PUBLIC WORKS LOANS BILL (Hansard, 6 August 1902)

§ (12.40.) MR. LOUGH (Islington, W.)
moved the omission of Clause 4. He thought the defence which they had had from the Secretary to the Treasury about one of these loans was not at all satisfactory, for he contended that the claims of the Treasury against Richard Cosh ought to have been proceeded with. He therefore moved that Clause 4 be omitted.

§ THE FINANCIAL SECRETARY TO THE TREASURY (MR AUSTEN CHAMBERLAIN,) Worcestershire, E
admitted that very regrettable loss had followed from the making of the Cosh loan referred to by the hon. Member. The Treasury had had to make the best of a bad job, and they had decided to write the amount off. The hon. Member had asked why they did not proceed against Cosh, to whom this loan was granted, but the only reason was that the Commissioners found that he had no property. And they thought he was not worth powder and shot, and, as he was a man of straw, there was no chance of recovering anything from him. If he thought there was the slightest chance of ever getting hold of this man and wiping off the loan he should be very 900 reluctant to relieve him of the obligaition, but that was not the case. He admitted that in one sense the explanation was not satisfactory, because it was an admission that the whole transaction was a bad one, but he hoped the hon. Member would be satisfied and that he would not divide the House. The Commissioners had advanced.£540,000 under the Act of 1866, and this was the only bad debt they had made on the whole of that sum. They had pleaded guilty to an error of judgment in this case. The Committee might feel assured that they did not make loans recklessly.

§ MR. CALDWELL (Lanark, Mid.)
said it was not the practice to write off bad debts in the way now proposed. The liability was continued against the debtor, so that it might be recovered if possible if at any time he should turn up. Why should they discharge the debt in this case? He urged that the liability should be left in the same way as when Irish tenants did not pay the advances made to them.

§ MR. WHITTAKER (York, W.R., Spen Valley)
called attention to the provisions of the Act of 1866, and asked why a loan of considerably more than half the value had been made.

§ MR AUSTEN CHAMBERLAIN
said that was one of the regrettable things in connection with this transaction. Unfortunately, the Commissioners made a mistake.

§ MR. FLYNN (Cork Co, N.)
called attention to the proposal with regard to the sale of the Derry Central Railway to the Northern Counties Railway Company, and asked why that Company should get the advantage of £15,000 on a transaction of,£100,000.

§ MR. AUSTEN CHAMBERLAIN
stated that when the Commissioners 901 foreclosed they offered the railway for sale. They failed to get a satisfactory offer. Tenders were then invited, and they accepted the highest. The bargain was carried out on the best terms that could be obtained. The property had been sold to the highest bidder, and they were not now releasing the Northern Counties Railway Companies of anything they undertook.

§ COLONEL NOLAN (Galway, N.),
said that the Government stuck fast to the mortgage on the line. Nobody looked after it, and the whole of the permanent way was stolen. [Cries of "Oh, oh!"] Well, he knew as a matter of fact, that a station was stolen.

§ MR. FLYNN
said he did not know that "stolen" was the proper word, but it had disappeared altogether. Under the circumstances he would not press the Amendment of which he had given notice.

§ MR. DILLON
moved the omission of all the lines on pages 5, from line 16 to the end of Part II, (1); and on page 6 from line 1 to line 16. This part of the Schedule covered the loans made to small tenant farmers in Ireland under the Land Act of 1881. Here was a system of making loans of public money to the small tenants for the purpose of improving their holdings, and when the holdings were improved the landlords took possession of all improvements because the rent had not been paid. That was an extremely good illustration of the way in which the Land Act was worked. In some cases the landlords robbed the State, in other cases they robbed the tenants, and in yet other cases they robbed both the tenants and the State. That gave one a conception of the untold millions which had been stolen by the Irish landlords by the process of eviction.

§ MR. AUSTEN CHAMBERLAIN
said that when he looked into this question last 902 year, he had been very much tempted to see whether he could not do what the hon. Gentleman opposite had suggested, and introduce some Amendment of the law with the general assent of the House, which would make the loan chargeable on the landlord's interest, but the difficulty was the inclusion of the losses. He would consult with the Irish Government and give the matter further consideration.

§ MR. DILLON
said he wished the hon. Gentleman to understand that he did not desire to obstruct the landlords improving their estates. The very reverse was the case. He begged leave to withdraw his Amendment.

§ (1.15.) MR. FLAVIN (Kerry, N.)
thought they ought to be supplied with more information about the men to whom this money was advanced, and in the information published they ought to give the district as well as the county where these men resided.

§ MR. AUSTEN CHAMBERLAIN
said he did not think there would be any difficulty about doing that.

§ MR. CALDWELL
asked if these Votes were being given at the present moment, and to what extent? In 1881 the circumstances were quite different. He wished to know to what extent money was being granted under this Act.

§ MR. AUSTEN CHAMBERLAIN
said he was afraid he could not give the hon. Member the details, but he might say that on the whole the losses were not very heavy. As a rule the tenants made every effort to pay, and it would really be placing an obstacle in the way of necessary improvements if they adopted any other course.

§ MR. DILLON
thought it would be a very great mistake to limit the issuing of these loans to improvements. 903 Everybody knew that the discouragement to undertake improvements had been so great up to the present time that there was a great deal of room for improvement in regard to small holdings. His object was to direct attention to abuses, and to show the real causes which had led to the mistakes which had occurred. He might say in passing that the British Treasury had lost nothing by those loans, for he understood that they had made a profit, because the interest was put sufficiently high to cover contingencies, and when one tenant was in default, the other tenants, by paying a little more, made up the loss. He wished to allude to the case of Mr. John O'Brien, who got an advance from the Treasury of £666, of which £470 16s. 7d. was now proposed to be written off. Therefore on that transaction the State lost £470. In this case the State advanced to the landlord a. sum largely in excess of the total value of the holding. The interest of the tenant was more than half the; total value of the holding; but what was being done in many cases was that pressure was put upon the tenant, and money was advanced upon the total value of the holding as it stood. The result was that, on account of the way in which those transactions were carried out, the security to the State was lost and done away with. That was what had happened in this case, with the result that it had been seized upon by the landlord, who had disposed of the estate. This transaction was only one of a considerable number of a similar character. It was a transaction in which the Land Commission departed altogether from the principle on which land purchase ought to be conducted with the result that they did away with the margin of security. He did not bring up this case, as the Chief Secretary had said, to show that the process of land sale in Ireland was unsafe to the State, because past experience had shown it to be one of the safest transactions which the State had over made. He believed that land purchase was the only possible solution, and he was jealous of the maladministration by which those losses wore incurred, and the Commissioners ought not to lend money under the pressure of needy landlords. It should be remembered that it was the duty of the Land Commission to the whole community to secure that this margin of security was safeguarded, 904 for upon this depended the whole success of this system. He was convinced that if this principle was carried out, no such cases of default, as he had alluded to, would ever arise. For these reasons he begged leave to move his Amendment.

§ MR. FLYNN
said he had worked out the case alluded to by the hon. Member for East Mayo, and he found that it amounted to twenty-nine years purchase. That was a very extravagant sum to pay for a holding in Ireland, and it was quite double its proper value. He thought his hon. friend had rendered a public service to the cause of land purchase in Ireland by drawing public attention to this important case, because, if such instances were not exposed, such cases might occur in larger numbers, and thus the whole system of land purchase in Ireland might be undermined. There was a great tendency to inflate the value of land on the part of the Irish landlords, and if they could only get any backing from the Government of the day, no doubt a great blow would be struck at the system. This case would never have occurred if the original burden placed upon the tenant had not been more than he could possibly bear. The real value of this example would be to warn the Land Commissioners and the Treasury that, in sanctioning loans of this character they ought to make it quite clear that there was ample security for what the State was advancing. He trusted that many cases of this kind would not crop up, but if the present tendency went on, he ventured to prophesy that in future sessions, instead of having one case, they would probably have many other cases involving thousands of pounds.

§ MR. AUSTEN CHAMBERLAIN
said he could not agree with the hon. Member in regard to the arguments he had put forward with reference to this particular case. The tenant in the first instance got a very considerable immediate relief which ought to 905 have put him in a good position to commence with. He did not wish to argue now a point of controversy, for he was only dealing with the principle with which he understood the Secretary to the, Treasury agreed. In this case their failure to obtain better land was largely owing to the dilapidations, because the holding had not been let for some time, and consequently the value of the farm had very much deteriorated during that time. This accounted for the loss which had been sustained by the State.

§ MR. DILLON
said that after the statement of the Secretary to the Treasury he would not pursue the matter further, beyond making a request that he should give them in future the name of the county or parish or district of the borrower, and the name of the vendor. He did not know much about the actual facts of the last case, but on a previous occasion he exposed in the House a case in which there had been collusion, where one relative sold a farm to another at a grotesquely outrageous price. Under the present law in Ireland, such transactions were possible, and cases were common where a relative let a big farm to a son at a fictitious rent for the purpose of coming on the British Treasury to scoop in a large sum of money. He objected to these collusive transactions, and while he had not sufficient evidence in the case, he had mentioned to warrant him in believing that then; had been collusion, he urged the Secretary to the Treasury to give them the name of the vendor in the future in order that they might make inquiries to ascertain whether the transactions ought to be allowed or not. He begged leave to withdraw his Amendment.