LOAN TO MUINTIR NA TIRE GUILD FOR TURF PRODUCTION.
Coiste um Chuntais Poiblí.
1. At the proceedings of the Public Accounts Committee on the 20th May, 1943,* I undertook to report to the Committee any write-off of losses in connection with the advances made from the Special Emergency Schemes Vote to the Tipperary and Bray Guilds of Muintir na Tíre in connection with turf production. My letter of 31st July, 1943, dealt with the winding-up of the transaction with the Bray Guild and the writing off of £1,000 of the advance of £1,500 made to that Guild. I have now to inform you that the remission of £1,250 from the loan of £3,000 to the Tipperary Guild has been authorised by the Minister for Finance and that the balance of £1,750 has been received from the Tipperary Guild.
2. The advance of £3,000 to the Tipperary Guild was sanctioned on the 28th May, 1941, on the understanding that the expenditure would be duly vouched and that the members of the Finance Committee of the National Executive of Muintir na Tíre would be jointly and severally liable for repayment of the loan upon the sale of a sufficient portion of the turf produced. The advance was to be free of interest.
3. The following considerations weighed with the Minister in sanctioning the advance which the Tipperary Guild represented would enable them to produce 10,000 tons of turf which would be delivered in Tipperary town at 30/-a ton, portion to be sold to the public at current prices and the remainder to the poor at a reduced price:—
(a) The Turf Development Board advised that it was highly desirable that this supply of turf should be cut and saved.
(b) Useful employment would be given to town labour.
(c) Turf was to be supplied to the town at reduced prices.
(d) The repayment of the loan was secured jointly and severally by members of the National Guild of Muintir na Tíre.
4. The Tipperary Guild in fact produced 1,600 tons of turf at a cost of 41/2d. a ton stacked on a site in the town, as against the original estimate of 30/- a ton. An additional expenditure had to be incurred for caretaking and breaking up of the stacks to admit of the proper saving of the turf.
5. Up to 31st March, 1943, the Tipperary Guild had refunded £1,300 out of the £3,000, and it was then expected that they would be able to refund the balance from the sale of the stocks of turf on hand without having to call on the guarantors.
6. In September, 1943, however, the Special Employment Schemes Office indicated to the Minister that there was likely to be a loss of £1,500 on the under. taking. A report of an Inspector of the Turf Development Board attributed the loss to an unfortunate set of circumstances which included:—
(a) The turf was cut at short notice in the only bogs available so that the turf was not of a very good quality.
(b) Too much light turf was put into the clamps to the detriment of the better material.
(c) The latter part of the 1941 season was wet and none of the turf was really dry at the clamping stage. Subsequent drying was retarded by the thatching of the clamps.
(d) The sides of the clamps were packed too tightly and a certain amount of mould was also included, so that the clamps consisted of a solid mass of turf which never shrank or allowed infiltration of air.
7. Notwithstanding various steps taken at the suggestion of the Inspector of the Turf Development Board, only comparatively small amounts of the turf were in saleable condition at any time, and even these did not reach the minimum standard necessary for general domestic use on a competitive basis. The Minister was satisfied that the Guild were doing everything possible to minimise the loss.
8. In January, 1945, it was reported that there was no unsold turf now on the hands of the Guild and after full examination of the matter the Minister eventually agreed to a total remission of £1,250 by the State from the amount of the original loan, which, according to the audited accounts, left a net deficiency to be met by the guarantors of £203 10s. 0d. against which there were certain items of equipment valued at £10. As stated above the sum of £1,750 has been received from the Guild.
9. By sanctioning the remission of the £1,250 the Minister was influenced by the following factors:—
(a) The possibility of loss on the repayable advance was made known to the Dáil by the late Parliamentary Secretary, Mr. Hugo Flinn, when introducing the estimate in July, 1941.
(b) The venture was undertaken by the Tipperary Guild of Muintir na Tíre in the national interest in order to avert a fuel shortage in the town.
(c) The unhappy experience of the Guild in regard to costings has been confirmed by that of other organisations who were concerned with the provision of the national supply of turf during the emergency.
(d) Employment was afforded to workers by the scheme who would otherwise have been in receipt of Unemployment Assistance. The saving in Unemployment Assistance is estimated at £250.
(e) The sale of turf at 60/- a ton to people with small means reduced the receipts of the Guild by £128, and the subsidisation of turf to necessitous families cost £176.
10. Having regard to these considerations, the Minister adopted a lenient attitude towards the guarantors, but he was unable to agree that the guarantors should be relieved of full liability for the amount due under their guarantee, which would be tantamount to acceptance of the proposition that a guarantee freely given for the repayment of a loan from the State is a matter of form to be regarded as imposing no obligations on the guarantors in the event of the undertaking for which the loan was granted resulting in a loss.
(Signed) J. J. McELLIGOTT,
27ú Meitheamh, 1945. Department of Finance.