Agricultural Credit Act 1927

PART I. Preliminary.

1 Short title.

1.—This Act may be cited as the Agricultural Credit Act, 1927.

2 Definitions generally.

2.—In this Act—

the expression “the Minister” means the Minister for Finance; the expression “the Corporation” means the Agricultural Credit Corporation, Limited, to be formed and registered in pursuance of this Act;

the expression “the Directors” means the Directors of the Corporation;

the word “agriculture” includes the breeding, rearing or keeping of animals of any kind (including birds and insects), dairying and the pasturing of animals, and cognate words shall be construed accordingly.

the word “farmer” means a person or two or more persons jointly or in common carrying on some form of agriculture on land as a business for profit;

the word “farm” means the land on which the farmer in relation to whom the expression is used carries on his business as farmer;

the word “mortgage” means and includes any instrument by which land is charged with or made liable for or security for the payment of money;

the expression “first mortgage” means a mortgage affecting only land which is not subject to any charge or encumbrance having priority to such mortgage other than terminable land purchase annuities under the Land Purchase Acts, rent-charges in lieu of tithes, or charges created under the Landed Property Improvement (Ireland) Acts, the Drainage and Improvement of Land (Ireland) Acts, 1863 to 1892, or the Drainage Maintenance Acts, 1866 and 1924.

PART II. The Agricultural Credit Corporation.

3 Formation and registration of the Corporation.

3.—Immediately upon the passing of this Act the Minister shall take all such steps as appear to him to be necessary or desirable to procure that a limited company (in this Act referred to as the Corporation) conforming to the conditions laid down in this Act shall be formed and registered under the Companies Acts, 1908 to 1924 not later than the 30th day of September, 1927 to perform the functions specified in this Act.

4 Name and capital of the Corporation.

4.—(1) The name of the Corporation shall be “The Agricultural Credit Corporation, Limited.”

(2) The capital of the Corporation shall be £500,000 (five hundred thousand pounds) divided into five hundred thousand shares of one pound each of which five shillings shall be payable on application for the share and a further five shillings shall be payable not less than twenty nor more than forty days after allotment, and the residue shall be payable as and when called by the Directors on not less than thirty days notice.

(3) A trustee may, unless expressly forbidden by the instrument (if any) creating the trust, invest any trust funds in his hands, whether at the time in a state of investment or not, in any shares of the Corporation which are at the time of the investment fully paid-up as to capital.

5 Subscription of capital of the Corporation.

5.—(1) Two hundred thousand shares of the Corporation shall be offered at the one time for subscription only by banks carrying on business either wholly or partly in Saorstát Eireann and as soon as may be after the expiration of the time limited with the approval of the Minister for such subscription the remaining three hundred thousand shares of the Corporation and such if any of the said two hundred thousand shares as shall not have been subscribed for by such banks shall be offered at the one time for subscription by members of the general public.

(2) All shares of the Corporation offered for subscription by the general public and not so subscribed for shall at the expiration of the time limited with the approval of the Minister for such subscription be subscribed for by the Minister.

6 State liability for capital of the Corporation.

6.—(1) In the event of the Corporation going into liquidation (whether voluntary or compulsory) and being wound up and its assets proving on such winding-up to be insufficient to pay to the members of the Corporation the full amount of its paid-up capital, the Minister shall provide and pay to the liquidator in such winding-up such sum as will be sufficient with the assets of the Corporation available for the purpose to pay the full amount of the paid-up capital of the Corporation.

(2) All moneys paid under this section to the liquidator by the Minister shall (whether the assets of the Corporation are or are not sufficient to pay its creditors in full) be applied by such liquidator in or towards paying to the members of the Corporation the full amount of the paid-up capital of the Corporation.

7 State liability for dividends on the capital of the Corporation.

7.—(1) The Corporation shall pay to its members dividends at the fixed rate of five per cent. per annum on the amount of its capital for the time being paid up and such dividends shall be paid by the Corporation half-yearly on such dates as shall be appointed for that purpose by the Directors with the approval of the Minister.

(2) If on any of the days appointed under this section for the payment of half-yearly dividends the Corporation have not any or sufficient moneys available for the payment of the dividend so payable on such day the Corporation shall forthwith certify to the Minister the sum which with the moneys (if any) so available is required to pay such dividend and upon receipt of such certificate the Minister shall advance to the Corporation the amount so certified by the Corporation and the moneys so advanced shall be forthwith applied by the Directors in or towards payment of such dividend.

(3) All moneys advanced to the Corporation by the Minister under this section shall be repayable by the Corporation to the Minister on demand with interest from the date of the advance at such rate as shall be fixed by the Minister and (except in the winding-up of the Corporation) shall be so repayable only out of moneys which are profits as ascertained in accordance with directions of the Minister and in the winding-up of the Corporation shall be so repayable after the creditors of the Corporation have been paid in full.

8 Memorandum of Association of the Corporation.

8.—(1) The Memorandum of Association of the Corporation shall be in such form consistent with the provisions of this Act as shall be approved by the Minister and the Minister for Lands and Agriculture.

(2) Notwithstanding anything contained in the Companies Acts, 1908 to 1924 no alteration in the Memorandum of Association of the Corporation which is made without the previous approval of the Minister and the Minister for Lands and Agriculture or is inconsistent with any of the provisions of this Act shall be valid or effective.

9 Objects of the Corporation.

9.—(1) The objects of the Corporation shall be so stated in its Memorandum of Association that the principal functions of the Corporation shall be the lending or advancing (subject to the restrictions imposed by this Act) of money upon such security as the Directors may, subject to the provisions of this Act, think proper, the discounting and purchasing (subject to the restrictions imposed by this Act) of bills of exchange, promissory notes, and other negotiable instruments, the receipt (subject to the provisions of this Act) of deposits of money, the receipt of deposits of securities for safe-keeping and management and, so far as may be lawful, the execution of trusts in relation to such securities.

(2) Nothing in this section shall prevent or restrict the inclusion among the objects of the Corporation as stated in its Memorandum of Association of all such objects and powers as are reasonably necessary or proper for or incidental or ancillary to the due performance of the principal functions aforesaid and are not inconsistent with this Act.

10 Articles of Association of the Corporation.

10.—(1) The Articles of Association of the Corporation shall be in such form consistent with the provisions of this Act as shall be approved by the Minister and the Minister for Lands and Agriculture.

(2) Notwithstanding anything contained in the Companies Acts, 1908 to 1924, no alteration in or addition to the Articles of Association of the Corporation which is made without the previous approval of the Minister and the Minister for Lands and Agriculture or is inconsistent with any provision of this Act shall be valid or effective.

11 Directors of the Corporation.

11.—The Articles of Association of the Corporation shall provide—

(i) that the number of directors (including the Chairman) shall be seven, of whom four shall be elected by the shareholders with the usual provisions for co-option to casual vacancies and three shall be nominated by the Minister from time to time as occasion requires;

(ii) that so long as the Minister holds more than two hundred thousand shares of the Corporation the Chairman of the directors shall be nominated from time to time by the Minister from amongst the three directors nominated by him.

12 Limitations on the lending of money by the Corporation.

12.—(1) The memorandum and articles of association of the Corporation shall be so framed and expressed that the Corporation shall be entitled and authorised to lend or advance money only to the persons and for the purposes hereinafter stated, that is to say:—

(a) to any farmer for the purpose of constructing buildings on his farm, or making on his farm improvements of a permanent character calculated to increase or facilitate or conduce to the increase of the productivity thereof or for the purpose of purchasing live stock, agricultural machinery or implements, manures, feeding stuffs, seeds, or other requisites of agricultural production or marketing;

(b) to any co-operative society (subject to the limitations hereinafter contained) for the purpose of establishing, carrying on, or extending its business;

(c) to any person engaged in or proposing to engage in an enterprise primarily designed for the service of farmers or of farming communities for the purpose of establishing, carrying on, or extending such enterprise;

(d) to any person (other than a co-operative society) for the purpose of purchasing for agricultural purposes land which was immediately before the purchase comprised in a security held by the Corporation from the vendor of such land;

(e) to any person (other than a co-operative society) for the purpose of paying off a loan which was originally made to him (whether before or after the passing of this Act) wholly or mainly for a purpose for which a loan could under this section be made to him by the Corporation;

(f) to any person (other than a co-operative society) for the purpose of paying off a loan which was originally made to him before the passing of this Act wholly or mainly for the purpose of purchasing land for agricultural purposes;

(g) to any co-operative society (being a co-operative society to which a loan could be made under this section by the Corporation) for the purpose of paying-off a loan made to such society (whether before or after the passing of this Act) wholly or mainly for a purpose for which a loan could under this section be made to such society by the Corporation.

(2) The memorandum and articles of association of the Corporation shall also be so framed and expressed that the persons to whom and the purposes for which the Corporation shall be entitled and authorised to lend or advance money as stated in such memorandum and articles in pursuance of this section may be varied (whether by extension, restriction, or otherwise) from time to time by the Minister and the Minister for Lands and Agriculture at their joint discretion by orders made by them jointly, but so that such persons and purposes shall not by any such order be extended so as to include—

(a) any person who is not engaged or about to engage in agriculture or in a business or enterprise of an agricultural character or calculated directly or indirectly to benefit primarily persons engaged in agriculture, or

(b) any person to whom the Corporation is expressly forbidden by this section to make a loan or advance, or

(c) any purpose which is not directly or indirectly related to or concerned with agriculture.

Every order made by the Minister and the Minister for Lands and Agriculture under this sub-section shall be laid before each House of the Oireachtas as soon as may be after it is made and unless either such House shall, within twenty-one days after the first day on which such House sits after such order is laid before it, pass a resolution annulling such order such order shall come into operation at the expiration of twenty-one days from whichever of the following days is the later that is to say the first day on which Dáil Eireann sits after such order is laid before it or the first day on which Seanad Eireann sits after such order is laid before it.

(3) The Corporation shall not make any loan or advance any money to—

(a) any co-operative society the objects of which do not include at least one of the following objects, that is to say, the giving of agricultural credit, or the production or the marketing of agricultural produce, or the sale of agricultural machinery or implements or manures, feeding stuffs, seeds, or other requisites of agricultural production or marketing, or the production and distribution or the distribution only of power and light mainly to farmers, or

(b) any co-operative society which at the time of the making of the loan or advance carries on the business of selling by retail any goods which are neither produced by that society or its members nor are requisites of agricultural production or marketing, or

(c) the chairman or any director of the Corporation.

(4) So long as any portion of a loan or advance made by the Corporation to a co-operative society remains owing to the Corporation, such society shall not give or continue financial assistance to any co-operative society or company, engaged in or carrying on the business of selling by retail any goods which are neither produced by that co-operative society or its members or by that company nor are requisites of agricultural production or marketing and shall not itself engage in or carry on any such business, and if any such society contravenes the provisions of this sub-section the whole of the loan or advance so made to it by the Corporation shall (notwithstanding any agreement to the contrary) forth with become due and payable by it to the Corporation.

(5) Where the goods sold by a co-operative society are mainly goods produced by that society or its members, any similar goods occasionally sold by such society may for the purposes of this section be deemed to have been so produced although in fact produced by, and purchased by the society from, other persons.

(6) The Corporation shall not discount or purchase any promissory note, bill of exchange, or other negotiable instrument which was made by a person to whom the Corporation is expressly forbidden by this section to lend or advance money or which was made otherwise than for the purpose of obtaining for the maker thereof or for any other person money for expenditure on a purpose for which a loan or advance could lawfully be made by the Corporation to such maker or person but this sub-section shall not apply to or prevent the investment of moneys in the purchase of bills, notes or other negotiable instruments made by the Minister for Finance or by the British Treasury.

(7) References in this section to the lending or advancing of money shall not be construed as including the investment of moneys in the purchase of stocks, shares, bonds or debentures quoted on the Stock Exchange in Dublin or on the Stock Exchange in London or the subscription for stocks, shares, bonds or debentures intended to be so quoted.

13 Limitations on receipt of deposits by the Corporation.

13.—The Memorandum and Articles of Association of the Corporation shall be so framed and expressed that—

(a) the Corporation shall not be entitled to receive deposits of money or deposits of securities for safe-keeping and management from any persons except co-operative societies, and

(b) that the Corporation shall not be entitled to receive deposits of money repayable on less than thirty days notice or on demand or against cheques.

14 Issue of debentures by the Corporation.

14.—The Memorandum and Articles of Association of the Corporation shall be so framed as to authorise the Corporation to borrow money on the security of debentures or debenture stock issued by it in accordance with the usual practice of limited companies but subject to the limitation that the amount at any time owing by the Corporation on the security of such debentures or debenture stock shall not exceed the amount of the paid-up capital of the Corporation at that time.

15 Issue of Certificates of Charge by the Corporation.

15.—(1) The Memorandum and Articles of Association of the Corporation shall be so framed as to authorise the Corporation to borrow money on the security of certificates of charge issued by it and shall contain in relation to the issue of such certificates the provisions set forth in the Schedule to this Act or other provisions to the same effect and may also contain such further provisions (not inconsistent with the said provisions set forth in the said Schedule) in relation to the issue of such certificates as may be thought necessary or proper.

(2) Whenever the Corporation proposes to issue a series of certificates of charge and the Minister is satisfied as a result of such inquiry, audit, and investigation as he may think proper to make that all conditions precedent to the issue of such series of certificates have been duly performed the Minister may, subject to the limitations hereinafter mentioned, guarantee in such form and manner as he may think proper the due payment by the Corporation in accordance with the terms of such certificates of the principal moneys and the interest thereon secured by such certificates.

(3) The total amount borrowed by the Corporation on the security of certificates of charge guaranteed by the Minister under this section in any one year shall not exceed one million pounds and the total amount owing at any one time by the Corporation on the security of certificates of charge guaranteed by the Minister under this section shall not exceed seven million five hundred thousand pounds.

(4) Section 93 of the Companies (Consolidation) Act, 1908, shall apply to certificates of charge issued by the Corporation as if such certificates were debentures and for the purpose of such application but no other purpose a series of certificates of charge shall be deemed to be a series of debentures.

(5) A trustee may, unless expressly forbidden by the instrument (if any) creating the trust, invest any trust funds in his hands, whether at the time in a state of investment or not, in any certificate of charge guaranteed by the Minister under this section.

16 Additional returns to Registrar of Companies.