Skip to main content
Normal View

Dáil Éireann debate -
Wednesday, 31 Jul 1929

Vol. 31 No. 6

Private Business. - Bank of Ireland Bill, 1929—Report Stage.

I move: "That this Bill be received for final consideration."

When this Bill was last before the House, we indicated our opposition to it on the general ground that the whole question of the banking position in Ireland, its system and organisation, should have been investigated long ago, and that such an investigation was in fact long overdue. Therefore, we felt that there should be no interference with the existing position until that investigation had been made, because we felt that, if there were such interference, the making of whatever alterations might be found to be necessary would be rendered more difficult. There were two particular grounds as well upon which our opposition to this Bill was based. There was, first of all, the fact that we were not satisfied that sufficient safeguards were being embodied in the Bill to prevent the Bank coming ultimately under foreign control. The other ground was on the question of amalgamation. It is not to be taken that we are opposed to amalgamation as such. Some of us feel that amalgamation in certain cases would be justified, but there are amalgamations which we, and, I think, the public as a whole, would view with alarm. In regard to that, however, our opposition has been to a certain extent met in the Seanad. On those particular grounds, we are not at the present moment prepared to oppose the Bill.

There is one other ground, however, upon which we have not been met, and it is upon this that we cannot accept responsibility for permitting the Bill to go through this House. That ground is this, that the representatives of the principal Opposition Party in this House were denied the right in Committee to consider this Bill. I argued before, and I state it again, that this Bill is not an ordinary Private Bill. This is a Bill which ought to have been introduced as a public measure. Every clause of it should have been considered by this House as a whole, because the interest promoting the Bill is an interest which practically controls and dominates the whole commercial and industrial life of the country. The Bank of Ireland touches every citizen of this State in its ramifications and, therefore, the legislature of this State ought to have been entitled, in Committee if necessary, to consider any Bill promoted by that interest. We made that plea. It was rejected by the House, and therefore we think that, in fairness to the Opposition, the representatives whom the Opposition desired to have placed on the Joint Committee to consider the Bill ought to have been given their place as of right and in justice and equity. On the ground that that right has been denied us, we are not going to assent to this stage of the Bill going through the House without challenge.

There is another point on which we would like to have further information. We would like to have an authoritative statement from those who are promoting the Bill as to their attitude on a matter which at the present moment is seriously exercising the minds of those engaged in industry and commerce in this country. I refer to the danger of a further increase in the bank rate. We know that that danger has been the cause of grave depression in England. It has been, I believe, the cause of no less serious depression here, because up to the present moment an increase in the bank rate in England has been automatically followed by an increase in the bank rate here. We are aware, of course, that the Bank of Ireland is not the sole agent in fixing the bank rate here, but undoubtedly it is a very big factor, and it exercises a very big influence in the matter. If that influence were to be exerted against an increase in the bank rate, it is scarcely believable that the bank rate would be raised. In regard to the anticipated increase itself, we feel that in the present circumstances such an increase would not be warranted.

The primary justification for an increase in the bank rate by the central bank in any country is that such increase is essential "to enable the rate of interest on deposits to be raised to such a level as will ensure the retention in the banks and other financial institutions of that country of the funds which have been placed there, and more particularly those funds which have been placed there by foreign depositors." Now, I emphasise in this connection the latter point, "more particularly those funds which have been placed there by foreign depositors," because it is the flow of foreign capital in its most liquid form which it is sought to influence and control by the bank rate. There are occasions when its flow cannot be influenced and cannot be controlled. For instance, in the year 1926, if the bank rate in England had been reduced to 2 per cent., nothing would have stemmed the flow into England of French gold flying from the falling franc.

On the other hand, it has been suggested, and I think is now admitted, that if the British bank rate were to be increased to seven per cent. or eight per cent. nothing would keep in England the French gold which France, in view of the Young Conference, is determined to have back in its own coffers. What is the position here? We have no French gold here, and we have no Irish gold here, except possibly the few sovereigns which old women in the country have rolled up in their long stockings. I must say they were wiser in their generation and more provident, from the point of view of the future of the country, than our bankers were. Since we have no foreign funds deposited in this country, no matter how high we raise the bank rate, we are not going to retain here what we have not got. But there is one form of foreign capital which we have here which I believe would be very adversely affected by the bank rate, and that is the foreign capital invested in Irish industry. An increase in the bank rate is going to make that capital less remunerative and make Irish industry less attractive to it. It is going to influence that capital to seek a more remunerative employment abroad. In the present circumstances of Irish industry, and particularly of those industries which have sprung up under tariffs, and which at present are largely dependent upon foreign capital, I believe an increase in the bank rate would be disastrous. What is the position in regard to native capital? I have shown, I think fairly conclusively, that from the point of view of foreign capital on deposit here there is no justification whatever for an increase in the bank rate.

The Deputy seems to be raising a very general matter on this Bill. Would the Deputy say what is the relevancy of the matter he is raising at this particular stage of the Bank of Ireland Bill?

The relevancy, as I pointed out in the beginning, is: the Bank of Ireland is one of the big influences which will determine the policy of the Banking Committee on this matter. Before the Bill goes through the House we want to have an expression of its attitude towards an increase in the bank rate, which we fear.

The Deputy cannot get an expression of the point of view of the Bank at this stage.

We think we are entitled to it, and unless we are assured that the Bank is going to be opposed to an increase in the bank rate we think the Bill ought to be opposed.

It is quite clear the Deputy cannot get an assurance on the Report Stage of this Bill. The question arises, but I am not deciding it, whether the matter to which the Deputy has referred could be raised by way of an amendment to the Bill, but it is quite clear that a general discussion on the bank rate has no relevancy to the Bill, and that the House, in entering on such a discussion, would be doing so without any end in view, for there is no one to answer.

Might I point out that when the Bill was last before the House the Government were its sponsors? They put on the Party Whips, and a Party vote was taken on this matter.

The Deputy will realise he has put a point which the Chair is not capable of deciding. This is a Private Bill which has now reached this particular stage, after having been referred to a Joint Committee. If the Deputy were speaking to an amendment framed to meet this particular case, it would be a different matter, but it would be quite impossible at this stage to have a general discussion on the bank rate.

I do not wish to contest your ruling, but I do feel, in view of the attitude the Government have taken up on this matter, and in view of the fact that they are possibly going to put on the Government Whips to carry the Bill through the Report Stage, I am entitled to have from them an expression of opinion in regard to a proposed increase in the bank rate, and what their attitude will be on that matter is what we are anxious to know. It is for the purpose of eliciting that that I have raised this matter.

Every Deputy on these benches is quite free to vote any way he likes, not like the Deputies on the opposite benches.

That is not the point at all. The point is that the Deputy wishes to raise a matter for which a Minister is not responsible. This is not the occasion. I allowed Deputy MacEntee to go to a certain distance with a view to seeing whether I could allow him to go any further, and I came to the conclusion that it was impossible, because it is impossible to debate the matter of bank rate on the Report Stage of this Bill. I think Deputy MacEntee realises that now.

I was only wishing that you would allow me to go on to deal with the position of latent capital, because I would have shown that there was no justification for raising the bank rate. However, since I am out of order, I am prepared, having stated our position in regard to the Bill, to let it stand at that. At the same time I think it is only right, before the House adjourns, having regard to the position that industry labours under, that we ought to have an authoritative statement from some member of the Executive Council as to whether they will bring pressure to bear upon the banks not to follow the example of the banks in England in the raising of the bank rate.

In view of the superior knowledge of the President on these matters, it is with fear and awe that one approaches the subject of banking——

The nearer the Deputy approaches the subject of banking the further away he will keep from the Bill.

I approach the subject of the Bank of Ireland Bill, and I think it would not be right that this Bill should become law without a certain protest. This Bill gives certain privileges to the Bank of Ireland. It is right to say that the Bank of Ireland and the other Irish banks enjoy privileges which no European or American banks enjoy. In view of these privileges one would expect a national sympathy from these banks. We do not get that in this country. It is a notorious fact that this bank, which is facilitated under this Bill, this bank, the principal bank in Ireland, lays down and has carried out a practice by which the majority of its employees should belong to the faith of the minority of the people. It is a notorious fact that no employee of this Bank can rise beyond the rank of cashier unless he belongs to the favoured creed. It is a very painful thing to talk about sectarian matters, but sectarianism has not been developed from these benches but in an institution like this. The Government, in affording facilities to this Bank by a Bill like this, should at least stipulate that these seventeenth century practices should cease.

We who have on the various Stages of this Bill criticised the operations of banking as we find them in this State, are actuated by these motives, that we realise that financial freedom precedes economic and political freedom and that until the Government of the State makes up its mind that they will have financial freedom and that the issue of credit shall be correlated to the needs of the community there cannot be real progress. That has not been done in Ireland. Until it is done, all your legislation is in vain. We will, however, continue to press this matter in spite of the terrorism of the Press and in spite of the fact that the banks largely subscribe to the Cumann Na nGaedheal Party during elections.

I take it that by rising in opposition to the Bill we will block the Bill for the time being until the next meeting of the Dáil, and that in the meantime we will give the President an opportunity of thinking seriously about the whole question as to whether he should not hold a thoroughgoing inquiry into the question of banking in this country.

If opposition is raised to a Private Bill in any particular Stage, no discussion can be allowed. When opposition is taken to a Private Bill it is postponed. If there is opposition to the Bill, consideration of the Bill will be postponed. Unless the House is prepared to go on with the Fourth Stage, we cannot take that Stage now.

In view of Deputy Kennedy's statement, I wish to state that my information is that the General Manager of the Bank at the present moment is not of the faith of the minority of the people as the Deputy has alleged.

A speech after the ruling by the Chair!

Tell the truth. That is all I want to do.

A certain discussion has been allowed on this. Technically, the procedure is to have opposition noted. Then further consideration must be postponed, as the Deputy has reminded me. I will, however, hear Deputy J.X. Murphy.

I did not intend to intervene in this debate at all, but if I heard Deputy Kennedy aright, I think he is labouring under a misapprehension. The Deputy said that no Catholic can get to a higher rank than that of cashier in the Bank. I want to say that that is not true.

Will the Deputy give us the figures as to the positions held by persons of different creeds in the Bank?

Opposition taken; Report Stage to be taken at a later date.

Top
Share