Before we go into Committee on the amendments, would the Minister state his intention with regard to them?
PUBLIC BUSINESS. - CURRENCY BILL, 1927—FROM THE SEANAD.
I intend, without any enthusiasm, to recommend the Dáil to accept all the Seanad amendments.
Will the Minister consider the advisability of circulating the evidence given before the Banking Commission before this big proposition of the new currency embodied in this Bill is proceeded with?
The Currency Bill has passed through all its stages in the Dáil and Seanad. It has been amended in the Seanad; we have to consider the amendments made in the Seanad, and the question that the Deputy raises is one that I think does not now arise. It is a question which might have been raised on the Second Reading of the Bill.
Yes, but you hurried it.
The Deputy will perhaps take my assurance that I did not hurry it.
Your Party did.
The Deputy will have to relieve himself of the impression that my Party has been a party to any such transaction.
Well, your ex-Party.
The Dáil went into Committee.
I move: That the Committee agree with the Seanad in Amendment No. 1:—
Section 2. Before the word "issued" in line 28 the words "heretofore or hereafter" inserted.
This is an amendment to the Definition Clause. The object of it is to ensure that it will cover not merely British Government Securities issued at the date of the passing of the Currency Bill, but similar securities issued in the future.
I think that this might be the best opportunity for me to say that I do not propose to resist the Minister's motion to accept the amendments to this Bill passed by the Seanad. It will be remembered that on the Second Reading of the Bill here I expressed certain views to the effect that for a considerable measure of this kind it might be the least opportune time to introduce changes into the currency when the country was not in a flourishing industrial or commercial state, but that the promise that, through the enactment of the Bill, there would come into the Exchequer a sum of approximately, £300,000 a year, was sufficient to warrant me in supporting the Bill, which did not, in my view, raise any very big question of principle. Statements have been made with authority that the sum of £300,000 a year might well be obtained without having to go through the whole process of establishing a Currency Commission, and if that could be done, within the working out of the Bill when it becomes an Act, without having to put into effect all its various provisions, it might be a very wise and judicious course to pursue. I do not know whether it is practicable—but I think it probably is practicable—to ensure to the State by the operation of certain sections of this Bill the enhancement of the Exchequer by the sum of £300,000 a year, while still leaving in abeyance the proposals with regard to the Currency Commission.
I understood that the Deputy was making himself clear with regard to the amendments, but he must realise that it would be impossible now to allow a debate which would be only suitable for Second Reading. The Deputy will realise that, I think.
I rather wanted to avoid having to use the occasion of the passing of a number of these amendments to get a considered statement. I have finished all I want to say, but I am putting that as an indication of my views on this matter.
I am strongly of opinion that the Deputy does not understand the Bill at all, having regard to the statement we have just heard.
Question put and agreed to.
I move:—That the Committee agree with the Seanad in amendment No. 2:—
Section 2. Before the word "carrying," in line 33, the words "for the time being" inserted.
This is practically a drafting amendment. It is to ensure that the Commission shall not continue to hold securities which might have had a guarantee at some time but which guarantee had been withdrawn through the lapse of time or for some other reason.
Question put and agreed to.
I move:—That the Committee agree with the Seanad in amendment No. 3:—
Section 24, sub-section (3). After the word "nominate" in line 29 the following words inserted: "after consultation with each of the shareholding banks and with each of the ordinary Commissioners."
This is to ensure, in case the first, Chairman has to be nominated by the Minister for Finance, that before he nominates him the Minister shall consult with the shareholding banks and with the ordinary members of the Currency Commission.
Question put and agreed to.
I move: That the Committee agree with the Seanad in amendments 4 and 5:—
Section 26, sub-section (2). After the word "Commissioner" in line 55 the words "who is not in the permanent service of the State" inserted.
Section 26, sub-section (2). The words "or any other person willing to act" deleted in lines 55-6.
These two amendments stand together. When the Bill went to the Seanad the Commission might appoint any person whom they regarded as suitable temporarily to act as Chairman. As it comes back it provides that they shall appoint one of the Commissioners other than that ordinary Commissioner who may be a permanent civil servant.
As we have not an opportunity of going into this Bill now, coming as it does at the eve of the proceedings, so to speak, as a lone Deputy, I will oppose this amendment. I can assure the President that I know a little about the Bill, and a little about finance, and I know that we are not benefiting to the extent of £300,000 yearly, because we are purchasing £20,000,000 worth of British securities to do what we can do without purchasing any British securities. We are cementing a financial Act of Union, tying a load around the neck of this country that nothing can break in the future. As one Deputy who understands a little about the Bill, I will oppose this amendment, as it is the only thing I can do at this stage. Perhaps, if I had been able to follow the Bill from the beginning, I might see that this amendment was quite harmless in itself, but the only opposition I can offer at the present time is to oppose the amendment. I know that evidence was given before the Banking Commission from the national standpoint that never saw the light of day. I think Deputies who represent the country, and who have to pay for the cost of the evidence, should see it, and the country should see it, before we become reunited financially to "John Bull." In 1920 £9,000,000 worth of bullion was brought down to the quays and shipped to England.
The Deputy ought to talk on this amendment.
I oppose the amendment.
Question put and declared carried.
I do not want to force a division or to waste the time of the House, but I want it to be recorded that I opposed the amendment, and a time will come when my opposition will be vindicated.
The Deputy can be recorded as opposing the amendment.
Section 29. The section deleted, and the following new section substituted therefor:—
"29.—(1) The Commission shall establish and maintain in such manner and form as it thinks proper such office or branch in London as it considers to be necessary or expedient for the performance of such of the functions of the Commission as are required by this Act to be performed or can in the opinion of the Commission be most conveniently performed in London.
(2) The Commission may, at any time and for such time as it thinks fit, in lieu of establishing or of maintaining (as the case may be) such office or branch as is mentioned in the foregoing sub-section employ a Bank having an office in London to be the agent in London of the Commission and to perform as such agent for the Commission such of the functions of the Commission as are required by this Act to be performed or can in the opinion of the Commission be most conveniently performed in London.
(3) The office or branch or the agency (as the case may be) for the time being maintained in London by the Commission under this section is in this Act referred to as the London Agency."
I move:—
That the Committee agree with the Seanad in amendment No. 6.
This is really a re-drafting of the section of the original Bill, the only consequence being to make it clear that the Commission, if it so chooses, may appoint a bank to act as its London agency. It is still open to the Commission to establish an office of its own.
Question put and agreed to.
Section 32, sub-section (1). The words "make and subscribe a declaration" deleted in line 12, and the words "take and subscribe an oath" substituted therefor.
Section 32, sub-section (1). The word "declare" deleted in line 14, and the word "swear" substituted therefor.
Section 32, sub-section (2). The word "declaration" deleted in line 22, and the word "oath" substituted therefor.
Section 32, sub-section (3). The word "declaration" deleted in line 26, and the word "oath" substituted therefor.
I move:—
That the Committee agree with the Seanad in amendments No. 7, 8, 9 and 10.
These amendments stand together. As the Bill went to the Seanad members of the Commission had to make a statutory declaration of secrecy. The amendments provide for an oath of secrecy. In the case of banks, I understand that an oath is taken.
Question put and agreed to.
Section 37, sub-section (1). All from and including the word "and" in line 34 deleted down to and including the word "business" in line 36.
Section 37, sub-section (2). A new sub-section inserted before the sub-section as follows:—
(2) The Commission may require any bank which is mentioned in the Third Schedule to this Act or which though not so mentioned is for the time being a shareholding bank or any bank which holds a controlling interest in or in which a controlling interest is held by any such bank to afford the Chairman or a permanent officer of the Commission specially authorised in that behalf in writing by the Chairman such access to the books and records of the bank to which such requisition is made as the Commission may consider necessary or desirable for the due discharge of its functions under this Act.
Section 37, sub-section (2). The word "or" deleted in line 41 where it first occurs and the following words substituted therefor: "lawfully required of him by the Commission under this section and every bank which fails within the time limited in that behalf by the Commission."
Section 37, sub-section (3). The word "banker" deleted in line 47 and the word "bank" substituted therefor.
Section 37, sub-section (3). The word "banker" deleted in line 53 and the word "bank" substituted therefor.
I move: That the Committee agree with the Seanad in amendments No. 11, 12, 13, 14 and 15. These amendments stand together. As the Bill went to the Seanad the Commission was enabled to require information from any person carrying on business as a banker, whether in connection with other business or not, and the Commission was authorised to have the books of that firm or bank inspected by its Chairman, or by a permanent officer delegated for that purpose. The effect of the amendment is that these powers remain in full in regard to shareholding banks or existing joint stock banks and any bank that may become hereafter a shareholding bank, and any bank in which a shareholding bank holds a controlling interest. But in regard to a private bank, or other firm carrying on banking in conjunction with other business, the power of inspection is taken away and there remains only power to require information, but not power to inspect books. For the purpose of the Bill it is only necessary to have this power of inspection in the case of a bank that will have bank notes.
Question put and agreed to.
Section 40, sub-section (3). The word "an" deleted in line 30, and the words "a permanent" substituted therefor.
Section 52, sub-section (3). The word "an" deleted in line 5 and the words "a permanent" substituted therefor.
I move: That the Committee agree with the Seanad in amendments 16 and 17. These amendments provide that the inspection shall be carried out only by a permanent officer of the Commission, and not as might previously have been the case, by someone brought in ad hoc.
Question put and agreed to.
I move: That the Committee agree with the Seanad in amendment 18:—
Section 53, sub-section (4). After the word "existing" in line 55 the following words inserted: "and other assets and liabilities of the shareholding banks."
As the Bill went to the Seanad it was provided in fixing the maximum limit of note issue the Commission should have regard to the liquid sound advances of the banks to persons in Saorstát Eireann, and to such other matters as they considered relevant. The amendment inserts certain words which will make the section read "that they shall have regard to the liquid sound advances and other assets and liabilities of the shareholding banks and such other matters as they consider relevant." Really, I do not think it adds anything to the Bill. I only makes more explicit what was explicit in the Bill as it left the Dáil.
Question put and agreed to.
I move: That the Committee agree with the Seanad in amendment No. 19:—
Section 53, sub-section (5). The words "unanimous vote" deleted in line 2 and the words "a vote of not less than five of its members" substituted therefor.
This amendment provides, where the legal tender note issue exceeds £6,000,000 and the Commission is issuing consolidated bank notes in excess of £6,000,000 it may do so by a vote of not less than five of its members. As the Bill went to the Seanad the Commission could do so only by a majority vote. I think this sufficiently safeguards the position. It is possible that the three banking members would, without very much necessity for convincing them, be in favour of an extension of the consolidated note issue in these circumstances. If we had left it as it was, that it might be extended by a majority vote, it would mean that they would have to get only one other person on the Commission to join with them. As the amendment stands they would have to get two other members, and I think that would be sufficient.
Question put and agreed to.
Section 53, sub-section (6). After the word "half-year" in line 12 the following words inserted: "together with the average amount of gold coins which are for the time being legal tender under this Act in Saorstát Eireann for unlimited amounts estimated by the Commission to have been in circulation or held by bankers in Saorstát Eireann during such half-year."
Section 53, sub-section (6). After the word "of" in line 15 the words "the aggregate of" inserted.
Section 53, sub-section (6). After word "amount" deleted in line 15 and the word "amounts" substituted therefor.
I move:—
That the Committee agree with the Seanad in amendments 20, 21 and 22.
As the Bill went to the Seanad it provided, where the issue of legal tender notes fell below £4,000,000, the Commission might reduce the consolidated note issue to a sum not exceeding £1,000,000 more than the issue of legal tender notes. It was pointed out in the Seanad that if the circulation of gold were restored, there might be practically no legal tender notes in circulation, and that consequently the consolidated note issue might be automatically wiped out. I do not think that situation is at all likely to arise. I do not think the circulation of gold is going to be restored for a very long time or that it would be profitable or advantageous in any way to restore the circulation of gold. But in case at some future time any other changes were made in the currency system and that gold came into circulation, it is well to provide that the £4,000,000 is to be calculated, not with reference to legal tender notes alone, but with reference to legal tender notes and the gold coin estimated to be in circulation.
Has the Minister considered what amount of currency is necessary per head of the population to carry on the business of this State in a flourishing condition?
That will vary from time to time, but the estimate of the Banking Commission was that the requirements of the country would be met by the provision of six millions of legal tender notes and six millions of consolidated bank notes, making twelve millions in all. If there were improved trade conditions the requirements might be greater. On the other hand, if the trade conditions got worse, a sum less than twelve millions might suffice.
Is the House to understand that twelve millions of currency would be sufficient to carry on the business of the country? We are told we will get more if trade demands it. I submit that trade can never demand it until you have sufficient currency. It is plenty of currency that will give you an increased trade. It was when currency was inflated in the war years that we had plenty of trade, and we had no unemployment. We have unemployment now because we have a deflation in currency. As regards the point of deflation, I doubt if it has yet come down to twelve millions. I speak subject to correction, but I think it is somewhere about eighteen or nineteen millions. If currency in this country is reduced to twelve millions we are going to have more unemployment.
The key of the whole situation is handed over to the Bank of England by this Bill. The man unemployed, the farmer who is going down, the manufacturer and the trader who are going down, are going down because England controls our money, and this is giving England a grip over our currency. The Minister for Finance tells us that twelve millions of currency would be enough to carry on the trade of this country. I say it would not, and it is a full reason, if there were no other, why this Bill should not be rushed through until this House, now complete, has had time to go into the matter. There is no use in bringing forward motions to relieve unemployment; there is no use in talking about bulls and boars in Cavan, and there is no use in talking about live stock schemes if we have not sufficient currency and the control of currency. The whole scheme of national progress depends on this Bill, and if you put it through and give the control to England, then you may as well give up possession of this House to England.
There is no limit of twelve millions in the Bill. The Bill provides for a degree of elasticity in regard to the issue of bank notes and currency matters generally which did not exist before. There is no such thing as a maximum limit to the legal tender notes mentioned anywhere in the Bill. The only thing is there can be no issue of consolidated bank notes in excess of six millions for the first two years, unless the issue of legal tender notes first exceeds six millions. I could not argue now, without the permission of the Chair, the question of inflation or deflation. I can only say that whatever stimulating effects there are in inflation, they are temporary, and work themselves out.
I would like if we could get a day when the Minister could argue the matter of currency.
Question: "That the Committee agree with the Seanad in amendments 20, 21 and 22"—put and agreed to. Amendment 23:
Section 53, sub-section (7). After the word "existing" in line 29 the following words inserted: "and other assets and liabilities of the Shareholding Banks."
I move that the Committee agree with the Seanad in this amendment. It is similar to amendment 18.
Question put and agreed to.
Amendment 24.—Section 55. The word "extraordinary" deleted in line 34.
I move: That the Committee agree with the Seanad in this amendment. It is a drafting amendment. It is considered the word "extraordinary" in the section added nothing to the sense and did possibly make for some confusion.
Question put and agreed to.
Amendment 25.—Section 58, sub-section (3). After the word "Commission" in line 13 the words "by general regulation or particular direction" inserted.
I move: That the Committee agree with the Seanad in this amendment. It provides that an arrangement for the issue by banks of consolidated notes other than their own may be made by particular direction or general regulation. That was not clear in the Bill.
Question put and agreed to.
Amendment 26.—Section 60, sub-section (3). After the word "authorise" in line 7 the words "by general regulation or particular direction" inserted.
I move: That the Committee agree with the Seanad in this amendment, which is consequential upon amendment 25.
Question put and agreed to.
Amendment 27.—Section 60, sub-section (3). The following words added at the end of the sub-section: "and the Commission shall make regulations under this sub-section for the purpose of enabling reasonable facilities to be given by banks to persons about to travel out of Saorstát Eireann for obtaining bank notes other than consolidated bank notes."
I move: That the Committee agree with the Seanad in this amendment. It is an amendment which I did not think was at all necessary, but there is no objection to it. It provides that the Commission not only may but shall make regulations for the purpose of enabling reasonable facilities to be given by banks to persons who desire to travel outside Saorstát Eireann for obtaining notes other than consolidated bank notes. The general principle is that banks are prohibited from paying out in notes other than their own. People travelling may desire to have, say, Bank of England notes. The Commission, under the Bill as it left the Dáil, had full power to make regulations so that people would be able to get from banks notes which they might require. This makes it mandatory on the Commission to make necessary regulations in that respect.
Question put and agreed to.
AMENDMENT 28.
Section 61, sub-section (3). Paragraph (d) deleted and a new paragraph substituted therefor as follows:—
"(d) British Government securities maturing within twelve months."
I move: That the Committee agree with the Seanad in this amendment. It is an amendment which I opposed in the Seanad. If it is accepted here it may afterwards call for some further legislative action. It provides that when the Currency Commission holds British securities against notes it shall only hold British securities maturing within twelve months— that is, practically Treasury bills. As the Bill left the Dáil the Commission might get securities with any maturity or securities which were not redeemable at all. In the Seanad members spoke about the losses likely to be sustained owing to a fall in the value of Consols. They pointed out great capital losses were sustained by great numbers of banks, and one could conceive a similar depreciation of existing securities occurring. On the other hand, there is no doubt if the Commission is tied to investment in short-dated securities the income will be less than it would be otherwise. The matter will not be, I think, of very serious consequence for two or three years at any rate, because in the early days I think the Commission will most probably pursue a cautious line and will purchase short-dated securities. If, after a year or two, it is thought better to remove the restriction, it will be possible to do it in a very short Bill. I am not much in favour of the amendment, but it was very strongly pressed from almost all Parties in the Seanad. I recommend the Committee to agree with it.
Question put and agreed to.
Amendments 29 to 33:—
Section 65, sub-section (1). After the word "issue" in line 28 and within the bracket the words "or by way of special excess" inserted.
Section 65, sub-section (1). After the word "issue" in line 35 and within the bracket the words "or by way of special excess" inserted.
Section 65, sub-section (1). Before paragraph (d) a new paragraph inserted as follows:—
(d) if any consolidated bank notes were during such half-year outstanding with such bank by way of special excess, a sum calculated at the rate of three per cent. per annum on the amount of consolidated bank notes so outstanding from day to day with such bank during such half-year, and.
Section 65, sub-section (2). The following words added at the end of the sub-section: "save in so far (if at all) as the same is determined by the Commission under this section to be outstanding by way of special excess."
Section 65, sub-section (3). A new sub-section inserted before the sub-section, as follows:—
(3) Whenever the quota of a Shareholding Bank is reduced under Part VI. of this Act the Commission in its discretion may, where the circumstances appear to it so to warrant, determine that during any specified period ending not more than six months after such reduction of such quota a specified portion (not exceeding the amount by which such quota is so reduced) of the amount of consolidated bank notes outstanding otherwise than on an extraordinary issue with such bank in excess of the amount permitted by or under this Act to be so outstanding shall be deemed for the purposes of this section to be outstanding by way of special excess.
I move: That the Committee agree with the Seanad in those amendments. They all stand together. The effect of them is that if the quota of bank notes that may be issued by any particular bank is reduced, the Commission may make arrangements during six months to treat them as being issued by way of special excess rather than by way of extraordinary issue. If they stood out as being extraordinary issue the bank which had them out would have to pay interest during the first month at 5 per cent., the second month at 5½ per cent., and the third month at 6 per cent. If for any reason through the contraction of the total amount of consolidated note issue or through a very serious reduction in the quota of a particular bank, perhaps through a new bank coming in amongst shareholding Banks, there would be great hardship on a bank having to pay the high rate of interest while it was reducing its notes in circulation to the quota, provision is made to enable the Commission to regard certain notes over a period not exceeding six months as being issued not by way of extraordinary issue but by way of excess. The notes issued by way of excess will pay tax at the rate of 3 per cent. instead of 5 per cent. I think it is unobjectionable, and it is the sort of section that will probably never be operative, because I cannot imagine such drastic reduction in the quota of any particular bank as some Senators seemed to think.
Ní misde dhom a rá ná fuil mo cháirde agus me fhéin sásta leis an mbille seo no leis an leasú. Ní raibh am againn go dti seo dul isteach sa cheist ach is dóigh linn nach í seo an tslighe is cóir chun i shocrú. Ba mhaith linn fhios a bheith ag gach éinne ná fhuilimíd i bfhabhar an Bhille seo ach nílimíd ag dul 'na choinne anois. Nuair a bheidh uain againn rachaidh mé fhéin agus mo cháirde isteach 'sa cheist. Ní maith linn bheith ceangailte ag an mbille seo ná ag na leas-rúin ata ós ár gcóin.
Níl agam le rá ach gur chuamair isteach sa cheist seo go cúramach, agus go bhfuaireamair comhairle ó sna daoine is fearr agus is mó eolas 'na taobh. Béidir ná fuil an ceart acu-san, ach creidimí£ féin go bhfuil. Nílim-se ag rá go socruíonn an Bille seo an cheist ar fad. Nuair a bheidh sé tamall i bhfeidhm gheobhfar dearmhad anso is ansúd ann, béidir, agus má gheibhtear is furuiste na dearmhadaí sin do cheartú.
Question put and agreed to.
The Dáil went out of Committee.
Agreement with amendments reported.
Question—"That the Dáil agree with the Committee in their agreement with these amendments"—put and agreed to.
Message to be sent to the Seanad accordingly.