Dáil Éireann díospóireacht -
Thursday, 9 Jul 1959

Vol. 176 No. 7

Industrial Credit (Amendment) Bill, 1959—Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Sweetman

I am sorry the Taoiseach is leaving the House as he is the architect of this iniquitous system by which the Industrial Credit Company is allowed to be in the position of setting at nought the terms of this Bill. Let me draw the attention of the House to the limitation provided in Section 3 (1) (d) (i) of the Bill. As the Minister indicated a few minutes ago, that provides that the limit of the share capital and the amounts raised by the Industrial Credit Company is to be £15,000,000. However, it does not, in any way, according to the procedure that has been adopted, limit the contingent liability which the Industrial Credit Company may take upon themselves, that whatever money may be advanced from time to time, or whatever money may be raised from time to time by the Industrial Credit Company by share capital or by loan stock, will be utilised by them and properly utilised by them for the purpose of the direct financing of industrial undertakings. But in addition to that the company has adopted the practice of making guarantees which, if the guarantees came home to roost, would far exceed the limitation that is included in this Bill and in the existing statutes. That is entirely wrong and in fact it is almost a breach of faith with the House.

Every one of us agrees that the appropriate finance should be made available for any worthwhile project but it should be made available in the right way. I am clear myself that there has been no project that was worthwhile that has failed to materialise because of lack of finance. Finance may have been provided in different ways that were not so desirable as this way, I agree, but finance has always been provided. However, where a State-sponsored body is committing itself to more than the limit of its commitments as provided by the Oireachtas, even though that commitment is only contingent, it is, in my view, a breach of the spirit and of the letter of the Act which sets it up.

There must be a much more frank approach to this situation. I appreciate there must be the confidential inquiries and negotiations that go on from time to time until a project becomes a reality and until the provision of finance or the provision of a guarantee becomes a reality. Once the provision of finance has become an actual fact then there must be the acknowledgement of the provision that it is the State and the taxpayer who are providing that finance, be it actual or be it contingent under guarantee. Once public money has been committed to an expenditure — and public rumour has it it has been committed in the Cork case — there is an obligation on the Minister and on the Industrial Credit Company to tell the House and the country of the commitments that have been entered into.

It is not right that commitments of the sort and size that have been made in that respect should be made without this House being told that they have been entered into. It is not right that commitments of that size, totalled up with the other umbrella or contingent guarantee commitments that have been made, should exceed, with the capital already advanced, the limitations provided in an Act. It would be far better for the future sound basing of Irish industrial finance that there would be frankness in this respect and that there would not be the effort that is being made up to this to hide the facts in relation to it. It would be far better for the industry concerned and for future industries as well.

The Taoiseach, when he was Minister for Industry and Commerce, said that, in his view, that could not be done because it would mean the Government would be taking political responsibility for something in regard to which they had not the political choice in the determination of the grant or of the provision of finance. I do not agree. I do not agree that there is any question of political responsibility if the Board of the Industrial Credit Company are going on their own initiative. If they are not going on their own responsibility, they can only be going on the responsibility of the Government in which circumstances it is only right that the situation should be publicised.

When the trade loan arrangements were being abolished we were specifically told here that the reason for the abolition of the trade loan procedure was not the publicity when the loan had been given but the cumbersome method of arriving at a decision as to whether a trade loan was warranted or not. I agree with the Minister for Industry and Commerce that the procedure coming up to the point of decision in relation to a loan under the Trade Loans (Guarantee) Acts was cumbersome but there were the further tabling provisions in these Acts and it was not suggested at that time that one of the things that the new practice was going to do was to avoid that publicity. I think it would be bad that it should be avoided.

I also wish to draw the attention of the Minister to the provisions in paragraph 9 of the Chapter on industry in Economic Development. Up to this a great deal of our industrial finance has been provided by bank loan overdrafts rather than by the provision of finance through public issues. The chapter to which I have referred draws attention to the possibility of operating unit trusts in Ireland to be sponsored by the Industrial Credit Company. It also draws attention to the fact that in other countries unit trusts of that sort, and savings movements within the factories concerned, give those employed an opportunity of taking an interest in their own concern and therefore in their own job.

There has been far too much holding of Irish industrial shares as a permanency rather than the free byplay of purchase and sale that would have the effect of procuring here an industrial share market. If one wants to buy the Irish industrial shares of the great majority of Irish concerns, for a considerable time there may not be any shares on offer for sale. Similarly if one wants to sell them, for a considerable time there may not be anyone on hand to purchase. It is that lack of fluidity that has contributed in no little degree to there being a lack of entrepreneur capital for industrial concerns which was met therefore by bank overdraft accommodation.

It was also contributed to by the desire of many people who bought such shares to continue to hold them and to the fact that they did not ever change out of them; therefore shares did not come on the market. But it was somewhat of a circle. The reason they did hold them was because there were not buyers and the reason there were not buyers was that the shares did not come into the market. The formation of a unit trust here for Irish industrial shares would materially improve that position. It would probably do more than anything else to create an industrial share market of real dimensions. If such is to be formed in this country, then it seems to me that it can only be done through a lead being given by the Industrial Credit Company such as is suggested in the paragraph of Economic Development to which I have referred.

I should like the Minister, when introducing this Bill, not only to do so in terms of monetary limits but also in terms of the class of production involved, what employment was hoped for and what amount of capital per employee was likely to be necessary, in modern parlance. In relation to the discussion we had this morning on the Undeveloped Areas Bill for Foras Tionscal and the Industrial Development Authority, it appeared that somewhere between £1,150 and £1,200 has to be sunk in any undertaking for the employment of one man or, to be more strictly accurate, one person, because the figures we got did not indicate whether it was male, female or juvenile employment.

Whether it is male, female or juvenile, it does make it clear that the amount that has to be found from industrial enterprise in order to provide employment is a very substantial amount indeed. It also makes it certain that when we are getting into a project of any substantial size, the amount by way of guarantee may be very substantial indeed. When it is as substantial as that, this House and the country as a whole have a right to be told the amount of the taxpayers' money that is being pledged in excess of the amounts permitted by statute for direct financing operations.

Mr. Norton

I want to refer first to the extent to which the capital of the Industrial Credit Company is being increased under this Bill. The Bill also provides that the company shall have power to raise and borrow moneys at any particular time to an amount not exceeding £15 million. I should like to ask the Minister how soon he anticipates that the new capital resources, which have been put at the disposal of the company by this Bill, will be invested by the company.

It is possible, of course, to put down any particular figure in a Bill of this kind and not to relate the amount so put down to the anticipated demands on the company for such finance for new enterprises. Is this figure for new powers of borrowing based upon an examination of the anticipated demands on the company within the next two, three or five years? Is it likely that the company will, in fact, be able to invest this money in one enterprise or another within a particular period and, if so, perhaps the Minister could tell us how long he thinks the new capital will be available to enable the company to carry on its financing activities?

The second point I want to raise is somewhat similar to that raised by Deputy Sweetman, that is, the position of the Industrial Credit Company in respect of guarantees. I submitted a question for answer next week to ascertain the extent of the State loan or State guarantee given in respect of a certain enterprise which has indicated its intention of going into production here. It seems to be difficult to ascertain to what extent the Industrial Credit Company has, in fact, committed itself by guarantee given in its name. I should like to know from the Minister what is behind that policy. Is there any reason why the Industrial Credit Company, having given a guarantee on behalf of the taxpayers, should not indicate, once the guarantee has been given, that, in fact, it has been so given?

I can understand the necessity for reticence and even secrecy when the negotiations to secure a guarantee for the company are taking place, but once the Industrial Credit Company has, in fact, given a guarantee, has pledged the credit of itself, the Government and the community and having laid the taxpayers open to the possibility that, by a raid on their pockets, the guarantee will have to be fulfilled, is there any reason why the Industrial Credit Company should not disclose publicly the fact that it has committed itself to a guarantee?

After all, State moneys are involved in this matter and I think that the minimum the public are entitled to ask is that they should know the extent of their commitment. I do not know how far the policy adopted by the I.C.C. has Governmental approval or whether it is a policy which the I.C.C. has adopted of its own volition. I should like the Minister to tell us what is behind this policy and what is the reason why the Dáil and the community generally cannot be appraised of the fact that the nation's credit has been committed in respect of guarantees given to private enterprise by the Industrial Credit Company. Perhaps the Minister could answer these two questions.

Mr. Cosgrave

I should like to follow the point already made about the particular guarantee in question. I raise it on this occasion because it is almost impossible to get an informative answer on this matter through a Parliamentary Question. I referred to this matter during the course of the debate on the Undeveloped Areas Bill during the past couple of days. The Minister for Industry and Commerce said it was not usual in financial transactions for finance houses or institutions to disclose details of transactions of that sort.

Surely, that is missing the point entirely? This is not a normal finance transaction and the Industrial Credit Company is not an ordinary finance institution. The moneys, as Deputy Norton said, are provided here by means of a statutory guarantee and are moneys raised from the public as a result of the statutory provisions governing the Industrial Credit Company and which will be further increased by this Bill.

It is, I think, reasonable that the matter should be treated delicately while negotiations are being conducted, but it surely is unreasonable to withhold information from the public as to the extent of a guarantee in respect of a project, more especially when the promoters are foreigners. Nobody questions the ability or capacity of the person concerned with this Cork Dockyard proposal but we want something more than the capacity, the ability or skill of an individual.

I think it only right that the House should be given full information concerning the extent to which moneys have been provided by the Industrial Credit Company on foot of a statutory authority for a transaction of this sort. It is generally recognised that in a normal transaction between any finance institution, banking establishment or other finance corporation, if the matter were arranged as a normal business transaction, there would be no obligation on the parties concerned to disclose anything to the public, but this is entirely different. This money is being provided by the State. Because it is raised in a particular way does not alter that fact and it is important, from the point of view of gaining public confidence, that full information should be made available. In fact, people would much more readily assent to an arrangement of this sort, if they knew all the facts. The rumours about this matter are varied, and of course no one is expected to believe all of them, but there would be far fewer rumours if more information were available.

I should also like to know when it is expected that this proposed extension of financial facilities will be absorbed in particular cases, what major immediate commitments are involved and if the Minister can give us an indication of the type of industry which it is expected will be financed as a result of the extended provisions here. I should also like to know to what extent extensions will be made of existing business, and what new businesses are concerned or contemplated under it, and if the Minister can give any indication of the expected employment content under both of these headings.

Mr. Russell

I should like to say a word on a point mentioned by Deputy Cosgrave, Deputy Norton and Deputy Sweetman. Personally, I would object strongly to interfering with the principle that the activities of a statutory body, such as the Industrial Credit Company, should not be open to investigation by way of Parliamentary Question. I agree that there is, or appears to be, a case here for securing information with regard to the financing of projects. I think the main reason for endeavouring to secure that information is that the public have reason to believe that the finance concerned is of a very substantial nature and I take it that our curiosity as Deputies would not be aroused to the same extent if we had reason to believe that the money so advanced to outside companies or interests was of a comparatively minor nature.

The trouble, as I see it, is if this body gave way to the request to give information of this type, where do we draw the line because in the case of a £2,000,000, £3,000,000, or £4,000,000 loan, certainly I think it is in the public interest that information should be given, but not in the way suggested. Even if it were a question of a half a million pound loan, or a loan of £100,000, we would still want information. I think you would cut largely across the effective operations of the Industrial Credit Company if its activities were to be scrutinised and made available by way of question in this House.

Personally, I think the Industrial Credit Company should not deal with transactions of this type at all, that if it is a question of a major industrial undertaking, involving several million pounds of the taxpayers' money, the matter should be dealt with by the Minister under some form of State guarantee, or something akin to the old trade loan section in the Ministry of Industry and Commerce. If we feel the Industrial Credit Company is being used or is using its powers to cloak up very substantial advances to any interests, either inside or outside the country, it would be far better to attack the question by changing the procedure for advancing these substantial sums.

A question which I should like to ask is: is there any association of any kind between the Minister for Industry and Commerce and the Industrial Credit Company? Is the company a completely independent statutory body, free from any suggestion of encouragement, direction or influence by the Minister? I am not saying that in reference to the present Minister but to any Minister whoever he happens to be, because one of its advantages was that it was to be free to operate as any ordinary lending business and to conduct its business in private and uninfluenced by political or any other considerations. Perhaps he would satisfy me on that point.

Mr. Dillon

I should like to hear what the Minister has to say as to the limitations which he thinks are right to put on the ability of the legislature to get information about the borrowing of public money. There is undoubtedly a dilemma here and it is not easy to see how best it can be overcome. The Minister himself, I think, will admit that it would be an astonishing proposition that it should be in the power of any agent of Oireachtas Éireann to lend, on the people's behalf, several million pounds of public money and yet to disclaim all liability to provide Oireachtas Éireann with any information about such a transaction.

I am prepared to concede that while a matter of that kind is under negotiation, a certain discretion is necessary, but it does appear clear that at some stage Oireachtas Éireann should be informed. Otherwise, the traditional power of Parliament to control finance, which is the ultimate sanction that Parliament holds over the heads of the Executive, appears to be virtually cancelled and we drift further and further into the position of the Executive coming to Parliament and saying: "We want a general authority to lend £20,000,000 or £25,000,000 or £50,000,000 without giving Parliament any information, good, bad or indifferent". I do not think that principle should be or could be conceded.

Some months ago, I mentioned to the then Minister for Industry and Commerce that it would be a prudent thing to communicate fully to the House the facts concerning the Verolme Dockyard construction agreement. On that occasion, the Taoiseach said that the position was that there was a sum of somewhere between £4,000,000 and £5,000,000 involved. The principals desired to supply it from Dutch sources but informed our Government that it was not impossible the Dutch Government would impose exchange restrictions which would make it impossible to transfer capital to this country and that our Government, through the Industrial Credit Company, informed the Verolme interests that we would hold an umbrella over their heads in the shape of an undertaking to provide from our resources any capital the Verolme interests required and which they are prevented from taking out of Holland by the action of their own Government.

The Taoiseach said on that occasion that he was not in a position to give any further information as to the actual facilities for the transfer of capital and we did not know what the outcome was going to be. I want to suggest that either we know now, or the Minister should tell us when we will know, and inform the House what the ultimate outcome of that transaction was, and whether he has in contemplation any other transactions of that dimension under the general powers conferred on the Industrial Credit Company by the terms of this Bill.

I want to make another submission to the Minister for Finance. Whenever we come to discuss the provision of employment in this country, we seem to concentrate almost entirely on newcomers to the ranks of employers. Now, I do not think I am wrong in saying that 80 per cent. of my neighbours in this country are employed and have been employed by people who have been in business of one kind or another for the past half century, and I am sure that considerable army of employers, who employ 50 men here or 100 men there, has abundant scope for expansion; but certainly in respect of a great number of them, particularly of private firms, the problem is that if they borrow money wherewith to expand, they never can pay it back because by the time they have paid interest on their borrowings, and income tax on their ascertained profits, there is nothing left to reduce the capital sum.

Ask any employer of labour in this country who has sought to expand by raising a bank overdraft or raising a loan and I think he will tell you that he curses the day he ever went into debt for that purpose, because, from that day forward, from whatever profits he realises from the expansion of his business, after allowances have been made for the payment of extra labour hired, for the payment of interest on the money borrowed, and of income tax and corporation profits tax on the profit earned, there has been nothing left wherewith to redeem the capital sum borrowed.

I want to put it to the Minister for Finance that without any permanent injury to the Exchequer a vast ocean of capital could be provided for the development of employment — and mind you, there is a great deal of employment given in this country which is not commonly described as industrial employment, in transport, and in distribution. Many people forget that the distribution industry in this country probably employs as many people as any other industry, or more people, but nobody has any respect for it. Yet, without distribution machinery, without marketing machinery, no other form of industrial activity is of any value because there is no use in producing stuff if you cannot sell, and you cannot sell on the home market, if you have not a distributing system to bridge the gap between the potential consumers and the goods produced.

I want to put it to the Minister that there is a vast ocean of capital available for expansion of existing industries, and existing businesses which provide employment, if it were possible to say to a person, to companies particularly, private and public: "Your profits will not be taxed until they are distributed. If you retain in your business, for the purpose of expansion, half of your annual profits, they will not be liable to taxation, but, if you distribute half of your annual profits, you will have to pay tax on that." If the investment is productive, and it is a reasonable assumption that no firm, public or private, will invest its own money in a losing transaction, you may postpone the Exchequer's harvest for two, three, four or five years, but, sooner or later, the increased investment which a firm undertakes in its own business will yield increased profit, and a time will ultimately come when that profit will yield revenues to the Exchequer.

Mind you, instead of encouraging dozens or twenties of entrepreneurs who may be encouraged by the provisions of this Bill, if you do that, you will encourage hundreds, and even thousands, of small employers in this country to undertake investment of that character, because, if they borrow in order to finance expansion, they have immediately within prospect the means of redeeming their borrowings and delivering themselves from the burden of standing charges which remains upon them, unless or until they can liquidate the capital commitments they have entered into.

I should be interested to hear from the Minister for Finance if we could not supplement the provisions of this analogous Bill by a step of the kind I suggest to him, because I believe you take off the responsibility of the Industrial Credit Company 50 per cent. of the burden that the company ought to be bearing, but is not bearing, because so many firms in this country are reluctant to go to a body of this character and argue the toss with them about getting an accommodation under the terms proposed by the Industrial Credit Company. Every merchant or every small entrepreneur in this country is on terms of relative familiarity with his bankers. They know as much about him as anybody is ever likely to know and, therefore, if they go to their bankers and get accommodation, they are dealing on a basis of mutual confidence. It may be old-fashioned. It may be reprehensible in these days of jet propulsion that a family business is not willing to sit down with some august body of this kind to chew the rag about what they regard as their personal affairs, and to argue the toss as to whether they might be operating their business on more efficient methods and up-to-date procedure.

Old-established firms are inclined to say: "That is our business. We know the way to run our business in the special circumstances in which we find it." Modern and up-to-date accountants and officials in a body of this character may take a different view. Bankers who have been dealing with old established businesses for generations are very often better equipped to understand that these businesses are best run by the people who know how to run them. I think it is these businesses that can provide a great deal of employment in this country at the present time, and in which there is a much bigger potential reservoir of employment than you will get out of new enterprises set up under this Bill.

I often wonder what is this House interested in. I am not interested in bringing tycoons to this country for their own sake. The only interest I have is to see industrial enterprise operated in this country, and to see good employment provided for my neighbours at decent rates of wages in their own country, so that nobody will be constrained to leave this country involuntarily because he cannot find work at home. I have always the feeling that the Taoiseach and some of his colleagues are in some kind of way bewitched by the dream of seeing chimneys belching smoke all over the place, large buildings, and brouhaha of one kind or another. They are not interested if work is quietly provided at fair wages for working people, without any dramatic externals associated with the employment provided. I am solely interested in the employment because I am convinced that permanent employment must be indissolubly associated with profitable occupation and I am certain there is an immense reservoir of potential employment at decent rates of wages of a permanent character for people here if existing firms in the country were given the only effective encouragement to expand to which they will promptly and energetically respond and that is the exemption of company profits from taxation except at the point of distribution.

I think it true to say that the Industrial Credit Company and those associated with it within the limit of the discretion conferred upon them are an admirable body and within the functions they undertook to discharge they have done a very good job. Certainly, any failures that have attended their efforts were not due to any want of effort on their part and it is gratifying to find that a body of that character deservedly receives the approbation of all sides of the House for the work put into the job assigned to them. I think it would be a terrible pity if, in a situation where everybody is prepared to applaud their exertions, they are now manipulated into the ambiguous position of becoming a conduit pipe for large credit transactions of which this House knew nothing and in respect of which certain elements in the House had the gravest doubts as to the expediency and propriety of their grant.

I do not know whether the Minister is prepared to consider the proposal I make for the expansion of the kind of credit which is capable of providing employment here and now, but I was never surer of anything than that the proposal I now make will produce a more rapid expansion of employment than any project which can be effectively promoted by the Industrial Credit Company.

Dr. Ryan

Deputy Sweetman at the beginning of his speech wanted to make it perfectly clear that any criticism he had to offer was not directed against the Board and he complimented the Chairman and welcomed the two new members of the Board. These are sentiments I heartily endorse. I think these gentlemen have given great service to the country and they are to be congratulated for their hard work on this Board.

I referred in my opening speech to a statement I made before that I should like to make certain that no worth-while project would fail to mature for want of finance. I think Deputy Sweetman took that as meaning that I had in mind that such projects had failed to mature in the past. I was rather thinking of the future and saying that, although the programme appears to be very big, I should still like to give that guarantee that no project would fail for want of finance. In that connection I might answer the question put by Deputy Norton— when was it likely that this money would be used by the company? I said in my opening statement that the estimate for this year and the next year was £3½ million each year and for the following two years £4 million each year and for the fifth year £5 million. That is how the £20 million is made up. I referred also to the fact that the Banks had advanced £1.8 million by way of loan to the Credit Company last year. He said that largely went to pay bank overdrafts and therefore made no material difference. To a large extent, that is true. £1.4 million went to pay bank overdrafts so that, if you like, there was £1.4 million of new money. But on the other hand it is now a loan which may extend for 32 years or may be paid off somewhat within that term. I think anybody in business would like to feel that if he had money he would not be pressed for it in six months' or twelve months' time but that he could make his plans to liquidate that amount over a certain number of years. Otherwise, it is preferable to have this rather than what was there before. It is a significant change.

I am not able to answer the questions as to what is the production expected from the projects before the Industrial Credit Company at present, where loans have been promised or commitments entered into or where they are under consideration. I do not know if they will be able to give me that information in a manner in which it could be intelligibly presented in regard to what employment might be given. However, I shall try to get some idea of that and see if the information can be supplied.

Speaking of the difficulties of providing capital, Deputy Dillon also pointed out the difficulties of an ordinary business in repaying capital if it had to pay interest on a loan and corporation profits tax. When a business man complains too much about corration profits tax I always think that he must at least have something left to meet a loan of that kind. The suggestion made by Deputy Dillon with regard to taxing only the distributed profits and leaving the undistributed profits behind is one, of course, that has received very much consideration. The question has even been put to me as Minister for Finance on more than one occasion and I had to go very fully into it—I am not sure if it was for last year's Budget or that of the year before—and look at all the pros and cons. It was a question that received great consideration and it created a great deal of difference of opinion between those who were arguing the point. Being a non-technician, I thought the only thing I could safely do was to leave things as they are. That only applied to that particular time. I am quite sure the question will be raised again. I may be wrong, but I should like to say to Deputy Dillon that the British tried out this idea and found it was not a very good arrangement. That may be too general a statement but I think the Deputy will find the experience in Britain, at any rate, was against it. At the moment I would not be able to say why. It is a question that has been fully considered and will be considered again.

Deputy Norton asked a question about guarantees. I am not sure whether he was talking there of guarantees between the State and the Company or guarantees between the Company and the State through somebody else. Any guarantee made by the State will be published and has to be published.

Mr. Norton

No, it is a question of the Company giving guarantees.

Dr. Ryan

Guarantees by the Company need not be published and, in fact, are not published, I think, under the present system. Deputy Russell asked whether the Minister for Industry and Commerce had any control over the Industrial Credit Company. He has not. He may have his own views about a new industry, which may be discussed with him by the Industrial Development Authority or by officials of his Department; but when the case goes to the Industrial Credit Company it is for their consideration alone. He does not even appoint the Board. It is the Minister for Finance who appoints the Board. At least, the Minister for Finance appoints the majority of the Board—I think it is four—and the minority three are appointed by the shareholders; but as the Minister for Finance is the principal shareholder, he appoints them, too. The answer, therefore, is that the Minister for Industry and Commerce has no particular control over that Company.

The big question referred to by many Deputies here is whether it is right that the Industrial Credit Company should maintain secrecy in issuing a big loan for a particular proposition—it does not matter what the proposition is. There are, of course, two points of view on that and we should assume, I suppose, while we are discussing this question, that we have an honest point of view on both sides. In regard to this particular dockyard, rumour has it that they got or were promised a very big loan by the Credit Company. Deputies speak of allaying public fears, that to satisfy the public confidence the facts should be disclosed. It is bad from the point of view of public confidence to make too much of this, because the public will probably come to the conclusion that there is something there which should be hidden for some reason other than the ordinary rules which apply to credit transactions. I do not think there is any reason for anyone thinking that. I do not know the full facts myself, but I have a fair idea of what they are. I do not think there is any reason for anyone to be troubled about this from the national point of view.

I read what the Minister for Industry and Commerce of the time said, when this question was put to him. I think his argument was that we set this Company up, and we put State money into it, because we wanted a body of that kind to deal with the financing of industry and with new projects of that kind. We gave them absolute freedom—well, I suppose there are certain limits under which they must work, but we gave them as much freedom as any bank has to deal with projects of that kind.

We set them up as an independent body. There is no such thing as any reference to any Minister for approval of that kind. They have absolute discretion to deal with any project, to make loans as they think fit, to give guarantees or purchase shares and do all the various other things, entirely on their own discretion. That being so, I think what we attempted to do in this House was to set up, as it were, another bank to deal with a certain type of business only. We put State money at the disposal of that credit organisation and then let them do the best they can. From that point of view, we must come to the conclusion that they should be treated in the same way as any other credit institution. I think we all agree that a credit institution is bound by many considerations, one of which certainly is to keep its transactions confidential. I do not think there is any doubt about that. We would be doing a great deal of injury to this organisation, and in turn to the idea of building up new industrial projects here, if we were to make public the method by which any particular industry here was financed.

One may say, of course, that this is reported to be a particularly big loan and that there is a big amount of money involved. However, if we publish all the facts of this case, all anybody has to do in future is to send out a rumour. I am not saying a rumour was sent out by anyone in this case. I said at the beginning that I am assuming that everyone is perfectly honest in this case. If we adopt the suggestion made, all any person or group would have to do would be to start a rumour that there was a shady transaction taking place and then we would be forced to give all the particulars. We would be driven from case to case, until everything would have to be published about everything, as time went on. I put it to Deputies that, from that point of view, it is not only undesirable to do this but it is a dangerous thing to do. I believe it is dangerous.

There may be a stage at which these things could be published. I do not know, I have not thought over that at all. I know that Deputies here have made it very plain that they would not require publication during negotiations, or even during the time when an industry would be set up, but that publication should be made at some stage. On that point, I must say that I have not given it any thought. It was only, as it were, when this case was raised, that I looked at the file and I found that this thing was raised. As I said, I looked at how it was dealt with by the Minister for Industry and Commerce at that time. I thought he had dealt with it well and certainly I would agree with what he said.

As for the other point, whether the facts could be revealed at some future time, that was not referred to and, therefore, I think no thought was given to it and I could not really say anything on that particular point. Deputies will understand that if I were to think about something of that kind, the first body I would have to consult would be the Credit Company themselves. They might have very strong views or they might not. I do not know, and I cannot say any more on that point at the moment.

Mr. Norton

Before the Minister concludes, may I ask one question on this point? He has made reference to the way financial institutions conduct their business. As far as I know, these are private companies, operating on private capital. In this particular case, the Industrial Credit Company is operating on the people's capital. Surely the people are entitled to know on what horse their money is?

Dr. Ryan

In answer to the Deputy's point that the people are the shareholders in this concern, the Deputy may be a shareholder in the Bank of Ireland—I hope he is—but has he any right to ask the Bank of Ireland how much they gave such and such a person? The Bank would tell him to mind his own business. Why has the State to give information of this kind, any more than a bank to an ordinary shareholder? I am speaking from the point of view that the people own the money. I do not think that is making a good case.

Mr. Sweetman

Is that analogy not wrong from this point of view? Any shareholder of the Bank of Ireland, if the bank's Irish assets are not sufficient to meet a guarantee cannot be called on for anything further. He has a limited liability. If the assets of the Industrial Credit Company are not sufficient to meet a guarantee, then clearly it is a State institution and the taxpayer has to meet the difference.

Dr. Ryan

Are we not limiting our liability here?

Mr. Sweetman

Not your contingent liability.

Dr. Ryan

Yes, we are. The limit up to now has been £5 million capital and £5 million by way of loan. We say we are increasing our liability but limiting it to £10 million and £15 million respectively.

Mr. Sweetman

Is it the interpretation of the Bill that the Industrial Credit Company are not entitled to enter into any guarantee that with the money they have already advanced to other concerns, they cannot go over that limit? That is not the meaning of the Bill.

Dr. Ryan

Yes, it is.

Mr. Sweetman

They cannot borrow.

Dr. Ryan

They cannot commit themselves to more than that. It is a limited liability company, if you like. However, let us not enter into it in a too controversial spirit.

Mr. Sweetman

I tried to be as quiet as possible.

Dr. Ryan

As I said at the beginning, there are two points of view. I was stating the other point of view. I may be wrong—I admit that. I did not give the matter much thought, but I read on the file what the Minister said and I thought he was on sound lines. I promise to give the matter consideration in the future to see if anything can be done in that way.

I have often been asked about State companies generally, how they could be controlled or information obtained from them. I have given a lot of time to that. I wrote to the chairman of every one of these companies asking could he suggest something.

Mr. Cosgrave

Herbert Morrison thought a lot about it, too.

Dr. Ryan

I read all that as well. It is an extremely difficult matter to deal with, and this is extremely difficult, too.

Mr. Norton

I did not hear anybody suggest anything strange about this matter at all, but I did hear people saying something like this. The Government are guaranteeing X sum of money to this Cork project, while other bodies, which could do with money apparently, do not find it easy to get it. Various sums of money were mentioned to me. One was mentioned to me on that occasion; others have been mentioned since. Everybody wishes the project well. There is no question of any disputation about the matter. The Minister ought to make the position clear in this case because it has become such a focal point of discussion. I did not know the matter would be raised in this way. I had already submitted a Parliamentary Question concerning it. The Minister ought to give some information in this instance.

Mr. Sweetman

Would the Minister mind indicating to me by letter between now and the next Stage what provision of the principal Act or of this Bill limits the Industrial Credit Company in the amount they can guarantee to anybody else? I fail to find it.

Dr. Ryan

I shall.

Question put and agreed to.

Committee Stage ordered for Tuesday, 14th July, 1959.