HC Deb 30 November 1928 vol 223 cc788-804

Order for Second Reading read.

The LORD ADVOCATE (Mr. William Watson)

I beg to move, "That the Bill be now read a Second time"

This Bill is on the same lines as that which was introduced for Scotland last Session, but with one small alteration. Its title has been somewhat altered, in order that it may be possible, if it be thought desirable to alter Part II so as to bring into operation in Scotland an equivalent of the chattel mortgage portion of the English Act. As in the case of the English Act, the Bill is divided into two Parts, Part I dealing with what I may call for convenience long-term credits and Part II dealing with short-term credits. Under Part I it is proposed to set up an Agricultural Security Company with capital of various kinds, to enable it to make advances to farmers and others. The object of this Part of the Bill is primarily to assist the tenant farmer who is likely to be disturbed in the occupation of his holding through the sale of a part or a whole of the estate—a not uncommon thing in these post-war days—when he can only safeguard his position as a tenant by buying the farm holding himself. The proposed company is to be in a position to make advances to farmers who can buy their farms but are not in a position at the time to find the whole of the capital necessary to make the purchase. The company would also be able to relieve farmers who have already bought their farms, but who have had, for instance, to give a bond over their property for, it may be, a large part of the purchase price. It would give them, I think, a form of security which may have advantages over the existing forms of advance they can get, because the ordinary bond is a mere bond carrying interest with it and providing at some date, which may be uncertain, for the repayment of the capital. We think that a form of security which would give a moderate return of interest to be paid, coupled with a gradual reduction of the capital liability by instalments, might be of advantage to farmers.

It may interest the House to know that the acquisition of farms by their tenants has become much more common in recent years, and at the present time there are about 13,000 occupying owners in Scotland. This number is about one-sixth of the total number of agricultural holdings in Scotland, but if we take into account the fact that the crofters' holdings in the crofting district form nearly a third of that number, and also that a good many holdings are not bona fide separate holdings, but are held in groups of two or more, probably about one-fourth of the ordinary farm land of Scotland is occupied by occupying owners. The process of transfer, I think we may say, is still on the increase. Further, as costs of production have gone up the farmer has since the War been in greater need of working capital for financing his ordinary day-to-clay operations on the farm. That has made it if anything more difficult for him to find the capital necessary to finance such transactions as we have in view at the present moment.

The Bill proposes to set up machinery by which a farmer in the position described can come to the company and obtain an advance on a long term reducible security, with the usual provisions as to two-thirds of the estimated value of the land on which it is secured. The House will appreciate at once that there are advantages to the peace of mind, if not to the peace of pocket, of a farmer to know that these advances may be spread over a period up to 60 years, to know that he has a fixed amount each year to find, and that he will not run the risk of having the bond called up, at the usual notice it may be, but still at an odd time when he may not be in a position to meet it. Further, by the annual reductions the principal is all the time being gradually paid off, instead of having to be found all at once. Hon. Members will recall that under the Agricultural Credits Act, 1923, it was possible to obtain from the Public Works Loan Board an advance somewhat of this nature. During the few years since that Act came into operation I understand that about£500,000 was advanced in Scotland to some 160 farmers, which goes to show that the average advance would be about£3,000. I think it is right to say that the system seems much appreciated by those who have taken advantage of it, and it is anticipated that a company specially formed for this purpose in Scotland would soon be better known amongst Scottish farmers than were the facilities obtainable from the Public Works Loan Board. The principal agricultural societies in Scotland have passed resolutions in favour of the Bill.

With regard to the finance of the Bill, it is intended that the Security Company should raise a share capital of£125,000 and the Board of Agriculture is to make advances up to a similar amount to establish a guarantee fund. No interest will be payable on those advances for 60 years, but at the end of 15 and again of 30 years there is a provision for raising the question of repayment if the Progress of the company is so good that there is surplus money available for meeting that situation. Reference to that will be found in Clause 2, Sub-section (h). The working capital of the company is to be raised by Means of the issue of debentures, just as in the case of the English Act. The Treasury are authorised by the Bill to secure the under-writing of those debentures up to£800,000, and to subscribe to the debentures up to the amount of£200,000. It is impossible for us to say precisely what the interest. charged to the farmer will be, but it will be affected mainly by the nits of interest at which the debentures can be obtained, because the debentures are going to be the main working capital of the company, as the dividends on the share capital are limited to 5 per cent. and the share capital will only go a little way towards financing the operations of the company. I should point out that the Government are not concerned to find loans at a specially low rate of interest, and perhaps I may suggest a reason. If the money available for this purpose were too cheap it might stimulate sales and possibly drive up the price of land, which would not be to the interest of the tenants who desire to purchase.

On the other hand there is a condition providing for a rate of interest which is a little below that rate. At the same time the Treasury is to be authorised to pay£1,750 per annum for 10 years towards the administrative expenses, and that should help to keep down the rate of interest which is to be charged to the borrowers. My right hon. Friend wishes me to say that be is at the present time in negotiation with the banks, as was done in the case of England for the setting up of this company, but he is not in a position at the moment to say that that will be arranged or that other arrangements will be made. The Secretary of State also asked me to say that he will undertake to be in a definite position to inform hon. Members before this Bill comes to the Committee stage what arrangements are to be made in regard to the company. Of course that is a matter which will be most conveniently discussed in the Scottish Standing Committee.

With regard to the second part of the Bill its purpose is to enable agricultural co-operative societies to finance their operations by offering to the banks their stock of merchandise as securities for advances. There are trading societies dealing in farmers' requisites, and marketing societies, and there has been a notable development during the past few years in that direction in Scotland. In the case of the marketing societies the milk agency is a very striking illustration. The marketing societies are frequently not in a position to immediately dispose of the produce taken from the farmers, and sometimes they hold it up in order to get a better market both in their own interest and in the interest of the farmers. It would, however, be an advantage that they should be in the position to get advances on the stocks which they so hold when they come to settle with the farmer, and this proposal will help them to finance such an operation. The possibility of that being done will tend to increase the membership of co-operative societies by attracting more people to those societies. The position of the society is that it is actually buying the class of produce sold by its members and in that way they are qualified to offer the stock hack and so forth which is held as security for the advance. Obviously the other class of societies which are trading with the farmers and selling different articles must have their stocks, and there again we think it will be very useful to have the power to advance money on the stocks.

There is one well known society in the North-East of Scotland which carries on large operations on that principle. As far as the proposals of the Bill are concerned, it does not deal with or provide for any cases of credit given directly by those societies to individual farmers, but it is obvious that that possibility will be facilitated by this Measure. I should say that in the English Act there was a provision giving security to the farmer for his stock and machinery, but that form of security is not very familiar to Scottish law and from what the Secretary of State for Scotland has been able to gather there are, or there have been grave doubts as to whether the using of that form of security if introduced into Scotland would not tend to adversely affect the credit of the farmer in other directions.


Have the Government only just discovered that?

1.0 p.m.


We have never had that provision in 1.0 p.m. Scottish Bills before and my right hon. Friend has now seen some signs which are favourable to a proposal of that kind. In order to afford an opportunity of discussing that matter within the terms of this Bill the title was altered, otherwise it would not have been posible under the Bill to deal with that point. I think this will he a useful Measure to some extent. in dealing with the agricultural industry.


The right hon. and learned Gentleman has referred to agricultural co-operative societies and marketing societies, and he said that those societies sometimes held up produce in order to get a better market.


I did not use that expression in any offensive sense. It is merely a matter of business.


The right hon. Gentleman said that those societies would be able to offer their stocks of merchandise as security for advances. In the case of financing a consignment of produce from the farmers to a society in Scotland, I suppose it must be the property of the society, because that is very important.


The credit will enable them to pay to the farmer. That is the intention of the Bili as drawn. I want to say in the first place that this Bill should be of some service to the agricultural community in Scotland; and in the second place, having got a precedent in the English Act, we should not be slow to take any help we can get from similar proposals in Scotland.


As the Lord Advocate has indicated, the Hill for England, on substantially similar lines to this, was taken, if I remember rightly, in May of the present year, and at that time it was added that a Measure would be introduced applicable to Scotland. That is the Bill which we are discussing this afternoon. In some respects it is unfortunate that this Bill has come before the House on a Friday, when so few of my Scottish colleagues are present—though I make no complaint on that account—because the question is one of undeniable importance to Scottish agriculture. We do not intend this afternoon to divide against the Bill, but there are certain considerations which should be put plainly and clearly to the House, and I am encouraged to put those considerations because it is quite obvious that the Lord Advocate holds out nothing more than a very limited hope in connection with this Measure.

We must relate all these agricultural credits, and other devices to help the agricultural community, to the broad position of farmers in the presence of legislation of this kind. Since 1896 we have embarked on the Agricultural Rates Acts and the structure of that legislation is now completed by the proposals which the Government have submitted to the House of Commons, under which, with the exception of dwelling houses, all rates on agricultural land will be swept away. Under other Sections of the Finance Acts of recent years, concessions have been given in regard to maintenance, property repair, and other items; and, in the third place, the Government have just proposed a further concession relating to agricultural produce, in that part of their de-rating proposals which is applicable to railway freight rebates which have to be passed on, in the form of reduced charges, on commodities of that kind in this country. All of these concessions have been given, and others which I dare not take time to describe.

We do not dispute, in this part of the House, that agriculture has been passing through very difficult times in many parts of the country since prices broke in 1921; but the fact remains that that is not peculiar to agriculture, and other sections of industry have had no concession of such a kind under the ordinary fiscal or taxation law. One consideration, which I press again, is that we should not embark on further legislation, either in Scotland or in any other part of fie country, until, under the Income Tax system, we know exactly how the farming community stands, and that was plainly in the minds of the Royal Commission on the Income Tax in 1919, when they recommended that farmers should be put on the ordinary Schedule D profits basis, and that the basis of one time the annual valuation, as it is now, or two times as it was at that date, should be swept away. The Government do not take that fundamental step. They systematically refuse to take it, although it was unanimously recommended, and they go on with one device after another, of which the latest illustration is this Agricultural Credits Bill applying to Scotland, corresponding to the Measure applying to England which was introduced earlier this year. Accordingly, we repeat that fundamental plea this afternoon, as being one which is in every way just arid fair to the agricultural community, since there can be no complaint on the part of anyone who is only asked to pay taxes on the profits that he actually earns.

Turning to this Scottish Measure, I should like to ask the Lord Advocate one or two questions. The finance of the scheme is tolerably plain, that is to say, we have the guarantee fund covering a capital of£125,000, the underwriting of the£800,000 of debentures a quarter of which the Government themselves propose to take up, and the contribution of rather more than£1,700 a year to the administrative expenses of the scheme. The real question is whether in Scotland—I am not going to speak for England at the moment—this device is going to help us in the very least, in the presence of the undoubted criticism of at least part of the banking institutions, and of what those institutions would very likely do on their own initiative. When the Minister of Agriculture introduced the English scheme, he paid a tribute to the support of the banks and the encouragement that they had given—a tribute which some of us found it very difficult to understand, because the real truth was that the banking institutions, or several of them, were strongly critical of this plan, and urged over and over again, quite openly, that they could provide all the facilities and credit which were required, and that the scheme which it was proposed to set up would very likely have little real application.

What has happened in England? The Government carried the Bill of May, 1928, and, within the past few days, an announcement has been made regarding the setting up of the corporation and the terms and conditions on which it is going to proceed; and no one will dispute that that corporation is just a shadow of the banking institutions, who, for all practical purposes, are in control of the situation. Are we going to achieve anything by establishing this machinery, and probably duplicating some part of it, if it be the case that the banks would themselves provide this credit wherever appropriate security was offered to them? That reminds us of the position of a certain class who, presumably, have always been very much in the minds of Members of the House as possible applicants for this credit. I refer to people who entered upon their holdings, or incurred responsibilities in regard to them, during the boom period of the Corn Production Acts between 1917 and 1921. These men, in many cases, financially, to use a popular phrase, bit off far more than they could ever chew, and leading bankers have told me and others quite openly that, if devices of this kind are intended to help men in that position, they simply cannot be entertained, and in any ease are not desirable, save, perhaps, in a limited number of cases where these men might be able to turn the corner.

We passed from that legislation into the atmosphere of the drop in prices and the depression, and, therefore, the real test before us now is whether the terms and conditions available under this legislation will be better than the banks themselves can offer. It was pointed out, in the discussion on the English Pill, that in all probability the terms would not be very much better than 6 pet cent., and, taking the case of Scotland, if the corporation emerges in Scotland—rather gathered from the Lord Advocate that it is still the subject of negotiation—when we have added up the terms and conditions of this capital and these de- bentures and the other items, I do not see much prospect of an improvement on that state of affairs. If that be the position of affairs under this corporation, which presumably is to come into existence in Scotland as in England, what better off are we than we are now in the presence of the ordinary banking credit, whether by way of overdraft or in any other form? I confess that I think that all that will happen under this legislation will be that we may get the corporation, probably, in Scotland substantially on the lines of the English corporation, and that the experience of the Act of 1923 will be so far repeated. I am not sure that this is not a weaker proposal than that of the Act of 1923, because, after all, if we relate these plans to the Public Works Loans Commissioners, they do try to go near to 5 per cent. in their advances where the conditions are suitable, and, on the face of things, it is doubtful whether that will be approached or achieved under this Bill. I do not want to pour cold water on agricultural credit for a single moment. I believe that a great development of co-operation among agriculturists in Scotland, according to all the information that is given to us, is urgently necessary, and I think that many of these societies, wisely developed on sound lines, can do the greatest good. But the financial structure of the Bill does not hold cut any real hope of progress in that direction, and accordingly, while we do not oppose it to-day, and reserve our criticisms for the Committee stage, I think it would be wrong to suggest to Scot tish agriculture that in all the circumstances this will lave more than a very limited application.


I always listen with interest to what is said by the late Financial Secretary, but I begin to think he has rather a bee in his bonnet about the profits of farmers, because he is constantly advocating that they should be assessed under Schedule D, apparently with the idea that it would be a profitable transaction for the Government.


That is not my case at all. I only wish to put it on a basis on which we can know exactly what they are doing. We want the facts.


Of course, the right hon. Gentleman is well aware that there is the alternative system, and it is open to any farmer to be assessed, at his own wish and request, under Schedule D. I have not the figures before me, but that option has been availed of a great deal, because they find it more profitable to themselves. In reference to the second point, that the banks would give all the credit that was necessary and therefore the Bill is unnecessary, I am not an authority on banking practice, but I have always understood that the one security a bank declined was a loan secured for a long period on real estate.

The object of the Bill is twofold. It is to secure long-term loans to farmers, or those interested in agriculture who have the security of real estate. The advantage of a long-term credit is not so much in the lowness of the rate of interest, though it is believed that will be lower than any loan from a private lender, but the loans will be secured on the terms that they are repayable by instalments. With the provision that those instalments, which consist partly of principal and partly of interest, are repaid punctually, the borrower has nothing to fear from what is the constant dread of a private mortgagor, that the money may suddenly be called in at a very awkward time whereby the borrower may suffer very serious loss. If this corporation does its work and these long-terms are given ii will be of immense value to a certain class of borrower, those who have assets of the nature to which I refer, but only to that limited class of farmer.

That really is not the ground on which I have intervened. I am particularly interested in one observation made by the Lord Advocate, when he pointed out that he had made a most marked difference in this Bill from the English Bill. He has limited the bill of sale business—giving bills of sale on chattels to the co-operative society—and he has done something further. He has distinctly left out the provision that those bills of sale should be secret. He has required that they shall be published and that it shall be known that money has been borrowed. I should like to ask the Lord Advocate why it is that the Scottish Bill has departed, so far as short-time credits are concerned, from the English Bill. The Lord Advocate used exactly the same expression that I used in opposing the Third Reading. I urged with all the power I possess that for a farmer to give a secret bill of sale on all his assets was almost certain to destroy his credit, and that a secret bill of sale, making the bank a preferred creditor over every other creditor, was contrary to honest dealing, that it put it in the power of a man to prefer one creditor and to include in his mortgage goods that he had just bought and give security for them to the bank, and that industry could not be carried on like that.

I assume there has been some communication between the Scottish Board of Agriculture and the English Minister. I should like to know whether any farmer has availed himself up to this date of the short-time credit facilities provided by the recent Act. The few bankers I have seen have told me that there has not been a single case up to now, and I do not think the facility ever will be used. I thought., and still think, it was a most foolish piece of legislation, contrary to the interests of the farmers, and contrary to straight dealing, and it was most undesirable that it should be put on the Statute Book. For these reasons, I congratulate the Scottish Ministry on the line that they have taken on this Bill. I think it wholly admirable. I do not know hut I thoroughly suspect that the Scottish farmers themselves will have nothing to do with the same bills of sale. The Lord Advocate has himself agreed with that view, and the Secretary of Scotland too, and I shall be glad if the right hon. and learned Gentleman will confirm my opinion.


Any Measure that tends to improve the facilities for farmers to obtain long-term credits on business lines must, I think, be to the interest of the industry generally. Although, like the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham), I do not expect any very great things from this Bill, I think that, at any rate, it will fill a gap that wants filling at the present time. As the hon. and learned Gentleman the Member for East Grinstead (Sir H. Cautley) pointed out, one of the greatest objections and one of the greatest difficulties the farmers have in regard to the question of long-term credits is that they are always afraid that the outstanding sum may be called in by the banks. If the loans made through this corporation which it is pro- posed to set up can be extended and paid off over a long period of years and the farmer is thereby relieved of the difficulties from which he now suffers because of the fear of having his outstanding debts called in, I think the whole House will favour this Measure being applied to Scotland. With regard to the criticisms which have been made by the hon. and learned Gentleman the Member for East Grinstead on the differences between the Scottish and English Bills, I think that the differences are always in favour of the Scottish Bill. I agree with him. I understand that there is not going to be a Division to-day, and, of course, we reserve our criticisms for the Committee stage.


I have been very interested indeed in the remarks of the hon. and learned Gentleman the Member for East Grinstead (Sir H. Cautley) because I remember his examination of the English Bill and the criticisms which he addressed to the English proposals at that time. It is very interesting to find that in the Scottish Bill the basis of Part II is entirely different from that of Part II of the English Act. For the information of the hon. and learned Gentleman—if he has not seen it—probably I can account for the fact that that change has been made. The "Scotsman" of the 10th May, when the English Bill was passing through the House of Commons, contained a report of a meeting of the Scottish Chamber of Agriculture. I find that at a meeting of the Council of that body when a motion was moved that the general provisions of the English Bill should be applied to Scotland, there was a heated discussion as to the application of Part II of the Bill for short credits, and that the previous question was carried by 10 votes to four. So that the Council of the Chamber of Agriculture in Scotland were evidently very much against applying to Scotland the short-term credits' part of the English Act at least with regard to individual farmers.

I entirely agree with the general criticism which the hon. and learned Gentleman has made of the English Act. The Lord Advocate indicated that they have broadened the title of the Bill from that originally produced, so that there might be some discussions in Committee if anyone wanted to secure that the English provision should be applied to Scotland. While it is obvious that the Lord Advocate is not pressing that point, the fact that he is leaving it for discussion in Committee makes it a matter for the House to watch very carefully, because it ought not to be assumed that a wrong Measure which has been applied in England should apply to Scotland.

Although this is a Scottish Bill, I should not be quite true to my convictions in the matter if I did not say something about the first part of the Bill on the same lines as that which I said on the English Bill. I agree entirely with what my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham) has said on the general question of long-term credits. I would also point out, with regard to the finance of the Bill, that while the banks probably would not want to give a great deal of long-term credit on real estate, as the hon. and learned Member said just now, they are to be induced to give long-term credit by means of a State subsidy. If you take the finance of the Bill, you will find that you are to advance up to£125,000 for a period of 60- years free of interest. Therefore, you make, in effect, a gift to the banks—that is if the loan is given for the whole period —of something like£375,000 by way of interest. In addition you are going to give£1,750 a year for 10 years for the ordinary administrative expenditure. You also undertake a not inconsiderable contingent liability for subscription by the Treasury to debentures if and when required. Those are very considerable subsidies for the banking institutions that will form the Land Corporation when it is set up. It seems to me that it is very unsound indeed for this House, whether in respect of Scotland or of England, to vote such large sums of public money and to undertake considerable contingent liabilities unless it can get, at the same time, a guarantee from the banks who will be the constituents of the Land Corporation.

I do not agree with the view—I know it is a debatable point submitted by the Lord Advocate, that the means provided by a Government Department of reducing the rate of interest at which money can be borrowed to buy real estate would necessarily induce a very large sale. I always understood that the Tory party in the past had desired that as many people as possible should be able to obtain ownership of their farms or their holdings. For that purpose, I should have thought that the Tory party would have moved directly to get money for people who are able, at any rate, to put up part of the capital required to buy their farms or holdings at as low a rate as possible. As a matter of fact, I do not think that such a subsidy could possibly command a great change in the market price of holdings or farms. After all, when you go and buy a farm or a holding you judge it upon the outgoings. You consider what are the outgoings of the place and what are likely to be the profits to be made. What is important is whether either the sitting tenant or seine moving tenant decides that it will he more to his advantage to own the holding or rent it from a landlord. I should have thought that from the Tory point of view they would do what they possibly could to secure direct ownership of the farms and holdings, but under this scheme there is no guarantee at all that after we have paid this public money, either by annual grant or by loan free of interest over a considerable number of years, a reasonable rate of interest will be obtained under these long-term credits at the bank.

I think it is a very great pity that we have got into the habit lately of making considerable grants from State funds without securing any really adequate quid pro quo from the private interests. We have made a protest here on many occasions. We made a protest in regard to the subsidy to the beet sugar industry. We protest against money going to private interest without guarantee as to what shall happen in the future, and without giving to the State a share in any capital assets that may be created. We do say that if we give public money we ought to have a guarantee to this Rouse that the farmers who are to make applications for long-term credits should get a guaranteed low rate of interest charged upon the mortgages which they may take out for the purpose of purchasing their farms or holdings.

I do not want to repeat all the items which I could give in support of that claim, but I want to ask one or two questions of the Lord Advocate. I am not quite clear about the point I put to him during his speech. It is much more desirable under Part II of the Bill that the short-term credits should be arranged through the co-operative societies. The agricultural credits which have been most successful in the countries which have adopted agricultural credits have been arranged through the local cooperative credit societies, and that has been due to the fact that when the credit is arranged it is arranged by men upon the local co-operative societies committee who know much about the individual would-be borrowers, whether they can be relied upon, whether they are good farmers, and so on. In the case of the societies as we know them in Scotland, they are mainly marketing societies, so far as I am aware, and a great deal will depend upon whether the credit under Part II of the Bill can be given upon stocks which are forwarded for sale to the society as agents.


Clause 5 (2) provides that The property which may be affected by such a charge shall be the stocks of merchandise from time to time owned by the society in pursuance of the objects which it has been formed to carry out.


That means that there may be some cases where the credit cannot be given to the extent which is desirable. That is the very point to which I should like the Lord Advocate to pay attention before the Bill goes to Committee. I do not want to discuss the point further on Second Reading. Another point is the definition of a bank. In the definition Clause the definition of a bank is very different from that which appears in the English Act. Clause 9 (2) says: 'Bank' means any bank having power for the time being to issue bank notes. If we look at the English Act we find that a bank means any bank, society or corporation doing banking business which is recognised by the Minister. That is a very different arrangement from that which is proposed in regard to Scotland. I regard that as an essential difference and an essential point. In England and Wales a considerable amount of the business done by the agricultural co-operative societies is done in connection with the larger co-operative institution which had for that purpose its own bank. I am glad to say that the Minister of Agriculture in the case of England and Wales recognises the co-operative bank for all the functions of the Act. I cannot understand why it is thought necessary in Scotland that some different process should apply. Why should not, if I may so put it, the senior co-operative financial institution in England and Scotland be able to undertake credits under the terms of the Bill for the Scottish co-operative credits societies in exactly the same way as is provided in the English Act it can be done in England and Wales? I would ask the Lord Advocate why a difference has been made in regard to Scotland. If he cannot answer that question to-day, will he give consideration to it before the Bill goes to Committee? It is obviously awkward for an English Member who happens to be interested in the subject, because he will not be on the Scottish Standing Committee to examine the Bill and except for the short time available on the Report stage there will be little opportunity to deal with the point.

It seems to me that the Government are a little premature in presenting this Bill. When the Minister of Agriculture for England brought in the Bill which has now become an Act for England and Wales he was able to give the House very full information as to the arrangements that he had made with the English banks. He paid a fairly strong eulogy to the banks for their help. The Lord Advocate now brings in this Bill and says that he is sorry he is unable to state that there is any arrangements with the banks. He hopes it may be possible to give particulars of some arrangement that will be made, when the Committee stage of the Bill is reached. The House ought not to be asked at this stage to proceed with a Bill guaranteeing certain financial credits and grants when there is no arrangement between the Government and the people who are to receive the advances. Having regard to what happened in regard to England, I have no doubt that the Government will carry the Bill if they will present a provisional agreement or contract made with the banks who will form the corporation, but to-day there is no arrangement presented to the House. The Lord Advocate seemed to suggest that the banks may not come in at all and that the Government may have to make some other arrangement through which the credits can be given. I should like the Lord Advocate to tell the House frankly whether there is any difficulty with the banks. Are the banks declining to come in? If so, have the Government any definite alternative in their mind in place of the suggested arrangements with the banks? If the Lord Advocate cannot answer these questions, it seems to me to be unreasonable to ask the House to give a Second Reading to a Bill with such important financial provisions in it without any definite arrangement or contract having been made between the banks and the Government.

Question put, and agreed to.

Bill read a Second time, and committed to a Standing Committee.