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Dáil Éireann díospóireacht -
Friday, 9 Mar 1934

Vol. 51 No. 4

Land Bond Bill, 1934—Second Stage.

I move:—

That the Land Bond Bill be now read a Second Time.

This Bill makes provision for the creation and issue of further land bonds for the purpose of acquisition of untenanted land under the Land Acts 1923-1933, for the resumption of holdings and for the compulsory acquisition of land for playing fields, sports fields, playgrounds, etc., and for the acquisition of sporting rights in certain cases. The total issue of land bonds to be created and issued under the Act will be limited to £10,000,000. The land bonds will be created as and when required, from time to time, by order of the Minister for Finance. Each order will prescribe the rate of interest to be borne on the bonds created under it, but the rate will not be less than 3 per cent., or more than 4 per cent. per annum. It is considered that the rate of interest on the bonds created by each order should be related to the rate of interest payable on the latest issue of the National Loan at the date of such order, having regard to the figure at which the Loan stands on the Dublin Stock Exchange. A small, fractional increase in the rate of interest payable on the land bonds above that earned on the National Loan might be regarded as permissible owing to the fact that there may be only a limited market in the land bonds of each series as compared with the market in the National Loan. These are the fundamental principles underlying the measure. Deputies no doubt are aware that in sub-section (2) of Section 25 of the Land Act of 1923 it was laid down that in default of agreement the price to be paid for untenanted land shall be such as may be fixed by the Land Commission, other than the judicial commissioner, or by the judicial commissioner, on appeal, from the Land Commission. It is also laid down that regard should be had to the fair value of the land to the Land Commission and the owner respectively. It is obvious that the fair value of the land to the Land Commission is the price that could be obtained on resale to the allottees; it is more difficult to decide what is the fair value of the land to the owner.

The case of tenanted land is perhaps simpler because income from tenanted land is comparatively certain as in the case of holdings subject to a judicial rent fixed for a period of years. In this connection however it is not to be forgotten that landlords were often compelled to forgive altogether arrears even on judicial rents which had accrued during long periods of agricultural depression. Incomes derived from tenanted land were naturally more certain than incomes from untenanted land and to that extent it is more simple to assess the fair value of the land, but, equally, like incomes from untenanted land they vary from year to year. It is obvious that the price of land purchased by the Land Commission will, therefore, vary as it falls into one or other of these categories but, in any event, it will be a fair price; and all that we are concerned with in the Bill is to provide for its payment in an equitable way. It is considered that an equitable price for land can be fixed on a proper basis if the rate of interest on land bonds, representing the purchase money, corresponds to the yield that might be secured from investments in the latest issue of National Loan current at the date of fixing the purchase price. The rate of interest should be such as would enable the land bonds to be sold by the vendor for an amount equal to the cash that a purchaser, other than the Land Commission, would be willing to pay for the land. The interest on the land bonds should also be such that the prospective income to be derived from them if retained by the vendor would be at least equivalent to the income that would be earned from trustee investments if the purchase money were to be paid in cash by a person other than the Land Commission and invested in such investments by the vendor. It is, therefore, clear I believe that the vendor is being treated with the utmost fairness if he receives land bonds at a rate of interest that at the date of issue would ensure them being quoted about par. It is upon these lines that the provisions of the Bill will be given effect to if the Oireachtas makes it law.

As to the sections of the Bill itself, Section 2 provides that the purchase money payable to the vendor in future, shall be payable in land bonds issued under the Act except in cases where the payment of the purchase money is governed by previous Acts. The House will no doubt remember that towards the end of last year, the Land Bonds Act was introduced which authorised the Minister for Finance to issue land bonds to the value of £1,000,000, being the amount which it was estimated would be required to complete pending purchases, and pending purchase agreements arising out of the Land Acts prior to that of 1933. Under this Bill it will not be possible to issue bonds or to compel the vendor to take bonds issued under it in respect of his purchase money under agreements and for transactions made under any other Act than that of the Act of 1923, and such subsequent Acts as experience may indicate, are necessary or desirable. The land bonds are to be accepted by the vendor at their nominal value.

Section 2 further provides that in cases where the purchase money is payable by means of an issue of land bonds created under the Act, the claims against the purchase money shall be discharged by payment in land bonds of the same series. That is to say if we issue land bonds under this Act we shall have to accept, in discharge of any claims against holdings or estates taken over, land bonds of the same identical issue. We cannot compel a person who is paid in 4 per cent. land bonds to discharge his liability in 4½ per cent. land bonds.

Section 3 provides that advances made to tenants and others for the purchase of holdings or allotments shall be made by an issue of land bonds created under this Act. Sub-section (2) applies the provision of earlier Land Acts to the repayment of these advances. Under these provisions as so applied, the advances will be repaid by means of purchase annuities or other annual sums until the advance is redeemed. But power is given to redeem advances in whole or in part during the currency of the annuity.

Sub-section (1) of Section 4 empowers the Minister for Finance, from time to time by order, to create a series of land bonds of such total amount and such denominations as he shall think proper. The rate of interest payable on each series of bonds will be specified in the Order, but it is not to be less than 3 or more than 4 per cent. per annum. The bonds in each series are to be subject to such conditions as the Minister shall specify, but such conditions cannot, of course, override the conditions set out in Section 7 of the Bill. Sub-section (2) is intended to provide that the Minister may, if necessary, direct that bonds of a certain series may be used for making advances, having regard not to the date of the advance but to the date of the agreement to purchase. For instance, if an agreement to purchase be made during the period when an issue of bonds then current carries interest at the rate of 4 per cent. and if for some reason or another the transaction is not completed until a new issue of bonds has been made at a lower rate, then the bonds handed over in completion of the transaction would bear interest at the higher rate: that is, the rate of interest current upon the date on which the agreement to purchase was made.

Sub-section (3) empowers the Minister to consolidate different series of land bonds when the rate of interest on such series is the same. Sub-section (4) provides that each Order shall specify the sums to be set aside half-yearly in the Land Bond Fund. These sums will, of course, depend on the rate of interest and the sinking fund to be paid on advances. Sub-section (5) provides that every Order made by the Minister shall fix the rate of the purchase annuities, or other annual sums payable for the repayment of the purchase money advanced, by means of an issue of land bonds created under the Order. Sub-section (6) provides that every Order made under the section shall lie on the Table of the Oireachtas.

Section 5 is not exactly the same as Section 4. It provides for the issue of land bonds as distinct from their creation. Section 6 limits the amount of the land bonds to be created and issued under the Act to £10,000,000. The Land Commission has calculated, I may say, that about £4,500,000 will be required for the purchase of untenanted land and about £4,500,000 for resumed holdings and other lands compulsorily acquired for the relief of congestion, the provision of sports fields, and the other purposes to which I referred at the beginning of my speech. Sub-section (2) of this section also provides that the land bonds advanced for the purchase of lands in respect to agreements entered into on or before the 31st December, 1935, shall bear interest at the rate of 4 per cent. per annum. Section 7 contains provisions similar to those contained in the Land Bond Acts of 1925 and 1933 with regard to the payment of interest on, and the redemption of, land bonds. The interest is to be paid half-yearly and the bonds are to be redeemed by means of periodical drawings. Bonds transferred by the judicial commissioner in redemption of purchase annuities are to be subject to immediate redemption after the expiration of 30 years from the date of the passing of the Act. Any bonds then outstanding may be redeemed at par by the Minister for Finance. In the event of the Land Bond Fund being unable to pay the interest on the bonds, or the money required for redemption, liability for the payments is made a charge upon the Central Fund. If it is necessary to make payments out of the Central Fund the amount so paid will be refunded out of the Guarantee Fund, but only to the extent of the revised annuities in arrear.

It will thus be seen that the land bonds under this issue are secured in three ways: first, upon the land for the purchase of which they have been issued; secondly, upon the Guarantee Fund, and ultimately upon the Central Fund of the State. Section 8 applies the provisions of Section 5 of the Land Act of 1923 relating to the costs fund of the bonds issued under this Bill. Section 9 directs that in the accounts kept of the Land Bond Fund the Minister shall distinguish between transactions financed by the issue of land bonds under previous Acts and between transactions financed by the issue of each series of land bonds under the present Bill. Section 10 gives the usual power to the Minister for Finance to make regulations for carrying the provisions of the Bill into effect, and to adapt, for the purposes of the Bill, any provision relating to land purchase finance contained in any previous Act.

I think I have given a fairly full explanation of the principles which underlie this Bill and of the manner in which it is proposed to operate it. I have only to say in regard to it that it is a Bill of extreme urgency: that many important transactions are held up awaiting its passage into law. I trust that the House will see its way to facilitate me, if possible, by permitting me to take all the stages to-day so that the Bill may be in the Seanad next week and may become law before the close of the financial year.

The Minister, in his preliminary remarks, indicated in a general way what would influence the price paid for land. If I understood him rightly he said that in the matter of tenanted land or land held under a judicial tenancy—it was news to me that there are any judicial tenancies now—the price paid would be such a capital sum that, invested in the National Loan or otherwise, but invested at the rate then obtainable for National Loan, would produce a profit rent on the land being purchased. As regards untenanted lands, I understood him to say that the computation of the price would be based on what a private purchaser would give for that land in the open market. If these are the principles on which it is proposed to work that part of the Act when computing the price, then I think that the method, in broad outline, is a fair one for arriving at a price.

Now we come to the Bill itself. It really represents the financial section of the Land Act of last year. This Bill will provide the money to work that Act. I am afraid the Minister hardly grasps the importance of this Bill when he asks the House to sign, seal and deliver a loan of £10,000,000 in an hour or two. It is a very easy way of getting money, if money can be obtained so expeditiously as that.

I am afraid the Minister did not pass this Bill before him in proper perspective. In considering this Bill we cannot forget that the present Government has dissipated the savings of the past and destroyed the opportunities of the present. This Bill is their proposal to mortgage the future. I must not be understood, in speaking against this Bill, as being in any way opposed to the subdivision of ranches and the planting of people on the land. I can say in passing that there is not a man in this House who has given more of his own time and money to further the cause of the back-to-the-land movement than I, but I am speaking on this Bill as a Finance Bill and it is nothing else. We passed Estimates yesterday for about £30,000,000. We are told that about £5,000,000 more will have to go on to that to meet services for the coming year. We know that in addition to that we have to pay the British £5,000,000 in annuities and other payments. That brings our national commitments to £40,000,000. I suppose the local rate will not be far short of £10,000,000. The total would be anywhere from £45,000,000 to £50,000,000. That is a first charge on this country. I wonder what acreage of arable land we have?

12,000,000.

I should say that 12,000,000 would be a generous estimate. Therefore, we have a first charge of £4 per acre on all the arable land of the country. The Minister wants to mortgage the future of that land now with a gesture of: "Hurry up, boys; give me this in an hour and let me be going on to spend it." He wants to mortgage the future of this land to the tune of £10,000,000. Any businessman in this House or outside it knows businessmen's problems. There is no businessman in this country, be he big or small, but remembers the day when he went to interview his bank manager for an overdraft.

Let us consider the case of the managing director of this country who at the moment, in matters of finance, is Deputy MacEntee, the Minister for Finance. Let him go on behalf of his company, the Free State, to a bank manager and ask for an overdraft of £10,000,000. That is what he is asking us for. The bank manager will ask him: "Well, how does your credit stand?""Oh," he will say, "I tried to borrow an item of £6,000,000 a couple of months ago. I put it up to the public to subscribe it at 80 per cent. above the current bank rate of interest in London and the public would not subscribe it." The bank manager will then say: "Now do you want me to give other people's money to you; after a pistol has been held to the heads of the banks of this country to disgorge and subscribe what the public would not subscribe, you want another £10,000,000 on top of that £6,000,000." That is the first shot and the first counter-shot.

Then, to carry it a step further, the bank manager will say, "Yours is an agricultural concern. I read in the papers where your colleague asked an Opposition Deputy a couple of days ago to sing himself to sleep by repeating the words ‘wheat, beet and peat' and, when he would wake up the next morning before his morning breakfast, his cigarette or pipe, to repeat the refrain ‘wheat, beet and peat'". Now, sir, the manager would naturally say to him: "How much wheat are you growing?""Oh," he would reply, "I have increased the acreage under wheat by 60,000 acres above what our predecessors were growing.""I am not concerned," the bank manager would say, "with how much you have increased it, but how much have you increased your bank account in respect of wheat? That is my concern." The Minister could only show a deficit and then would come the next step. The bank manager would ask: "Well, how is the beet going?" and the Minister would reply: "Oh, our predecessors were producing a trifle, which we inherited, of 20,000 tons. We want slightly over 100,000 tons for our requirements and we are getting busy. We have got the authority of the Dáil and we are getting busy constructing factories to deal with that 80,000 tons to supplement the 20,000 in order to meet our full requirements." What business scheme can you lay before him with regard to that? "I have read," the bank manager, I assume, will say, "your speech on the introduction of the Sugar Bill. My recollection is this, that when everything is going in full going order you will be producing 80,000 tons at a loss of £800,000 a year. Do you expect me to lend people's money on a concern like that?" We are making bog roads and we are borrowing for that £100,000 of the people's money——

We have had for two days a debate on the economic conditions of the country. Surely the Deputy does not imagine that going into the financial aspect of beet, wheat or peat, is relevant to this motion.

I submit, Sir, subject to your ruling, of course, that this Bill to provide £10,000,000 of land bonds that we are asked to vote on to-day is, in its very nature, seeking authority to force a loan from the citizens of this country. If the citizens of this country are able to give that forced loan they must have some assets as security for that forced loan. I do not want to deal with these particular items in the way they have been dealt with in the last few days and previously. To be quite candid, I am tired of hearing them repeated.

There are more than you tired of hearing them.

I am sure of that. Therefore, when I mention them I do not want to labour them or their place in the economic mechanism, but I want to analyse the security that we have for this forced loan. Only in that regard I want to deal with it. Those three items I have mentioned cannot stand on their own legs. Dairying has to be subsidised too. Store and fat cattle have to be subsidised. The same has to be said of sheep, pigs, poultry and eggs. The standard price to be fixed for potatoes will be 35/- a ton. Supposing the whole outfit were put up for auction—there are some auctioneers here—what auctioneer would guarantee £4 conacre for the land of the Free State? I know that a statute acre of land in the Free State hardly anywhere would fetch £4 conacre, and that is the first charge. We turn now to the industrial side. Not one of those industries can stand on its own legs. They have to be protected by a tariff wall. Ability to pay that tariff depends upon the productive capacity of agriculture, which, considering the various items of agriculture separately or collectively, is not in a sound economic condition at the present time. Anybody could turn around to the Minister and say: "Your proposition is really further to mortgage a concern, I will not say a bankrupt one but one that cannot show a profit balance sheet, and to use that money to buy land from those people who now have it and cannot make it pay—though those men have been living on it and have been trained to work it—and to divide it up, at the cost of the State, with charges greater for the incoming man than his predecessor had; with the danger that the incoming occupier or purchaser will not be selected on the basis of competency to work the land but on some political basis." How can it be proved as a business proposition that that is borrowing money for a sound investment? The moral, of course, is that the Minister and his Government, before taking land from Jack and giving it to Bill, should put agriculture in a paying position for Jack or Bill. If not, we are going to accelerate the pace to bankruptcy.

I could quote various independent opinions on the state of this country, and there is one independent opinion which goes to show that the economic condition of this country is such that the country as a whole is a non-paying proposition. Instead of our Government applying itself to making it a paying proposition it tries to camouflage the position by forcing a loan out of the people's pockets which they would not give in the ordinary way. If this proposition is sound why does not the Minister float stock and buy the land with stock? I would make him another suggestion; I will put it to him by way of a query, which I hope he will answer. Supposing there are £5,000 in bonds paid to a farmer for portion of his land, and supposing that farmer has £100 a year to pay in annuities afterwards; will the Government accept those bonds at their face value in payment of those annuities; or if that farmer wants to redeem the annuities on any land he still holds will the Land Commission accept those bonds at their face value to redeem that land annuity; or will they allow the man who gets those bonds to sell them to a neighbour who wants to pay his annuity or redeem his annuity? This is the most preposterous proposition that I ever heard or read of any responsible Minister or any responsible man in any position conceiving. How does the Minister expect that the State will be indemnified against this loss? Who gets the power to issue those bonds? Who buys £10,000,000 worth of land? There will be a loss upon each little holding that will be parcelled out of that land. The cost of that land to each allotee will be greater for that unit than it was to his predecessor, and we have it acknowledged from the Government Benches—of course we knew it without their acknowledgment—that agriculture is in a depressed condition. When the owner of the land is not able to make the land pay how will the increased charge on that land be paid by the new allotee?

Remember that machinery of this kind was tried before. National Loan could be floated easily and over-subscribed in a few days. Prices for all agricultural commodities were higher and producers in this country could get the full world price for their produce, but they cannot get it now. Perhaps depression has reached a greater intensity now than it has any time and even though the price is rising in America and England, we have not got the advantages of that rise nor can we get the advantages of that rise for reasons which the Minister knows very well. The fixed policy of the Minister, the boasted achievement of the Minister and his colleagues, is that we will not get those world prices in future and that the market in which we got them is gone and yet we are going to parcel out the land, forcing money out of people's pockets and mortgaging their credit, and give it to people who have not much experience, or, perhaps, have no experience, and expect them to pay. "Ultimately," said the Minister, "the charge will be on the Central Fund." Of course, the charge will be on the Central Fund and the Central Fund will have to bear it while it is able.

Another important aspect of the situation is that these allottees will, of necessity, of course, be small farmers. They will have to start at the bottom to produce and when the whole economic effect of our exclusion from the world market works itself down to its natural level, it is the small farmer who will have to bear the brunt of that low level of prices, because he will be the producer of the young stock and it is at the point of production that the economic loss will settle down because the man who buys from him will buy to make a profit and will buy at such a price as will enable him to make a profit. The next man who buys from him will do ditto and the man who produces will have to take any price that the fellows up the ladder will give him. They can only give a price that will pay them to handle the stock and, perhaps, feed them for a while. The allottees who will get the land purchased by this money will be the people, so to speak, on the bottom storey, producing the livestock and who will have to bear the brunt of all the low prices. How are they going to pay? The Minister is not concerned. I can see the Minister haranguing an audience in County Dublin and saying: "Deputy Belton often came here advocating a back-to-the-land movement but he opposed the measure in the Dáil that would enable the people to get back to the land." I am opposing the putting of people into slavery. That is what it is and every man who knows anything about land knows that. I am not afraid to defend my action either in County Dublin or County Meath where I have advocated that back-to-the-land movement. You are going to put these people into slavery by putting them in to do a job that is physically impossible. I remember, on one occasion, hearing the classic solution of an agricultural grievance by Deputy O'Reilly in the suggestion, put seriously, of controlling the price of calves and weanling calves. I heard him suggesting that in his best sensible mood. They will be controlled and the victims of that control will be the very people whom it is proposed in this Bill to plant on the land as slaves. We should break up a lot of the ranches and turn them into production in this country but nobody is ging to produce, not even if you stand over him with a whip——

I am very sorry to interrupt the Deputy but might I remind him that Public Business is to be interrupted at 12 o'clock for the purpose of permitting him to make another speech and that we assumed that this Bill would be through before 12?

Whether the Deputy is to make a speech at 12 o'clock or not is immaterial compared with the absolute necessity of instructing the ignorant on the opposite benches.

The Chair has no power to regulate the length of Deputies' speeches.

But Deputies might sometimes be merciful.

The Deputy will always be truthful and he will always quote correctly, not like the Minister.

And the Minister will only be brief when it suits him or when the subject is important.

And I will never waste the time of this House with a speech three or four hours in length on a subject I know nothing about. The Minister could brazen that out but I could not because I have some sense of shame.

You are not a bad starter at all.

The Minister for Finance on agriculture for three or four hours is a gem! He possibly did not waste the time of the House because not many listened to him and nobody will ever read him. To deal exhaustively with this matter would take too long, and I do not propose to do so. I have touched only on the simple factors of the situation and asked people to think about it before they vote for the Bill. Normally, the Bill should go through and go through quickly and if the new little farms that are to be parcelled out could be given to people who had any hope of surviving, this Bill would go through very expeditiously and I would be one of its strongest advocates, but, like many other aspects of Government policy, I have very grave misgivings with regard to the result of the things they are doing when they are not handled in the right way and at the right time. To put a man to work on a farm at a time when every product of that farm shows a loss is not good business. There is another side to it which even in the best of times, it would be well for the Government to bear in mind—and I am not saying but that their predecessors sinned a little in this—no man should get land unless he shows an aptitude for working that land——

That aptitude of allottees does not arise on this.

I was going to make a suggestion, but I will not. However, I just want to sum up, without going into all the details necessary in this, and to point out to the Minister that agriculture is depressed the world over-artificially depressed here, and that, at least, that artificial depression should be removed before the Minister comes to this House and asks for a forced loan of £10,000,000.

You are on the right way to remove it!

We are. The perfectly right way to remove it, or to do anything, is that you must first make up your mind to do it. If you do not make up your mind that a thing wants to be done, you will never tackle it. The Deputy's Party says, in effect, that artificial depression is here and that it is going to remain, thank God. We do not say that. We have the mind to remove that artificial depression, and when that artificial depression is removed and when our exclusion from world markets ceases, then we can divide up ranches, if it is thought to be good business, and plant men in small farms on those ranches with a sporting chance of success. To plant a man, however, on a little slice of land from a ranch at the present time will only mean that he will not stick it, just as some of the Deputy's colleagues there did not stick it when they got land in better times. There will be cheap little farms for sale in a couple of years. Within ten miles of where I am standing I could point out many ranches that have gone back to their original state. To discuss that, however, I would be disobeying the principle of the ruling of the Chair, because I would be finding fault with the qualifications of those planted on the land, and the Chair has ruled that that is out of order. Our concern is not capable of borrowing this sum of £10,000,000 of money in the market, and so the powers of Government are being mobilised here to-day to force it out of our pockets in the form of paper bonds. If those paper bonds will not maintain their full face value, the owner of them will lose that depreciation. It would put the Minister to the test if he would say: "I will accept revenue payable in those bonds. I will accept death duties or any kind of revenue in that form. I will accept the redemption of Land Commission annuities in these bonds." There is one thing certain, and that is that England will never ask for the land annuities if she can get them in the Minister's bonds. If the Minister wants a lightning passage for this Bill he ought to consider, during the Committee Stage of the Bill, announcing that we can pay our annuities, or income tax or any revenue in those bonds. If the Minister will agree to that, it will mitigate some of the financial sufferings that will be caused by this Bill as a Finance Bill, but it will not mitigate or in any way lessen the inevitable and certain loss this country is going to sustain if agriculture is kept in its present crippled condition and if its future is going to be mortgaged by a forced loan of £10,000,000 taken out of the pockets of those people who, even if they had money, would not give it to the Government for purposes, apparently, more productive than this.

In conclusion, Sir, I want to say that, whatever action is taken—I do not know what action my Party is taking on this—I, as a 100 per cent. son of the soil, of the small farming stock, stand four square in opposition to this tyrannical proposal to force money out of people's pockets, ostensibly to plant landless men on the land, but in reality to plant landless men in slavery. I want to be recorded as opposing this measure.

I have very little fault to find with the statement made by the Minister as to the principles on which he thinks the Act is based, and as to the way in which the Government propose to work the Act, except to make one general remark. He used a phrase to the effect that the income derivable from property— land or holdings—should be, in equity, maintained by this transaction. If that were to be interpreted to mean that the present income derivable from land was to be only maintained to the holder in perpetuity, I think that a terrible hardship would be done to landholders and tenants in their holdings. That is a general remark which I hope he will consider very carefully. There is one very special remark, however, that I want to make. on the grounds of which I hope the Dáil will not pass this Bill in its present form. To my mind, the Bill goes entirely beyond the principles laid down by the Minister and it would give any Government in office a power to discriminate in the issue of those bonds, which I do not think this Dáil ought to give or the Government to hold.

The only way in which I can read Section 4—particularly sub-section (4)— is that after a price has been fixed, whether for landholders or for a tenant's holding, the Minister or the Executive Council would have the power to provide the payment of that amount by the issue of land bonds and they would have the right to say whether that land bond issue should be bearing interest at 3 per cent., 3½ per cent. or 4 per cent. That would give the Government of the day the right, practically, to vary the price that had been fixed by the court, because they would say that they would issue one class of bonds to pay, let us say, landowners at the rate of 3 per cent., and issue at the same time another class of bonds to pay for tenants' holdings, for which they would allow 4 per cent. I got advice about it and I am assured that that is the meaning of Section 4. I do not believe that is what the Minister intends at all. I accept his statement in that respect completely; but there is nothing to indicate in the Bill that at the same time, quite apart from the value of money at the time, the Minister may not say that one class of bonds shall bear interest at 3 per cent. and another class of bonds shall bear interest at 4 per cent. I quite understand that, as the value of money fluctuates, there should be some power of control of the interest on these bonds. Money may become even cheaper than it is at present. A land bond for £100 at 4 per cent might be worth, a year hence, much more than its present cash value of £100. On the other hand, money may be dearer and the same land bonds issued for £100 at 3 per cent. might have a great deal less value than the present cash value of £100.

There should be some power of control of the interest attached to those bonds as the value of money changes, but it should not be a power in the hands of the Minister for Finance or the Executive Council. It is a power over which this Dáil ought to retain control. The Dáil should be able to vary the rate of interest from time to time as money changes, but neither the Dáil nor the Minister should have the right to say that at the same time they will issue bonds for one purpose bearing interest at 3 per cent. and for another purpose bearing interest at 4 per cent. It is for that reason that I felt strongly on this matter when the Minister was asking for leave to put this Bill through to-day. This Bill requires very careful examination in many of its clauses and I have in mind, on reflection, to submit for the careful consideration of the House certain amendments. I would therefore press the Minister to give the Dáil proper time for such consideration. To hand over the Bill in its present form to the Seanad would be surrendering the functions of the Dáil in a way which I do not think we ought to do. I appeal to the Minister, even though the Bill may be urgent, to give full and proper time for the consideration that the Bill deserves by the House.

The point that Deputy Thrift has raised emphasises what a monstrous thing it is for the Minister, on a Friday morning when the House has been sitting from the Tuesday, to come forward and ask for all the Stages of this Bill this morning because it is urgent. Deputy Thrift put his finger on one particular point that troubled me in the Bill. He seems to have derived a certain amount of assurance on that point from the Minister's statement. I confess to having got rather the opposite from the Minister's statement. It emphasises to me the necessity for having fully discussed in the Dáil what exactly the Minister has in mind with regard to that because it did seem to me setting out on a plan to borrow £10,000,000, without giving the House any information as to what he was going to base the changes in rate of interest on, but that, according as the bonds were issued, he was going to change them in a fairly radical way. I am sure the House would like to hear from the Minister on the question of interest alone what are the factors that are going to operate in his mind in fixing the interest at varying stages in different years or different parts of the year. The Minister has indicated that that is going to be his policy. The House will want to know what are the things that are going to operate in bringing about those changes. It seems to me that the House might easily decide in embarking on a scheme like this that they would not allow the change in the rate of interest to depend purely on the money market at the time alone; that they might even have to consider the land value index. There might possibly be a basic rate to be scaled up or down for, say, the 30 years that the Minister has in mind.

The Minister gave no indication that he proposes to have a court operating on the bonds issued in 1934, say, at 4 per cent. or the bonds issued in 1935, at 3 per cent.

The Deputy has not read Section 6 which provides:

Notwithstanding anything contained in any other section of this Act, land bonds created and issued under this Act for the purpose of making an advance or paying any purchase money the amount of which is agreed or fixed.

—that is agreed between the vendor, on the one hand, and the Land Commission on the other, or fixed by the Land Court—

on or before the 31st day of December, 1935, shall bear interest at the rate of 4 per cent. per annum on the nominal amount thereof.

That is the way it is proposed to operate the Bill. It is not proposed to make a fresh issue in respect of each transaction, but to make an issue which will cover transactions over a reasonable period in advance, say one or two years.

On that point, the Minister is right that it is definite and fixed.

The things that are going to affect the changes of rate of interest are matters that will require very much discussion here. The Minister indicates that the security is going to be the moneys paid by the purchasers, the moneys in the Guarantee Fund and the guarantee of the State. The Minister has not told us how the money paid by the purchaser is going to be related to the purchase money that is going to be paid to the owners. He will require to make more clear the position of the Guarantee Fund at the present time and the relation the payments under the pre-1933 Acts and the payments under the 1933 Act—the moneys received from the tenants—are going to have to the Guarantee Fund; particularly what part of the Guarantee Fund is going to be related to the bonds issued under this Bill.

The whole of it. Under any of the existing Acts there is no allocation of the Guarantee Fund as between transactions carried out under one Act or another. They are all chargeable against the Guarantee Fund.

All this emphasises the large number of points which require to be brought up and made clear and that can only be done on the Committee Stage and when the Deputies have had an opportunity of examining both what is contained in the Minister's statement and what is left out of the Minister's statement.

I quite agree. I accept Deputy Thrift's position.

There seem to me to be three points that one might discuss on this Bill. One is the point raised by Deputy Thrift which I myself was struck by when I read the Bill. Another point that requires to be elucidated is the effect that this will have on the people from whom the land is acquired. The third point is the probable cost to the Central Fund eventually. The Minister rather went into the original Act—I do not want to get back on that—and stated how the land will be acquired, whether by agreement or compulsorily. What I am mainly concerned with is the effect of this on the people from whom the land is acquired and its possible effect on the recipients of those lands. I suppose the Minister will adjust his rate of interest to the market price of the day. Whatever rate of interest these are issued at, there will probably be a rush to sell by the recipients of the bonds. That is almost inevitable. The recipients of those bonds will be people who will want ready cash and there will be a heavy loading of those bonds on the market with an almost certain fall in price. The price which any of these landowners will get for the land must be necessarily very small, if the Minister proceeds on the method which he proposes and that he alluded to very shortly here—that the price paid for the land would be a price which was fair to the landholder and fair to the Land Commission.

I want now to get what is fair to the landholder but I will not go into that because I would be going back to the original Bill; but I want to point out that the price that would be fair to the Land Commission to give for the land would be practically a very small price for the landholder and would amount to what is practically confiscation. I would like to see that the labour recipients of this land will get fair value. But fair value must necessarily be very small value for the landowner— practically as I have said, confiscation. And the future might make it so that it might be even of less value. There might be further reductions in the annuities. For the last 40 years land purchase has been improving so that each Act that was passed made the annuity or the rent lower than the previous annuity or rent and we must remember that probably we have not arrived at the lowest stage yet. It may happen eventually that some of this money may fall on the Central Fund. It is well that the House should appreciate that. This is not a case of borrowing money on the security of land. The money will be entirely borrowed on the security of the Central Fund. It is well that the House should understand that now.

I, for one, am not grudging these people the land but I would rather make them a definite present of the land than ask them to pay something which I know they cannot pay and which would eventually fall on the Central Fund. That is one point I wanted to make. The second point is with regard to the recipients of the bonds. I would like some assurance that when a man gets these bonds he could turn them into cash. The price would be a very small price and the tendency would be to overload the market. I know the Minister for Finance will issue the bonds at the lowest rate of interest that he can give. That is what I would do myself if I were Minister for Finance. People will probably sell these bonds at a discount so that there will be a further loss on the already depleted price they are getting for the land.

I would like to see as far as possible the sellers of the land, the original owners of the land, fairly protected. In the first place, they will be at a loss in getting the small price that will be given to them under the Act of 1933 and they should not suffer further in having to sell the bonds at a discount. At the best they would be only getting a small price. The third point to which I wish to refer is the point raised by Deputy Thrift. To me it seems the section is vague and I suggest that it might be interpreted in the manner in which Deputy Thrift has interpreted it. I am sure no Deputy would like the Bill to leave the House in such a state that there might be some difficulty about the interpretation of any section. I know the Minister is satisfied in his own mind that the section is quite plain and that all interests are safeguarded. But the section would not appear plain to many people and some lawyers would cast doubt on the particular section. I do not think that the Bill is a Bill that we should rush too quickly through the House. I think we ought to have a further occasion to consider it in Committee. The Minister says there is urgency for it but, after all, there cannot be so much urgency that a day or two would cause any great inconvenience to the Minister. I would ask the Minister to give the Deputies a little further time to consider this in all its moods and tenses.

I want some information in connection with this Bill and in what I have to say I will be very brief. The point I am making is practically in reference to the point made by Deputy Bennett. The Land Commission acquires a holding from, say, Jack Smith on which a value of £500 is placed. He will be paid land bonds, I understand, for that amount. I can quite easily understand that these land bonds are of very little value to the individual. If I understand the matter rightly these bonds would mean £20 a year at 4 per cent. interest. What guarantee has he that the day on which he parts with whatever interest he has on his holding, he will be able to realise the price in hard cash, the price which the Land Commission will allow him for his holding?

Very few of those whose lands will be acquired under the Land Act of 1933 will be millionaires. Very few of them can afford to continue taking the interest that will be coming to them under this Act. They will want ready money. I would like to see some arrangement by which the man whose lands are being acquired will be paid that amount of money in cash and will be paid it as soon as his holding is acquired. I would like some statement from the Minister on that particular point. I think that is the most serious aspect of the whole problem. I am not now going to enter into the question of the Land Act of 1933 or the price that may be given for the land, but I would like to be assured by the Minister and by the Government that the people whose land is to be acquired will get money on those bonds.

I have only a few minutes to reply and not enough to deal with all the points raised.

Does Deputy Belton, who is to resume his Motion about the relief of rates at 12 o'clock, agree to give the Minister five or ten minutes to reply to the points raised by Deputies on the Land Bonds Bill?

Certainly.

On the point raised by Deputy Thrift I should like to say that it is not the intention to issue those bonds in small parcels. They will be issued on the basis of an estimate made by the Land Commission as to the number of transactions that they might have to finance over a certain period of time—one or two years. Under Section 4 the Minister will create land bonds and under sub-section (6) of Section 4 every order made under this section will be laid before each House of the Oireachtas as soon as may be after it is made. Under sub-section (2) of Section 4 the Minister in "an Order made under this section may specify or restrict the class or classes of advances and purchase moneys for the making or payment of which land bonds of the series created by such Order may be issued." I pointed out that the purpose of that section originally, or at least the main purpose, was to ensure that payment will be made in bonds which were current at the date upon which the agreement to purchase was made. We contemplate that the order issuing the bonds will specify the particular class or classes of transactions for which bonds will be applied in payment and will say that they are to be applied to such as were completed on or before a certain date or in which the price was either fixed or agreed upon at that date.

Is that in the Bill?

It is not, but if the House thinks that some safeguard of that sort is necessary I am quite prepared to agree. I admit that if one could consider a Government which would use its powers to abuse the principle of justice in that way, that a safeguard of that sort would be necessary. I think the House is to some extent safeguarded by the fact that an opportunity of criticising——

Only criticising?

Yes. It is only an opportunity of criticising.

A Deputy

That is futile.

When delicate financial negotiations are going on, we do not come here to ask the House to ratify an agreement which might be entered into.

I do not want to suggest that any Government would do so, but I say it is contrary to the principle of this House to pass a Bill with that kind of contingency there.

The House last night passed a Bill with the same con tingency, if I may say so. Power was given to the Minister to borrow £12,000,000. In effect, in certain peculiar circumstances this would give power to borrow. I am quite willing to acknowledge these circumstances do exist, and if Deputy Thrift or any Deputy interested would put down an amendment to safeguard the point, that it is wished to have safeguarded, I shall be prepared to consider it. In the meantime, I shall have the matter looked into. I would rather that some Deputy would formulate an amendment to cover the point.

Is there anything in the Bill to prevent the Minister issuing bonds for quite small amounts? There should be some restriction of that kind.

There is not, but I think it may be taken that the Minister would not issue them for small amounts. I do not think it would be possible for the Land Commission to go on doing its work, if we were to tackle it in that spirit. As is indicated by Section 6 we are fixing a rate of interest now for almost two years.

Is it that after that period has passed another period will be fixed in the same way?

In the same way, more or less. We anticipate that the greater number of transactions under the Bill will be financed and agreement reached before 1935. We are only taking precautions against that eventuality not being reached. With regard to the point raised by Deputy Curran, as to the principle upon which the rate of interest on the bonds should be arranged, the Deputy asked about a holding to be acquired from Jack Smith. In that case the price to be paid would be fixed in one or two ways.

I am not concerned with that.

It is important. It would be fixed either by agreement with Jack Smith, in which case Smith is satisfied that he is getting a fair price, or it would be fixed by the court. The next point that arises is, if Jack Smith has to be paid in bonds, what rate of interest should they carry. The rate of interest should be such as would enable the land bonds, representing the purchase money, to be sold by Jack Smith on the day that he gets them, or the day after or within a reasonable period, for a sum equal, at least, to the cash amount which any other purchaser than the Land Commission would pay Jack Smith for the land. That is fair and reasonable. I do not think one could question that basis. That is the principle upon which the Bill will be operated.

Of course, that cash might represent 5 per cent. discount. It could not be guaranteed.

I indicated at the beginning that it is considered the rate of interest which these bonds bear should be related to the return which a person would get from an investment in National Loan during the currency of the bonds.

Could the Minister tell something about the relationship of the Guarantee Fund to the Central Fund in this issue of land bonds, as distinct from the other bonds?

This is a charge on the Guarantee Fund and interest and sinking fund will be charged on that fund in the same way as interest on other land bonds.

The Minister is aware that annuities for new holdings will not be fixed in the way in which they were fixed in the past. There was a kind of collateral security for the annuities and the amount was paid as fixed. It was fixed at a certain rate which was supposed to pay for the land bonds. They are not going to be fixed at that rate now, as the State or the Central Fund will be responsible for a much larger amount.

That is true.

I think the holders should be informed of that.

Following the question put by Deputy Thrift it was stated that the income of a person would be related to that person's previous income. As I have something to do with these cases I would like to know on what income the amount would be based, say on tenanted land from which there has been no income shown for the last two years? How would the amount be arrived at there?

It will not be based on the income. It will be based on a fair price, the agreed price between the vendor on the one hand, and the Land Commission; on the price fixed by the court as a fair price. That is the basis of the new transaction.

Question put and agreed to.

When will the Committee Stage be taken?

As the Minister has met me extremely fairly, would he be prepared to give a week to consider amendments?

That would depend. Deputy Mulcahy could suggest whether we could get the Committee Stage on Friday next, if it is put down for that date.

It all depends on what other business is going to be done on Friday. I understood that there was a likelihood of skin and hair flying on Friday next on other matters.

Not in the House.

If that is so, I could hardly imagine in the middle of that the Committee Stage of this important Bill going through.

I do not like to be like Dickens' boy, always asking for more, but it would be a tremendous convenience if the Committee Stage could be taken on Tuesday week.

The only trouble is that I am anxious to get the Bill to the Seanad. I suggest to Deputy Mulcahy that if other Bills are going to be shorn and torn, there is no reason to apply these surgical operations to this Bill.

I am only talking of the atmosphere.

Committee Stage ordered for Tuesday, 20th March.
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