Edition Bobbett2. Speeches and statements by Elizabeth F. Bobbett
1951 Wicklow, Meeting of the County Council
Source: Wicklow People, 20.01.1951
Miss Elizabeth F. Bobbett said, in raising this question of interest on Loans: I am actuated by the one desire, to endeavour to find an item on which, if we concentrated our endeavours, I believe we could greatly reduce the Rates on all ratepayers. Believe me, I have no political motive in raising this matter, I am here to represent the farmers who are the largest ratepaying section of the community, and the fact that £37,231 13s 11d (which represents charge of 3s in the £) was collected through the rates to meet the interest charges on these loans for year 1949/50 will be an eye-opener to many people. I have given a good deal of study to this matter of Bank created credits over the past number of years and have consulted very eminent people who were in a position to give sound advice on it. Recently at the annual conference of Municipal Authorities held in Cork, Professor John Busteed suggested that “a joint inquiry by representatives of all local authorities into the whole question of local borrowing might be of great practical value.” I think we should give the lead from Wicklow County Council and invite representatives from all the County Councils and Municipal Authorities to join us in having such an inquiry held. I believe it should be possible to have interest rates drastically reduced if not completely withdrawn. I understand that some of these loans are borrowed from the Local Loans Fund (Commissioners of Public Works) which is operated by the Central Government for the benefit of local Authorities. These loans are usually for Housing or some ancillary schemes of top social priority and the term is for 35 to 50 years. While if the State borrows at a high rate to finance the Local Loans Fund, it borrows for about 15 years, but they apply a corresponding high rate to Local Authorities for the full 35 or 50 years. Other loans are borrowed from the banks at interest, but these Bank Loans are created Credits on which they charge the ratepayers interest. They are quite different to a Cash Loan as between A and B. Large borrowings are conducted under the provisions of the 1894 and 1844 Acts. The money is created by catering a credit in the bank ledger and cheques are used. It is this system of debt created credits that has plunged the country into debt. I believe that if all County Councils and Municipal Authorities were to take up this matter and request the Government to take the necessary legal action, they could with great benefit to the ratepayers and injustice to none instruct the Banks to issue the necessary credits to County Councils free of interest but paying the banks a fee for their services of say 1 per cent but not interest. In 1938 the Local Debt was 26 million pounds, in 1946 it was 36 millions. It is probably 40 millions now.
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Miss Bobbett said they should have more favourable consideration. They had the whole community as security for loans. Wasn’t it the banks who made the interest rate? Now was a golden opportunity to re-open the matter. They had the Republic of Ireland, and the only freedom they had not got was financial freedom.