DAIL IN COMMITTEE. - COINAGE BILL, 1926.—SECOND STAGE.

I move the Second Reading of the Coinage Bill. Its purpose is to establish a separate and distinctive token coinage for the Saorstát. It is the natural and logical consequence of the setting up of the Saorstát that we should have here a coinage distinctively our own, bearing the devices of this country. There is a certain advantage also in having control even of token coinage in the matter of maintaining a proper supply of coinage and a supply of the right denomination of coinage. There are also very substantial monetary advantages in the issue of token coinage. It is estimated that the face value of the amount of token coins required for the use of the people of this country would be about one million pounds.

There is, or there lately was, in circulation, and in the possession of the banks, in silver and copper, a great deal more than one million pounds. About a year ago, there was, I think, something like one and a half million pounds. But that was much more than was necessary. During the boom years a great deal of silver came into the country. A great deal of silver was required because prices were high and a great deal more money circulated. The result was that quite a considerable amount of silver coinage came into the country. To a large extent, that went gradually out of circulation and some of the banks had a considerable amount of silver coinage stored in their vaults which was not required for the use of the country. I understand that recently the banks have taken steps to get rid of considerable quantities of the silver coinage that they held. Our estimate is that the amount that would serve the country at the present time, and in the immediate future, would be about one million pounds, speaking of the face value of the coins. It might be that, if ten shilling notes went out of circulation, a further sum would be required, but if we estimate that one million pounds worth of token coins—principally silver—would be required, the profit on that would be very considerable.

We propose to issue a coinage containing a higher percentage of silver than the existing British coinage. Up to 1920 British silver coins consisted of 920 parts in 1,000 of silver. By the Act of 1920, that was reduced to 500 parts in 1,000 of silver. That produces a coin which does not look well, which has to have special processes applied to it in the course of manufacture and which, it is believed, will result in its being a coin that will not wear well. Quite a number of recent issues of silver coin by various countries have been in the proportion of 75 per cent. silver and 25 per cent. alloy. We propose to adopt the same proportions. That will give us a coin which will be a much better-looking and a much better-wearing coin than the existing one.

We propose to issue the coins in something like the following proportions:—Half-crowns, 2,888,000; two shilling pieces, 2,700,000; shillings, 3,600,000; sixpences, 3,600,000; three-penny-pieces, 2,000,000; pennies, 12,000,000; halfpennies, 9,600,000; farthings, 4,800,000. The threepenny piece is an inconvenient and unpopular coin and it is thought desirable to replace that by a nickel coin of a somewhat larger size. That involves also the making of our sixpenny pieces of pure nickel somewhat larger than the present sixpenny piece. We believe that by making them of nickel and by having plain edges, instead of milled edges, which the silver coins will have, there will be no likelihood of confusion and that we will have coins that will be somewhat more easily handled than the existing coins. Assuming that we have silver coins consisting of 75 per cent. silver and 25 per cent. alloy, and that we have sixpenny pieces and threepenny pieces consisting of pure nickel, and other coins of bronze, there will be, at the present price of metal, allowing for the cost of mintage, but not for the cost of freight or the cost of insurance in transit, a profit of £624,000.

Spread over how many years?

Spread over one year.

Mr. BYRNE

That is not a recurring profit?

No. There will be no recurring profit—no profit to talk about. There will be a certain wastage and loss of coinage and there will have to be certain new issues not representing issues in the replacing of amounts which have been withdrawn, and there would only be a percentage of profit on making up that wastage. I do not think that would amount to anything. It would be very difficult to estimate what it would be.

We do not propose to set up any establishment for the manufacture of coin here. It is proposed to arrange to have the coins manufactured at the Royal Mint in London. That will save additional expenditure, it will enable the coinage to be supplied much more quickly than any small establishment we would set up might supply it, and it will probably mean that the cost of actual manufacture will be less than it would be with us.

The scope of this Bill is confined entirely to token coinage—coinage which has not intrinsic value, coinage which is not anything like its face value, coinage which is limited legal tender. We propose to limit the tender in approximately the same way as tender is now limited in the case of the British coinage. Silver coins will be legal tender for payment up to 40/-; bronze coins will be legal tender for payment up to one shilling, and nickel coins for payments up to five shillings. The Bill consequently does not affect in any way the general currency position or the general position in regard to legal tender.

I recognise very fully that any change in the currency position at the present time would have serious reactions. It would, I believe, lead immediately to an Exchange position adverse to this State. It would lead to unsettlement and produce the adverse effects that unsettlement would have, I believe that this State, struggling to get on its feet economically, struggling to get going, would be hindered and handicapped by any change in the currency position or by any departure from the state of affairs that exists at the present time, in which we have British currency as our real legal tender. The theoretic arguments—what I might call the "national arguments"—in favour of having a separate token coinage are probably the same as would apply in the case of general currency. But there is this difference: that at the present time we can issue our own token coinage and get the benefits that arise from that issue without any detrimental results that I have been able to discover. I have discussed this matter with a large number of people. As a matter of fact, this Bill, although no rumour got about regarding its impending introduction, is a Bill that was discussed with a larger number of people outside the Government than any Bill that has been introduced for a considerable time.

A testimony to the public!

Would the Minister say whether he consulted bankers?

I consulted everybody from whom I thought that information or argument or views that ought to be taken into consideration could be received and, having heard all these views and arguments, I am satisfied that there are no detrimental effects whatever to be anticipated from the introduction and issue of our own token coinage. Touching on the main currency question, any alteration in the main currency would be another matter altogether. There would undoubtedly be wide and grave reactions from that, and there would be immediate serious reactions. It might be argued that what are arguments in favour of one change might be arguments in favour of another change, and that those arguments could be treated as of equal force. We may decide to do one thing because there is no injury or reaction to be anticipated from it. We must decide against the other when we feel that the reactions would be such that this country ought not have willingly brought upon it in its general financial and economic condition.

Would the Minister say whether the coinage will be legal on the other side of the Border?

I think the Constitution prescribes the power of the Oireachtas to legislate for the Irish Free State.

I confess, in view of the pressing needs for legislation in many directions, that I cannot see anything in the nature of urgency for this Bill. It is true that there is one argument in its favour and, that is, that it will, according to the Minister, produce a profit of £640,000, a very considerable sum and a sum not to be despised by a State such as ours. So far as I can gather, however, that sum is not to be considered in the light of a recurring profit, and the risk we are running—and I think we are running some risk—in taking this departure is wholly and solely to produce this sum for the Exchequer. I think there are many other ways in which that sum could either be saved to the Exchequer or brought into it. I think, for instance, that the Army could be reduced. I think that a considerable sum could be saved in that direction, for I see no necessity for either the size of the Army at the moment or its cost of upkeep which is something like three millions. I think it would be wise if the Minister for Finance would consider the position of the Irish distilleries, and if he could possibly reduce the present exorbitant excise duty on Irish manufactured whiskey, a duty which has lost to the Exchequer a sum of over £500,000 during last year. I could go on enumerating various other means of raising or saving £600,000.

Does this Bill preclude that saving?

No, but I think it would have been wiser to have started in other directions where the same amount of risk would not have been run, and where a more useful purpose would have been served. It may be said, and the Minister is probably entitled to say, that theoretically no risk will be run. I personally agree with him, and I understand the difference, as any ordinary person should, between this proposal which deals with token coins and a proposal to tamper in any way with the existing currency. The two things are quite distinct, but although this does not tamper, strictly speaking, with the existing currency, it is, at the same time, very hard to get away from the idea that in the minds of certain people in the country—not quite so sophisticated perhaps as the Minister—there will be a certain amount of uneasiness and unrest, because, although the present coins may not look well, according to the Minister, and, perhaps, they do not wear very well—a fact which I myself can testify —I think, at the same time, that people are very well satisfied with the present coins, and I do not think that there has been anything in the nature of a demand for this departure. I hope that the departure will be successful and that the Minister will be a true prophet when he says that there will be no injury—I think he qualified it by saying "serious" injury.

The Minister now says that no injury is to be anticipated. I hope he is right in that. It is one of those matters which you cannot exactly give definite reasons why there should be injury, or why there should be uneasiness, but, as the Minister and the House know, the fluctuations of the money market are strangely influenced, and, even the mere substitution of one form of token coinage for another, though it may not influence the minds of certain classes of people, runs the grave risk of influencing the minds of others. The Minister said that before he introduced the Bill he consulted several classes of people, including bankers. I am glad to hear that statement, but I do not know whether he has made any arrangements with neighbouring countries. It is true that there is different token coinage in other dominions. I have seen it myself in Australia and elsewhere, but I know that these other dominions have made arrangements whereby their token coinage is interchangeable between themselves, if not between the individual dominions and Great Britain. Here, however, we are in an entirely different position to that of the other dominions. Unlike Canada and Australia, which are thousands of miles away, we have up against our doors not quite a dominion, but a country which is rapidly reaching the status of a dominion, namely, the North of Ireland, and we have, within a few miles cross-Channel, Great Britain itself. I would like to know whether the Minister has thought fit to endeavour and, if so, whether he has succeeded, in making any arrangements, either with Northern Ireland on the one hand, or Great Britain on the other, whereby these new token coins of ours shall be accepted by them, and if we likewise shall accept theirs. I think that is a most important matter in view of the proximity of this country and in view of the natural interchange and intercommunication between the two countries. It certainly will be a matter of convenience if the Minister has made this arrangement, and if we know when we get on board the boat at Dun Laoghaire that if we want to give a porter something at Holyhead he will be ready to take a Free State nickel sixpence.

Make it a nickel shilling and he will chance it.

Yes, or a nickel shilling. It will also be convenient for visitors coming the other way, though probably the same risk would not be run in their case. I think it would be well if such an arrangement has been, or could be, made for the general convenience of all concerned. I am rather inclined to think that such an arrangement has been made, and I will tell you why. The Minister made a case, and I think it was a rather feeble one, for increasing the percentage of our new Irish coins. He said that they would wear well and look better. That may be so, but I have got it in the back of my mind that one of the reasons that he is increasing the percentage of our coins is in order to enable them to be accepted on the other side in substitution of those of a lower percentage. I hope, at any rate, that that will be the case. I hope that the coins will be interchangeable, and I would respectfully throw out the suggestion to the Minister that, if he has not come to any such arrangement as I have mentioned, it would be wise for him, before the Bill finally passes into law, to come to such an agreement or arrangement with the Exchequers of both Northern Ireland and Great Britain—I think in this respect they are probably one— so as to enable their coin and ours to be interchangeable. I do not see, as I have said, any immediate urgency or necessity for this Bill. If it is going to give a saving of £600,000 I, for one, would have no objection, but I fear that there will be some risks run in connection with it, and I think there are other ways by which this sum could be better realised at the moment.

Like Deputy Redmond, I do not quite understand the urgency of dealing with this matter. We are told it has been under consideration for a long time, yet the average Deputy ten days ago had not the faintest notion that such a measure was under conception, and we are asked now to give it a Second Reading to-night. It seems all the stranger to me because the Minister is going to set up a Committee on banking which must necessarily consider the questions of currency and coinage, and I feel it somewhat regrettable that the position of that Committee should be prejudiced to a limited extent in advance. I hope the Minister will give us, when he replies, some reason as to the urgency of the Bill. Of course I dismiss entirely the suggestion that has been made that it is in the nature of a gesture to the People's Party led by Deputy Professor Magennis. So far as that particular prodigal is concerned, the Government are not prepared to kill the fatted calf; they are much more likely to let loose the bull. I do not accept that, but I think a stronger case needs to be made for its urgency. I do not want to use unduly exaggerated language. It is perfectly lawful and constitutionally competent for us to change our coinage in any way we may like, or for that matter to change our currency, if we wish. The whole question is that some things that are lawful are not expedient, and I think the inexpediency of this measure is the ground on which I should urge that it should not be allowed to receive a second reading.

The Minister told us that we can get the advantage of token coinage without any detrimental effect. The Minister is perfectly consistent. He always ignores inconvenience. Whether it is a question of tariffs, of double income tax, a change of coinage, or whatever question it may be, he never takes inconvenience to the individual into consideration. This Bill is going to cause a considerable amount of inconvenience to anybody whose business takes him either to Northern Ireland or across the Channel. Double coinage is a nuisance. Even people going from one part of the Saorstát to another would be inconvenienced. Take the case of a Tirconnail Deputy coming from his constituency. If he goes by train he has to pass through Northern Ireland, and if he wants to get out at Derry or Enniskillen to buy a paper or a cup of tea or spend any money at all, he will have to provide himself with coinage current in Northern Ireland in order to do it, and the same when he is returning. I put it on no higher plane than inconvenience, but it is a considerable inconvenience.

Again, I am very strongly opposed to nickel coinage. My experience of nickel coinage in Europe has been that it is an unqualified nuisance. A nickel coin is so near the size of a silver coin and so closely resembles it at first sight that you are almost always mistaking one for the other. When you impose them suddenly on a population that is not used to them you will have a great deal of grumbling and a great deal of difficulty before people realise the difference between a sixpence and a shilling which will be very nearly the same size. Remember that the designs will presumably be new, the lettering will very possibly be in Irish, and there will be unqualified confusion at first.

Another objection, which is perhaps only personal to myself, is that I am in the habit of carrying my copper coins in one pocket and my silver coins in another. I do not know where to add a third pocket in which I can carry nickel coins. Yet, if I mix them up, I shall find a good deal of difficulty in sorting them out, and I shall be giving a man sixpence when I mean to give him a shilling or vice versa. I stress this point of inconvenience all the more because of my experience in Europe, although as regards nickel coins the French have got over the difficulty to a certain extent by punching a hole in them. Is it proposed to do that? The Italians do not.

The Belgians do.

The inconvenience is mitigated by that, but it is not entirely removed. In Italy you have nickel coins and silver coins almost exactly the same size and shape and the inconvenience is considerable. Much of this argument will be more proper to an amendment to the schedule which I shall put down.

Another difficulty that we find prevailing in Europe is the difficulty of getting small change in the currency of the country you are going to. It is quite easy to get a one-thousand franc note either in Dublin or London, but you very often have to go to two or three places in London before you can get sufficient French silver or nickel to take with you.

Did the Deputy ever try a half-crown at Calais and see if it will be accepted by a porter?

I have no doubt it would be accepted, but it would be very much more than I would give to a porter. It is very difficult to get English silver at Calais. I want to call attention to the omission that Deputy Redmond called attention to—the failure of the Minister to state whether any of the people consulted on the matter were people in Great Britain or Northern Ireland, because much of my objection to this Bill may be removed by a statement that an arrangement had been made by which the coinage of one country should circulate in another. That in no way derogates from the national status. Before the European war had thrown all the rates of exchange into a state of muddle and confusion, France, Italy, Switzerland, and, I think, Belgium came to an agreement to allow their silver coinage mutually to be used each in the other's country. That was carried out satisfactorily, as far as I know; it certainly operated. I do not see that we need be frightened of placing ourselves in a worse position than Switzerland or Belgium with regard to France if we make a similar agreement with Great Britain. Northern Ireland really does not enter into it, because I think it has not power to make its own coinage. The Minister quoted the Constitution to Deputy Byrne, but he can hardly suggest that the Constitution precludes him from negotiating with the British Government on matters of mutual interest. If so, I do not know what he was doing in London last month. I hope, at any rate, he will tell us definitely whether he has approached the British Government on this matter or not.

I want seriously to stress my belief that this is a step in the wrong direction. When once you begin tampering with coinage you go on to tampering with currency, and once you begin to tamper with currency you begin to operate an inflation that leads to national disaster. Trying to get money for nothing is very attractive, no doubt, even though this is a capital sum, and the interest on it will be only a little over £30,000. Trying to get money for nothing is like hunting the crock of gold at the bottom of the rainbow. It is leprechaun gold. It does not really benefit you. It sets your feet in the wrong path. Gold which you have not produced by your own industry or the industry of the country is not, in the long run, an advantage to the country. I believe war indemnities generally have been a disadvantage to the countries that got them.

I do urge the Minister and the Dáil seriously to reflect before we take the first step on the road that France is now treading—the road of national humiliation, because she is absolutely unable to meet the demands of her creditors. I say nothing derogatory to a friendly State more than that it is obvious from the repeated series of Cabinet crises, and the discussions that France has been engaged in lately, that her state is not an entirely fortunate one in that respect. I do dread that if not this Minister for Finance, some later Minister for Finance will say: "They made £600,000 by altering the coinage; why should not we make £6,000,000 by printing and circulating our own notes?" and so create a rate of exchange? I feel conscientiously bound to oppose any step in that direction—any precedent for it.

If there is such a wonderful gain of £600,000, a great national gain in that new status, why have not Ministers had the courage of their convictions? Why have not they renamed the coinage? Why call a thing sixpence that is not sixpence, does not behave like a sixpence, and is not made of the same material? Why not get a new name for it? Why do they not emulate that born British Chancellor of the Exchequer— I know not whether it was Sir Robert Walpole or Sir Robert Peel—who first caused the shilling to be called a bob? Why do they not rename the coinage after the Executive Council? People are already talking about Blythe shillings. I am sure the Minister for Finance, as a modest man, will take the lowest denomination. The penny is a good sound coin, and it might be called after the Minister for Defence. The threepenny bit, at any rate in the form we now know it, might be an "O'Sullivan." Then you would have the "sixpenny McGilligan," the "shilling O'Higgins," and the "florin Cosgrave." There is still the half-crown. I was going to say that the only thing you can equate the half-crown to would be to call it "Tim."

Debate suspended.