asked the Minister for Finance if he will arrange for land bonds to be accepted at par in discharge of death duties.
Ceisteanna—Questions. Oral Answers. - Land Bonds.
16.
The answer is in the negative.
Would the Minister not agree that these land bonds have proved to be a most unjust method of payment for land? Could the State not make up for this injustice to some extent by accepting the bonds in part for death duties? This would impose only a very limited demand on the State and would result, possibly, in considerable recompense to bond holders.
At one time I was of the opinion that this would go some way towards remedying what is, to say the least, a very unsatisfactory situation.
Hear, hear.
However, a number of reasons have emerged which seem to indicate that it would not be satisfactory in that, first, the Deputy may have noticed that in National Loans we did have the provision that the loan would be accepted in payment of death duties but he may have noticed also that this has been dropped from the last National Loan because it was found that it did not have any real effect. Secondly, we have made some efforts to activate the land bond market but these efforts have not been successful because the number is so small. Thirdly, the bulk of the land bonds issued were issued prior to 1939 and it is very unlikely that many of these bonds are now held by the original holders. Therefore, if we were to give the concession that is suggested in the question it would amount really to a free gift to the purchasers of a lot of those bonds who bought them at a price that was low and took account of all factors including the fact that they do not rank for payment of death duties. At the moment the existing issue of 9¾ per cent bonds is at a premium and unless interest rates increase to a higher level than they are at the moment, this death duties concession would be of no value at all in relation to them.
Might I suggest to the Minister that the bonds of 7, 7½ and 8 per cent issues are in the hands of the original allottees and that it would be an ease to them if the bonds were accepted in the way mentioned? May I suggest further that it is wishful thinking to speak of a market in land bonds being created when there is no redemption date for land bonds?
We tried to create a market by having the Government stockbroker dealing in them. The question raised by the Deputy in his supplementary is one that has been considered also but the problem is where to draw the line or what should be the basis to justify drawing the line as between one set of bonds and another.
The Minister has said that to say the least the situation in regard to land bonds is unsatisfactory. We would all agree with that and I think most Deputies would admit the cogency of some of the points raised by the Minister in reply to Deputy Cooney's questions. Since the situation is unsatisfactory will the Minister not agree that some action is needed and needed quickly because there is a real injustice, even if the suggested way of remedying it is not the correct one?
The Minister for Lands and I have been going into this matter in some detail recently. As I have outlined, the problem is that any steps that would be taken to remedy the situation will operate only for the benefit of earlier issues which may well not be in the hands of the original holders. The recent issues of land bonds are not such as to create any injustice to those to whom they have been allotted. We have not completed our consideration of the matter.