of an undertaking of this sort for the best price that could be got.

Mr. MacDermot

I am puzzled by something the Minister said. He talked of a further issue being made of the stock of the Sugar Beet Company.

Mr. MacEntee

Yes.

Mr. MacDermot

Which would be guaranteed?

Mr. MacEntee

Some part of it.

Mr. MacDermot

Is that to be a public issue?

Mr. MacEntee

Yes.

Mr. MacDermot

Then there would be two public issues. There is this company offering its shares to the public, and another company is also to offer its shares to the public?

Mr. MacEntee

Yes.

Mr. MacDermot

So it is not decided in the minds of the Government what the investment in this company would be by the sugar concern.

Mr. MacEntee

The Government is taking this possibility into consideration, that notwithstanding the fact that the shares of the Sugar Beet Company will be offered to the public, the public may not take them up. As I have already pointed out, in reply to a statement made by Deputy Good, the public did not subscribe the shares of the Carlow Sugar Beet Factory. We may be in the same position with regard to the new company, and we may be in that position in relation to every other project which the Government decides to initiate or the shares of any project which the Government may offer to the public. That is the method of procedure and the policy which has been definitely decided upon. Therefore, in fixing the figure for the capital of this company, it has got to take every one of those contingencies into account.

Mr. MacDermot

Am I to take it that £2,000,000 is the maximum amount?

Mr. MacEntee

Yes.

Mr. Cosgrave

Then the directors are bound to under-write?

Mr. MacEntee

They are bound to under-write.

Mr. Cosgrave

Can the Minister indicate to the directors of the company that they have got to under-write? They must underwrite?

Mr. MacEntee

That is one of the principal functions which this company will have to fulfil: to under-write shares in commercial undertakings which the Government proposes to the public.

General Mulcahy

Can the Minister say how much extra taxation will be necessary to secure that £2,000,000 capital? How much will it be annually in taxation in the beet industry?

Mr. MacEntee

I am not discussing at the moment the beet industry. That is a question that might appropriately be put on the Sugar Beet Bill.

General Mulcahy

The Minister will answer the question on the Sugar Beet Bill?

Mr. MacEntee

If additional taxation should be necessary in respect of the beet industry there is no reason why that should not be disclosed.

Mr. MacDermot

Why does the Minister say that the directors will be bound not to go beyond this figure? There is nothing in the Bill to compel them. Suppose the directors say that they will not be bound in the way suggested what then?

Mr. MacEntee

Then I take it that the Minister will have to call a general meeting of the company and get other directors who would.

Mr. Cosgrave

May I put a natural question that flows from under-writing? Will they then be associated in any way with the project in respect of which they have under-written?

Mr. MacEntee

I am not going to commit myself to that. The proposed directors are prudent men who will be responsible to the Minister for the project, and as such they will take steps to ensure that the money which they put into any undertaking will be judiciously and properly handled, and used for the purposes of the undertaking.

Mr. Cosgrave

That is not the point. I want to put this point to the Minister. We will take a smaller figure than £2,000,000. Let us take £1,000,000. They will deal with that much money. They are told it is Government policy, and they are told to under-write to that extent, or to that proportion of it. There are three or four sugar companies and there is a quarter million of money in each case. They have to lend the money that is not taken up by the shareholders. They have no other voice than the shareholders' voice in connection with the management; because if they have I see a regular vista of industrial labour on these directors. The number, to my mind, is far too small.

Mr. MacEntee

There is nothing in this Bill compelling them to be represented on the boards of any of the concerns they underwrite. They have got to satisfy themselves that it is first of all necessary that they should be represented on the boards of these concerns.

Mr. Cosgrave

May I put it to the Minister that the word "under-write" has been unhappily applied, and that they have got to take up the shares not applied for?

Mr. MacEntee

Yes, they have got to take up the shares that are not applied for.

Mr. Cosgrave

That is more than under-writing.

Mr. MacEntee

They have got to enter into a contract to take up the shares if the public do not apply for them.

Mr. Cosgrave

Then they are held responsible for the money?

Mr. MacEntee

Yes, they are held responsible for the money.

Mr. Cosgrave

And which they are bound to lend?

Mr. MacEntee

They will have to participate in the management of these concerns to the extent that is necessary and desirable, bearing in mind their responsibilities. They can say "whether it is necessary for us to be on this Board" or whether it is not. They themselves are not going personally to sit on the boards. They can put people there who will be responsible to them. The Minister is responsible to the House and the Deputy knows the Secretary of a Department is responsible to the Minister but the Secretary of a Department does not himself discharge and carry out all these functions. There are other people responsible to him.

Mr. Cosgrave

Yes, but in the one case there is a machine which has grown up; in the other case you have to create it.

Mr. MacEntee

If the activities become so multifarious the directors will have to delegate authority to the extent that in their own judgment is judicious. We are not going to bind ourselves in any way beyond this to the extent that they must necessarily underwrite, in the first instance, the shares in the industrial undertakings that will shortly be initiated by the Government.

Mr. Good

Just one question I should like to ask the Minister.

An Ceann Comhairle

This is an important measure. Many questions have been asked on this Money Resolution, questions obviously put with the genuine desire to elicit information. Money Resolutions are considered in Committee on Finance, but I would remind Deputies that at least two speeches were Second Reading speeches, and that it is most unusual and almost unprecedented to spend one hour discussing a Money Resolution of a Bill. Many of the matters raised might be debated on Section 5 of the Bill itself. I am loth to seem to desire to limit discussion owing to the importance of the Bill and the manner in which the debate has been conducted, but I would again draw the attention of the House to the fact that it is contrary to precedent to have a protracted debate on a Money Resolution.

Mr. Dockrell

I am in your hands if you wish to put the Money Resolution.

Mr. Cosgrave

You have yourself, sir, put your finger on the kernel of the case. This is really a Bill involving £5,000,000 which we are voting in an hour. To that extent the usual procedure might, I submit, be related somewhat. It is rare we have obligations of such magnitude as we have in the few sections of this Bill. It is unlikely that another Bill of this kind will ever be introduced in the House. That being so, there is clearly a case for eliciting information.

An Ceann Comhairle

Deputies have had an hour. I put it to Deputies that further questions might be brief and limited in number.

Mr. Dockrell

I am entirely in your hands, a Chinn Comhairle.

Mr. MacEntee

It seems to me that all this discussion might more properly have taken place on Sections 4 and 11.

Resolution put and agreed to.

Resolution reported and agreed to.